In
shipping, there is various transportation mode such as Ocean (sea by ship), Air
(by aeroplane), Land (truck and train). All of these modes have distinct tools
of application at different times for different purposes. One such tool is the
Bill of Lading.
Some of
our clients who have come across a BOL for the first time have asked for
clarity. We already have a post you should check if you need to know. In today’s post, you’d be
acquainted with various transport mode and their respective types of bills.
Table of Contents
·
What is A Bill of
Lading?
·
Bill of
Lading by Transport Mode
o
Ocean Transportation
§
Types of
Ocean Bill of Lading?
o
Air Transportation
o
Air Transportation
What Is A Bill Of Lading?
In one
word, a Bill of Lading is a ‘receipt’. It is a legal document or contract
between the carrier and shipper. It carries details of the type, quantity, and
destination of goods being carried. When a carrier receives a shipment, it is
important he obtains a document which must state that the receipt of the
shipment. Information about the shipper, the receiver and other necessary
information about the shipment are stated clearly.
Bill Of Lading By Transport Mode
We have
three (3) major mode of transportation.
·
Ocean
Transportation
·
Air
Transportation and
·
Land
Transportation.
Ocean Transportation
In sea
shipping, there are several types of Bill of Lading. An Ocean Bill
of Lading is issued whenever a carrier uses sea transportation.
Types Of Ocean Bill Of Lading?
An
ocean bill of lading is an agreement between the shipper and the ocean
carrier. The document acts as a carrier receipt to the shipper. The bill
contains every detail of goods that are being transported. This document is
submitted to shipper while picking up goods. The shipper later gives it to the
receiver on the delivery of goods.
We limit
our findings to 4 major BOL. They are as follows:
i. A Straight Bill of Lading: This type is used for
shipping items that have already been paid for. Such shipments may be donations
or gifts and don’t require payment It is a non-negotiable form of BOL addressed
to the buyer directly. Due to its non-negotiable nature, it cannot be assigned
to anyone but that party. This helps in the correct delivery of the goods.
In this
type of BOL, it is only the person whose name appears on the bill that can
claim the goods.
ii. Shipper’s Order Bill of Lading: Used for shipments ordered but
payment not made in advance. This can be shipping to one of your distributors
or a customer on terms. In other words, the ‘Order BOL’ is used when the goods
are sold on credit, to either a distributor or the customer. It is addressed
“to order” or “to order of [a party]” instead of the buyer.
The
shipper’s order bill of lading is commonly used when the purchase of goods is
covered by a letter of credit or if the goods are expected to be traded on a
mercantile exchange while the shipment is still in transit.
iii. Clean Bill of Lading: This type of bill is not issued
unless the receiver receives the goods in good condition. In order words, if
the goods received are confirmed to have been damaged or with flaws, the Clean
BOL is never issued.
It is
issued to that the shipping carrier signs off to indicate that at the time the
packages were loaded they were in good condition. On the contrary, if the
products or shipment are flawed, a “Soiled Bill
of Lading” or a “Foul Bill of Lading” are issued instead.
iv. On-board Bill of Lading: As the name implies, this
is one major Ocean Bill of Lading which is issued when the cargo is placed in a
vessel. On this, the master of the vessel signs this bill of lading. In a
nutshell, it verifies that goods have been placed on the cargo vessel.
Air Transportation
In Air shipping, a recognized name for Bill of Lading is Air
Way Bill. There is a clear difference between an Air Way Bill and a Bill of Lading,
even though they both serve similar purposes.
An Air
Waybills or AWB, as implied is issued when goods are transported by air. This
document accompanies goods shipped by an international air courier. It
provides detailed information about the shipment and allows it to be tracked.
An Air
Waybill is a type of Bill of Lading that serves, also, as a receipt of goods,
but by Air (not Sea).
Just like
some types of Ocean Bill of Lading, the Air Waybill is non-negotiable. When
Cargoes arrives at the airport of destination, they are immediately handed over
to the consignee or some times, the customs clearing agents for customs
clearance and final delivery.
Air
waybills, therefore, serve only as:
·
A cargo
receipt whose function is to show that the carrier has received the shipment
·
A
contract of carriage
·
Delivery
instructions, if special handling is necessary
However,
based on some conditions, the airway bill may be consigned to a bank, if items
or goods are shipped under a letter of credit or where the shipper chose to use
his bank to collect payment for goods prior to release to the consignee.
In such
cases, the consignee must pay the bank, who in turn provides a bank release to
the airline to authorizing the carrier to release the goods. This process
typically takes several days during which the goods will sit at the airline
warehouse and possibly incur demurrage.
Air Transportation
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