There are many ways goods can be shipped by sea. Many exporters who sell abroad regularly will ship
their goods in containers. If their volumes are sufficient to fill a container then the container
will contain only their goods, this is a Full Container Load [ FCL] shipment. If the goods are
insufficient or consists of only a small quantity then the goods are consolidated with other
parties / shippers goods and shipped in a Less Container Load [ LCL] form. Whilst the container
themselves are carried by shipping lines with fixed schedules and voyages, often the shipments are
arranged by freight forwarder. The contracts of carriage are often bills of lading or seawaybills.
The forwarders who issue bills of lading issue House Bills of Lading. When they book with the
shipping lines, the shipping lines will issue Master Bills of Lading.
Bills of Lading
A bill of lading is a document signed by the shipowner, or by the master or other agent of the
shipowner, which states that certain specified goods have been shipped in a particular ship, and
which purports to set out the terms on which the goods have been delivered to and received by the
ship. After signature, it is handed to the shipper, who may either retain it or transfer it to a
third person. This person may be named in the bill of lading as the person to whom delivery of the
goods is to be made on arrival at their destination, in which case he is known as the consignee; if
he is not named in the bill of lading, he is usually known as the holder or indorsee of the bill of
lading.
The three functions of the bill of lading are:
As a document of title;
Receipt of the goods;
Evidence of contract of shipment
Document of title
The bill of lading is a symbol of the goods specified in it. Its possession is equivalent to the
possession of the goods themselves, and its transfer, being a symbolical delivery of the goods, has
by commercial usage the same effect as an actual delivery in the same circumstances.
Read Also: Glossary Of Maritime Terms
As regards the shipowner, the bill of lading is a document of title, entitling its holder on
production to delivery of the goods. Accordingly, a delivery to the holder of the bill of lading,
discharges the shipowner, provided that it is made in good faith without notice of any defect in
the holder’s title. The shipowner is not, however, discharged, however bona fide his act may be, by
delivery to the wrong person without the production of the bill of lading.
By mercantile custom, a bill of lading has become a symbol of the right of property in the goods.
Its possession is equivalent to possession of the goods themselves, and its transfer has the same
effect as an actual delivery.
Presentation of bill of lading
Arising from this function, it has been held that a carrier and his agent who delivers cargo
without presentation of the original bill of lading is liable for the value of the goods to the
actual goods owner, even if delivery is made to the named consignee.
Carriers who release goods without the surrender of the original bill of lading will often obtain
an indemnity from the person demanding release to protect against claims from the actual goods
owner.
The original bills of lading are often issued in set of three. Once any one of the original bills
of lading is presented by the holder in exchange for the goods, the remaining bills of lading –
which can no longer be used to claim the goods – are ‘stale.’
