Comprehensive interpretation of bill of lading knowledge
Source: admin Time: 2023-02-17
Basic knowledge and points to note
- Bills of lading usually come in 3 copies, but sometimes in 2 copies.If the letter of credit has any requirements, please specify them with the freight forwarder.
When paying by T/T, theoretically only one original copy is needed (other original copies will automatically become invalid after the goods are picked up, and copies cannot be used to pick up the goods). After T/T receives the full payment, you can consider keeping one original copy for yourself and sending all the others to the customer (to avoid the bill of lading being lost during shipment).
- The carrier (full name) must be shown on the front of the bill of lading.This is what I learned. When I was actually making a letter of credit, the bank told me that the bill of lading could still be safely handed over and payment could be collected even if the carrier was not shown on the bill of lading (so in theory it should be shown).
If the carrier is shown on the front, the carrier will stamp and sign directly in the lower right corner.
When the carrier is not shown on the front and the bill of lading is signed by the shipping company, the identity of the signatory shall be indicated when signing the bill of lading.
A bill of lading that shows the full name of the carrier on the front but is signed by a shipping line should indicate the identity of the shipping line when signing.
- Shipped bill of lading and ready for shipment bill of lading:
Shipped bill of lading: a bill of lading issued after the goods are loaded on board.
Ready-to-ship bill of lading: issued when the goods have not been loaded, it only means that the carrier has taken over the goods delivered by the shipper. Therefore, this bill of lading cannot prove the loading time of the goods (the date of the ready-to-ship bill of lading is not the loading date).
A ready-to-ship bill of lading can only be converted into a shipped bill of lading after it is stamped with "shipped on board" and the loading time is indicated.
4. There cannot be any unclean notation on the bill of lading.
- The consignee and notify party of the bill of lading must be filled in strictly in accordance with the letter of credit.
- Bill of Lading issuance, date and number of copies:The bill of lading must be issued by the carrier or the captain or their agent, and the identity of the issuer should be clearly stated. The general expression methods are: CARRIER, CAPTAIN, or "AS AGENT FOR THE CARRIER: XXX", etc.
7. For bills of lading with the name of the shipping company (carrier) printed on them, the freight forwarder will usually write "as agent for the carrier".If the name of the shipping company is not printed on the bill of lading, it must be stamped and signed by the shipping company (your bill should be a shipping company bill of lading signed by the carrier).
8. Discrepancies between the letter of credit and bill of lading:The carrier is not shown on the bill of lading. I checked and the official explanation is this: According to Article 23, paragraph 1 of the Uniform Customs and Practice for Documentary Credits, the ocean bill of lading must indicate the name of the carrier on the face of the bill of lading and be signed or otherwise authenticated by the carrier or a named agent or representative of the carrier, or signed or otherwise authenticated by the captain or a named agent or representative of the captain.
9. The bill of lading can be divided into the following types depending on the issuer:FREIGHT FORWARDER B/L refers to the bill of lading issued by a transport company that is engaged in international cargo transportation but does not own a ship. ORIGINAL BILL OF LADING, commonly known as sea bill.
The time sequence of each document under L/C payment conditions
contract－－－>Letter of Credit－－－>Invoice (the invoice date should be earlier than the delivery date and the validity period of the letter of credit. The date on the commercial invoice cannot be earlier than the issuance date on the letter of credit, and the invoice date should be the first of all documents)－－－>Certificate of Origin(The date of the certificate of origin must be consistent with the date on the invoice you make. You can apply for the certificate of origin on the day the invoice is made or after, and the date of issuance is equal to or later than the invoice date).Insurance policy, packing list, export license, commodity inspection, other inspection certificates－－－> Shipping company certificate(If necessary) ->Bill of Lading Date－－－>draft(Note that the bill date must be earlier than the L/C presentation date and validity period).Beneficiary certificate(Some letters of credit do not have beneficiary proof, which is included in the document requirements),Shipping Notice(equal to or later than three days after the bill of lading date)Anyway, the dates of the documents that need to be submitted must be earlier than the submission date.
The above time sequence is basically consistent with the entire foreign trade process. After completing an order, you will understand the key details of the entire process.
Bill of Lading Classification
There are three types of bills of lading:
The first is a straight bill of lading (straight B/L), which is a bill of lading that lists the name of the consignee.my country's Maritime Code stipulates that a straight bill of lading cannot be transferred, and the carrier must deliver the goods to the consignee stated in the bill of lading.
The named bill of lading is not widely used in international shipping trade, and is generally only used to transport personal belongings and exhibits. (The first TT consignee was directly the customer's name, and I didn't realize the potential danger: in the absence of payment guarantee, you must never make a named bill of lading.)
In many countries, the consignee of a named bill of lading can pick up the goods without the bill of lading, so the bill of lading has actually lost the control over the right to the goods. Just like an airway bill, the consignee can pick up the goods with just his identity card. Even for letter of credit settlement, the issuing bank is unwilling to accept a named bill of lading, so generally the letter of credit stipulates a blank bill of lading such as TO ORDER, so as to control and master the right to the goods.
Therefore, we should not only remember the non-transferable nature of a named bill of lading, but also remember that "the consignee of a named bill of lading can pick up the goods without the bill of lading, so the bill of lading has actually lost the function of the right to the goods." This is a crucial point! The concept must be remembered comprehensively to avoid mistakes and losses in the work. Therefore, if only 30% of the payment is collected, and the payment method is 70% after T/T, and a bill of lading for a designated consignee, that is, a named bill of lading, is made, once the customer has a bad reputation and does not pay, it is possible to face the situation of losing both the money and the goods. Of course, if you have confidence in the customer and are sure of collecting the payment, it is another matter.
The second is Open B/L (Blank B/L, Bearer B/L), which means that the name is not listed in the consignee column of the bill of lading.This type of bill of lading can be transferred without endorsement, and the carrier will release the goods based on the bill of lading.
For a bearer bill of lading that does not specify the name of the consignee, whoever holds the bill of lading can collect the goods from the carrier based on the bill of lading. The carrier delivers the goods based on the bill of lading, not the person.
The consignee column on the bill of lading states: To the order
The third is an order bill of lading, which is a bill of lading that delivers the goods according to the instructions of the order party stated in the bill of lading.It is the bill of lading commonly used in current international trade.
1. According to the bank's instructions.That is, the consignee column of the bill of lading should be filled in as "to the order of xx Bank".
2. According to the consignee's instructions.That is, the consignee column of the bill of lading is filled in as "to the order of ABC Co. Ltd".
3. According to the instructions of the consignor.That is, the consignee column of the bill of lading is filled in as "to the order of shipper", and the shipper makes a blank endorsement on the back of the bill of lading. This bill of lading can also be endorsed in the name of the consignor according to the provisions of the letter of credit. The consignee may not make an endorsement, in which case only the shipper can pick up the goods, which means that the seller retains the ownership of the goods.
The so-called release of goods without bill of lading refers to the act of the carrier delivering the goods without the original bill of lading.
At present, for order bills of lading and bearer bills of lading, the carrier must release the goods with the original bill of lading. If the carrier fails to release the goods with the original bill of lading, no matter to which party the goods are released, the legal holder of the original bill of lading can pursue the carrier for breach of contract for releasing the goods without a bill of lading. This is a unified point in my country's maritime judicial practice. However, in the case of a named bill of lading, if the carrier fails to deliver the goods to the named person with the original bill of lading, can the legal holder of the named bill of lading claim breach of contract against the carrier? At present, there is a negative tendency in both theory and practice.
In summary, domestic cargo owners should fully understand the dangers of named bills of lading and should not agree to the buyer's request for a named bill of lading with them as the consignee at will, so as to ensure that if the settlement of foreign exchange through letters of credit or other means is blocked, the carrier will be held liable for breach of contract if it releases the goods without a bill of lading.
Bill of Lading Release Form
- Telex release: The original “Telex Release Guarantee” is required.A letter of guarantee is a statement that the goods will be released to your customer, and then stamped with the official seal, sent to the freight forwarder, and you don't have to worry about the rest. (Of course, the premise of telex release is safe payment! Generally, the telex release is made after the TT receives the money), the bill of lading is confirmed, the goods are shipped, and the freight forwarder sends a copy of the bill of lading back, and then sends it to the customer.2. Split order:3-4 days after the ship is sailed (When customers order the same container from us and other factories, for convenience and safety, we can send the bills of lading separately to the customers.)3. Combined order: same as above
- Remote order placement:It must be approved by the shipping company.
Packing
- Door to Door:It means booking a space with a freight forwarder, agreeing on a time, and then the freight forwarder will send a fleet to your factory or a designated place to load the goods and then return to the port.
- Interior:It means that the factory sends the goods directly to the freight forwarder's warehouse, and then they help you transport them to the port area. The owner of the goods has no right to deliver them directly to the port area.
The bill of lading notify party should not be underestimated
There is a role on the ocean bill of lading that is often overlooked, but its importance cannot be underestimated, that is the notify party. Usually, there are two or even three companies that need to be filled in the destination port information section of the ocean bill of lading, generally the Consignee and the Notify party. Some shipping companies' bills of lading will also list the First Notify Party and the Second Notify Party.
The difference between Consignee and Notify Party
Consignee refers to the consignee, usually the customer at the destination port, that is, the real buyer. Under the terms of letter of credit payment, it is usually a bank.
Notify party refers to the notifying party, which is the contact person of the customer at the destination port. If it is the customer himself, it can be filled in as Same as consignee. Otherwise, it will generally be marked as the customer's agent or trader at the destination port.
The significance of the existence of the notifying party
After the goods arrive at the destination port, the shipping company will notify the notifying party of the arrival information as soon as possible, so that the notifying party can notify the consignee to pick up the goods or do other processing. This prevents the untimely collection of goods, resulting in demurrage fees or even huge fines. Therefore, in order to prevent the failure to notify, sometimes there will be two notifying parties. Because under the terms of letter of credit payment, the Consignee on the bill of lading is often the issuing bank, not the real consignee; when all documents are delivered to the issuing bank, the issuing bank will notify the real consignee to conduct negotiation and other processes.
Fill in the form randomly
In many cases, the notify party is not aware of the notification or has not been communicated in advance, resulting in the arrival notice not reaching the consignee in time, causing delays in picking up the goods and additional costs. This requires that when confirming the bill of lading, special attention should be paid to the notify party column and it should not be arbitrary.
About To order
Sometimes we will encounter To order bill of lading. To order bill of lading generally refers to order bill of lading. The general format is 'To order of xxx', and the endorsement of 'xxx' is required to transfer or pick up the goods. If the consignee column on the bill of lading only has 'To order', then it means 'To order of shipper', and the endorsement of 'shipper' is required. The notify party only serves to notify the consignee and has nothing to do with endorsement.
Questions about the notifier
1) If the consignee and notify party of the bill of lading are not the same, to whom is the arrival notice generally sent?
Generally, the consignee is notified. Most bills of lading use the notifying party's information as the main information for the destination port shipping agent to contact the consignee. Because the consignee in most bills of lading is To order, not directly named. Sometimes, if the notified party cannot be contacted, the consignee will be contacted, or the shipper will be contacted if necessary.
2) To whom should the bill of lading be given for telex release?
Consignee. Whether it is the original copy or the telex release, it is the transfer of property rights, and its fundamental purpose is to transfer it to the owner of the property rights. The consignee is the one who truly owns the property rights.
3) Is it okay for both the consignee and notify party of the bill of lading to be To order?
On the surface, this is convenient and can be transferred to any consignee. However, in actual operation, shipping companies generally stipulate that the consignee and notify party of the bill of lading cannot be To order at the same time. There can only be one, which is also to prevent freight risks.
4) The customer's letter of credit requires that two companies be listed in the notify party column on the bill of lading. Is this possible?
Some shipping companies' bills of lading will have first and second notify parties. If not, you can fill in two companies under one notify party.
5) If the consignee is To order, can the notify party on the ocean bill of lading pick up the goods?
No, when the consignee of the original bill of lading of the shipping company is To order, if the shipper does not endorse it and send it to the customer, the consignee cannot pick it up, let alone notify the person.
6) The customer requested that the notify party column of the bill of lading should be displayed as "To order". Is that possible?
It is best not to use "To order". After all, the role of the notifier is to learn about the status of the goods in a timely manner and notify the consignee to receive the goods in a timely manner. Generally, if there is no notifier, you can write "Same as consignee".
7) The consignee of the bill of lading is the same as the consignee.
If the consignee is To order, a Notify party with specific contact information must be provided. Otherwise, after the ship arrives at the port, the goods cannot be picked up due to the inability to notify the importer or the relevant responsible party, and may even be confiscated by the customs and other serious consequences. If you want to declare AMS/ACI, you may also be fined a huge amount by the other customs.
8) Does the To Order bill of lading need to be endorsed by the notify party?If the consignee of the bill of lading is "To order" and there is no other content after that, for example, "To order of the XXX", then this is called a blank order bill of lading, which requires endorsement by the shipper. The notify party is the person who notifies the destination port and has nothing to do with endorsement.
9) The goods have arrived at the port, but the customer said that the letterhead of the person notifying the customer was not complete and asked to change the order, otherwise customs clearance would not be possible. Does this really have an impact?
An error in the notify person's heading will not have any impact, as long as the consignee on the bill of lading is correct and the notify person's information does not affect the authenticity of the judgment, it will not affect the customs clearance and delivery of goods by the customer at the port of destination.
Frequently asked questions
1. Why can foreign businessmen sometimes pick up goods without a bill of lading?
We know that in theory, the bill of lading should be a "certificate of property rights", that is, whoever "legally obtains" the bill of lading is equivalent to getting the goods.
There are four parties on the bill of lading: Shipper (exporter), Carrier (freight forwarder/ship owner), Consignee, and Notify Party. The "Consignee" determines the ownership of the goods.
There are usually two ways to fill in "Consignee":One is "By Instruction (TO ORDER or TO ORDER OF...)", that is, the consignee is not yet determined. This type of bill of lading can be freely transferred through endorsement (the original holder signs on the back of the bill of lading to indicate the transfer), which is more expensive-----because whoever "legally" gets the bill of lading, the goods belong to him. Such a bill of lading is a "bearer bill of lading". In the operation of bearer bills of lading, foreign merchants have no right to pick up the goods if they cannot get the original bill of lading (unless the freight forwarder and the shipping company mess up and illegally release the goods without a bill of lading). It is very safe and recommended for everyone to use. Under the letter of credit, banks usually require such bills of lading. The other is a named bill of lading, that is, the "Consignee" column specifically states the name and address of the consignee's company (usually a foreign company), and only this company can pick up the goods. Because the consignee is specifically stipulated, it is useless even if someone else gets the bill of lading, and this bill of lading cannot be transferred. On the other hand, because it is stipulated that the consignee is dead and only he can pick up the goods, some countries recognize that this consignee can pick up the goods even if he does not have the original as long as he proves his identity. This is why we encounter in business situations that foreign merchants can pick up goods without getting the original bill of lading. In this case, handing the goods over to the freight forwarder to issue a named bill of lading is almost equivalent to directly delivering the goods to the foreign merchant. If the payment is not collected at this time, there is a certain risk, and whether the payment is made depends on the foreign merchant's self-consciousness. The named bill of lading also loses its effectiveness as a "property certificate".
2. Which countries allow delivery of goods without the original straight bill of lading?
Not all countries allow delivery without the original (bill of lading).
There are two mainstream legal systems in the world, the Anglo-American legal system and the continental legal system. Only the Anglo-American legal system used to believe that a named bill of lading was not a certificate of property rights. Therefore, countries with the Anglo-American legal system are prone to the phenomenon of privately picking up goods under a named bill of lading.
Common law countries include:
United States, Canada, United Kingdom, Australia, New Zealand, India, Pakistan, Bangladesh, Malaysia, Singapore, Bahamas, Botswana, Brunei, Cameroon, Cyprus, Fiji, Gambia, Ghana, Grenada, Guyana, Jamaica, Kenya, Kiribati, Lesotho, Maldives, Malta, Mauritius, Mozambique, Namibia, Nauru, Nigeria, Seychelles, Sierra Leone, South Africa, Sri Lanka, Swaziland, Tanzania, Tonga, Trinidad and Tobago, Tuvalu, Uganda, etc.
If you have any doubts, you can check online whether the foreign company belongs to a country with the common law system.
However, even in countries with the common law system (including the UK), some cases have emerged in recent years that believe that a named bill of lading is also a certificate of property rights. In the common law system, case law is law, which can be seen as a turning point. Nevertheless, we still need to be cautious. After all, prevention is the priority. Once something goes wrong, even if the lawsuit is won, it will not be worth the loss for most small and medium-sized export companies. What's more, it is not certain that they will win. Experienced foreign businessmen can easily turn the lawsuit into a commercial dispute and drag it out for several years.
Therefore, for unfamiliar foreign merchants, especially D/P, it is best to use named bills of lading with caution. In fact, whether it is named or bearer, it will not cause too much inconvenience to foreign merchants in serious business operations.
3. Are freight forwarder's bill of lading and shipowner's bill of lading the same thing?
In actual operation, we will encounter two types of bills of lading: shipowner bills of lading and freight forwarder bills of lading. The shipowner is a freight company that owns an ocean-going freighter. The cost of building an ocean-going freighter is not cheap, and the company that owns its own ocean-going fleet is naturally strong. In a sense, such a company is also more reliable, because they pay more attention to their reputation in doing long-term business, and will not destroy their reputation for a little bit of profit. Relatively speaking, the operation is more formal. Another type of freight company is a freight forwarder, or freight forwarder for short. Freight forwarders do not have their own ships, and in a sense, their nature is similar to that of ordinary trading companies. After they solicit goods, they take them to the shipowner for booking. Let's regard the difference and relationship between shipowners and freight forwarders as wholesalers and retailers, and the goods are the "cabin space" of ocean-going freighters. The shipowner wholesales the cabin space to the freight forwarder, and the freight forwarder retails the cabin space to us.
It is not difficult to imagine that although the shipowner is safe, it is inevitable that the "big store" will have more customers, and the flexibility and attentiveness of the service are often not as good as the freight forwarder. There are many freight forwarders, and they are widely distributed. It is very convenient to communicate with us in foreign trade, and they are more willing to cooperate with our operations, especially the special operations like "backdated bills of lading" mentioned above. Therefore, in actual work, we deal with freight forwarders more often.
On the surface, the effectiveness of the shipowner's bill of lading and the freight forwarder's bill of lading are similar. We sell the original bill of lading to foreign merchants, and the foreign merchants pick up the goods with the bill of lading. But in fact, there are still differences. First of all, the bill of lading itself is a kind of "transportation contract". When the shipper issues the bill of lading to us, it is equivalent to signing a carriage contract. The shipowner's bill of lading is a contract between us and the shipowner, while the freight forwarder's bill of lading is not. We hand over the goods to the freight forwarder, and the freight forwarder hands them over to the shipowner. There is a carriage agreement between the freight forwarder and the shipowner. The shipowner is only responsible to the freight forwarder and not to us, the shipowner, because under the operation of the freight forwarder's bill of lading, for the shipowner, the freight forwarder is the "shipper". .
Therefore, with the shipowner's bill of lading, you can directly pick up the goods at the destination port; but the freight forwarder's bill of lading cannot be used. You need to take the freight forwarder's bill of lading to the port agent to "exchange the bill", that is, issue a delivery notice based on the freight forwarder's bill of lading, and then pick up the goods. Of course, for us consignees, this is just one more procedure on the surface, which does not affect the delivery of goods and is not a risk. On the contrary, we can use this to better control the property rights. For example, after we hand over the freight forwarder's bill of lading to the customer, we suddenly find that the customer has committed fraud and may not pay. At this time, we can ask the freight forwarder for help and notify the destination port agent to "detain" the goods, so that foreign merchants cannot pick up the goods temporarily even if they hold the freight forwarder's bill of lading, which gives us precious time (without formal reasons, it is inconvenient for the destination port to forcibly detain the goods, and it can only be delayed for a few days, but for foreign trade disputes, this delay is very beneficial to exporters). In short, if something goes wrong with the cargo transportation itself, when we hold the freight company responsible, it is obvious that the powerful shipowner is more capable of taking responsibility than the ordinary freight forwarder. Freight forwarders are usually more cooperative with us than shipowners. Freight forwarders are very helpful in handling bills of lading flexibly and preventing commercial fraud. In addition, freight forwarders' transportation prices are also very advantageous and often have discounts.
The operational differences between MBL and HBL: MBL is the shipping company's bill of lading; HBL is the freight forwarder's bill of lading.
- SHIPPER passes the consignment note to FORWARDER, indicating whether it is FCL or LCL.
- FORWARDER books a space with the shipping company, and after the ship is on board, the shipping company issues an MBL to the FORWARDER. The SHIPPER of the MBL is the FORWARDER at the port of departure, and the CNEE is generally the branch or agent of the FORWARDER at the port of destination.
- FOWARDER signs HBL to SHIPPER. SHIPPER of HBL is the real owner of the goods. CNEE usually issues letters of credit as TO ORDER.
- CARRIER transports the goods to the destination port after the ship departs.
- FORWARDER sends the MBL to the branch office at the destination port via DHL/UPS/TNT, etc. (INCLUDING: CUSTOM CLEARANCE DOCS)
- After receiving the bill of lading, the SHIPPER shall present the bill to the domestic negotiating bank within the delivery period and settle the exchange. If T/T SHPPER is used, the documents shall be sent directly to the foreign customer.
- The negotiating bank pays the issuing bank for the full set of documents.
- CNEE pays the issuing bank to redeem the bill.
- FORWARDER takes the MBL to the shipping company to exchange the bill of lading for the goods and clear customs.
- CNEE takes HBL to FORWARDER to pick up the goods.
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