Bill of Lading (B/L) is a receipt issued by a shipowner or his agent incorporating a contract setting out the rights and obligations of a shipping company in transporting goods by sea. It specifies the name of the ship, ports, destination, goods and the consignee.
In some instances, a bill of lading could cover goods transported by more than one means (e.g. sea, rail). A bill of lading is not an automatically negotiable instrument but it does possess a certain similarity to a negotiable instrument insofar that it is drawn “to the order” of the person named; it may be endorsed and transferred by delivery thereby giving the transferee right to the goods.
Delivery of the goods is made upon surrendering one valid “negotiable copy” of the bill of lading fully endorsed. All other copies are then rendered void. Originally, it is a Document of Title meant for items shipped by sea but nowadays, goods transported by road or air also use it.
Aspects Mentioned in a Bill of Lading
Listed below are the elements that are almost always included in a bill of lading -
- Names and addresses
- Dates
- Reference or order number
- List and description of items
- Packaging type
- National Motor Freight Classification (NMFC) class or code
- Hazardous material designation (if required)
- Special Instructions
Use on the Term in Sentences
- The bill of lading acts as the conclusive receipt that includes the term of the contract as well as the documentation of the title.