Functions of a Bill of Lading

An individual wishing to ship a consignment of goods overseas approaches a shipping line, either directly or more often through a forwarding agent, with a view to reserving space on a vessel. He is then instructed by the carrier when and where to deliver the goods and, having done so, is issued with a receipt indicating the type and quantity of goods handed over and the condition in which they were received by the carrier’s agent. From that point the carrier normally has control of the goods and is ultimately responsible for loading aboard. In the meantime the shipper will normally acquire a copy of the carrier’s bill of lading form which is obtainable either direct from the carrier’s agents or from stationers throughout the country. On the form he will enter details of the type and quantity of goods shipped, together with any relevant marks, and interalia will specify the port of destination and the name of the consignee. On receipt of the completed bill, the carrier’s agent will check the cargo details against the tallies at the time of loading and, if correct, will acknowledge them if so requested. After calculating the freight and entering it on the bill, the master or his agent will sign the bill and release it to the shipper in return for delivery of the mate’s receipt or equivalent and payment of any advance freight due. The shipper is then free either to dispatch the bill directly to the consignee or to deliver it to a bank if the shipment forms part of an international sales transaction involving a documentary credit. In either case, the consignee may decide to sell the cargo while in transit, in which case he may indorse the bill of lading in favour of the purchaser. Eventually the ultimate consignee or indorsee of the bill will surrender it at the port of discharge in return for delivery of the goods. This brief outline indicates the vital importance of the bill of lading to the performance of the carriage contract and it is now necessary to consider the various functions of the bill in more detail.