Bill of Lading (BOL)

A bill of lading (B/L or BOL; the "BL full form" is simply bill of lading) is the document a carrier issues to the shipper once it has taken the goods into its charge. It does three jobs at once:

• Receipt: it records the marks, the number of packages or the quantity or weight, and the apparent order and condition of the goods. Under the US Carriage of Goods by Sea Act (COGSA) it is prima facie evidence that the carrier received the goods as described
• Evidence of the contract of carriage: the terms on the bill govern the voyage, and COGSA applies to every contract for the carriage of goods by sea to or from US ports in foreign trade
• Document of title: when the bill is negotiable, whoever lawfully holds the original controls the cargo and can sell it while it is afloat

Types of bill of lading

• Order (negotiable): the goods are to be delivered to the order of a consignee, such as a bank or "to order of shipper", and the bill passes by endorsement. The carrier releases the cargo against a surrendered original. This is the form a letter of credit normally calls for
• Straight (non-negotiable): consigned to a named party. Endorsing it does not make it negotiable, and under the Pomerene Act, which covers US domestic and export bills, a carrier issuing one must mark it "nonnegotiable" or "not negotiable" (49 U.S.C. 80103)
• Sea waybill: not a document of title and no originals to surrender; under the CMI Uniform Rules the carrier delivers to the named consignee on proper identification
• Telex release: a release method rather than a separate type. The originals are surrendered to the carrier at origin, and the destination office is told to release the cargo without paper
• Master and house bills: the ocean carrier issues the master bill to the NVOCC or forwarder, and the NVOCC issues its own house bill to the actual shipper

Clean vs claused, on board vs received

A clean bill carries no clause or notation expressly declaring a defective condition of the goods or their packaging; a claused, or foul, bill does. Under UCP 600 article 27 banks accept only clean transport documents, although the word "clean" does not have to appear on the bill. A received-for-shipment bill is issued when the carrier takes the goods into its charge; a shipped, or on-board, bill confirms they were loaded on a named vessel. Under COGSA the shipper can demand a shipped bill once the goods are loaded, and a received bill noted with the vessel name and shipment date counts as one.

What to check on the draft

Shipper, consignee and notify party; ports of loading and discharge; vessel; container and seal numbers; marks, package count and description; gross weight; freight prepaid or collect; and the on-board date. The package count matters beyond paperwork: COGSA limits the carrier's liability to $500 per package, or per customary freight unit for goods not shipped in packages, unless the shipper declares a higher value before shipment and it is inserted in the bill. Under a letter of credit, a description or date that does not match the credit can get the documents refused.

Which US law applies

COGSA governs the ocean carriage. The Federal Bills of Lading Act, commonly known as the Pomerene Act (49 U.S.C. 80101 and following), applies to bills issued by common carriers for moves between US states (and certain other domestic moves) and for exports from a US state to a foreign country, and is where US law defines negotiable and non-negotiable bills.

Bills of lading on Airlift shipments

Airlift is an FMC-licensed NVOCC (OTI license 016162) and issues its own house bills of lading on the ocean freight it books, full container or LCL. Tell us at booking whether you need an original order bill, a straight bill or a sea waybill. Check the draft against your commercial invoice and packing list, and against your letter of credit if there is one, before the bill is released.