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A Comprehensive Guide to Bill of Lading Knowledge

Published:2026-10-21 02:35
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The Bill of Lading (B/L) represents the goods, so it is essential to have a thorough understanding of it. 

 

Basic Knowledge and Key Points

1. A Bill of Lading is typically issued as 3 originals and 3 copies, though sometimes 2 originals and 3 copies are used. If the letter of credit has specific requirements, be sure to communicate them clearly to the freight forwarder. 

For T/T payment terms, theoretically only one original is needed (once the goods are released, the other originals become void automatically; copies cannot be used to take delivery). After receiving full payment under T/T, you may consider keeping one original for yourself and sending all the others to the customer, to guard against loss during courier transit.

2. The carrier (full name) must be shown on the front of the bill of lading. This is what I have learned. In practice, when handling a letter of credit, the bank informed me that the documents were safely presented and payment was received even though the carrier was not shown on the bill of lading (so theoretically it should be shown). 

If the carrier is shown on the front, the bill of lading is stamped and signed directly by the carrier company at the bottom right corner.

If the carrier is not shown on the front and the bill of lading is signed by a freight forwarder, the signatory’s capacity must be indicated when signing.

If the carrier’s full name is shown on the front but the bill of lading is signed by a freight forwarder, the forwarder’s capacity must be indicated when signing. 

3. Shipped on board bill of lading and received for shipment bill of lading: 

Shipped on board bill of lading: A bill of lading issued after the goods have been loaded on board the vessel.

Received for shipment bill of lading: Issued when the goods have not yet been loaded on board, it only indicates that the carrier has taken custody of the goods delivered by the shipper. Therefore, this bill of lading cannot prove the time of shipment (the date on a received for shipment bill of lading is not the on-board date). 

A received for shipment bill of lading can only be converted into a shipped on board bill of lading when it is stamped “Shipped on Board” and the on-board date is indicated. 

4. The bill of lading must not contain any unclean notations.

5. The consignee and notify party on the bill of lading must be completed strictly in accordance with the letter of credit. 

6. Issuance, Date, and Number of Copies of the Bill of Lading: The bill of lading must be issued by the carrier, the master, or their agent, and the capacity of the issuer must be clearly indicated. Common expressions include: CARRIER, CAPTAIN, or “AS AGENT FOR THE CARRIER: XXX”, etc. 

7. For bills of lading pre-printed with the shipping line’s (carrier’s) name, the freight forwarder will usually add “as agent for the carrier”. If the carrier’s name is not pre-printed on the bill of lading, it must bear the shipping line’s stamp and signature (that shipment of yours should be a carrier-signed master bill of lading, right?). 

8. Common L/C Discrepancies Related to the Bill of Lading: The carrier is not indicated on the bill of lading. Upon checking, the official interpretation is as follows: According to Article 23(a) of the UCP 600, a marine bill of lading must appear on its face to indicate the name of the carrier and be signed or otherwise authenticated by the carrier or a named agent for or on behalf of the carrier, or by the master or a named agent for or on behalf of the master. 

9. Classification by Issuer: A FREIGHT FORWARDER B/L refers to a bill of lading issued by a company engaged in international cargo transportation that does not own vessels. An ORIGINAL BILL OF LADING is commonly known as an ocean bill or master bill. 

 

Chronological Order of Document Preparation under L/C Payment

 

Contract → L/C Issuance → Invoice (The invoice date must be earlier than the document presentation date and the L/C expiry date. The date on the commercial invoice cannot be earlier than the L/C issuance date, and the invoice date should be the earliest among all documents.) → Certificate of Origin (The date on the Certificate of Origin must match the date on the invoice you prepare. You can apply for the Certificate of Origin on or after the invoice date, so the issuance date will be equal to or later than the invoice date.), Insurance Policy, Packing List, Export License, Inspection Certificate, Other Inspection Certificates → Shipping Company Certificate (if required) → Bill of Lading Date → Draft (The draft date must be earlier than the L/C document presentation date and expiry date.), Beneficiary’s Certificate (Some L/Cs require a Beneficiary’s Certificate, as specified in the document requirements.), Shipping Advice (Issued on or within three days after the Bill of Lading date.) In any case, the dates on all documents required for presentation must be earlier than the document presentation date.

The above chronological order essentially aligns with the entire foreign trade process. After completing one full shipment, you will have a clear understanding of all the key details in the workflow.

 

Bill of Lading Classification

Bills of lading are divided into the following three types: 

　　First is the straight bill of lading (straight B/L), which specifies the name of the consignee. China's Maritime Law stipulates that a straight bill of lading is non-negotiable, and the carrier must deliver the goods to the consignee named in the bill of lading. 

　　Straight bills of lading are not widely used in international maritime trade and are generally only used for shipping personal effects or exhibition goods. (For the first TT transaction, the consignee was directly the customer's name, without realizing the potential danger: never issue a straight bill of lading without guaranteed payment.) 

　　In many countries, the consignee of a straight bill of lading can take delivery of the goods without presenting the original bill of lading, so the bill of lading effectively loses its control over the title to the goods. Just like an air waybill, the consignee can take delivery simply by providing identification. Even for letter of credit settlements, issuing banks are reluctant to accept straight bills of lading, so L/Cs generally stipulate a blank-endorsed bill of lading such as "TO ORDER" to control and retain title to the goods.

　　Therefore, one must not only remember the non-negotiable nature of a straight bill of lading, but also keep in mind that "the consignee of a straight bill of lading can take delivery without presenting the original bill of lading, so the bill of lading effectively loses its function as a document of title." This is a crucial point! The concept must be fully understood to avoid errors and losses at work. Therefore, if only a 30% deposit is received with the remaining 70% payable by T/T after shipment, and a straight bill of lading is issued naming the consignee, you could face the loss of both payment and goods if the customer has poor credit and fails to pay. Of course, if you have confidence in the customer and are assured of payment, that is a different matter.

　　Second, the Open Bill of Lading (Open B/L, Blank B/L, Bearer B/L), where the consignee field is left blank. This type of B/L is transferable without endorsement, and the carrier releases the goods against the document.

　　An Open B/L does not specify the consignee’s name. Whoever holds the B/L can take delivery of the goods from the carrier, as the carrier delivers goods against the document, not to a named individual. 

　　The consignee field on the B/L is marked: To the order

　　Third, the Order Bill of Lading, i.e., a B/L where goods are delivered to the order of a named party. This is the most commonly used B/L in international trade today. 

　　1. To the order of a bank. The consignee field is filled in as “to the order of xx Bank”. 

　　2. To the order of the consignee. The consignee field is filled in as “to the order of A.B.C. Co. Ltd”. 

　　3. To the order of the shipper. The consignee field is filled in as “to the order of shipper”, and the shipper endorses the B/L in blank on the reverse side. This B/L can also be endorsed to a named party as required by the letter of credit. The shipper may also choose not to endorse it, in which case only the shipper can take delivery, meaning the seller retains title to the goods. 

　　The so-called delivery without original B/L refers to the carrier releasing the goods without presentation of the original bill of lading. 

　　Currently, for Order B/Ls and Open B/Ls, the carrier must release goods against the original B/L. If the carrier releases goods without the original B/L, regardless of to whom the goods are released, the lawful holder of the original B/L can hold the carrier liable for breach of contract for delivery without original B/L. This is uniformly applied in China’s maritime judicial practice. However, in the case of a Straight B/L, if the carrier delivers the goods to the named consignee without the original B/L, can the lawful holder of the Straight B/L claim breach of contract against the carrier? Currently, there is a tendency toward a negative answer in both theory and practice.　　 

　　In summary, domestic cargo owners should fully recognize the risks of Straight B/Ls and should not readily agree to a trade buyer’s request to issue a B/L naming the buyer as consignee, so as to ensure the ability to hold the carrier liable for delivery without original B/L if settlement under a letter of credit or other methods is obstructed. 

Bill of Lading Release Methods

1. Telex Release: Requires the original "Telex Release Letter of Indemnity".
The letter of indemnity is a statement declaring which goods are to be released to your specific customer. It must be stamped with your company seal and sent to the freight forwarder—after that, there’s nothing else to worry about. (Of course, the prerequisite for a telex release is secure payment! Generally, it is only done after receiving payment via T/T in advance.) Once the B/L is confirmed and the goods are shipped, simply wait for the forwarder to send back the B/L copy, then forward it to your customer.
2. Split B/L: Available 3-4 days after vessel departure. (When a customer books goods with us and another factory in the same container, for convenience and security, the B/L can be split so each party can send their own to the customer.)
3. Combined B/L: Same as above. 

4. Release at a Different Location: Requires approval from the shipping line.

Container Loading Options

1. Door-to-Door: You book space with a freight forwarder, agree on a time, and they will dispatch a truck fleet to your factory or designated location to load the cargo, then return it to the port.

2. Inland Container Yard (ICY) Loading: The factory delivers the cargo directly to the freight forwarder’s warehouse, and they then arrange for it to be moved into the port area. The cargo owner is not permitted to deliver directly into the port area.

The Notify Party on a Bill of Lading Should Not Be Underestimated

On an ocean bill of lading, there is a party that is often overlooked, yet its importance should not be underestimated—the Notify Party. Typically, the destination port information section on a bill of lading requires two or even three companies to be listed, usually the Consignee and the Notify Party. Some shipping line bills of lading also include a First Notify Party and a Second Notify Party.

Distinguishing Between Consignee and Notify Party

The Consignee refers to the receiver of the goods, typically the customer at the destination port, i.e., the actual buyer. Under letter of credit payment terms, it is often a bank.
The Notify Party refers to the contact party for the destination port customer. If it is the customer themselves, it can be filled in as "Same as consignee"; otherwise, it generally indicates the customer's agent or trader at the destination port.

The Purpose of the Notify Party

Upon arrival of the cargo at the destination port, the shipping line will promptly notify the Notify Party of the arrival information, so that the Notify Party can inform the Consignee to take delivery or make other arrangements. This helps prevent delays in cargo pickup that could lead to demurrage, detention charges, or even substantial penalties. Therefore, to ensure the notification is received, sometimes two Notify Parties are listed. Under Letter of Credit payment terms, the Consignee on the Bill of Lading is often the issuing bank rather than the actual receiver; when all documents are presented to the issuing bank, the bank will notify the actual consignee to proceed with negotiation and other processes.

Do Not Fill In Casually

In many cases, the Notify Party is unaware or has not been communicated with in advance, resulting in the arrival notice not reaching the consignee in time, which causes pickup delays and additional costs. This makes it essential to pay extra attention to the Notify Party field when confirming the Bill of Lading and not to fill it in casually.

About "To Order"

Sometimes we encounter "To Order" Bills of Lading. A "To Order" Bill of Lading generally refers to an Order Bill of Lading. The typical format is "To order of xxx," which requires endorsement by "xxx" to be transferred or to take delivery. If the Consignee field on the Bill of Lading only states "To order," this means "To order of shipper" and requires the shipper's endorsement. The Notify Party only serves the purpose of notifying the consignee and is not related to the endorsement.

Questions About the Notify Party 

1) If the Consignee and Notify Party on the Bill of Lading are different, to whom is the arrival notice generally sent?

It is generally sent to notify the consignee. In most cases, the Notify Party's information is used by the destination port shipping agent as the primary contact details for the consignee. This is because the Consignee on many Bills of Lading is "To Order" and not directly named. Sometimes, if the Notify Party cannot be reached, the agent will contact the consignee, or if necessary, the shipper.

2) When a telex release is arranged for the Bill of Lading, to whom should it be sent?
 

Consignee. Whether it is an original bill of lading or a telex release, both represent the transfer of title, and the fundamental purpose is to transfer it to the title holder. The party that truly holds the title to the goods is the consignee.

3) Can both the consignee and the notify party on the bill of lading be "To order"?

On the surface, this seems convenient as it allows transfer to any consignee. However, in practice, most shipping lines stipulate that the consignee and the notify party cannot both be "To order." Only one can be designated as such, which is also a measure to mitigate freight risks.

4) The customer's letter of credit requires two companies to be listed in the notify party field on the bill of lading. Is this acceptable?

Some shipping lines' bills of lading provide for a first notify party and a second notify party. If not, two companies can be entered under a single notify party field.

5) When the consignee is "To order," can the notify party on the ocean bill of lading take delivery of the goods?

No. When the consignee on the shipping line's original bill of lading is "To order," if the shipper does not endorse it and send it to the customer, the consignee cannot take delivery, let alone the notify party.

 6）The customer requests that the notify party field on the bill of lading show "To order." Is that acceptable?

It is best not to use "To order." After all, the purpose of the notify party is to stay informed of the cargo arrival status and notify the consignee to take delivery in a timely manner. Generally, if there is no notify party, you can enter "Same as consignee."

 7）The consignee on the bill of lading is "To order," and the notify party is "Same as consignee."

If the consignee is "To order," a notify party with specific contact details must be provided. Otherwise, once the vessel arrives at the port, it will be impossible to notify the importer or the responsible party, preventing the cargo from being claimed. This could even lead to serious consequences such as confiscation by customs. If an AMS/ACI filing is required, it may also result in substantial fines imposed by the destination country's customs.

 8）Does a "To order" bill of lading require endorsement by the notify party?
If the consignee on the bill of lading is "To order" without any further details—for example, it is not "To order of the XXX"—then this is a blank endorsed bill of lading and requires endorsement by the shipper. The notify party is the contact at the destination port and has nothing to do with the endorsement.

9）The cargo has arrived at the port, and the customer says the notify party's name is incomplete and requests an amendment, claiming they cannot clear customs otherwise. Does this really have an impact?

An error in the notify party's name will not affect customs clearance. As long as the consignee on the bill of lading is correct, and the notify party information does not compromise the authenticity assessment, it will not affect the destination customer's ability to clear customs and take delivery of the goods.

 
Frequently Asked Questions

 

1. Why can a foreign buyer sometimes take delivery without a bill of lading?

　　 We know that, in theory, a bill of lading should serve as a "document of title," meaning whoever "lawfully obtains" the bill of lading effectively takes possession of the goods.

　　 A bill of lading involves four parties: the Shipper (exporter), the Carrier (freight forwarder/shipping line), the Consignee, and the Notify Party. Among them, the "Consignee" determines the ownership of the goods.

The "Consignee" field is typically filled in one of two ways:
　　 One is "To Order" or "To Order of...," meaning the consignee is not yet determined. This type of bill of lading can be freely transferred through endorsement (the original holder signs on the back to indicate transfer), making it quite valuable—because whoever lawfully holds the bill of lading owns the goods. Such a bill of lading is a "Bearer Bill of Lading." In operations involving bearer bills of lading, the foreign buyer cannot take delivery without the original bill of lading (unless the freight forwarder or shipping line acts improperly and releases the goods without presentation, which is illegal). This is very secure and is recommended for use. Under letters of credit, banks usually also require such bills of lading.
　　 The other is a "Straight Bill of Lading," where the "Consignee" field specifies the exact company name and address of the consignee (usually the foreign buyer), and only that company can take delivery. Because the consignee is specifically designated, even if someone else obtains the bill of lading, it is useless, and this bill of lading cannot be transferred. On the other hand, precisely because the consignee is fixed and only they can take delivery, some countries recognize that this consignee can take delivery simply by proving their identity, even without the original document.
　　 This is why, in our business, we sometimes encounter situations where a foreign buyer can take delivery without obtaining the original bill of lading.
　　 In such cases, handing over the goods to a freight forwarder and issuing a straight bill of lading is almost equivalent to delivering the goods directly to the foreign buyer. If payment has not been collected by that point, there is a certain risk, as payment then depends solely on the foreign buyer's integrity. A straight bill of lading thus loses its function as a "document of title."

 

2. Which countries allow cargo release without an original straight bill of lading?

　　Not all countries allow cargo release without an original (straight) bill of lading.

　　There are two major legal systems in the world today: common law and civil law. Under common law, a straight bill of lading was historically not considered a document of title. As a result, unauthorized release of cargo against a straight bill of lading is more likely to occur in common law jurisdictions.

Common law countries include:

　　United States, Canada, United Kingdom, Australia, Hong Kong, New Zealand, India, Pakistan, Bangladesh, Malaysia, Singapore, Bahamas, Botswana, Brunei, Cameroon, Cyprus, Fiji, Gambia, Ghana, Grenada, Guyana, Jamaica, Kenya, Kiribati, Lesotho, Maldives, Malta, Mauritius, Mozambique, Namibia, Nauru, Nigeria, Seychelles, Sierra Leone, South Africa, Sri Lanka, Swaziland, Tanzania, Tonga, Trinidad and Tobago, Tuvalu, Uganda, and others.

　　If in doubt, you can check online whether the overseas buyer is based in a common law country.

　　That said, even in common law countries (including the UK), recent case law has emerged recognizing a straight bill of lading as a document of title. In common law systems, judicial precedents carry the force of law, so this can be seen as a positive shift. Nevertheless, caution is still advised — prevention is always the priority. Once a problem arises, even if you win in court, it may not be worth the cost for most small and medium-sized export enterprises. Moreover, winning is not guaranteed; experienced foreign buyers can easily turn litigation into a commercial dispute, dragging it out for years.

　　Therefore, when dealing with unfamiliar overseas buyers — especially under D/P terms — it is best to avoid using a straight bill of lading. In practice, whether the bill is straight or negotiable makes little difference to the buyer in a legitimate business transaction.

 

3. Are a forwarder’s bill of lading and a carrier’s bill of lading the same thing?

 

　 　In practice, we encounter two types of bills of lading: the master bill of lading (MBL) and the house bill of lading (HBL). A shipping line is a freight company that owns ocean-going vessels. An ocean-going vessel costs a fortune to build, so any company with its own fleet is financially strong. In a sense, such companies are also more reliable, because those in it for the long haul care about their reputation and won’t risk it for petty gains — their operations tend to be more by the book. The other type of freight company is the freight forwarder, or forwarder for short. A forwarder does not own ships; in some ways it is similar to an ordinary trading company. It collects cargo from various shippers and then books space with the shipping line. You can think of the difference and relationship between a shipping line and a forwarder as that between a wholesaler and a retailer — the “goods” being the slots on an ocean-going vessel. The shipping line wholesales the slots to the forwarder, and the forwarder retails them to us. 

　　It is easy to imagine that while shipping lines are reliable, they can be a bit “too big to bend” — often falling short of forwarders in terms of service flexibility and attentiveness. Forwarders are numerous and widely distributed, making communication with us in foreign trade very convenient. They are also more willing to accommodate our operational needs, especially when it comes to special arrangements like the “backdated bill of lading” mentioned earlier. So in day-to-day work, we deal with forwarders far more often. 

　　On the surface, an MBL and an HBL appear to have similar legal effect — we sell the original bill of lading to the foreign buyer, and the buyer takes delivery against it. In reality, however, there are differences. First of all, a bill of lading is itself a “contract of carriage”; when the carrier issues a B/L to us, it is effectively signing a carriage contract. An MBL is a contract between us and the shipping line, whereas an HBL is not. We hand the cargo to the forwarder, who then hands it to the shipping line. There is a carriage agreement between the forwarder and the shipping line, and the shipping line is responsible only to the forwarder, not to us as the cargo owner — because under an HBL arrangement, the forwarder is the “cargo owner” in the eyes of the shipping line. 

　　Therefore, with an MBL, you can take delivery directly at the port of destination; with an HBL, you cannot — you need to present the HBL to the port agent to “switch” it, i.e., obtain a delivery order based on the HBL before you can pick up the cargo. Of course, for the consignee, this is just one extra formality on the surface and does not affect the ability to take delivery — it is not a risk. On the contrary, we can use this to better control title to the goods. For example, after we hand the HBL to the customer, if we suddenly discover fraudulent behavior and suspect the customer may not pay, we can ask the forwarder for help and instruct the destination agent to “hold” the cargo. This way, even if the foreign buyer holds the HBL, they cannot immediately take delivery, buying us valuable time (without a formal reason, the destination port cannot forcibly detain the cargo for long — only a few days — but in foreign trade disputes, such a delay is very advantageous to the exporter).   
　　In short, if something goes wrong with the shipment itself and we need to hold the freight company liable, a financially strong shipping line is clearly more capable of taking responsibility than an ordinary forwarder. In day-to-day operations, however, forwarders are more accommodating than shipping lines. When it comes to flexible handling of bills of lading and preventing commercial fraud, a forwarder’s assistance is crucial. Moreover, forwarders often offer competitive freight rates and frequent discounts.
 
　　Operational differences between MBL and HBL: MBL is the shipping line’s bill of lading; HBL is the forwarder’s bill of lading.
 

1. The SHIPPER sends the shipping instruction to the FORWARDER, indicating whether it is an FCL or LCL shipment.

2. The FORWARDER books space with the shipping line. After the vessel is ON BOARD, the shipping line issues the MBL to the FORWARDER. The SHIPPER on the MBL is the forwarder at the port of loading, and the CNEE is usually the forwarder’s branch or agent at the port of destination.

3. The FORWARDER issues the HBL to the SHIPPER. The SHIPPER on the HBL is the actual cargo owner. The CNEE is usually TO ORDER when a letter of credit is involved.

4. The CARRIER transports the goods to the destination port after vessel departure.

5. The FORWARDER sends the MBL to the destination branch office via DHL/UPS/TNT, etc. (INCLUDING: CUSTOMS CLEARANCE DOCUMENTS)

6. After obtaining the Bill of Lading, the SHIPPER presents documents to the domestic negotiating bank within the presentation period for settlement. If under T/T terms, the SHIPPER sends the documents directly to the overseas customer.

7. The negotiating bank forwards the full set of documents to the issuing bank for settlement.

8. The CNEE makes payment to the issuing bank to release the documents.

9. The FORWARDER uses the MBL to exchange for the delivery order from the shipping company, then handles cargo pickup and customs clearance.

10. The CNEE presents the HBL to the FORWARDER to take delivery of the goods.
 
 
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