Among the many international shipping documents, the Bill of Lading is the most important one. It changes hands throughout the import and export process.
During this process the B/L or BOL’s status, scope and nature may be altered. In addition to that, shipment documentation can be issued or received by a number of different parties due to the complexity of the supply chain. The issuer and receiver of the Bill of Lading may also need to be changed to suit certain situations.
As a result, the shipping documentation practice in some countries have additional labels attached to a B/L to facilitate easier tracking and understanding of these aspects of the bill. This gives rise to the many ‘types’ or terminology.
In this article, we provide a brief explanation of each, beginning with the more commonly searched for terms. But before we begin, here is a short review of Original Bill of Lading.
Original Bill of Lading (OBL)
The OBL comes in a set of 3 in case it is damaged or misplaced. The exporter must send an OBL to the importer when the cargo leaves the port of loading.
Once the cargo arrives at its final destination, a Delivery Order or Delivery Note (D/O) is issued by an import assigned forwarder. The importer then exchanges the OBL for the D/O to collect the cargo.
Straight Bill of Lading
A non-negotiable B/L, it is typically used when shipping to a customer, especially for shipments that have already been paid for. Due to its non-negotiable nature, it cannot be transferred or re-assigned to anyone except the specified consignee.
The consignee is charged with collecting the shipment but does not hold title to it. This means the consignee cannot sell the cargo or transfer rights for the shipment to another party.
Straight bills are sometimes used for ‘in-house’ shipments made between divisions of a multinational company. It is mostly used when the shipper is absolutely sure that the consignee will not sell off the cargo.
Blank Bill of Lading
A Blank Bill of Lading can mean two things. The first is simply a BOL which has not been filled. The second can refer to the Short Form Bill of Lading or Blank Back Bill of Lading.
A Blank Back Bill of Lading is a B/L which does not have the Terms and Conditions of Carriage printed on the form. It could, however, have a reference of the terms, which are made available on a website or a separate document.
Some traders prefer to see the terms clearly state in the B/L, and not be pointed to another source.
House Bill of Lading (HBL)
A HBL is created by an Ocean Transport Intermediary (OTI), which is either a freight forwarder or non-vessel operating company (NVOCC), according to the Federal Maritime Commission of America.
Similar to any Bill of Lading, it is also a negotiable document. An OTI issues the HBL to the supplier once the cargo has been received. Thus, the document acts as an acknowledgment of the receipt of goods that are to be shipped.
‘House’ is based on the idea of a forwarder issuing its own B/L, thus the word ‘house’. The format of the B/L will be based on the forwarder’s B/L format.
The format may include the details of the forwarder’s branch or its local agent in other countries which will issue an Arrival Notice and D/O at the import side. The forwarder’s customers can contact these branches or agents at the import side if there are any issues with delivery.
Master Bill of Lading (MBL)
This document is issued by a shipping line to a freight forwarder or NVOCC. It acts as a contract between the forwarder and the shipping line or carrier, as well as a receipt of transfer.
The Shipper details in an MBL would be that of the exporting freight forwarder or NVOCC, which is the client of the shipping line. However, the consignee field will contain details of the importing freight forwarder or NVOCC.
The format of a MBL will be that of the shipping line’s format. It may also contain details of the shipping line’s branch or local agent at the importing side.
A HBL is a receipt for a shipment from one shipper whereas a MBL is a receipt that can cover the shipments of many, as the cargo is consolidated by the carrier into one vessel.
An exporter can engage a shipping line directly without going through a forwarder. If that is so, the exporter will be issued a Master Bill of Lading by the shipping line. The details of Shipper and Consignee fields in the bill will then be that of the exporter and importer respectively.
Surrender Bill of Lading
Also called Surrendered B/L or just Surrender, it is basically a Bill of Lading that has been surrendered. We mentioned earlier about the flow of B/L in the section Original Bill of Lading.
Surrender means the B/L has been collected from the exporter at the exporter’s side. This is indicated on the B/L by a stamp bearing SURRENDERED and date of surrender, or TELEX RELEASE which is equivalent to SURRENDERED.
However, the OBL need not be physically sent to the importer. Instead, the stamped B/L copy is sent by email. This is for cases where the cargo may arrive at its port of unloading before an OBL can reach the importer’s hands.
The importer can use the copy of B/L stamped with the SURRENDER stamp, i.e. Surrendered B/L, to exchange for the D/O to collect his cargo.
Ocean Bill of Lading (Port to port Bill of Lading)
As its name suggests, it only allows a shipper to transport cargo over oceans, whether nationally or internationally. An Ocean B/L also indicates that the responsibility of carriers begins at the port of loading and ends at the port of discharge.
Clean Bill of Lading
When a shipment has been loaded in good order and condition, the Bill of Lading will be marked ‘CLEAN ON BOARD’. However, it will not bear a clause or notation which expressly declares a defective condition of the cargo or packaging.
If the packaging or cargo is visibly damaged, the carrier will issue the opposite of Clean Bill of Lading, which is called either Dirty B/L, Claused B/L, Soiled B/L or Foul B/L.
Through Bill of Lading
This type is a little more complex than most BOLs as it serves as a cargo receipt, a carriage contract and, sometimes, the title for the goods.
Whereas a typical BOL only covers one leg of a cargo’s journey, the Through Bill of Lading encompasses multi modes of transportation for both within domestic borders and through international shipment. It also allows for the carrier to transport the cargo through different distribution centers.
Thus, a Through Bill of Lading functions like an umbrella of bills. If the goods are travelling over land, an Inland Bill of Lading is also required, particularly for domestic transportation. If the goods are moved across the sea, an Ocean Bill of Lading is required in addition to the Through Bill of Lading.
Switch Bill of Lading
This refers to a second set of bills issued by a carrier or the carrier’s agent as a substitute for the OBL issued at the time of shipment. This can occur for a few reasons.
The first is when an agent is at a different port from the load port. The second is when the B/L holder decides for some reason that the first set of B/L is unsuitable, and the carrier is asked to issue switch bills to satisfy the new requirements of the bill holder.
The third reason, the most common one, is when the consignee does not wish to reveal the exporter’s identity to his buyer. The Seller’s details on the OBL are then changed to the consignee’s. Alternatively, the consignee might
Therefore, a Switch Bill of Lading is considered negotiable and a kind of Open B/L.
Order Bill of Lading
This negotiable document is used for shipments where payment is not made in advance. Because it is negotiable, the title or ownership of the bill can be transferred.
That is why the Order Bill of Lading is a common choice for shipping to distributors or a customer on terms. Naming a distributor as the consignee will make it easier for the distributor to reassign to the next party or redirect the goods to its next destination.
To safeguard against fraudulent claims of the goods, the release of goods must only be made against an original bill. The carrier bears the liability if the goods are delivered to the wrong person.
Charter Party Bill of Lading (CPBL)
Charter party refers to a deed between a vessel owner and a trader for the hire of a ship and the delivery of cargo, or a group of people using a hired ship. A Charter Party Bill of Lading is therefore a bill which incorporates the terms of a charter party.
It is commonly used for transporting commodities or bulk cargo via ocean transport. Instead of a forwarding agent or carrier, it is the charterer that issues the Charter Party Bill of Lading, a document of title.
A vessel that has been chartered would move only goods belonging to the charterer, which can be one shipper or a group of shippers. The vessel cannot hold any cargo which is not from the charterer.
Combined Transport or Multimodal Bill of Lading
This is a type of Through Bill of Lading involving at least two different modes of transport; it can be a combination of road, rail, air or water. Thus, the term ‘multimodal’ or ‘combined transport’.
A Multimodal B/L covers all forms of transport from one inland point to another. The cargo carried is usually in the form of large containers.
The issuer of the bill has the primary responsibility for all states and modes of carriage. The issuer can also sub-contract another carrier to carry the cargo in one or more modes of transfer.
Claused Bill of Lading
When a shipment is damaged or shows a shortfall, the Bill of Lading is considered claused. In other words, it is a Dirty BOL, Soiled BOL or Foul BOL. The term ‘claused’ was created to suggest that the bill did not provide what was promised.
Therefore, this term can apply to any type of B/L which contains a notation of the imperfect cargo. Aside from shortfall, this also applies to the apparent order and condition of the goods, or its quantity or weight.
Liner Bill of Lading
This type simply means that the bill of lading is issued by a specific shipping line, and it contains the terms and conditions of that shipping line. It is often used in lieu of a Charter Party Bill of Lading.
Inland Bill of Lading
This allows a shipping carrier to ship cargo by road, rail and inland waterway, but not across oceans or ‘overseas’ or across international borders.
Since its purpose is for domestic transportation only, the consignee will not be the importer. The consignee field will be filled with an appointed third party such as a warehouse, freight forwarder or packaging company.
An Inland Bill of Lading can be either negotiable or non-negotiable. If it is non-negotiable, it may only be delivered to the named consignee. If it is negotiable, the carrier in possession of the Inland B/L may re-route the shipment.
Direct Bill of Lading
This type of bill is used when the same vessel that picked up the cargo is confirmed to also deliver the cargo to its final destination. It is treated as a temporary B/L when a vessel is late. When the vessel arrives at the port of loading and the cargo has been loaded, it will be replaced by a Shipped On Board Bill of Lading.
Bearer Bill of Lading
It is a type of bill where the bearer is the owner of the shipment and no consignee is named in the bill. Being a negotiable document, the title or ownership of this bill can be transferred.
Because of the huge risks involved in possible misuse, a Bearer Bill of Lading is seldom used. When it is used, it can apply for bulk cargo which is turned over in small amounts.
Received Bill of Lading
Also known as a Received for Shipment or Carriage Bill of Lading, it is simply a B/L which indicates that the shipment has reached the port and is cleared by customs for loading. However, the cargo has not been loaded yet.
It is usually used as a temporary bill for when a vessel is late; sent to the shipper by the agent or charterer. Once the vessel arrives at the port and the cargo has been loaded, it can be turned into a Shipped On Board Bill of Lading.
This can be done by amending the date on the face of the bill. Then it must be signed by the shipowner or an authorised agent on the shipowner’s behalf.
Shipped Bill of Lading
This document is issued when a shipment arrives at the port in good condition from the shipping carrier and the shipment has been loaded onto a vessel for ocean transport.
In the United States of America, it is known as an ‘On Board’ bill as it records the receipt of goods by a carrier when it is loaded on the carrying vessel.
Banks in the US see Shipped on Board B/L and Received for Shipment B/L as significantly different. They often accept the former only when used with a Letter of Credit.
Open Bill of Lading
A negotiable bill, it is the type where the consignee can be changed. Therefore, it is open to negotiation where it can be transferred multiple times provided it is properly endorsed and accounted for.
Dirty Bill of Lading
When the condition of a cargo is not in good order, the consignee can add remarks to indicate that in the B/L. This causes the bill to be ‘claused’ or ‘dirty’. Most banks or financial institutions will not accept a Dirty Bill of Lading. Other similar terms are Claused B/L, Foul B/L or Soiled B/L.
Stale Bill of Lading
The term ‘stale’ is used to describe a Bill of Lading when the cargo arrives at a port before the bill does.
Conclusion
The Original Bill of Lading is the only actual B/L or BOL as one of the many shipping documents for the import and export industry. All the other types are versions of the OBL which have terms or labels given to them to facilitate faster communication among all the parties involved in an international trade.
The practice for documentation can vary from one country to another. That is why it is advantageous for exporters and importers alike to engage a logistics provider which has extensive experience in global logistics and can offer a wide range of services, including special attention to documentary support of transportation.
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