Ocean Bill of Lading

An ocean bill of lading is the foundational document for international sea freight, functioning simultaneously as a receipt for shipped goods, a contract with the ocean carrier, and a document of title that can transfer ownership of cargo.

Three Functions of Ocean B/L

1. Receipt

• Confirms carrier received goods
• Documents quantity and condition
• “Clean” B/L means no noted damage
• Evidence of shipment

2. Contract of Carriage

• Terms of transportation
• Carrier liability limits
• Shipper obligations
• Governing law and jurisdiction

3. Document of Title

• Represents ownership of goods
• Can be bought, sold, traded
• Required to claim cargo
• Enables trade finance

Types of Ocean Bills of Lading

By Negotiability

By Coverage

By Issuer

Key Information on Ocean B/L

Parties

• Shipper: Party sending goods
• Consignee: Party receiving (or “to order”)
• Notify Party: Contact for arrival notice

Shipment Details

• Description of goods
• Number of containers/packages
• Weight and measurements
• Marks and numbers
• Container numbers and seals

Voyage Information

• Vessel name
• Voyage number
• Port of loading
• Port of discharge
• On-board date

Original Bills of Lading

The “3/3” Standard

• Usually 3 originals issued
• All equally valid
• Only one needed to claim cargo
• Others void once one used

Handling Originals

• Treat as cash (they represent cargo value)
• Send via secure courier
• Track delivery
• All originals to consignee (or bank)

Consignment Options

“To Order” B/L

Consignee: TO ORDER
Notify: ABC Importing Co.

• Negotiable
• Endorsed to transfer ownership
• Used with letters of credit
• Blank endorsement = bearer

“Straight” B/L

Consignee: ABC Importing Co.

• Non-negotiable
• Only named party claims cargo
• Cannot be traded
• Simpler, less flexible

Clean vs. Claused B/L

Clean Bill of Lading

• No remarks about cargo damage
• Goods received in “apparent good order”
• Required for letter of credit payment
• Banks won’t accept claused B/Ls

Claused (Dirty) B/L

• Notes damage or issues
• “Packages torn,” “Drums leaking”
• Affects insurance and payment
• Shipper should refuse to sign

Releasing Cargo

With Original B/L

1. Consignee presents original B/L at destination
2. Shipping line verifies
3. Delivery order issued
4. Cargo released from terminal

Without Original (Telex Release)

1. Shipper surrenders originals at origin
2. Carrier telexes destination
3. Consignee proves identity
4. Cargo released without paper B/L

Sea Waybill Alternative

• Non-negotiable from start
• Faster cargo release
• No originals to manage
• Used for trusted relationships

B/L and Letters of Credit

Documentary Requirements

• Clean, on-board B/L
• Specific dates and ports
• Correct party names
• Required endorsements
• Full set of originals

Common Discrepancies

• Late shipment date
• Wrong port names
• Description doesn’t match L/C
• Missing endorsement
• Claused (not clean)