Bill of Lading- What it is and Common Precautions Prior Signing it

Bill of Lading- What it is and Common Precautions Prior Signing it

bill of lading

A Bill of Lading is something which a seafarer must have heard very commonly. In this article, we will understand what are the uses of Bill of Lading and what precautions must be practiced by the Master prior signing Bill of Lading.

A Bill of Lading mainly helps in serving following 3 purposes:

  1. It acts as a receipt for the goods describing their apparent condition, quantity and any other distinctive numbers or marks. (To say it in a simple manner, basically when you purchase something from a shopkeeper you get a receipt which gives the information about what you have purchased, the quantity and any identification of that particular thing, in shipping the same thing is done by B/L which gives all these information about the good that the carrier is transporting.)

  2. It is a document of title to the goods and is generally transferable by endorsement.

  3. Bill of lading itself is not a contract of carriage but most of the time it contains some of the terms and and conditions of carriage and hence in most of the cases it is the only evidence of a contract of carriage.

Now that we have understood what B/L actually is, the next question which needs to be answered is that who issues the Bill of Lading? Is it the carrier or is it the shipper?

Now, before understanding who issues the Bill of lading, we should first understand the two terms: “Carrier” and “Shipper”

Carrier: A person or company that undertakes the professional conveyance of goods or people. To put it in more simple words, a carrier is the ship or the owner of the ship.

Shipper: A person or company that transports the goods. In simple words, the owner of the cargo who is transporting his goods from one place to another through a carrier.

Now as we know who is a carrier and a shipper, let us answer the above question i.e. who issues a Bill of lading.

A bill of lading is always issued by the carrier based on the goods that are received from the shipper. The Master of the ship or the carrier company’s agent signs the B/L on behalf of the carrier.

So, let us understand what precautions a Master must practice while signing a Bill of Lading, the precautions are listed below:

  • Master should check that the name of the vessel, load/discharge port and the date of shipment are correctly mentioned.

  • S/he should also ensure that description of goods matches with that of the mate’s receipt.

  • Ensure that port of discharge falls within the charter party limits.

  • Ensure that goods has actually been shipped and accurately described.

  • Any short loading are to be correctly mentioned.

  • Ensure that the B/L is not marked with “Freight Paid” or “Freight Prepaid”. If so marked, master should confirm the factual position.

  • Number of originals should be as per the requirement. (Normally, 3 original B/L are prepared).

  • Check B/L for requirements of ETA/NOR tendering to the consignee or applicable party.

  • Ensure that cargo is discharged only on sighting the original.
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