Bill of Lading, more facts

Bill of Lading

Bill of Lading, more factsBill of Lading is a document issued by the shipping company or his agent acknowledging the receipt of cargo on board. This is an undertaking to deliver the goods in the same order and condition as received to the consignee or his agent on receipt of freight, the shipping company is entitled to. It is a very important document to the exporter as it constitutes document of title to the goods.

Each shipping company has its own bill of lading. The exporter prepares the bill of lading in the form obtained from the shipping company or agents of shipping company.

The goods can be consigned to order of the exporter, which means the exporter can authorize someone else to receive the goods on his behalf. In such a case, the exporter would discharge the bill of lading on its reverse. When the bill of lading is negotiated through the bank, it would be endorsed in favour of the bank that would endorse further to the importer, on receipt of payment.

Bill of Lading is made in signed set of 2 originals, any one of which can give title to the goods. The shipping company also issues non-negotiable copies (unsigned) which are not documents of title to goods but serves the purpose of record only.

The reverse side of Bill of Lading contains the terms and conditions of the contract of carriage. The clauses on most of the bills of lading are common. A Bill of lading should be clean to facilitate the exporter to obtain the proceeds of export without difficulty. Main Purposes It serves three

Main purposes.

(A) As a document of title to the

(B) (B goods ) As a receipt from the shipping company and

(C) As a contract of affreightment (transportation) o good s.

 

 

Types of Bill of Lading

(1) Received for Shipment give B/L: A shipping company issues it when goods have been given to the custody of the shipping company but they have not been placed on board.

(2) On Board Shipped B/L: The shipping company certificate that at the cargo has been received on board the ship.

(3) Clean B/L: It indicates a clean receipt. In other words, it implies that there has been no defect in the apparent order or condition of goods at the time of receipt or shipment of goods by the shipping company.

(4) Claused or Dirty B/L: It shows that the B/L is qualified which expressly declares a defective condition of goods. The clause may state "bale number 5 hook-damaged" or "package number 10 broken". By superimposing this type of clause, the shipping company is limiting its responsibility at the time oi delivery of goods, at the destination. It is very important to note that bank accepts only a clean B/L at the time of negotiation.

(5)) Transhipment or Through B/L: When the journey covers several modes of transport from the place of starting to the place of destination, this type of B/L is taken. It indicates that transhipment would be en route. For example, part of the journey is by ship and the rest of journey may be by road, rail and air.

(6) Stale B/L: According to international commercial practice, B/L along with other documents must be presented to the bank not later than twenty one days of the date of shipment as given in the B/L. In some cases, the importer may indicate the number of days within which the documents are to be presented from the date of shipment. Exporter has to comply with the stipulation indicated. Otherwise, the B/L becomes stale and is not accepted by the bank for payment. A stale bill is one which is tendered to the presenting bank so late a date that it is impossible for the bank to dispatch to the consignee's place, in time, before the goods arrive at the destination port. hi other words, bank finds it impossible to see the documents reach before the ship reaches the destination.

(7) To Order B/L: In this case, the B/L is issued to the order of a specified person.

(8) Charter Party B/L: It covers shipment on a chartered ship.

(9) Freight paid B/L: When the shipper pays the freight, then this type of B/L is issued with the words "Freight paid".

(10) Freight Collect B/L: When the freight on the B/L is not paid and to be collected at the point of destination, it is marked "Freight Collect" and this B/L is known as "Freight Collect B/L".

Generally, the importer insists on the "clean on-board shipped" bill of lading with the prohibition of transshipment of goods as goods can suffer damage during transhipment. If transhipment is allowed, even period of journey may take longer.

B/L is a non-negotiable document: A bill of lading is not a negotiable document while it is a transferable document. Transferability enables the exporter to claim payment from the bank even before the goods reach the destination. Similarly, it enables the importer to sell the goods even before they reach the destination.

 

 

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