What is Bill of Lading and How It Works?

The Bill of Lading serves as a receipt, proof of contract, and document of title for sea cargo, while the Air Waybill is a non-negotiable receipt used in air transport. The article covers the different types and contents of each document, their functions, and how amendments can be made to the Bill of Lading before and after departure.

1. What is Bill of Lading (B/L)?

A Bill of Lading (B/L) is a written document issued by a shipping company or its agent to the shipper, acknowledging the receipt of cargo and the agreement to deliver it to the destination. It serves as proof of a contract between the carrier and the shipper and holds the legal status of a document of title. This document is essential in the shipping process, ensuring that both parties adhere to their contractual obligations.

1.1 Roles and Purposes of Bill of Lading

• Cargo Receipt: The Bill of Lading acts as a receipt, confirming that the cargo has been received by the carrier and loaded onto the vessel.
• Proof of Contract for Carriage: It serves as evidence of the contract between the shipper and the carrier, establishing their rights and obligations regarding the shipment.
• Document of Title: The Bill of Lading functions as a title document, granting the holder the right to claim the cargo and take possession of it.

1.2 Types of Bills of Lading

• Original Bill of Lading: Issued by the carrier to facilitate the delivery of cargo. Multiple originals may be issued, with only one being valid at a time.
• Telex Release Bill of Lading (TLX B/L): An electronic version, allowing the consignee to receive cargo without the original document, using a copy marked "Telex Release" sent to the destination port.

1.3 Contents of Bill of Lading

The Bill of Lading includes key details about the cargo, shipper, and carrier:

• Shipper’s Information: Name, address, and contact details.
• Cargo Details: Name, label, quantity, weight, and volume.
• Carrier’s Information: Name, business address.
• Additional Shipping Information: Container number, seal number, vessel details, and loading ports.
• Signatures: Signed by the carrier or its agent.

2. What is Air Waybill?

An Air Waybill is a document issued by an airline or its agent to acknowledge the acceptance of cargo for air transport. Unlike the Bill of Lading, it is non-negotiable and does not represent the ownership of the cargo.

2.1 Functions of Air Waybill

• Contract of Carriage: The Air Waybill serves as the agreement between the shipper and the airline to transport the cargo.
• Cargo Receipt: It confirms that the cargo has been delivered to the carrier.
• Freight Bill: It lists the charges associated with the shipment.
• Customs Declaration: Used for customs clearance at the destination airport.
• Insurance Certificate: In some cases, it may serve as proof of insurance for the cargo.

2.2 Contents of Air Waybill

Key details of an Air Waybill include:

• Airline and Flight Information: Airline name, logo, and flight details.
• Shipper and Consignee Details: Name, address, and contact information.
• Cargo Information: Description of the goods, weight, volume, and chargeable weight.
• Freight and Charges: Details of the freight charges, including payment terms.
• Customs and Insurance: Information about customs declarations and insurance.

2.3 Air Waybill vs. Bill of Lading

The primary difference between an Air Waybill and a Bill of Lading is that the Air Waybill is non-negotiable and does not confer ownership of the cargo. In contrast, the Bill of Lading acts as a document of title, transferring ownership rights to the holder. Both serve as contracts for carriage but differ in their legal status and usage.

3. Amendment of Bill of Lading

If a shipper identifies errors on the Bill of Lading before departure, they can request amendments without incurring charges. However, if amendments are needed after the cargo has departed, the carrier must verify whether the changes can be made, and an amendment fee may be applied.

Key Takeaways

• The Bill of Lading is a document of title that proves shipping and delivery, while the Air Waybill is a non-negotiable receipt used for air transport.
• Amendments to the Bill of Lading can be made without charge before departure; however, amendments after departure may incur fees.
• The Bill of Lading is a legal document of title, whereas the Air Waybill is a contract of carriage but not a title to the cargo.