A Guide to the Type of Bills of Lading

Understanding the Bill of Lading

A Bill of Lading (B/L) is a cornerstone of international trade. It's a legal document from a carrier that acts as a receipt for cargo, a proof of ownership, and a contract for transportation. Explore the different types below to see how they facilitate global commerce.

Receipt of Goods

Document of Title

Contract of Carriage

Straight Bill of Lading

Definition

A non-negotiable document issued to a specific consignee who is the only party authorized to receive the goods.

Use Case

Ideal for shipments that are already paid for, or where the buyer and seller have a strong, trusting relationship. It simplifies delivery.

Key Features

• Not transferable; ownership cannot be traded.
• Specifies the exact party for delivery.
• The simplest and most direct form of B/L.

Order Bill of Lading

Definition

A negotiable document that allows the transfer of ownership of the goods by endorsing the bill.

Use Case

Essential for international trade where goods are financed through letters of credit or may be sold multiple times while in transit.

Key Features

• Can be bought, sold, or traded.
• Offers flexibility and control, allowing the seller to retain ownership until payment is made.
• Endorsed by the named party to transfer title.

Bearer Bill of Lading

Definition

A document stating that delivery will be made to whoever holds the bill, making it a high-risk but highly negotiable instrument.

Use Case

Used for rapid transactions or bulk cargo that can be sold in-transit to any buyer. Less common due to its inherent risks.

Key Features

• Highly negotiable and easily transferable.
• No specific consignee is named.
• Poses significant security risks if lost or stolen.

Seaway Bill of Lading

Definition

A document that acts as a receipt of shipment but is not a document of title, meaning it doesn't need to be presented for cargo release.

Use Case

Perfect for situations where speed is critical and a high level of trust exists, such as intra-company shipments.

Key Features

• Simplifies and speeds up cargo release.
• Not a document of title, reducing paperwork.
• More efficient than traditional B/Ls for trusted partners.

Through Bill of Lading

Definition

A single document that covers the shipment of goods across multiple modes of transportation (e.g., sea, rail, truck).

Use Case

Used in multimodal transport to streamline logistics, allowing goods to move seamlessly from a ship to a train to a truck under one contract.

Key Features

• One document for the entire journey.
• Facilitates transport across different carriers.
• Simplifies logistics management.

Multimodal B/L

Definition

Similar to a Through B/L, but issued by a single carrier who takes responsibility for all modes of transport.

Use Case

Ideal when a single carrier (like a large logistics firm) manages the entire door-to-door transportation process.

Key Features

• Single carrier liability simplifies claims.
• Provides clear accountability for the entire journey.
• Easier to resolve disputes.

Clean Bill of Lading

Definition

States that the goods were received in perfect condition, with no visible damage or defects.

Use Case

Essential for financial transactions, especially Letters of Credit, as it confirms the goods meet quality standards before shipping.

Key Features

• No clauses or notations about damaged goods.
• Indicates proper handling by the shipper.
• Preferred by banks and financial institutions.

Claused / Dirty Bill of Lading

Definition

A bill of lading that includes a clause or notation from the carrier detailing a discrepancy or damage to the goods.

Use Case

Used when goods are damaged, short-shipped, or don't match the description. It alerts the consignee and banks to a potential problem.

Key Features

• Provides an accurate record of the cargo's condition.
• Can cause issues with payment under a Letter of Credit.
• Also known as a "Foul" or "Unclean" B/L.