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Club Ujjayi 108 Group

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Victor Martin
Victor Martin

Bill Of Lading

The bill of lading is a required document to move a freight shipment. The bill of lading (BOL) works as a receipt of freight services, a contract between a freight carrier and shipper and a document of title. The bill of lading is a legally binding document providing the driver and the carrier all the details needed to process the freight shipment and invoice it correctly.

bill of lading


Land, ocean and air transport are the modes that use lading bills. Like the inland bills of lading for goods transported via roadways or railways, a bill of lading in shipping records the traded goods received on board. It is a document that establishes an agreement between a shipper and a transportation company for the transportation of goods. The Transportation Company (carrier) issues these records to the shipper.

There are usually two types of bill of lading, the House Bill of Lading and the Master Bill of Lading. An ocean bill of lading indicates a particular carrier through which the goods have been placed to their final destination and the conditions for transporting the shipment to its final destination.

While many confuse the bill of lading with Proof of Delivery, the former is a contract between the owner of goods and freight carrier, while the latter is proof that the goods have reached their destination.

The carrier need not require all originals to be submitted before delivery. Therefore, the exporter must retain control over the complete set of the originals until payment is effected, a bill of exchange is accepted, or some other assurance for payment has been made to him.

A bill of lading is very important when making shipments to move the cargo or freight from one point or distribution center to the other. On the one hand, it is a contract between a carrier and shipper for the transportation of goods, and on the other hand, it serves as a receipt issued by a carrier to the shipper.

Hence, the bill of lading is considered a legal document which provides all the vital details to the shipper and the carrier to conveniently process the freight shipment through different maritime countries and invoice it correctly.

Negotiable bill of lading: In this type of bill, clear instruction is provided to deliver the goods to anyone possessing the original copy of the bill, which signifies the title and control of the freight. In this type of bill, the buyer/ receiver or their agent has to acquire and present an original copy of the bill of lading at the discharge port. Without an original bill copy, the freight will not be released.

Non-negotiable bill: This type of bill of lading fixes a specific consignee/name of the receiver to whom the freights will be shipped and delivered. It, however, does not itself serve the owner of the goods. Under this bill, the assigned receiver/ buyers can claim the cargo by confirming their identity.

3. Bearer bill of lading is a bill that states that delivery shall be made to whosoever holds the bill. Such a bill may be created explicitly or an order bill that fails to nominate the Consignee, whether in its original form or through an endorsement in blank. A bearer bill can be negotiated by physical delivery. They are used for bulk cargo that is turned over in small amounts.

4. Order bill of lading is the bill that uses express words to make the bill negotiable. This means that delivery is to be made to the further order of the Consignee using words such as delivery to A Ltd. or to order or assigns. The cargo is only delivered to the bona fide holder of the lading bill, which must be verified by an agent who issues the delivery order and the verified bill of lading. The order bill of lading:

The master will sign the original bill of lading, and when the master of the agent signs the three-bill of lading, all other copies are considered void. This clause is written on the bill of lading supplied in sets.

The contract between the carrier and the shipper is already created before issuing the bill of lading when the cargo is loaded on the ship. This is done to safeguard the shipper in case the cargo is damaged before loading it on board the vessel and to help the shipper in the claim process. For the carrier and the Consignee, the bill of lading will act as the actual contract of carriage.

The convention governing the carriage contract is usually stated on the first page of the bill of lading. Upon booking space for shipment by the Consignee, the carrier sends a booking confirmation which states Clauses sent by the carrier. It will indicate the terms and conditions governing the booking and carriage contract.

Different companies use different forms of bill of lading, making tracking challenging unless the carrier provides a specific tracking service. A few companies tie up with the shipping carriers to track the bill of lading for easy trade.

With the modernisation of the shipping industry as a whole, the bill of lading is also modernised to the electronic bill of lading to solve the issues occurring while using a paper bill of lading under the latest iteration of the International Group of P&I Clubs. The problem faced when using a paper bill of ladings are:

A bill of lading is a contract issued by a transportation company to a shipper that gives out the quantity and types and specifies the destination of goods being shipped. It is also a receipt of shipment and prevents the goods from being robbed while transported.

Nowadays, various types of BOL has been presented in this market industry, the most common BOL are Master Bill of lading (MBOL) and House Bill of lading (HBOL). Identify the difference mechanism between MBOL and HBOL when it involves with Letter of Credit (L/C) functions.

1.Please help me get the similarities between sea waybill and Bill of lading.2.explain with an examples how five of the 17 exceptions build upon the common law exceptions applicable to every carriage

DCSA, in conjunction with our member carriers, has published data and process standards for the submission of shipping instructions and issuance of the bill of lading (B/L). Through this initiative, DCSA aims to facilitate acceptance and adoption of an electronic bill of lading (eBL) by regulators, banks and insurers and to unify communication between these organisations and customers, carriers and all other stakeholders involved in a transaction.

This article builds a case for digitalizing trade documentation and demonstrates how adopting an electronic bill of lading could save $6.5 billion in direct costs and enable between $30 billion and $40 billion in new global trade volume. It also highlights actions that various stakeholders can take to unlock this opportunity in global ocean shipping.

The original bill of lading still requires many stakeholders to print, stamp, and sign various paper copies before physically transporting them from origin to destination as air express shipments (Exhibit 1). This non-digital process is costly, takes time to execute, and is highly susceptible to errors.

Digitalization has also been bolstered by organizations actively setting and promoting digital change. For example, the Digital Container Shipping Association (DCSA), a collaboration between several large container shipping companies, has helped the industry to establish digital standards for critical building blocks of information exchange, like electronic bills of lading and vessel schedules.

The analysis quantifies the expected impacts of 100 percent adoption of an electronic bill of lading on ocean carrier costs, for stakeholders in the broader shipping ecosystem, and on broader trade enablement. This quantification illustrates the substantial impact that can be generated from digitalizing a single, yet critical, component of trade documentation.

Adopting an electronic bill of lading could lead to direct cost savings for all stakeholders, amounting to $6.5 billion a year. Carriers could realize up to $2.1 billion in benefits such as more direct interaction with shippers, and streamlined and digitalized workloads, leading to cost savings. New digital capabilities could also lead to new revenue stream for carriers, for example through improved customer journeys. A further $6.9 billion in value could be unlocked for the broader trade ecosystem. Ultimately, greater digitalization could enable $40 billion in global trade by 2030 (Exhibit 2).

Several factors indicate that the industry is ready to embark on digitalizing the bill of lading. First, digital standards for the bill of lading have been established. Data and process standards for the submission of shipping instructions and issuance of the bill of lading have already been established through DCSA, and accepted by nine container carriers that represent 70 percent of containerized trade.

Second, the required IT investment to accommodate a digital bill of lading is low. McKinsey estimates that limited investments into IT connectivity and employee training would enable this transition. These costs would be more than offset by the aforementioned cost savings.

Lighthouse examples exist of market participants in ocean trade that are striving for change. ZIM International Shipping Lines has set ambitious targets for digitalizing trade documentation. The carrier started educating customers about the benefits of an electronic bill of lading and trained its workforce to get familiar with the new process. The effort yielded results very quickly: After one year, the carrier tripled its adoption rate of the electronic bill of lading from 3 percent to 10 percent.

All stakeholders can scale up current electronic bill of lading solutions and work together to keep existing infrastructure running, as collaboratively as possible. The industry can move to finalize electronic bill of lading solutions and API integrations to jointly shift to the new era of container shipping.

A bill of lading (BOL) is a document that primarily serves as a legally binding agreement between the carrier and shipper or freight owner. It helps the carrier process the cargo according to the original contract. A bill of lading is presented to the carrier, outlining the individual shipping orders included in a shipment. 041b061a72


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