For many years, the industry has sought a solution to the difficulties, costs and inefficiencies associated with paper bills of lading. One answer is to make the bill an electronic document. An electronic bill of lading (or eB/L) is the legal and functional equivalent of a paper bill of lading. An electronic bill of lading must replicate the core functions of a paper bill of lading, namely its functions as a receipt, as evidence of or containing the contract of carriage and as a document of title.
The Bill of Lading designates that a carrier shall assume all risk of loss, damage, delay and liability in the transportation of any goods for shippers from the time of carrier's receipt of such goods and from a shipper until proper delivery has been made. Carriers are responsible for full actual loss. If the consignee of goods finds the freight damaged or unacceptable the bill of lading also serves as a legal instrument to dispute the delivery of goods in accordance to the provisions of Title 49 of the Code of Federal Regulations Section 1005, Section 14706 (the Carmack Amendment), and applicable state law to rectify any losses that happened due to the carrier.
In a time-charterparty or voyage-charterparty, if the charterer is shipping his own cargo (rather than the cargo of a third party) he will receive a bill of lading from the master, acting as agent of the shipowner; but that B/L will serve solely as a receipt and document of title, and its terms will (subject to contrary intent) be secondary to the terms of the charterparty, which remains the dominant contract.
A charterparty is the contract governing the relationship between the shipowner and the charterer. The bill of lading governs the relationship between the shipper and the carrier (who will be either a shipowner or a demise charterer). If the exporter (the shipper) is shipping a small amount of cargo, he will arrange for a carrier to carry the goods for him, using a bill of lading. If the exporter needs the whole (or a very substantial part) of the ship's cargo capacity, the exporter may need to charter the vessel, and he will enter into a charterparty agreement with the shipowner.
The growth of mercantilism (which produced other financial innovations such as the charterparty (once carta partita), the bill of exchange and the insurance policy ) produced a requirement for a title document that could be traded in much the same way as the goods themselves. It was this new avenue of trade that produced the bill of lading in much the same form as we know today.
While there is evidence of the existence of receipts for goods loaded aboard merchant vessels stretching back as far as Roman times, and the practice of recording cargo aboard ship in the ship's log is almost as long-lived as shipping itself, the modern bill of lading only came into use with the growth of international trade in the medieval world.
Under English law, the Carriage of Goods by Sea Act 1992 provides that the term "bill of lading" includes a "received-for-shipment" bill of lading issued by, say, a freight forwarder or a storage depot/warehouse. A "combined bill of lading" may be issued by a carrier who, say, collects goods from a factory for subsequent delivery to a ship via multi-modal transport.
Alternatively, to overcome the possibility of the goods reaching the destination ahead of the cargo, majority of the Shipping Lines offer an “Express release” service (formerly known as “Telex release”). By surrendering the full set of bills of lading issues at the port of loading, the shipping line can instruct the port of discharge to release the cargo without the physical presentation of bills of lading at destination.
The bill of lading from carrier to the shipper can be used as an evidence of the contract of carriage by the fact that carrier has received the goods and upon the receipt the carrier would deliver the goods. In this case, the bill of lading would be used as a contract of carriage. In this case, the bill of lading can be used if shipper does not properly ship the goods then the shipper cannot receive the bill of lading from the carrier. Eventually, the shipper would have to deliver the bill of lading to the seller. In this case, the bill of lading is used as a contract of carriage between seller and carrier. However, when the bill of lading is negotiated to a bona fide third party then the bill of lading becomes a conclusive evidence where no contradictory evidence can be introduced. It is because the third party cannot examine the actual shipment and can only pay attention to the document itself, not survey or examination of the shipment itself. However, the bill of lading will rarely be the contract itself, since the cargo space will have been booked previously, perhaps by telephone, email or letter. The preliminary contract will be acknowledged by both the shipper and carrier to incorporate the carrier's standard terms of business. If the Hague-Visby Rules apply, then all of the Rules will be automatically annexed to the bill of lading, thus forming a statutory contract.
Under Art. III of the Hague-Visby Rules, a carrier must, on demand, provide the shipper with a bill of lading; but if the shipper agrees, a lesser document such as a "sea waybill" may be issued instead. In recent years, the use of bills of lading has declined, and they have tended to be replaced with the sea waybill. (If a so-called bill of lading is declared to be "non-negotiable", then it is not a true B/L, and instead will be treated as a sea waybill.)
A bill of lading is a standard-form document that is transferable by endorsement (or by lawful transfer of possession). Most shipments by sea are covered by the Hague Rules, the Hague-Visby Rules or the Hamburg Rules, which require the carrier to issue the shipper a bill of lading identifying the nature, quantity, quality and leading marks of the goods.
A bill of lading (sometimes abbreviated as B/L or BOL) is a document issued by a carrier (or their agent) to acknowledge receipt of cargo for shipment. Although the term historically related only to carriage by sea, a bill of lading may today be used for any type of carriage of goods.
When the bill of lading is used as a document of title, it is particularly related to the case of buyer. When the buyer is entitled to received goods from the carrier, bill of lading in this case performs as document of title for the goods. There are two types of bill of lading that can perform as document of title. They are straight bill of lading and order bill of lading. Straight bill of lading is a bill of lading issued to a named consignee that is not negotiable. In this case, the bill of lading should be directed only to one specific consignee indicated on the bill of lading. Order bill of lading is the opposite from a straight bill of lading and there is no specific or named consignee. Therefore, an order bill of lading can be negotiated to a third party.
For some time, it has been the case that the cargo may arrive at the destination before the bill of lading; and a practice has arisen for the shipper (having sent the bill of lading to the banks for checking) to send to the consignee a letter of indemnity (LOI) which can be presented to the carrier in exchange for the cargo. The LOI indemnifies the carrier against any cargo claim, but the document is not transferable and has no established legal status. 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 document within international trade.
Teeming and lading is a bookkeeping fraud also known as short banking, delayed accounting, and lapping. It involves the allocation of one customer's payment to another customer's account to make the books balance, often to hide a shortfall or theft.
Simply, the bill of lading confers prima facie title over the goods to the named consignee or lawful holder. Under the "nemo dat quod non habet" rule ("no one gives what he doesn't have"), a seller cannot pass better title than he himself has; so if the goods are subject to an encumbrance (such as a mortgage, charge or hypothec), or even stolen, the bill of lading will not grant full title to the holder.
Teeming & lading is a method by which a person who takes or handles payments uses the money personally for some days and posts the transaction later. The handler receives cash, and uses it for personal purposes instead of depositing it. A common practice trait in this fraudulent activity is that the amounts received from the subsequent debtor is credited to the earlier debtor's account so that one debtor's account does not show an outstanding balance for a long time. To make up the shortfall, when another payment comes in, the handler will deposit that money against first money used, and does not show the new amount received until later. Such a process is continued until the time the original amount misappropriated is finally replaced or until the cashier is caught.
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 (cost and freight) and FOB (free on board).
The word "lading" means "loading", both words being derived from the Old English word hladan. "Lading" specifically refers to the loading of cargo aboard a ship. The Dutch word "lading" has exactly the same meaning (freight, cargo, an amount of transportable goods) as it has in the English "bill of lading", but is not restricted to shipping.
Although the term "bill of lading" is well known and well understood, it may become obsolete. Articles 1:15 & 1:16 of the Rotterdam Rules create the new term "transport document"; but (assuming the Rules come into force) it remains to be seen whether shippers, carriers and "maritime performing parties" (another new Rotterdam Rules coinage) will abandon the long-established and familiar term, "bill of lading".