Bill of Lading – Extensive Study

An example of bill of lading used in ancient times

An example of bill of lading used in ancient times

Bill of Lading

  • abbreviated as B/L or BOL.
  • a document issued by a carrier which details a shipment of merchandise and gives title of that shipment to a specified party.
  • one of three important documents used in international trade.
  • Purpose? To guarantee that exporters receive payment and importers to receive merchandise.

Order of BOL

  • used when shipping merchandise prior to payment, requiring a carrier to deliver the merchandise to the importer, and at the endorsement of the exporter the carrier may transfer title to the importer.

Endorsed Order BOL

  • can be traded as a security or serve as collateral against debt obligations.

Attributes of BOL

  • on board – merchandise has been physically loaded onto a shipping vessel, such as a freighter or cargo plane.
  • received-for-shipment – merchandise has been received, but is not guaranteed to have already been loaded onto a shipping vessel.
  • clean – merchandise is in good condition upon being received by the shipping carrier
  • foul – merchandise has incurred damage prior to being received by the shipping carrier. Letters of credit usually will not allow for foul bills of lading.

Reference: http://en.wikipedia.org/wiki/Bill_of_lading

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