International Trade Law Assignment

TOPIC-: What is Bill of Lading

Submitted By

MOHAMMAD ZIYA ANSARI

BALLB (HONS)
SEMESTER-VIII
ENROLLMENT NO- GI- 6492
FACULTY NO- 17BALLB-072
PROJECT

Submitted To

Dr. GAURAV VARSHNEY SIR

Assistant Professor, Faculty of Law

Aligarh Muslim University

ALIGARH-202002 (INDIA)

2020-21

[Type here]
 SYNOPSIS

1-INTRODUCTION.

2- DEFINITION OF BILL OF LADING.

3- WHAT IS THE PURPOSE OF BILL OF LADING.

4- WHAT INFORMATION CAN YOU FIND ON A BILL OF LADING?

5- TYPES OF BILL OF LADING.

6- TIPS ON FILLING UP A BILL OF LADING CORRECTLY.

7- WHAT'S IN A FREIGHT BILL OF LADING?

8- CONCLUSION.

9- BIBLIOGRAPHY.

[Type here]
 ACKNOWLEDGEMENT

I WOULD LIKE TO EXPRESS A DEEP SENSE OF

THANKS & GRATITUDE TO MY PROJECT GUDIE Dr GAURAV SIR

FOR GUIDING ME IMMENSELY

THROUGH THE COURSE OF THE PROJECT.

I ALSO THANKS TO MY SENIORS FOR THEIR MOTIVATION &

SUPPORT. I MUST THANKS TO MY CLASSMATES FOR THEIR
TIMELY HELP & SUPPORT FOR COMPLETION OF THIS PROJECT.

LAST BUT NOT THE LEAST, I WOULD LIKE TO THANKS TO ALL

THOSE WHO HELPED ME DIRECTLY OR INDIRECTLY TOWARDS
THE COMPLETION OF THIS PROJECT.

THANKING YOU

MOHAMMAD ZIYA ANSARI

BALLB-4th Year GI-6492

17BALLB-72

[Type here]
1-INTRODUCTION: -

Those in the export or import business will often come across the term Bill of Lading or its
abbreviations – BL or B/L – during the course of their work.

For those new to the business, a Bill of Lading is an important legally-binding document
that details the type, quantity, and destination of the goods being carried as we ll as details of
the shipper (consignor), carrier (transporter), and consignee (buyer/receiver) among other
things. By spelling out these details, it helps prevent the risk of any miscommunication or
communication gap amongst the parties involved in the transaction 1.

The term “Bill of Lading” comprises two key words. While “bill” refers to a statement – be
it hand-written, printed, or digital – containing the cost of items delivered or services
offered, “lading” refers to the act of putting cargo on a ship, aircraft or a truck for transport.

2- DEFINITION OF BILL OF LADING: -

According to the Business Dictionary2, a Bill of Lading is:

“A document issued by a carrier, or its agent, to the shipper as a contract of carriage of goods. It
is also a receipt for cargo accepted for transportation, and must be presented for taking delivery
at the destination.”

A bill of lading (BL or BoL) is a legal document issued by a carrier to a shipper that details
the type, quantity and destination of the goods being carried. A bill of lading also serves as
a shipment receipt when the carrier delivers the goods at a predetermined destination. This
document must accompany the shipped products, no matter the form of transportation, and must
be signed by an authorized representative from the carrier, shipper and receiver.

1
Ch Robinson, What Is Bill of Lading, https://www.freightquote.com/how-to-ship-freight/bill-of-lading/, Visited
on- 20Apr, 2021.
2
https://economictimes.indiatimes.com/definition/bill-of-lading, Visited on- 11:55 am, 20Apr, 2021

[Type here]
As an example, a logistics company intends to transport, via heavy truck, gasoline from a plant
in Texas to a gas station in Arizona. A plant representative and the driver sign the bill of lading
after loading the gas on the truck. Once the carrier delivers the fuel to the gas station in
Arizona, the truck driver requests that the station clerk also sign the document.

3- WHAT IS THE PURPOSE OF A BILL OF LADING?

A Bill of Lading has three primary functions 3:

• It is a contract of carriage between the carrier and the shipper.

• It is a receipt for shipped goods.
• It serves as a document of title of the goods.

A Bill of Lading ties the sending and the receiving parties by law and, as a result, protects
them from false claims and losses. Because it is an agreement whose terms all involved
parties have agreed to, it can act as a lawful statement in case of disputes.

4- WHAT INFORMATION CAN YOU FIND ON A BILL OF LADING?

A Bill of Lading contains detailed information about the shipper (consignor), carrier
(transporter), consignee (buyer/receiver) and the goods being carried. These the details that
you will find in the document 4:

1. Bill of Lading number

2. The complete name and official address of the shipper and the receiver
3. Details of the shipping line
4. Details of the freight forwarder
5. The pick-up date
6. Name of the vessel used for transport

3
Ibid.

4
Evan Tarver, Bill of Lading, https://www.investopedia.com/terms/b/billoflading.asp, Visited on- 20April, 2021.

[Type here]
 7. Details of the goods (including the number of units, weight, and dimensions)
8. Nature of the goods transported
9. The packaging material used such as pallets, crates or drums
10. If the items transported are hazardous, the BL must be tagged as such and also
have the necessary certification to allow such transport
11. Any specific instructions for the carrier

5- TYPES OF BILLS OF LADING: -

Here are the primary types of Bills of Lading:

a. Based on the Carrier 5

• House Bill of Lading
A House Bill of Lading is a document issued by the freight forwarder or NVOCC
(Non-Vessel Operating Common Carrier) operator. In this document, the. “consignor” is the
actual seller/sender/exporter and the “consignee” is the actual buyer/receiver/importer. Like
all Bills of Lading, this also contains details of the cargo, carrier, destination and so on.

• Master Bill of Lading

The Master Bill of Lading is issued by the shipping line or carrier. It is also known as the
Ocean or Carrier Bill of Lading. In the Master BL, details of the cargo and carrier must be
identical to that of the House BL barring one crucial difference. The “consignor” in the
Master Bill of Lading is the agent, freight forwarder or NVOCC of the actual seller while
the “consignee” is the agent freight forwarder or NVOCC of the actual buyer.

But it’s not as straightforward as that. Shippers can decide if they want to move shipments
directly using a Master BL. Whether they opt for this is determined by the trade terms the
shipper and the consignee have agreed upon.

5
https://www.cogoport.com/blogs/types-and-usage-of-bill-of-lading-meaning, Visited on- 3:30pm, 20Apr, 2021.

[Type here]
Details on the Master BL therefore depend on whether the freight forwarder has introduced
a House BL for the shipment or not. If the shipment is being executed directly using a
Master BL, the “consignor” is the actual shipper and the “consignee” is the actual receiver.
But if a House BL has also been introduced, the “consignor” in the Master BL changes to
the agent/freight forwarder/NVOCC as mentioned above.

b. Based on Payment and Consignee 6

• Straight Bill of Lading
A Straight Bill of Lading is issued when the customer has made the complete payment for
the shipment in advance, and gets the right to receive the consignment directly. The
consignee must receive the delivery, and has no way to renounce the right to another person.
This is why it is known as a non-negotiable instrument.

• Order Bill of Lading

This is the most common kind of Bill of Lading. Unlike the Straight Bill of Lading, it is a
negotiable instrument that allows the consignee named in the document to renounce their
right to receive the goods to a third party.

• Bearer Bill of Lading

A Bearer Bill of Lading is one that promises delivery to whomsoever holds the document.
The name of the consignee in this document may be “bearer”. It is a negotiable instrument
allowing a third party to accept the goods on arrival.

• Clean Bill of Lading

This Bill of Lading is issued by the carrier after it inspects the goods. The document
declares that the shipment was received in good condition, in the right quantity and
packaging and that there was no damage during transport.

6
Ibid.

[Type here]
 • Foul/Dirty or Claused Bill of Lading

This document is a Bill of Lading that contains clauses regarding quality defects or quantity
shortcomings in the shipment. The carrier outlines the damages and other discrepancies to
the cargo in these clauses or notations on the Bill of Lading, allowing the consignee to
refuse to accept it and/or their bank to refuse to release payment.

c. Based on Transportation 7

• Inland Bill of Lading: For domestic shipments

• Ocean Bill of Lading: For overseas shipments
• Through Bill of Lading: When the carrier moves the goods across several
destinations using single or multiple modes of transportation
• Multimodal Bill of Lading: Used when goods will move across at least two modes of
transport

d. Other Important Bills of Lading 8

• Seaway bill

A Seaway bill, also known as the Express Release Bill of Lading or Straight Bill of Lading,
is not technically a Bill of Lading. It is similar to the Bill of Lading because it acts as a
receipt of the goods as well as a contract of carriage. The key difference, however, is that it
is not a document of title.

A Seaway bill is used when there is a high level of trust between the shipper and the owner
of goods. The receiver doesn’t need to present it for cargo delivery; they will only have to
establish their identity to take possession of the goods once it arrives at the port.

• Received for Shipment Bill of Lading

7
Ibid.
8
Ibid.

[Type here]
The carrier issues the RFS or Received for Shipment Bill of Lading to confirm the receipt of
the container at the port for loading purposes. It does not indicate that the goods have been
placed on board the ship. This document is replaced by a Shipped-on Board Bill of Lading
when the goods are placed on the ship.

The Received for Shipment BL is generally used for shipments with shorter transit times.
Usually, a Bill of Lading is couriered to the consignee so that they can take delivery of the
shipment when it arrives at the port. But when transit times are short, sometimes the
consignee doesn’t get the Bill of Lading in time to receive the cargo. Carriers usually
release a Received for Shipment Bill of Lading to give the shipper more time to courier the
document to the consignee.

• Shipped on Board Bill of Lading

The Shipped-on Board Bill of Lading is an acceptance from the carrier that it has received
the goods and loaded the goods onto the ship. It is released post the sailing of the vessel.

• Switch Bill of Lading

A Switch Bill of Lading helps in the smooth conduct of triangular shipments – a common
scenario today, where one transaction can involve three different parties based in three
different countries.

It is used when an importer makes an international purchase from a middleman or trader and
not from the actual manufacturer. This middleman or trader usually wants to conceal the
identity of the manufacturer to prevent the buyer from contacting the manufacturer directly,
and eating into their business.

In this scenario, the parties involved create two BL sets. The first BL will contain the details
of the first sale between the original consignor/manufacturer and the consignee/middleman.
The second BL set – the Switch Bill of Lading – will cover the sale between the middleman
and the actual customer/importer. This BL will be an edited version of the first document.
Here, the details of the manufacturer will be removed and replaced with the details of the

[Type here]
trader. The consignee will be the end customer/importer. Switch BLs are usually issued only
when the first set is surrendered to prevent multiple parties from claiming the same cargo.

6- TIPS ON FILLING UP A BILL OF LADING CORRECTLY: -

You must be careful before signing on any legal document, and the Bill of Lading is no
different. Here are the details you must double-check before signing it:

• Identity of the shipper

• Port, and the date of loading of goods
• Discharge port
• The present condition of the goods
• Weight and type of cargo
• Freight terms

Ensure there are no ambiguous statements in the document. The terms should be crystal
clear and not disadvantageous to you.

7- IMPLICATIONS OF FILING A BILL OF LADING INCORRECTLY: -

If you fail to file a Bill of Lading, omit information or file inaccurate inform ation, you may
suffer grave consequences. This is why it is advisable to take the help of a freight forwarder
to fill out any paperwork regarding Bills of Lading. Here are all the possible implications of
filling a bill of lading incompletely or inaccurately:

• Claims from the receiver of goods 9: A completed Bill of Lading will have details
that the goods were delivered in a good condition to the transporter. A document that

9
Supra Note-2.

[Type here]
 has incomplete or inaccurate information will leave you vulnerable to claims by the
receiver. These can include claims of damage or receipt of a lesser quantity than was
agreed upon. If your documentation is inaccurate or incomplete, the transporter will
get an opportunity to refute your claims that you had handed over an undamaged
consignment to the carrier, making you directly liable to compensate the receiver
• Loss of P&I insurance cover (protection and indemnity insurance)
• Loss of right of indemnity from the charterer
• Possibility of criminal prosecution
• Losing the right to exercise limitation of liability clause

8- WHAT'S IN A FREIGHT BILL OF LADING?10

• Names and addresses: The full names and address of both the shipper and receiver
(consignee) should be legible and easy to locate on the document.
• Purchase orders or special reference numbers: These numbers may be important to
your business or a necessary reference in order for freight to be released for pickup or
accepted at delivery.
• Special instructions: Here is where you will note instructions for the carrier that are not
extra service requests like liftgate or delivery notification.
• Date: This is the pickup day, and it may be needed as a reference to track your freight or
when you reconcile shipping invoices.
• Description of items: Shippers should note the number of shipping units, the dimensions
and weight, as well as information about the material and its makeup.
• Packaging type: Note whether you are using cartons, crates, pallets and/or drums when
shipping.
• NMFC freight class: Freight classes can impact the cost of your shipment. Freight
shipments are broken down into 18 classes based on weight, dimensions, density, storage
capability, ease of handling, value and liability.

10
Supra Note-3.

[Type here]
 • Department of Transportation hazardous material designation: Hazardous shipments
must be clearly cited and special rules and requirements apply when shipping.

9- CONCLUSION: -

The bill of lading is a required document to move a freight shipment. The bill of lading (BOL)
works as a receipt of freight services, a contract between a freight carrier and shipper and a
document of title. The bill of lading is a legally binding document providing the driver and the
carrier all the details needed to process the freight shipment and invoice it correctly.

The bill of lading is a legally binding document that provides the carrier and shipper with all
of the necessary details to accurately process a shipment. It has three main functions. First, it is a
document of title to the goods described in the bill of lading. Secondly, it is a receipt for the
shipped products. Finally, the bill of lading represents the agreed terms and conditions for the
transportation of the goods.

8- BIBLIOGRAPHY: -

• Ch Robinson, What Is Bill of Lading,

https://www.freightquote.com/how-to-ship-freight/bill-of-lading/.
• Evan Tarver, Bill of Lading,
https://www.investopedia.com/terms/b/billoflading.asp.
• https://www.cogoport.com/blogs/types-and-usage-of-bill-of-lading-
meaning
• https://economictimes.indiatimes.com/definition/bill-of-lading

[Type here]