The bill of lading is one of the most important shipping documents you’ll encounter as you begin to move your cargo around the world. In this article we explain what it is and why it’s the key to unlocking international logistics.
What is a bill of lading in shipping?
A bill of lading is a legal document that has a few important functions in shipping and logistics. It is firstly a contract between the shipper, carrier, and consignee stating which goods are being shipped, where the shipment is coming from and where it’s headed.
If you’re new to logistics, terms like shipper, carrier and consignee can be confusing - so let’s make it clear:
- The shipper is responsible for packing and preparing the shipment for transportation. This might be your supplier, or your own warehouse/manufacturer.
- The carrier is the party that moves the cargo. For example, this could be Maersk, or any other shipping line, haulage company or airline that carries your cargo.
- The consignee is the party designated to receive the shipment. Again, depending on what you’re shipping this could be your company, or a manufacturer who uses parts you’re shipping.
The bill of lading is only issued after the vessel has departed from the port of loading and the customer has provided us with all the details, such as the shipper, consignee, notify party, commodity, weight, cargo description, etc. It also serves as a receipt, i.e., an acknowledgement that the goods have been loaded (not where the cargo is) and contains or evidences the terms of the contract of carriage.
Why is the bill of lading important?
A bill of lading is important because whoever has it owns the cargo. It acts as the legal document of title which allows the person holding it to claim ownership of the cargo. This means that filling out your bill of lading accurately and completely is very important. The bill of lading also acts as a contract of carriage — it details the responsibilities of the carrier with the parties involved in the transportation of the cargo. To know more about this, check our guide for Incoterms®.
How many types of bills of lading are there – and when is a bill of lading required?
There are many different types of bills of lading, depending on where you are shipping to, what commodity you are shipping, and your needs. The type of bill of lading you encounter might be based on who issued it, the mode of transport, or the relationship between yourself and the shipper – for example, if you’ve paid for goods or transportation upfront or on credit.
Two types of bills of lading you’ll come across at Maersk include:
- Original bill of lading: The primary document used in sea transport. It functions as a contract of carriage, transport goods receipt, and a document of title affording ownership. To receive the cargo, the buyer (consignee) will need to present the original bill of lading.
- Seaway Bill: The sea waybill is a type of bill of lading. It is a key document used in sea transport when the supplier (shipper) decides to release ownership of the cargo to the buyer (consignee) immediately. This means that the cargo can be picked up by the party identified in the waybill without presenting a document of ownership. A sea waybill is proof of a contract of carriage and a transport goods receipt but does not give title to the goods.
What is a telex release?
It's worth a quick note here on something else you might encounter in your shipping — a telex release or electronic cargo release. The telex release is not a type of bill of lading, but a method of releasing a bill of lading electronically. A telex release is only relevant to shipments where an original bill of lading has been issued. It is a message that authorises the carrier to release the cargo to a named party at the destination, without the presence of the original bill of lading.
So, the bill of lading is the key to unlocking international logistics. It’s the pass that gets you through the door, but it relies on being correctly issued and — most importantly – correctly filled out. Take your time getting to grips with the documentation before you book. You can read more about the bill of lading in our FAQs.
Feel ready to tackle your logistics? Why not sign up to Maersk today to explore the platform, browse routes and start booking.
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