You must read this if you are intending to sign a bill of lading or if your company currently has a signatory to a bill of lading. Bill of lading is mentioned in this article only in relation to containerized trades.
Here is a review of the functions of a bill of lading for anyone who might still be unsure before we get to the meat of the essay.
A bill of lading serves three primary functions (in no particular order of importance):
- The first role is evidence of the contract of carriage; the word “evidence” is stressed.
Several people believe that –
- The seller and buyer have a contract when they sign a bill of lading.
- A bill of lading is an agreement for transportation between the shipper and the carrier.
Both notions are incorrect.
When a buyer placed an order with a seller, a contract between them was already in place, and they both negotiated and agreed (verbally or in writing) on the specifics of the transaction, including what, where, when, how, and how much.
When the shipper or his agent made a reservation with the carrier (shipping line) to transport the cargo from A to B, the contract between the shipper and the carrier was already in place.
The B/L is PROOF of the carriage agreement made between the “Carrier” and the “Shipper or Cargo Owner” to transport the cargo in accordance with the sales agreement between the buyer and the seller.
2. Receiving Goods; the word “Receipt” is stressed.
In exchange for receiving the cargo, the carrier or their agency issues a B/L to the shipper or their agent. The fact that the B/L was issued is evidence that the items were delivered by the shipper or their agent in what seems to be good order and condition.
3. Goods’ Document of Title (with a focus on the word “Title”).
It means that the goods may be transferred to the B/L holder, who then has the authority to either claim the commodities or transfer them to another party.
Possibility of a bill of lading being issued as a –
- Uncomplicated Bill of Lading
- Bill of Lading that can be negotiated or a Sea Way Bill of Lading
The bill of lading will be issued with one or more original bills of lading with an original signature if it is issued as a Straight Bill of Lading or a Negotiable Bill of Lading.
Before signing a bill of lading, there are a number of formalities to take into account. If you are the bill of lading signatory, then you should be aware of the following 8 factors:
1) Select the appropriate stationery
2) Confirm the address information
3) Check the cargo information
4) Ensure that the goods is received for transport or transported on board
5) Examine the protective clauses
6) Exclusion of business terminology
7) Original bills of lading must be issued with the correct numbers and properly labelled
8) Verify that payment has been made
ProConnect Integrated Logistics – Your Warehousing & Freight Forwarding Partner
A third-party logistics firm can help shippers mitigate a variety of risks throughout the supply chain by outsourcing certain logistics functions. By partnering with a 3PL, a shipper can free up time to concentrate on his or her core competencies without suffering from the ever-shifting logistics landscape.
If you are looking for a partner to take care of all your logistics hassles, talk to us.