Freight Glossary

Bill of Lading (BL / B/L)

A Bill of Lading (BL or B/L) is a legal document issued by an ocean carrier to a shipper that simultaneously acts as a receipt of cargo, a contract of carriage, and a document of title. In ocean freight, whoever holds an original BL has the legal right to claim the cargo at the destination port.

Three Functions of a Bill of Lading

1. Receipt of Cargo

The BL confirms that the carrier has received the goods in the stated condition and quantity. It is evidence that the cargo was loaded on board the vessel.

2. Contract of Carriage

The BL defines the legal terms under which the carrier agrees to transport the cargo from port of loading to port of discharge, including liability limits.

3. Document of Title

The original BL represents ownership of the cargo. The consignee must present the original to claim the goods at the destination port (for negotiable BLs).

Types of Bill of Lading

Straight BL (Non-negotiable): Consigned to a specific named party. Cannot be transferred by endorsement. Used when there is no trade finance involved and the goods go directly to the importer.
Order BL (Negotiable): Made out "To Order" or "To Order of [Bank]". Can be transferred by endorsement. Used in documentary credit (LC) transactions where banks hold the BL until payment is made.
House BL (HBL): Issued by an NVOCC or freight forwarder to their customer. Backed by a Master BL from the shipping line. The HBL customer doesn't see the Master BL or the actual carrier rates.
Master BL (MBL): Issued by the shipping line to the NVOCC or consolidator. Covers the entire container, while individual House BLs are issued to each cargo owner within that container (for LCL).
Switch BL: A replacement set of BLs issued in exchange for the original BLs, usually at a different port. Used to conceal the origin of goods in back-to-back trading arrangements.
Telex Release / Express Release: Not a physical document. An instruction to the destination agent to release cargo without surrendering original BLs. Requires the shipper to have already surrendered originals at origin.

Related Freight Terms

Seaway BillAWB (Air Waybill)LR (Lorry Receipt)Commercial InvoicePacking ListCertificate of OriginLetter of Credit

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Bill of Lading - FAQ