The bill of lading
performs the following functions:
- A contract of carriage between the shipper of the cargo
and the carrying shipping company.
- The name of the shipper and the receiver of the goods
the consignee.
- The contents of the packages as declared by the
shipper.
- Shipping details such as: port of loading and the port
of discharge.
- The bill of lading is a freight invoice and indicates
if the freight costs have been prepaid by the exporter or will be paid by
the importer, "freight collect".
- The bill of lading states the number of packages,
weight and dimension of the shipment.
- It is a document of title to the goods stated thereon.
Every original bill of
lading signed by or on behalf of the shipping company is a document of title to
the underlying goods. This special function of a bill of lading is achieved by
a form of words which state: "In witness whereof the undersigned on behalf
of the shipping company has signed three bills of lading all of this tenor and
date, one of which being accomplished the others to stand void".
"Accomplishing" the bill of lading requires the surrender to the
shipping line or its agents in the port or place of destination one of the
signed original bills of lading duly endorsed by the consignee/importer. Unless
and until one of the original bills of lading as described above is
surrendered, the shipping line will not release the cargo to the
consignee/importer. Upon surrender of any one of the originals the other
originals bills of lading become void.
Endorsed Bills of Lading
Bills of lading can only
be issued with the words "shipped on board", if the cargo has
actually been loaded onto the named vessel at the port of loading. By insisting
that the exporter supplies the importer with a "shipped on board" bill
of lading, the importer obtains conclusive evidence that the goods have been
loaded on board the intended vessel.
Some importers insist
that the exporter presents "shipped on board" bills as a condition
for payment. "Received for shipment", bills of lading can be issued
as soon as the goods have been delivered into the custody of the carrying
shipping company or its agent either at the point of receipt or at the port of
loading. Thus, a 'received for shipment", bill of lading will only
indicate the ship in which the cargo is intended to be loaded on. The risk
remains that the loading may, for many reasons delayed or the cargo may not be
loaded at all.
Banks responsible for
the payment of funds in payment for goods under letters of credit will not
release the funds if the bill of lading has been endorsed "received for
shipment".
