A bill of lading (B/L) is an essential document in international logistics, and it serves as proof that goods have been received for shipment. Importers must obtain a B/L to claim their cargo. The B/L is then exchanged for a delivery order, which allows the importer to take possession of the goods. It’s important to note that a B/L alone is not sufficient to receive the cargo; it needs to be exchanged for a delivery order.
Now let’s explore the different types of bills of lading:
1. Original Bill Of Lading:
The original bill of lading (OB/L) is issued in three copies – one for each party involved: shipper/exporter, carrier/transport company, and consignee/importer. Having multiple copies helps mitigate risks such as loss or misplacement during transit.
As implied by its name, the OB/L refers specifically to an original copy rather than a duplicate or photocopy. To take possession of the cargo at destination, importers must present this original document instead.
Here’s how it works:
When a vessel departs from port A carrying goods destined for port B, an OBL is issued by the exporter’s agent on behalf of the shipping line/operator upon departure from port A. This OB/L is then sent via courier service (e.g., DHL or FedEx) from exporter/shipper to importer/consignee once they are ready to receive it.
Upon arrival at port B, after customs clearance procedures are completed and the goods are ready for delivery, the importer presents the OB/L to the carrier’s agent at port B in exchange for a delivery order. With this document, the importer can claim their cargo.
2. Negotiable Bill Of Lading:
A negotiable bill of lading (NB/L) implies that it can be negotiated or transferred from one party to another. It is marked as “To Order,” and copies are acceptable.
What does it mean by “negotiation”?
Negotiation refers to obtaining possession of a bill of lading at the country of origin, i.e., on the exporter’s side. Once transferred, there is no need to present an original copy; importers can receive their goods upon presenting a copy and exchanging it for a delivery order.
An NB/L typically includes stamps such as “Surrendered” and “Telex Release.” The term “Telex Release” denotes similar conditions as those associated with an NB/L.
Why do we have negotiable bills of lading?
In some cases, due to fast transit times or other factors like nearby destinations, vessels might arrive at port before original bills of lading are issued and delivered to importers. For instance, if it only takes 3-4 days from departure until goods reach nearby ports.
Importers cannot quickly take possession without having access to original documents. However, unlike with an OB/L where surrendering is not possible, exporters/shipper may release an NB/L by notifying their shipping line/operator accordingly and paying additional expenses on the export side.
The shipper sends a copy via email or fax directly to the importer who then exchanges this copy for a delivery order — streamlining operations while reducing risks associated with losing originals.
3. Sea Waybill:
A sea waybill differs slightly from traditional bills of lading as it does not represent ownership rights but serves more as evidence/documentation during the shipment process. It is not used when a letter of credit (LC) is a condition for delivery.
A Sea Waybill, also referred to as an Express Release Bill of Lading or a Straight Bill of Lading, is used when the shipper decides to release ownership of the cargo immediately. As a result, the goods can be delivered to the person identified on the document, and they will only need to verify their identity in order to claim the freight.
A Sea Waybill serves only as evidence and does not give title to the goods (non-negotiable).
The shipper is given a SW/B as a reference when loading the shipment. In this case, neither the shipper nor the importer must submit any additional documents to the carrier, so the cargo is released once it has arrived at the port.
What is the best time to use a Sea Waybill?
There is a high degree of trust between the shipper and consignee.
During transport, the goods will not be traded or sold.
An approved line of credit is used to pay for the goods.
