Bill of lading
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A bill of lading (sometimes abbreviated as B/L or BOL) is a document used in the transport of goods. It serves several purposes in domestic and international trade.
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Description [edit]
A bill of lading is issued by a carrier, details a shipment of merchandise, gives title to the goods, and requires the carrier to deliver the merchandise to the appropriate party.
History [edit]
The bill of lading evolved with the growth of international trade in the medieval world. Merchants needed a way of knowing what had been loaded onto ships, and began to issue signed receipts to certify the loading of goods on to vessels and to verify the condition of those goods at the time of loading. With the growth of mercantilism, these receipts began to be used as the title to the goods, and the bill of lading became established in much the same form as we know today.
The current regulations on bills of lading were codified by the Hague Rules in 1924.
Uses [edit]
As a receipt [edit]
The principal use of the bill of lading is as a receipt issued by the carrier once the goods have been loaded onto the vessel. This receipt can be used as proof of shipment for customs and insurance purposes, and also as commercial proof of completing a contractual obligation, especially under Incoterms such as CFR and FOB.
As title [edit]
The bill of lading confers title to the goods to the consignee noted on the bill. The bill of lading may also be made out "To Order", which confers title to the goods to the holder of the ship.
As a negotiable instrument [edit]
Because the bill of lading represents title to the goods detailed upon it, it can be traded in much the same way as the goods may be, and even borrowed upon if desired. This is a very important and common document used in export and import trade globally.
Sea Waybills and Electronic Document Interchange (EDI) [edit]
In recent years, the use of bills of lading has declined, as they have been replaced in the most part with the sea waybill. The main difference between these two documents is that the waybill does not confer title of the goods to the bearer, and as a result there is no need for the physical document to be presented for the goods to be released. The shipping line will automatically release the goods to the consignee once the import formalities have been completed. This results in a much smoother flow of trade, and has allowed shipping lines to move towards Electronic data interchange which greatly eases the flow of global trade.
However, for letter of credit and Documentary Collection transactions, it is important to retain title to the goods until the transaction is complete. This means that the bill of lading still remains a vital part of international trade.
See also [edit]
References [edit]
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