Bill of lading

Bill of lading

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A Bill of Lading (sometimes abbreviated as B/L or BOL) is a key document used inthe transport of goods. As a document of title, it is also an important financialinstrument.

Contents1 Description2 Name3 History4 Uses

4.1 As a receipt4.2 As title4.3 As a negotiable instrument

5 Sea Waybills and Electronic Document Interchange (EDI)6 See also7 References

DescriptionAt its most basic, a Bill of Lading is a document generated by a shipper, detailing a shipment of merchandise, giving title to thegoods, and requiring the carrier to release the merchandise to a named party at the destination.

NameBills of Lading are sometimes wrongly called "Bills of Loading"; while the words loading and lading are both derived from the OldEnglish word hladan,[1] lading specifically refers to the loading of cargo aboard a ship.

HistoryWhile there is evidence of the existence of receipts for goods loaded aboard merchant vessels stretching back as far as Romantimes,[2] and the practice of recording cargo aboard ship in the ship's log is almost as long lived as the ship itself, the modern Billof Lading only came into use with the growth of international trade in the medieval world.

The growth of mercantilism (which produced other financial innovations such as the bill of exchange and the Insurance Policy[3])produced a requirement for a title document that could be traded in much the same way as the goods themselves. It was this newavenue of trade that produced the bill of Lading in much the same form as we know today.

The current regulations on bills of lading were codified by the Hague Rules in 1924.

Uses

As a receipt

The principal use of the bill of lading is as a receipt issued by the carrier once the goods have been loaded onto the vessel. Thisreceipt can be used as proof of shipment for customs and insurance purposes, and also as commercial proof of completing acontractual obligation, especially under Incoterms such as CFR and FOB.

As title

The bill of lading confers title to the goods to the consignee noted on the bill. The bill of lading may also be made out "To Order",which confers title to the goods to the holder of the bill of lading

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As a negotiable instrument

Because the bill of lading represents title to the goods detailed upon it, it can be traded in much the same way as the goods maybe, and even borrowed upon if desired. This is a very important and common document used in export and import trade globally.

Sea Waybills and Electronic Document Interchange (EDI)In recent years, the use of bills of lading has declined, as they have been replaced in the most part with the sea waybill. The maindifference between these two documents is that the waybill does not confer title of the goods to the bearer, and as a result thereis no need for the physical document to be presented for the goods to be released. The shipping line will automatically releasethe goods to the consignee once the import formalities have been completed. This results in a much smoother flow of trade, andhas allowed shipping lines to move towards Electronic data interchange which greatly eases the flow of global trade.

However, for letter of credit and Documentary Collection transactions, it is important to retain title to the goods until the transactionis complete. This means that the bill of lading still remains a vital part of international trade.

See alsoTrade financeWaybill

References^ "Online Etymology Dictionary" (http://www.etymonline.com/index.php?term=lade&allowed_in_frame=0).1.

^ "THE EVOLUTION OF THE BILL OF LADING SF du Toit (University of Johannesburg)" (http://uir.unisa.ac.za/bitstream/handle/10500

/3629/Du%20Toit%208%20December%202005.pdf?sequence=1). pp. 2–3.

2.

^ "BILL OF LADING" (http://maritimeknowhow.com/wp-content/uploads/image/Bills%20of%20lading/B-L%20split

/B-L%208-10%20Hist%20Intro.pdf).

3.

Retrieved from "http://en.wikipedia.org/w/index.php?title=Bill_of_lading&oldid=578375881"Categories: Ship chartering International trade Business documents

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