At a Glance
- Function
- Contract of carriage + receipt + document of title
- Transferable
- Yes (negotiable instrument)
- Originals
- Usually 3 originals (shipper, bank, consignee)
The three functions of the bill of lading
As a contract of carriage the B/L sets out the terms of the sea carriage. As a receipt the shipping line confirms that it has received the goods in the stated condition ("on board" or "received for shipment"). As a negotiable instrument (a document of title) the original bill of lading can be transferred – whoever presents it has a claim to the goods. That distinguishes it fundamentally from the air waybill (AWB), which is not transferable.
Types of bill of lading
Order bill of lading: transferable by endorsement – used with documentary letters of credit (L/C). Straight bill of lading: only the named consignee can collect the goods. Sea waybill (SWB): a non-transferable sea freight document allowing faster handling. Telex release: digital release of the goods without a physical original – where there is trust between buyer and seller.
Loss of the bill of lading
If the original bill of lading is lost, the goods are blocked at the port. The shipping line will only release them without the original against an expensive bank guarantee (letter of indemnity). Secure dispatch and digitalisation via telex release or electronic B/L systems (eBL) are therefore increasingly important.
