Bill of Lading & History

A bill of lading (sometimes abbreviated as B/L or BOL) is a legal document used in the transport of goods by sea between the shipper and the carrier detailing the type, quantity and destination of the good being carried. The bill of lading, also serves as a receipt of shipment when the good is delivered to the predetermined destination. This document must accompany the shipped goods, no matter the form of transportation, and must be signed by an authorized representative from the carrier, shipper and receiver.

The functions of the bill of lading were gradually created by the practical needs and technical developments of a certain time. It’s necessary to understand how the bill of lading evolved into the instrument that we know today. Bills of “Loading” as they were once called have been around for centuries, the early transportation contracts began to appear in 13th century. Back then it only functioned as a receipt for goods received by master or ship owners. Through the centuries it has developed into a receipt containing the contract of carriage between shipper and carrier, and it acquired the third characteristic later on, negotiable document of title.

Originally merchants in the old days didn’t really have a need for such a document when transporting their goods, because merchants were often also the master of the ship or at least they used to travel at sea with their merchandise. Obviously, this wasn”t a very practical system. With commercial activity increasing in the world and merchants staying at shore, such transportation documents needed to be generated to prevent disputes and to serve as a proof of shipment to protect both shipper and consignee.

Back in old times, masters of the vessels had to be attended with clerks when receiving goods, these clerks were a member of the crew and their most important duty was to accurately record the cargo received in a parchment book or register while the master, shipper and another witness were present. The bill of lading which was originally a copy of the book of lading probably australian casinos online produced to guard against the loss of the only record of the cargo in case a ship was lost. In such case the shipper would often be at the mercy of the master to clarify what the cargo consisted. Since the merchants didn’t accompany the cargo anymore, there was also a need for separate documentation that they could keep with them, and later another copy would also serve as a proof that the party demanding the cargo at destination was in fact the consignee. One of the earliest documents where the bill of lading is mentioned by its modern name was in Europe, in the law of the Hanseatic cities in 1591. It’s also widely accepted that Italy is the birthplace of  the bill of lading, because of the growing economies of the Italian city states due to the sea commerce between Italy and the Roman Empire in Constantinople.

Through the centuries, many protocols and rules shaped the characteristics of today’s modern bill of lading, limitation of the parties, practices of bill of lading exchanges, shipper’s, consignee’s and carrier’s legal rights. Hague Visby protocols, Bill of Lading Act of U.K. Brussels Protocol, Carriage of Goods by Sea Act are some of the most important ones. There are many types of bill of ladings used in shipping industry depending on transportation mode, purpose etc., to summarize shortly we can list Shipped (On Board) B/L and received for shipment B/L, Clean B/L and unclean B/L, Straight, blank and order B/L (which is used widely used in international trade), Direct, transshipment, through bill of lading, Liner B/L, container B/L and combined transport B/L, On Deck B/L, stale B/L, ante-dated B/L and advanced B/L, Non-Negotiable Bill of Lading, House Bill of Lading (also known as forwarder bill of lading).

There have been many efforts to bring into existence negotiable electronic bill of lading that would replicate all the functions of their paper version but the development has been slow so far. Because this concept hasn’t received the full support and confidence of all the participants in international business due to concerns about security and authenticity. Now after mentioning brief history of the bill of lading, I’d like to mention the importance of it. A bill of lading has 3 main characteristics:

1. Receipt for the goods shipped.

2. Evidence of the terms of the contract of carriage

3. Document of title to the goods specified in the Bill of Lading.

The Receipt Function

It indicates the identification of the shipped goods, the number of packages, pieces, quantity, or weight of the goods shipped, and the apparent order or condition of the goods at the time of loading.

Evidence of Contract of Carriage Function

It is evidence about a valid contract of carriage of goods by sea. In short the bill of lading is evidence of the contract of carriage of goods. So, it is not a contract but it is only evidence of the contract between shipper and carrier.

Bill of lading is a document of title

The bill of lading confers title to the goods to the consignee noted on the bill. The bill of lading may also be made out “To Order”, which confers title to the goods to the holder of the ship.

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