Bill of Lading (B/L)

The Bill of Lading (B/L) stands as the single most important document in international shipping, serving three distinct legal functions that make it indispensable to textile trade.

As a receipt, the B/L confirms that the carrier received the goods in the condition described. A "clean" B/L—one without notations about damage or discrepancies—certifies the cargo was in apparent good order when loaded. Banks financing the shipment through letters of credit typically require clean B/Ls, making this status crucial for payment.

As a contract of carriage, the B/L establishes the terms under which the shipping line transports the goods from origin to destination. It specifies the vessel, voyage, ports, and the carrier's liability limitations.

Most critically, as a document of title, the B/L represents ownership of the goods. Whoever holds the original B/L can claim the cargo at destination. This negotiability makes the B/L function almost like a bearer instrument—it can be endorsed and transferred, allowing goods to be sold while still at sea.

Original B/Ls typically come in sets of three, any one of which can be used to claim the goods. For LC transactions, the full set usually goes to the bank. The shipper, consignee, notify party, vessel details, container numbers, cargo description, and weights all appear on the document and must match other shipping documents exactly.

Modern trade increasingly uses alternatives to original B/Ls. Telex release (or electronic release) allows the shipper to surrender the original B/L at origin, with the carrier then releasing goods to the named consignee at destination without requiring physical documents. This speeds up cargo collection and eliminates courier costs, though it sacrifices the negotiability that original B/Ls provide.

Sea waybills offer another option—non-negotiable documents that name a specific consignee who can claim goods simply by proving their identity. These work well for transactions between trusted parties where title transfer isn't needed.

Freight forwarders issue House B/Ls while shipping lines issue Master B/Ls. For LCL shipments, buyers typically receive a House B/L from the consolidator, who holds the Master B/L covering the full container.