Documents
Bill of lading (B/L)
The sea transport document that serves as receipt for the goods, evidence of the contract of carriage, and title to the goods when negotiable.
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The bill of lading is issued by the carrier or a forwarder after the goods are loaded. It has three functions: a receipt showing quantity and condition, evidence of the transport contract, and, when negotiable, a document of title, so whoever lawfully holds an original can claim the goods. An original B/L is usually issued as a set of three. Common versions are the original B/L, the telex released or surrendered B/L, and the sea waybill. Most letters of credit require a clean, shipped on board B/L. Example: a Dubai buyer pays 30% deposit and 70% against a B/L copy. After paying the balance, the supplier surrenders the B/L in China, and the buyer's agent collects the delivery order in Dubai without needing paper originals.
Questions
What happens if the original bill of lading is lost?
The carrier usually requires a letter of indemnity, often countersigned by a bank, before releasing the cargo. This takes time and money, so a telex release is preferable where possible.
What is a clean bill of lading?
A clean B/L has no remarks about damage or shortage. A B/L with remarks such as cartons wet is called claused, and banks reject claused B/Ls under letters of credit.