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The Bill of Lading

The best known document covering transport of merchandise by sea is the bill of lading. A bill of lading is issued to the shipper of the goods by the owner of the ship (also known as the carrier) or by his accredited agents. There are different types of bill of lading but the most acceptable one is the clean shipped on board marine bill of lading evidencing transport of goods from one port to another port by ship. A bill of lading performs four vital functions.

The four vital functions of bill of lading are:

I) It acts as the receipt for the goods from the shipping company to the exporter.

Ii) It is evidence of the contract of carriage between the exporter and the carrier. the conditions subject to which the goods are carried usually appear on the back of the documents.

Iii) It acts as the documents of title for goods being shipped. The goods will be released at the port of destination, only against production of one of the original bills of lading. Bills of lading are usually issued in sets of three or more. The number of originals issued is indicated on the bill of lading.

Iv) It is a quasi-negotiable documents. It is usually made out to the order of the shipper and it is transferable by endorsement and delivery. Thus the bill of lading can be used to sell or pledge the goods while they are afloat.

The bill of lading contains the name of the shipping company, the name of the shipper, which is usually the exporter and a provision to incorporate the name of the consignee. Where a negotiable document is required the word order appears against the consignee. The shipper may endorse the bill of lading in blank or endorse it to a named transferee. A bill of lading endorsed in blank is transferable by mere delivery. Once the goods arrive at the destination they will be released to the bearer or the endorsee of the original bill of lading. The carriers duty is to deliver goods to the first person, who presents any one of the original bills of lading. The carrier need not require all originals to be surrendered before delivery. It is hereof essential that the exporter retains, control over the full set of the originals till payment is effected or a bill of exchange is accepted or some other assurance for payment has been made to him.

The bill of lading also has provision for incorporating a notify party. This is the person whom the shipping company will notify on arrival of the goods at destination. The bill of lading also contains other details such as the name of the carrying vessel, the marks and numbers on the packages in which the goods are packed, a brief description of the goods, the number of packages, their weight and measurement, whether freight costs have already been paid or whether payment of freight is due at the destination. In the case of containerized cargoes, the particulars of the container are also mentioned. The document is dated and signed by the carrier or his agents. The date of the bill of lading is deemed to be the date of shipment. If the date on which the goods are loaded on board the ship is different from the date of the bill of lading then the actual date of loading on board will be evidenced by a notation on the bill of lading. A clean shipped bill of lading is one which states that the cargo has been loaded on board the ship in apparent good order and condition and bears no clause or notation which expressly declares a defective condition of the goods and / or the packaging.

Variations of the marine bills of lading in one detail or other are known by the other names. Some of the variation are:

(i) a straight bill of lading is one where the goods are consigned to a named consignee. He alone can take delivery of the goods at the destination.

(ii) where the goods are subject to transhipment at an intermediate port but the entire voyage is governed by the bill of lading issued by the first carrier it is a through bill of lading.

(iii) if all the conditions subject to which the goods are being carried are not printed on the bill of lading itself it is a short form bill of lading.

(iv) a liner bill of lading indicates that goods are being carried on a ship that travels on a scheduled route indicating that the goods will reach the destination by a set date.

(v) a charter party bill of lading is one which is issued by the hirer of a ship to the shipper of cargo. The terms of the carriage are subject to the contract of hire between the ship owner and the hirer. The contract of hire is known as the charter party.

(vi) Multi - modal transport : With the advent of container shipment transport of cargo from an inland container station on the exporters country to an inland destination in the exporters country has become quite common. This type of transport operation usually involves at least two land legs in addition to the sea voyage and is known as combined transport or multi-modal transport. In such an operation one carrier makes itself responsible for the entire transport operation. The contracting carrier is referred to as the combined transport operator. He is liable in contract to the shipper if the goods are damaged on any stage of the carriage. The multi-modal transport document may be issued either in negotiable or non-negotiable form.

(vii) Non-negotiable sea waybill is a transport document that can be issued by the shipping company as an alternative to marine bill of lading. This is similar in scope to an air waybill. A waybill is not a document of title and it is not negotiable. It invariably specifies the consignee to whom goods are to be delivered at destination. As soon as the goods reach the destination, the shipping company will notify the consignee. He collect can collect the goods after identifying himself. In countries where international trade is not shackled by exchange control regulations, exporters and importers prefer sea waybills for conducting open account trading.

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