The Types of Bill of Lading

You may be aware of what is referred to as a Bill of Lading, but did you know that there are up to 8 different types of Bill of Lading, out of which 4 are commonly used. Based on the mode of transportation and your shipping terms, this can differ. Let us explain!

Essentially, a Bill of Lading functions in three ways; as a receipt for goods, as proof of contract of carriage, and as a document title to the goods. There is what is referred to as a “Master Bill of Lading” or MBL which is a document that used for shipping company by the shipping carriers as a means of receipt of transfer of goods. The MBL will include the terms of transporting the freight, and the name and address of the shipper (or consignor) as well as the consignee (the person who is in possession of the good). However, there are other types too. Let’s break down how a Bill of Lading applies to you based on the mode of transport; ocean transportation, air transportation, and land transportation.

Straight Bill of Lading

It’s a non-negotiable form of a bill of lading, address directly to the buyer with the buyer’s customs broker being listed as the “notify party”. With a straight B/L, three sets of original bill of lading documents will be issued by the carrier, one of which will be endorsed by the consignee and presented when collecting the goods at the destination. A straight bill of lading is typically issued when there is a balance payment to be made.

Order Bill of Lading

Another non-negotiable form of bill of lading, of which this type is addressed as “to order’ or as “to order of a party” without being consigned to the buyer. The cargo shipment will hand over the shipment to whoever presents this specific bill of lading (as long as the bearer has been endorsed on the back) as the bearer will be considered the owner of the shipment. This type of bill of lading is typically used when the purchase of such goods is carried out via a letter of credit or in the instance when the goods are expected to be traded on a mercantile exchange platform whilst its being shipped.

Electronic or Telex Release

This form of bill of lading is essentially digital and there will be no need for the original bill of lading to be presented at the destination when requesting the release of goods. What an electronic or telex release will do is the shipper will endorse the original B/L, submitting it to the carrier’s agent at the point of origin, who then will notify the agent at the destination. The goods will be then instructed for released without the hard copy of the original bill of lading. The name comes from the past use of telex services, but nowadays emails or integrated systems will do the needful. This type of bill of lading is used when a balance payment is due, but payment goes through before the cargo arrives at the destination.

Stay tuned for the next blog on An Air Waybill and how it differs from a Bill of Lading.