Bill of Lading (B/L): Meaning and Types

B/L stands for bill of lading. It is the document a carrier, or its agent, issues to the shipper when it receives goods for transport, most often by sea. In US trucking the same idea is usually abbreviated BOL. A bill of lading does three jobs at once.

1. Receipt for the goods. It records what the carrier received: the number of packages, the description, the weight and the condition.
2. Evidence of the contract of carriage. Its terms, often printed on the back or referenced online, govern the carrier's duties and liability.
3. Document of title. A negotiable bill of lading represents the goods: whoever lawfully holds the original can claim them at the destination. That is why banks use it under letters of credit.

What does a bill of lading contain?

A typical ocean bill of lading shows:

• the shipper (usually the seller or exporter) and the consignee (who receives the goods), plus a notify party
• the B/L number, the vessel and voyage, the port of loading and the port of discharge
• container and seal numbers, marks, number and kind of packages, a description of the goods, gross weight and volume
• whether freight is prepaid or collect, the date the goods were shipped on board, and the number of originals issued (often "3/3", three originals)

The figures should match the commercial invoice and packing list exactly. A mismatch in weight or package count is one of the most common reasons a bank rejects documents under a letter of credit.

Types of bill of lading

Type	What it means
Straight B/L	Names a specific consignee and is not negotiable; only that consignee can take delivery.
To order B/L	Made out "to order" or "to order of" a bank or shipper; it can be transferred by endorsement, so it works as a title document.
Master B/L (MBL)	Issued by the shipping line to the freight forwarder or NVOCC.
House B/L (HBL)	Issued by the forwarder to the actual shipper, often for consolidated cargo.
Clean B/L	No remarks about damaged goods or packaging. A "claused" or "foul" B/L notes a problem and is usually refused by banks.
Shipped on board B/L	Confirms the goods are on the vessel, with the date. A "received for shipment" B/L only confirms the carrier has them.
Sea waybill	A non negotiable alternative: the named consignee collects the goods without presenting an original. Used when no bank needs a title document.

How is cargo released against a bill of lading?

With original negotiable bills, the consignee or holder surrenders one original at the destination to get a delivery order. If the originals are late, the shipper can surrender them at origin and ask the carrier for a "telex release", or the parties can use a sea waybill from the start. Electronic bills of lading are growing, and are now recognised by law in several countries, but paper originals are still common.

Bill of lading and Incoterms

The Incoterm decides who arranges the carriage and therefore who gets the bill of lading from the carrier. Under CIF or CFR the seller contracts the ship and must hand the buyer the transport document. Under FOB or FCA the buyer contracts the carrier. To prepare the document itself, use the bill of lading generator.