Chapter six

Maritime Documents
6.1. Introduction
There is a standard regime for sea freight documentation, depending upon the documentary
requirement by the shipper. For each form of maritime transport, there is a specific transport
document, and it has different levels of significance depending upon the mode of maritime
transport. If the shipment is of a deep sea nature, then the documentation required will be
either a bill of lading or a sea waybill. If the shipment is of a short-sea nature, then the
documentation may be a bill of lading (if a container feeder vessel is used), a sea waybill or a
CMR consignment note (if the consignment is loaded in a trailer for Ro-Ro ferry purposes).
The main difference between the CMR consignment note and the bill of lading or sea waybill
is that the consignment note covers the whole freight movement using the road trailer, and
does not refer specifically to a ferry journey as part of that movement. However, all shipping
documents refer to the vessel cargo manifest, which is the document showing all cargoes
loaded aboard the vessel, and gives summary details of each cargo. In turn, a copy of the
cargo manifest is always presented to the vessel’s master prior to the vessel’s departure, and a
mate’s receipt is signed and handed back to the ship’s agent prior to the vessel leaving port,
as proof of receipt of the cargo aboard the vessel.

6.2. Bill of Lading

A bill of lading (often referred to by its full title, namely an ocean or marine bill of lading) is
a receipt for goods shipped on board a vessel, signed by the person (or their representative,
the agent) who contracts to carry them, and stating the conditions in which the goods were
delivered to (and received by) the ship. It is not the actual contract, which is inferred from the
action of the shipper or ship owner in delivering or receiving the cargo, but forms adequate
evidence of the terms of the contract. It is also a document of title (ownership) to the goods,
which is the subject of the contract between the seller (exporter) and the buyer (importer).
Furthermore, it may be seen as a proof of loading aboard the vessel in its ‘shipped on board’
format, and is, therefore, seen as proof of shipment of the consignment. It is, therefore, the
most important commercial document in the process of international trade, and is used to
control the delivery of goods transported by sea. It, therefore, has three primary functions:

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1. Document of title (ownership): a document of title (ownership) to the goods, which
is the subject of the contract between the seller (exporter) and the buyer (importer).
Transfer of ownership of goods to freight carrier or importer.
2. Evidence of the contract of carriage: B/L is the contract b/n a shipper and the
carrier. It outlines the shipping method, terms of transporting goods from origin to
destination.
3. Receipt for the goods: The B/L acts as a form of receipt that the shipping agent
receives goods. It’s the proof that the carrier has received the goods from the shipper
or their agent in apparent good order and condition.

The ocean (marine) bill of lading contains or provides evidence of the contract of carriage
between the carrier and the shipper, under which both the carrier and the shipper promise
that the goods will be carried from the port of loading by maritime vessel and safely
delivered at the port of discharge. During the voyage, the ownership of the goods will
normally be transferred from the original seller to the ultimate buyer (deemed to be the
receiver of the consignment), who will take delivery of the goods from the ship.
Effectively, the bill of lading, in its legal format, places the responsibility for looking
after the goods while in transit firmly in the hands of the carrier, who then becomes liable
for the consignment in the event of loss or damage while the goods are in transit on the
high seas. This responsibility is detailed the Carriage of Goods by Sea Acts, in force in
national legislation. The bill of lading is, in reality, only raised once the vessel has sailed,
given that it is a document that proves the consignment has been loaded aboard the vessel,
and is on its way to the port of destination. It is raised, essentially, from the cargo
manifest, which is prepared in advance of the vessel being loaded, and details all cargoes
to be loaded aboard the vessel.

Parties in Maritime B/L

1. Carrier: it is the party that moves the cargo. E.g. Maersk – or any shipping line
(ESLSE), haulage company or airline that carries your cargo.
2. Shipper: it is responsible for packing and preparing the shipment for transportation.
This might be your supplier, or your own warehouse/manufacturer.

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 3. Consignee: it is the party designated to receive the shipment. Again, depending on
what you’re shipping this could be your company, or a manufacturer who uses parts
you’re shipping.
4. Notify Party: the person designated on a B/L to be notified when a shipment arrives
at its destination. This person is often responsible for arranging customs clearance,
and can be the buyer, consignee, shipping agent, or other entity.
5. Named agent: a licensed agent in a port who transacts the ship business such as
insurance, documentation etc.
6. Master (Captain).

Contents of Bill of Lading

The main points incorporated in a bill of lading are listed as follows:

1. the name of the carrier, agent or NVOCC;

2. the name of the shipper (usually the exporter);
3. the name of the carrying vessel;
4. a full description of the cargo (provided it is not bulk cargo), including any shipping
marks, individual package numbers in the consignment, contents, cubic measurement
and gross weight;
5. the marks and numbers identifying the goods;
6. port of loading/shipment;
7. port of unloading/discharge;
8. full details of freight charges, when and where payable, whether freight prepaid or
payable at destination (freight collect);
9. name of consignee or, if the shipper prefers to withhold the consignee’s name, the
shipper’s order (to the order of . . .);
10. the terms of the contract of carriage;
11. the date the goods were received for shipment and/or loaded aboard the vessel;
12. the name and address of the notified party (the person to be notified on arrival of the
shipment, usually the buyer);
13. the number of bills of lading signed on behalf of the vessel’s master or his or her
agent, acknowledging receipt of the goods; and
14. the signature of the vessel’s master or his or her agent and the date of signature.

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There is also the clause stating that the consignment was ‘received in apparent good order
and condition’ by the carrier, which absolves the carrier from any liability in the case of the
consignment arriving at the quayside already damaged. If damage has occurred to the
consignment up to the point of receipt by the carrier, this clause is struck through, and the bill
becomes a ‘claused’ bill of lading, requiring the seller to assume responsibility for such
damage to the consignment.

6.2. Types of Bill of Lading

There are several types and forms of bills of lading, and these are as follows.

1. The shipped on board bill of lading.

Under the Carriage of Goods by Sea Act 1971 (Hague-Visby Rules), the shipper can demand
that the ship owner supplies bills of lading proving that the goods have actually been shipped;
in other words, that they have been loaded aboard the vessel and that the vessel has sailed
from the port of departure. This set of conditions is always required by a bank, especially
where a letter of credit or cash against documents payment terms are used between seller and
buyer. For these reasons, most bill of lading forms are already printed as shipped on board
bills and commence with the words ‘shipped in apparent good order and condition’. It
confirms that the goods are actually on board the vessel.

2. The received bill of lading.

This document is used where the words ‘shipped’ or ‘shipped on board’ do not appear on the
bill of lading. The term simply confirms that the goods have been handed over to the ship
owner or operator and are in their care. The cargo may be in the dock, warehouse or transit
shed of the shipping line, or even inland at an inland clearance depot (ICD). This bill,
however, does not have the same meaning or importance as a ‘shipped on board’ bill, and the
buyer, under a CIF or CFR contract, is not legally obliged to accept such a bill for ultimate
financial settlement through a bank unless provision has been made for this in the contract of
sale. In general, forwarding agents will avoid handling ‘received bills’ for their customers
unless special circumstances require.

3. Through bills of lading.

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In many cases, it is necessary to use the services of two or more carriers to ship the goods to
their final destination. The on-carriage may be either by a second vessel or by a different
form of transport (e.g. the trans-shipment of a cargo such as a container of Scotch whisky
from the port of Grange mouth to Hong Kong via the port of Rotterdam, or the use of rail
freight to ship a containerised consignment from Liverpool via the port of Montreal to
Chicago). In the first example, a container feeder vessel ships the consignment to the port of
Rotterdam, and then the consignment is transhipped on to a larger deep-sea container vessel
to the port of Hong Kong. In the second example, the container vessel sails from Liverpool to
the port of Montreal, and then the consignment is trans-shipped on to a waiting container
train for onward shipment to Chicago. In such cases, it would be very complicated and more
expensive if the shipper had to arrange on-carriage themselves by employing an agent at the
point of trans-shipment. Shipping companies, therefore, issue bills of lading, which cover the
whole transit, and the shipper deals only with the first carrier. In the case of the trans-
shipment, the shipping agent will arrange the whole set of voyages, as well as the unloading
and loading at the port of trans-shipment, and special bills of lading need to be prepared for
such through-consigned cargo. This type of bill enables a through rate to be quoted, and is
growing in popularity, as well as necessity in many cases, with the development of
containerisation.

4. Groupage (master) and house bills of lading.

Another sector of the container business that is experiencing significant growth is the
principle whereby consignments from individual consignors destined for several consignees
located in the same country or region are forwarded as one single consolidated consignment
in a single container load, classed as an LCL (less-than-container load). Each consignment is
not large enough to completely fill the container, so it is grouped or consolidated with several
other consignments at an inland depot, and is shipped as a container load to the port and on to
the waiting vessel.

At the point of consolidation, the shipping line issues a groupage bill of lading to the
forwarder or NVOCC. This is the ocean bill of lading, and it shows a number of
consignments of groupage of a certain weight and cubic measurement in a cargo manifest
format, often supported by a load list. The forwarder then issues subsequent cross-referencing
to the ocean bill of lading (the master bill) through the house bills of lading, each bill
referring to the separate consignments within the groupage or consolidation. The house bill is

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simply a receipt for the cargo and does not have the same status as the ocean bill of lading
(the master bill) issued by the shipping line. The advantages of grouping or consolidation
include the following:

 less packing;
 lower insurance premiums;
 quicker transits;
 less risk of damage and pilferage; and
 lower rates when compared with such cargo being despatched as an individual parcel
or consignment.
5. Trans-shipment bill of lading.

In some respects, the trans-shipment bill of lading is very similar to the through bill of lading,
but, more often, is issued by shipping companies when there is no direct service between two
ports, but when the ship owner is prepared to trans-ship the cargo at an intermediate port at
their expense. In the example used of the shipment of Scotch whisky out of the port of
Grangemouth to Hong Kong, a trans-shipment bill of lading could be used rather than a
through bill of lading, since there is no direct container vessel service between Grangemouth
and Hong Kong. There is a need to trans-ship the container via a third port, such as
Felixstowe or Rotterdam.

6. Combined transport bill of lading.

With the development of combined transport operations such as sea and rail or sea and road,
an increasing volume of both liner cargo trade and bulk cargo shipments will be carried
involving the bill of lading being issued in association with a selected charter party.

7. Container bills of lading.

Containers are now the standard form of transport for most general cargoes, and, as a result,
container bills of lading are commonly in use. They cover the goods from port to port, or
from inland point of departure to inland point of destination, usually an inland clearance
depot or container base.

8. Negotiable bills of lading.

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If the words ‘or his or their assigns’ are contained in the bill of lading, it is negotiable, along
with the term ‘negotiable bill of lading’ at the top of the bill. There are, however, variations
in this terminology (e.g. the word ‘bearer’ may be inserted, or another party may be stated in
the preamble to this phrase). Bills of lading may be negotiable by endorsement or by transfer.
If they are negotiable, the bills are used as collateral by the seller to secure payment from the
buyer, especially where the ‘cash against documents’ payment terms is used. Each bill must
be individually signed by a representative of the agent or the shipping line, and then
presented to the party exercising lien (right of ownership) over the goods.

9. Non-negotiable bills of lading.

When the words ‘or his or their assigns’ are deleted from the bill of lading, or the words
‘non-negotiable bill of lading’ appear at the top of the bill, the bill of lading is regarded as
non-negotiable. The effect of this deletion is that the consignee (or other named party) cannot
transfer the property or goods by transfer of the bills to the buyer.

10. Clean bills of lading.

Each bill of lading states the expression ‘received in apparent good order and condition’,
which refers to the cargo received by the shipping line. If this statement is not modified by
the ship owner or vessel operator, the bill of lading is considered as ‘clean’ or ‘unclaused’.
By issuing clean bills of lading, the ship owner or vessel operator admits their full liability of
the cargo described in the bill under the law and their contract with the shipper, while the
cargo is in their care.

11. Claused bills of lading.

If the ship owner or vessel operator does not agree with any of the statements made in the bill
of lading, or knows that a cargo has been damaged prior to them receiving it at the port of
loading, they will add a clause to this effect, or will strike out the ‘received in apparent good
order and condition’ clause on the bill, thereby causing the bill of lading to be termed as
‘unclean’, ‘foul’ or ‘claused’. There are many recurring types of such clauses, including the
following:

 inadequate packaging;
 unprotected machinery;

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  second-hand cases;
 wet or stained cartons (especially in the case of alcoholic goods);
 damaged crates; and
 cartons missing.

The clause ‘shipped on deck at owner’s risk’ may, thus, be considered to render a bill claused
under this heading. Such bills would normally lead to the buyer seeking some form of
compensation or replacement of goods from the seller, and can, in some cases, lead to total
rejection of the consignment by the buyer.

Example 1: bill of lading showing cargo description as ‘‘HDPE bags’’ – few bags or HDPE
consignment ‘‘master ‘’observed torn or wet. In that case master put his observation clause
i.e. may be like: ‘‘Torn HDPE bags’’ or ‘‘Wet HDPE bags’’

Example 2: in case of cargo observed short by quantities ‘‘Master’’ may be added ‘‘clause’’
like: ‘‘Short shipment’’ or ‘‘Quantities goes missing’’

6.3. The sea waybill

The sea waybill is also a maritime transport document, but, unlike a bill of lading, it is not a
negotiable document, and, therefore, does not have the status of a document of title. It is,
however, still seen as evidence of a contract of carriage between the ship owner or vessel
operator and the shipper, and is also a document of receipt for the goods by the shipping line.
It is more often used for short-sea shipments, as the time taken to transport such
consignments is in the nature of some 24 hours, especially in the case of shipments through
European waters, and there is no time to consider the use of the bill of lading as a negotiable
instrument between seller and buyer. The sea waybill is also used where there is no specific
need for the evidence of transfer of title from seller to buyer on the grounds of different
means of payment terms between the two parties, and this means that the legalities of a bill of
lading are not required.

6.4. The CMR consignment note

The CMR (consigne de marchandise routière) consignment note is a transport document, but
without the same legality as a bill of lading. In some ways, its function is similar to that of a
sea waybill, except that it covers a road transport journey, usually with an element of sea

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transport integrated within the journey, namely a short-sea Ro-Ro ferry crossing. The CMR
consignment note is issued by the road haulage company for the consignment within a trailer
load, and is transferred to the shipper through the freight forwarder, and includes any
arrangements to ship the goods by Ro-Ro ferry, where appropriate. The consignment note can
cover not only the consignment itself, but also the entire trailer load, where required.

In general, the maritime element of the journey is not specified on the consignment note, as,
in many ways, the Ro-Ro ferry is only considered an extension of the roadway, but, in reality,
a distinct booking must be made by the haulier with the ferry operator for the loading of the
trailer on board the vessel, which is then seen as a maritime contract of carriage in its own
right. However, there is a box on the CMR detailing any successive carriers, and the name of
the ferry company could be inserted in this space on the note.

Even if the shipper is not aware of the short-sea Ro-Ro ferry route taken by the trailer, the
haulier is aware of it, as not only is the responsibility of the ferry crossing on the shoulders of
the haulage company, but also the cost of the journey must be taken into account by the
haulage company and included in the freight invoice to the shipper, even where the ferry
crossing is booked and paid for at the last minute, often by the driver of the vehicle him or
herself. However, because of the nature of road haulage and the expediency of using the
least-cost means of shipment, the haulage contractor may not decide until the last minute
which ferry crossing the trailer is to take. Therefore, it is not always expedient to book a ferry
crossing well in advance, as the choice of ferry service to be used may only be made while
the trailer is on the move. This does not mean that the trailer is always accompanied by the
driver; in many cases, the tractor is removed from the trailer prior to loading aboard the
vessel, and the trailer is moved on to the ferry by a separate tug, which leaves the trailer on
board and drives off the ferry prior to its departure. The trailer is carried in an unaccompanied
state to the port of destination, where it is driven off the vessel by another tug and is collected
by a waiting driver in his or her own tractor unit ready for onward transport to its final
destination. As long as the correct documentation refers to the trailer load, then the carriage
may be undertaken without issue.

6.5. The cargo manifest

The cargo manifest is often overlooked as a freight document, in that it is not normally issued
to either seller or buyer, but it nevertheless plays a vital role in the process of the movement

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of goods by sea. The cargo manifest is the first main document to be produced by the agent
for all shipments being loaded aboard the vessel. It is based on the load list submitted for the
contents of every container, or even a list of all cargoes being loaded aboard a general cargo
vessel, and details those cargoes to be loaded aboard the vessel. In the case of a container
vessel, it details all the containers to be loaded aboard the vessel and the contents of each
container. It is from this information that the bill of lading can be derived, although, on many
occasions, the export cargo shipping instructions (ECSI) will perform the same function.

There are several copies of the cargo manifest, and these are kept by the following parties:

 the vessel;
 the shipping line;
 the shipping agent at the port of departure;
 the shipping agent at the port of arrival;
 export customs; and
 import customs.

It is vital that a copy of the cargo manifest is kept on board the vessel, as this performs three
distinct functions:

1. it notifies the master of the vessel of all cargoes aboard the vessel;
2. it acts as the master’s receipt for such cargoes; and
3. it acts as a legal function verifying that the master of the vessel is fully aware of the
cargoes he or she is carrying.

Under the Carriage of Goods by Sea Acts, the master of the vessel is fully responsible as the
carrier’s representative for all cargoes carried aboard the vessel, and, therefore, must be fully
aware of all the cargoes carried by that vessel, especially in the case of accidents or
emergencies, should action be required to limit damage or problems that might endanger and
prejudice the safety of the vessel and its crew.

A bill of lading has more distinct functions than does a cargo manifest. Whereas a manifest
gives overall details of a set of cargoes, which can then be summarily scrutinised by the
customs authority for the purpose of examination of a specific cargo or the container in which
it is located at the port, a bill of lading will be used for the purpose of an import customs
declaration, and may be scrutinised by a landing officer of the customs authority for details
with relation to the assessment of import duties and taxes, which cannot be undertaken with a

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cargo manifest. Furthermore, the bill of lading has three distinct functions that do not relate to
a cargo manifest. These functions are:

 Document of title (ownership of the consignment);

 Evidence of contract of carriage; and
 Receipt by the carrier for the consignment.

In these respects, the bill of lading is a legal document and can be used as collateral in the
contract of sale, as well as proof of responsibility for the carriage of the shipment. In this
respect, it may be used as legal evidence where a cargo manifest cannot.

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