In an international business, all companies or individuals have to focus on proper documentation. Proper documentation is the only way by which people can complete transactions and come up with the best business deals. Bill of lading is one of the most important documents. Mainly, it plays a big role for the exporters. Here, we will discuss some major details about the bill of lading and its types.
The Bill of lading is an essential legal document for international trade. Mainly, it helps in describing different situations or updates regarding the export of goods between the shipper and carrier. It assists in specifying multiple factors, such as -
The bill also works like a shipment receipt. In the case of international business, multiple conditions may take place. In all conditions, a different kind of B/L is preferred.
These are the three main sources or transportation modes that are connected to the bill of lading.
Releted post: 16 Documents Required For Export
As we discussed earlier, there are multiple types of bill of lading used for different situations during the shipment of goods.
It is a specific bill of lading that is issued by the carrier from the sender’s side. The main purpose of issuing such a bill is to provide proper information regarding the delivery of goods to the port. But, the availability of this particular kind of bill also indicates that the goods are not loaded to the ship yet.
Shipped on board bill of lading is useful in specifying the actions of the carrier regarding the loading activities. It indicates that the goods are physically loaded to the ship as per the list, information, and instructions provided by the exporters.
It is also an important type of bill of lading. A clean bill of lading works like a source of surety by which the exporter gets updates regarding the condition of goods. It is issued by the master of the carrier if they do not find any kind of defect or discrepancy in the condition of goods. If goods are completely perfect in condition as per the information provided in the list, then it is issued.
Claused bill of lading is completely opposite to the clean B/L. In case the ship’s master detects any kind of issue with the loaded and shipped goods or something different from the information provided, then it is issued. This particular bill is completely based on the observation of the carrier’s master. It is also known by some different names, such as - dirty B/L, unclean B/L, and soiled B/L. If you present a claused bill of lading to the bank, then it can be a reason for several problems. Mainly banks do not release payments with such conditions. You have to present only a clean bill of lading to get your payments released.
A negotiable bill of lading can be treated as a financial instrument as well. Here, the biggest role is played by the final consignee. The consignee is the individual who has the authority of dealing with the goods and the complete transaction. By using such an authority, the consignee is capable of providing the goods to another person by making a deal or under any kind of trade. All these things can be possible only in one condition, the bill of lading should be clean B/L.
In case you are dealing with the non-negotiable bill of lading, then there are multiple restrictions applied. Mainly, under such rules and regulations, the final consignee is not capable of using it as a source of trade. The goods can be delivered to the named person only. No one else can get possession of goods.
If an international business deal is going to be finalized on the basis of advanced payments, then the complete transaction work with a straight bill of lading. In these conditions, the receiver or importer will get the goods directly, there no one else is involved. Mainly, these types of bills of ladings are counted under the non-negotiable B/L.
In case the transaction takes place on the basis of credit, then an order bill of lading can be issued. In these conditions, the goods are going to be shipped first. These types of B/L are categorized under a negotiable bill of lading. Here, the shipment can be registered to the distributor or directly to the customer. If anyone plays a role as a consignee in the complete transaction, then he/she has the authority of B/L endorsement. Mainly, these actions are taken by the consignee or bank when a buyer does not transfer money according to the letter of credit. It can be used as a source of trade.
This particular bill of lading is useful in minimizing the complete process by establishing a connection between the agents on both ends, the sender’s port, and the receiver’s port. Here, the agent informs the agent on another side regarding the goods and asks for releasing it. For all these things, they can use modern means of communications, such as - email.
Direct bill of lading is issued in the condition when a single mode of transport is used during the complete transaction. It means the goods are transported on the same vessel from the exporter’s place to the importer’s place.
In the case of multimodal transport where more than one mode or source is used for transportation, then through bill of lading can be issued. Mainly, these types of conditions are appearing when the receiver is not located in the port area.
All business cases or conditions are not similar. In some transactions or deals, there are different places available. Here, the goods have to cover the distance between the buyer and seller via the ocean and land. Mainly, land sources are used for transporting goods from the port to the buyer’s location in the same country but the region is different. Here, an inland bill of lading can be issued separately for the transportation that takes place by road.
It can be issued for the transportation of goods via sea or ocean. It is also considered as the port-to-port shipment bill of lading.
In case you are exporting goods via air transportation sources instead of sea route, then an airway bill of lading is issued. Mainly, these types of bills of lading are considered as the through B/L. It also eliminates the requirements of multi-mode transportations.
The house bill of lading is issued by the freight forwarder to the shipper. Mainly, the freight forwarder is hired by the exporter for handling some tasks on his behalf. The main reason behind the usage of this particular bill of lading is indicating your goods as part of the complete consignment.
It is issued by the shipping to the freight forwarder. In case you are dealing with goods in bulk or a complete container, then the master bill of lading can be issued.
Here, both house and master bills of lading are negotiable trade instruments.
In some cases, the ship is not operated by the shipowners on their own. Here charters are operating the ships and conducting all transportations. In these conditions, the bill of lading is also issued by the charter instead of the shipowner. If you are choosing the letter of credit as the payment method, then you may get some negative responses from the banks as well. There is always a risk available in the charter bill of lading. In case any dispute takes place between the charter and shipowner, then the shipowner has the authority to claim the goods.
If you are going to present or submit your bill of lading later according to the date mentioned in the letter of credit, then it can be considered as the stale bill of lading. In the conditions, the goods may be reached another end before the bill of lading. Here, the banks can reject the B/L and refuse to release the payments.
These are some major types of bills of lading that you can face or get during an international business transaction. In case you want to get more details about the bill of lading as per your business and other factors, then you can consider the international business experts for proper consultation.