Bill Of Lading Explained: The Complete Beginner’s Guide
You may be familiar with the term “bill of lading” but unsure what it entails. Simply put, a bill of lading is a document that proves the goods being transported have been received by the carrier. It’s a vital document in the transportation process and one that often confuses shippers and customers alike. That’s where the sea waybill comes in. While they share some similarities, there are also some fundamental differences between these 2 documents.
In this article, we’ll break down the bill of lading and sea waybill in detail, so you can be sure you understand the ins and outs of each. This article also explains the circumstances in which the Chinese bill of lading you receive might be a House Bill of Lading & what precautions you should take. Further, we present some of the prominent Master China Bill of Lading issued by the largest China shipping companies.
What Is A Bill Of Lading?
A Bill of Lading is a document that serves as a receipt for the goods that are being shipped. It also acts as a contract between the shipper and the carrier.
What Is A Chinese Bill Of Lading?
A Chinese bill of lading, as anywhere else in the world, is a legal contract between a shipping company, “the carrier,” and whoever is sending the goods, “the shipper.”
As far as we know, a Chinese bill of lading is always an English document, although some form fields may also include details in Chinese characters. Read on for a more in-depth introduction to the Bill of Lading China.
Functions Of A Bill Of Lading
The original bill of lading serves all 3 purposes:
Document of Title to the Goods: A Bill of Lading is a document that accompanies the cargo and states the terms of the contract between the shipper and the carrier. The Bill of Lading is also used as a document of title to the cargo.
Evidence of Contract of Carriage: The Bill of Lading is a contract of carriage and outlines the responsibilities of both the shipper and the carrier. It also assigns liability for loss or damage to cargo during transit.
Acknowledge Receipt of Cargo: The Bill of Lading is also a receipt for the cargo. Upon cargo delivery, the carrier will sign and date the Bill of Lading to indicate that they have received the goods.
What Does A Bill Of Lading Contain?
A Bill of Lading usually consists of the following particulars: the name and address of the shipper and the consignee; the nature, quantity and quality of the goods; the marks and numbers on the packages; the name of the vessel, port of shipment, date of shipment and voyage; and, in some cases, the rate of freight.
- The name and address of both the shipper and the consignee
- The description, quantity, and weight of the shipment
- The marks, numbers, brands, and signatures of the shipper and the carrier
- The date of the shipment
What Is Sea Way Bill Of Lading?
The Sea Waybill of Lading is a document that proves ownership of the goods and serves as a receipt for the goods. It is similar to the Bill of Lading, but some significant differences exist. For starters, the Sea Waybill does not need to be signed by the carrier or its agents. Instead, it must be signed by the shipper or its agent as verification that they have sent the goods in good condition. This document does not contain any contractual obligations between shippers and carriers, as does the Bill of Lading.
The Sea Waybill is also used for customs clearance, containing information about the cargo, shipper and recipient. In addition, it allows for open terms on delivery so that cargo may be delivered without all parties having to sign off on each item being shipped. Finally, it may include additional services such as loading, unloading, storage, and insurance coverage, which are not included in a regular Bill of Lading document.
Functions Of A Sea Way Bill Of Lading
A Sea Waybill of Lading serves only 2 purposes:
Evidence of Contract of Carriage: The Sea Waybill is essentially a document of the receipt for the cargo, but that’s not all it does. It also serves as a contract for the shipment of goods between the shipper and the carrier. This means it has to contain all essential details regarding both parties, such as name, address, description of commodities and other relevant information. Unlike a Bill of Lading, a Sea Waybill is not negotiable. The carrier holds onto the Sea Waybill until both parties have met all terms and conditions. This ensures that no one party will be paid before the other.
Acknowledge Receipt of Cargo: Unlike the Bill of Lading, which provides proof of ownership of the goods being shipped, a Sea Waybill is used only as evidence that cargo has been shipped from point A to point B. It doesn’t provide any proof or guarantee of ownership or quality—only that it was shipped from one point to another.
Bill Of Lading China
Like elsewhere, China’s shipping companies issue a bill of lading with each shipment, which constitutes a legal contract between the carrier and the shipper.
Chinese bill of lading comes in many forms, depending on the mode of transport, payment conditions, and ownership of the shipped merchandise. There is two Chinese bill of lading types – “Master” and “House.”
In most cases, a Chinese bill of lading is a “Master” bill of lading, which means it has been issued directly by the shipping company that will transport your goods. The common abbreviation for a Master bill of lading is “MBL.”
In some circumstances, when your Chinese supplier has used a China freight forwarder, you may receive a “House” bill of lading. This house bill of lading is issued by the China freight forwarder, not by the company shipping the goods, and is commonly abbreviated as “HBL.”
In Chinese, you can write these shipping terms as follows:
Master Bill of Lading: 船东提单 (Chuán Dōng Tí Dān)
House Bill of Lading: 货代提单 (Huò Dài Tí Dān)
What Does A Chinese Master Bill Of Lading Look Like?
The easiest way to identify a “Master” bill of lading is to look at the name and logo of the shipping company that issued the document.
If a Chinese bill of lading is a “Master,” it’s probably issued by one of the largest shipping companies operating in China:
- CIMC
- COSCO
- MAERSK
- CMA-CGM
- EVERGREEN
- HANJIN
- HAPAG-LLOYD
- HYUNDAI
- YANGMING
- KLINE
- KMTC
- MOL
- MSC
- NYK
- OOCL
- ANL
- APL
- PIL
!!!: the above shipping companies are not necessarily all Chinese companies – most major international shipping companies also operate in China.
What Does A Chinese House Bill Of Lading Look Like?
If your bill of lading China isn’t issued by one of the shipping companies listed above, it might be issued by one we didn’t include. You can see a complete list of shipping companies on the container tracking site: track-trace.com.
If you still can’t find the bill of lading issuer, it’s likely that the document you have been given is a house bill of lading.
To further Identify, you can also look out for these telltale signs:
- Who Is The Shipper?
A Chinese bill of lading will include a field identifying the shipper.
If this field specifies a freight forwarder, it is likely to be a “Master”; if it specifies the Chinese company exporting the goods, it is expected to be a “House” bill of lading.
2. Different Shipping Methods
For FCL shipments (Full Container Load), both a House and Master bill of lading can be issued.
For LCL shipments (Less than Container Load), only a “House” bill of lading is issued to the exporter.
LCL shipping means that more than one customer’s goods are being shipped together in one container, so although China freight forwarders receive a “Master” bill of lading from the shipping company, they only issue a “House” bill of lading to each customer.
3. Bill Of Lading Number
Each Chinese bill of lading is issued with a unique number, and for master bill of lading, the first few characters will usually correspond to the shipping carrier’s name. E.g., bills of lading issued by Maersk will usually start with letters “MAEU.”
Key Differences Between Bill of Lading and Sea Waybill
One major difference between a Bill of Lading and a Sea Waybill is when they’re used. The Bill of Lading is typically used when goods are transported on the carrier’s ship or an independent vessel, while the Sea Waybill is used when goods are shipped on a chartered vessel with no fixed destination point.
Another key distinction lies in ownership. With a Bill of Lading, ownership changes hands at the port after the goods have been loaded onto the ship. On the other hand, possession transfers for those using a Sea Waybill are governed by the contract that was drawn up between the shipper and the carrier.
Finally, one more big difference lies in liability. A Bill of Lading contains provisions limiting a carrier’s liability for lost or damaged cargo, so shippers can recover some losses if something happens in transit. A Sea Waybill does not provide this kind of protection—the shipper will only be able to recover losses from the carrier if it was proven that they were negligent.
Who Is Liable in Case of Damage or Non-Delivery?
Let’s talk about who is liable in case of damage or non-delivery.
In the case of the Bill of Lading case, the carrier is liable for any property damage caused during the transport. On the other hand, for a Sea Waybill, liability is usually transferred to the consignee after delivery.
The carrier must provide evidence to be relieved from liability with a Bill of Lading, but with a Sea Waybill, there is no such requirement. So if you’re dealing with a shipment that requires special attention and care, it’s best to opt for a Bill of Lading since it provides more protection than a Sea Waybill.
That being said, both these documents can provide maximum protection when they are used correctly and all the relevant information is provided in them.
What Legal Implications Should I Be Aware of When Using a Bill of Lading or Sea Waybill?
When shipping international cargo, you’ll want to consider the legal implications of using either a Bill of Lading or a Sea Waybill.
When it comes to the Bill of Lading, this is often used as evidence in court in the case of disputes or other legal action between two parties. Since it contains all the terms and conditions of the shipment, it can be used as proof that a contract was made between the shipper and carrier and thus is legally binding.
On the other hand, the Sea Waybill does not have any contractual power (it is not legally binding) and serves as a receipt for goods shipped. In other words, if disputes arise with a Sea Waybill, it is not much help in court since there are no terms and conditions associated with its use.
So depending on which document you use when shipping international shipments, you should keep in mind that there may be different legal implications—so choose wisely!
Bill of Lading vs. Sea Waybill, Which is Right for me?
Now that you know the differences between a bill of lading and a sea waybill, it begs the question: which one should you use? The answer to this depends largely on your shipping needs.
For instance, if security is paramount for you, then the bill of lading would be the best option since it provides more legal protections for its holders. On the other hand, if speed is more important to you and you’re in a hurry to get goods to their destination quickly, then a sea waybill might be better as it’s faster and easier to process than a bill of lading.
It’s essential to do your research to make an informed decision—if security is not an issue, but the cost is more of a concern, then it could be worth exploring other options, such as air freight or rail freight. Ultimately, it’s up to you to decide which option works best for your situation.
Final Thought
So, there you have it—a detailed look at the differences between the bill of lading and the sea waybill. When it comes down to it, the main difference is that the bill of lading is a contract between the shipper and the carrier, whereas the sea waybill is a contract between the shipper and the consignee.
The main difference is that the bill of lading is a physical document, whereas the sea waybill is a digital document. So, if you’re shipping internationally, it’s worth getting familiar with both documents.
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