Bill of Lading :

Functions of Bill of Lading  :

1. Document of title – whoever holds the B/L is the Owner of goods,

2. Receipt for the cargo, signed by the master or by the owner’s port agents on behalf of carrier, with remarks as to the condition of the cargo,

3. Evidence of Contract i.e contract between two(2) parties, governing terms and conditions of carriage.

Various types of B/L :

1. Bearer B/L : which is directly addressed, name of the consignee / bearer is entitled to take the delivery of a cargo.   – It’s a highly risky B/L and hence very rarely used now-a -days.

2. Order B/L : It is one of the most common B/L’s used presently.   – It is usually drawn ” to the order of _ _ _ _ _ _ _ _ _ _ _ _ _”  – It can be transferred to any number of Consignee’s by a simple endorsement by the current holder of B/L.  – It is a negotiable document.  – It serves all the purpose of a B/L

3. Clean B/L : Even though the actual condition of the cargo may be suspect, many letter of credit transactions require “clean” bills of lading i.e Bills stating that the goods described therein are in “apparent good order and condition”, with no words indicating deficiency in the goods.   – However, a carrier cannot agree to issue a clean bills of lading when the goods are not in good condition, even where “letter’s of indemnity are offered by the concerned parties.   – Bills of lading must accurately depict the actual conditions of the goods and if they don’t then it is considered a fraud.

4. A Foul B/L : This is the bill of lading which is in some way claused or dirty.  – This means that the cargo loaded is not perfect and the ship-owner protects himself against a claim at the discharge port.

5. Received for Shipment B/L : In liner trades the cargo is actually received into the custody of the ship-owner or his agent but is not actually on board the vessel at that time this bill of lading is issued.  – It is also called a Custody B/L.  – If this is issued, the shipper may demand from the carrier an endorsement on the B/L when the goods have been loaded on board stating ” since shipper “.  – This is also common in container trades where containers are taken in the carriers custody at inland container depots.

6. Shipped B/L : This is issued especially for bulk cargoes and confirms that the cargo is actually on board the ship.  – Any previously “Received for Shipment B/L” must be surrendered before issuing this.

7. Through B/L or Straight B/L : These are issued where the cargo will only be carried for part of the voyage by the carrier signing the bill of lading.  – The remainder of the voyage may be over land or another vessel.  – With a through bill of lading, the carrier signing it is only responsible for his part of the carriage and acts an agent for the shipper for the other parts of the voyage.

8. Owner’s B/L : An owner B/L is the one where the owner has his own format for the B/L.   – Master signs the B/L, on behalf of the ship owner.  – Hence, it is the ship owner who is the shipper in this case

9. Liner B/L : They are normally used on container vessels, where the vessel’s route is fixed and the vessel is called a “liner”

10. Sea-way B/L : It is simply a receipt for the goods carried on board.  – It is not a document of title and hence cannot be used as a transport /negotiable document.   – It also cannot be used for the purpose of bank or Institutional finance.  – The contract of carriage is produced on the reverse of the sea-way B/L.  – The receiver or the consignee is required only to prove his identity in order to take delivery of the goods.   – It is used only on fixed trades.   – The advantage of sea-way bill is, the master does not have to sight the original B/L’s in order to deliver the cargo. Hence, the problem of transporting the original B/L is avoided.

11. Combined Transport B/L : Under combined transport B/L, there is an organization called as CTO (Combined Transport Operator).  – This is a B/L, which is used from point ‘A’ to ‘B’ i.e. (door-to-door) and document is called ” Transport Document “.  – The responsibility for the entire transport is taken by an organization known as Combined Transport Operator (CTO).   – The CTO signs the B/L in this type.

12. Charterer’s B/L : The charterer’s format for B/L is used and the master signs on behalf of the charterer, thus making the charterer, a carrier of the goods.

13. Charter-Party B/L : In C/P B/L, the format used is given in the C/P itself.  – Master signs the B/L under the instruction of the Charterer.   – Under this B/L’s, for the shipper, carrier is the charterer whereas for the receiver / consignee, the carrier is the ship-owner. 

Precautions before signing a B/L and procedures for cargo delivery : 

1. That the goods as mentioned in the B/L have been actually shipped.

2. The date of shipment is as per the Mate’s Receipt .

3. If the B/L is marked freight prepaid, whether it has actually been paid.

4. Any clausing required as per the Mate’s Receipt.

5. A reference is made to the CP if one exists.

6. That the CP terms are not in conflict with the BL terms.

7. The number of original B/L in the set is stated.

8. The port of discharge is as per the vessel’s itinerary and within accepted trade limits as per CP.

Procedures for Cargo delivery : 

1. The master is duly bound to deliver the goods to the first person presenting a signed B/L with proof of identity and proof that the freight is paid.

2. Once the goods are released to a receiver, the carrier’s lien for the freight is lost.

3. If the B/L has been transferred by the original consignee, the endorsement on it should be checked.

4. Cargo must be delivered to a bonafide holder of a B/L. If the B/L is open, then cargo can be delivered to anybody who presents it, provided the master has not been informed of any theft or fraud.

5. If the B/L is straight, the master should check that the person claiming delivery is the same as named in the B/L.

6. If the B/L is negotiable, it is very important that the master checks whether the B/L is properly endorsed, and the person claiming delivery is entitled to the goods.

7. Once the master has done this, he has to endorse the B/L as accomplished, and date and sign the B/L with this remarks. As soon as one B/L is accomplished all the other original B/L’s become null and void.

Contents and significance of Mate’s Receipt :

1. It is a receipt issued and signed by the carrying ship’s Chief officer for the goods received on board.

2. It has been replaced in many ports by the Standard Shipping Note (SSN)

3. Details of the B/L are based in the details of the Mate’s Receipt. Therefore both should tally.

4. Details of the Mate’s Receipt should be from the ship’s tally and should show the actual quantity and condition of the goods received.

5. If the condition of the cargo justifies it, be endorsed as torn bags, rusty drums etc.

6. If the ship’s and shippers tally disagree, should be endorsed for the quantity in dispute, if on board to be delivered.

7. It will be a ship owner’s form in triplicate, on board / person delivering the goods / ship’s agent. On board copy for tallying with the B/L.

8. It is not a document of title for the goods shipped as it does not contain a contract of carriage.

9. Does not pass any title by its endorsement or transfer.

10. The shipper usually presents the signed Mate’s Receipt to the agent in exchange for the signed B/L before the vessel sails.

Difference between Mate’s Receipt and B/L :

1. It is a receipt issued and signed by the carrying ships Chief officer for the goods received on board, whereas a B/L is not signed by the chief officer.

2. Details of the B/L are based on the details of the Mate’s Receipt. Therefore both should tally.

3. Details of the Mate’s Receipt should be from the ship’s tally and should show the actual quantity and condition of the goods received. Whereas details on the B/L are as per the Mate’s Receipt.

4. Endorsements on a Mate’s Receipt have no significance, whereas those on the B/L are very significant.

5. It is not a document of title for the goods shipped as it does not contain a contract of carriage, whereas a B/L is a document of title.

6. Does not pass any title by its endorsement or transfer, whereas B/L does.

7. The shipper usually presents the signed Mate’s Receipt to the agent in exchange for the signed B/L before the vessel sails.