The Bill of Landing

The Bill of Landing (its abbreviation is B/L) is an essential document in international trade and shipment. It is important in law, in finance, and in insurance.

It is important in law because it is legal title to ownership of the goods. If an importer holds the Bill of Landing he can take possession of the goods printed on it. The consignee (the buyer or importer) can get his goods only when he presents the Bill of Landing to the shipping company when the ship arrives.

It is important in finance because the Bill of Landing is usually handed to the bank together with the Export Invoice and the Certificate of Insurance, before the bank will issue credit or accept the Bill of Exchange. The consignor (the seller or exporter) sometimes demands payment before he hands the Bill of Landing to the buyer or his bank.

It is important in insurance because the Bill of Landing states whether the goods have been inspected on board ship by the Captain (or Master) of the ship. In the USA, ‘on deck’ is often used instead of ‘on board’. This is important in deciding who is responsible or liable for any damage to the cargo.

The Bill of Landing is a receipt signed by the captain of the ship for the cargo he has received on board. This is called a ‘shipped’ Bill of Landing (also called a ‘shipped on board’ Bill of Landing). This Bill of Landing states that the captain has inspected the goods after loading, and gives the following details:

- the name of the shipper

- the name of the ship

- the consignee (or ‘to order’)

- the port of loading

- the port of discharge

- the marks and numbers

- the quantity

- the type of packing

- the description of the goods

- the weight

- the measurement

Banks usually require ‘shipped’ Bill of Landing for credit transactions.

A ‘clean’ Bill of Landing means that the ship owners agree that the goods were received on board in good condition. If the goods are not in good order and condition, the Bills of Landing are described as ‘dirty’, ‘unclean’, or ‘foul’.

Some Bills of Landing are also called ‘claused’, because the ship owners sometimes add an extra clause to show that the goods were, for example, badly or inadequately packed. This may be important for the insurance surveyor.

A bill of Landing is negotiable document. An importer can endorse the Bill of Landing and sell the goods in this way, even before they arrive. An importer can endorse a Bill of Landing by signing across the back. In this way, ownership of the goods can be transferred to another buyer simply by handing the endorsed Bill of Landing to him. A Bill of Landing can state that the goods must be delivered to a certain person or company, or it may state ‘to order’. (This phrase is also printed on cheques and Bills of Exchange). A letter of Credit may demand that the Bill of Landing should be made out ‘to order’ and endorsed ‘in blank’. This means that the sellers place no restrictions on the right to transfer ownership.

Many ship owners print their own Bills of Landing, and not all look alike. The master of the vessel signs the Bill of Landing and the ship owners retain a copy. The other copies are sent to the exporter (or seller). He will then send a copy to the bank either for payment or for acceptance of a Bill of Exchange. If there is a regular trade between a seller and a buyer, the seller will draw on the buyer’s credit, and send copies of the Bill of Landing by separate mails to make sure he receives at least one. The buyer can then present the Bill of Landing to the shipping company at the port of discharge, and can take delivery of the goods. Companies often do this through forwarding agents. When these arrangements are completed, they receive the Bill of Landing from the captain of the ship which transports the goods. There are usually three or four copies. On of the copies is kept by the shipping company, and the other copies are sent to the exporter.

II. Answer these questions:

i. How can you characterize the Bill of Landing?

ii. Why is it important in law?

iii. When can the consignee get his goods?

iv. Why is it important in finance?

v. Why is it important in insurance?

vi. When is the Bill of Lading called ‘shipped’?

vii. What does it state?

viii. What does a ‘clean’ Bill of Landing mean?

ix. When are the Bills of Landing described as ‘dirty’?

x. Why are some Bills of Landing called ‘claused’?

xi. Why is the Bill of Landing a negotiable document?

xii. Do all Bills of Landing look alike? Why?

xiii. How can a buyer present the Bill of Landing to the shipping company?

III. Say whether the statements are true or false:

1. A Bill of Landing gives the person named on it the right to possess the goods described on it.
2. The consignee’s name is usually printed on the Bill of Landing.
3. If the Bill of Landing is made out ‘to order’ it means that ownership of the goods cannot be transferred to another person.
4. The Bill of Landing is signed at the bottom by the exporter.
5. A shipped Bill of Landing is one which is signed by the captain of the ship after he inspects the goods on board ship.
6. The marks and numbers of the containers or crates must be printed on the Bill of Landing.
7. You endorse a Bill of Landing by signing it, and you can then transfer ownership of the goods to someone else.
8. The Bill of Landing is one of the shipping documents which must be presented to a bank when payment is arranged.
9. Copies of the Bill of Landing are sent to the exporter and the customs only.
10. In insurance it is important to know if the Bill of Landing is ‘clean’ or not.
11. The consignee is the person who receives the goods.

IV. Match the equivalents:

A	B
1. Airway bill	a) груз
2. Bill of Exchange	b) сделать передаточную запись на бланке
3. Bill of Landing	c) вексель
4. Bill of Landing to order	d) авиагрузовая накладная
5. Cargo	e) ордерный коносамент
6. Clean Bill of Landing	f) разгружать
7. Consignee	g) грузоотправитель
8. Consignor	h) бланк транспортной накладной
9. Dirty Bill of Landing	i) право собственности
10.Discharge	j) коносамент
11.Endorse in blank	k) грузополучатель
12.Shipment	l) коносамент с оговорками
13.Shipped Bill of Landing	m) отправка товаров
14.Title	n) коносамент, транспортная накладная

V. Match the terms with its definitions:

Term	Definition
1. Cargo	a) a right to posses, or own goods or property
2. Consignee	b) goods carried or transported by road, rail, sea or air
3. Consignor	c) ownership can be transferred by endorsing and transferring a document
4. Negotiable	d) the person or institution (in the exporting country) which sends the goods
5. Title	e) the person or institution (in the importing country) to which goods are sent

VI. Insert the correct words in the appropriate spaces in the passage below: