Bills of lading are official documents used to prove a contract between shippers and shipping companies. Different types include direct, order, combined transport, and through bills, with varying provisions and clauses. They protect buyers, sellers, and the transaction itself.
There are several types of bills of lading in use among shippers and merchants around the world, although they can generally be divided into a few general categories. The simplest is usually what is known as a direct or direct account, although it is usually only suitable for standard interactions between shippers and sellers. More complicated situations call for more nuanced types, mainly order invoices, which are used when goods are shipped before they have actually been paid for; combined transport bills, which cover both shipping and delivery; and through bills, which include multiple carriers and a translation liability. It is also common to add a variety of clauses to invoices to tailor them to the specifics of a given situation.
Understanding bills in general
Bills of lading are official documents which serve as proof of a contract between a shipper and a shipping company or ship’s master, in which the latter has agreed to carry the goods on behalf of the shipper to a specified destination. They are important legal tools that are often used to assign liability and demonstrate liability in the event that shipped goods do not arrive, or do not arrive as promised.
Early bills of lading applied almost exclusively to sea merchants and were an important aspect of maritime law for centuries. Most direct or simple types remember this more simplistic past tense, in which there is a sender and a receiver. Many still relate to ocean liners, but virtually any form of transportation can make use of this bill today. However, modern trade is often more complex than in past eras, and as such different types of bills of lading have adapted. While the specific terms and provisions vary, sometimes widely, the core concept – to protect buyers, sellers and the business transaction itself – generally remains consistent.
Direct or straight invoices
Merchants often use a through bill of lading when goods are only moved from the port of origin to the port of destination. In practical terms, this means that the freight forwarder will have to independently arrange for the delivery of the goods from storage to the shipping company. Upon arrival of the goods at the port of destination, the consignee, or the person indicated on the bill as the recipient of the goods, must arrange for the goods to be collected from the shipper. Most of the time, this type of bill has a clause on the back that grants the shipping company the authority to transfer the goods to another vessel, truck, or vessel before its arrival at the stated destination.
Order invoices Order
Order invoices are similar in scope, but are usually used when the shipped goods have not yet been paid for. Sellers in these cases often assume responsibility for the value of the goods if damaged, and orders and provisions in bills typically give consignees the right to refuse defective or incomplete shipments. Provisions on how and when payment is to be collected are also typically included.
Combined transport invoices
The combined transport note is normally issued in situations where the shipping company assumes responsibility for collecting the goods from the shipper as well as delivering the goods to the consignee upon arrival at the destination. This type of bill of lading is called a “combined” bill because it usually involves more than one means of transportation. For example, the shipping company may pick up the goods from the shipper’s office, warehouse, depot or home by truck. It would then be loaded onto a ship or plane, unloaded upon arrival at its destination, and delivered to the recipient via truck, train, or other means of transportation.
Provide multiple carriers
A through bill of lading is similar to combining since both types involve other means of transportation. The only difference is that, with bill through, other forms of transportation will not be provided by the shipping company. In this case, the different stages of the transport will involve other carriers such as truck rental, rail transport and even air transport. In such a case, the Forwarder may only accept liability for any damage to the goods while the goods are in his direct possession. Liability for damage while the goods are in the possession of other carriers may be limited to them.
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