Learning Scenario 4 Fulfillment

of International Freight
4.4 Formation and issuance
Forwarding of bills of lading
Contracts

Speaker: Li Zhe
 1 Learn to navigate

conten 2
Definition and types of
bills of lading
t
CONTENTS
3
Bill of lading
preparation and
business
4 practice and think
01 Learn to
navigate
Learn to
navigat
e
01 01 Ability to make bills
of lading
02 Will operate bill
02
Know of lading
business
ledge
Skill
Targe
targe 02
01 Understand the t
definition and types t
02 of bills of
Master lading
the drafting
and business of bills 01
of lading
Learn to
navigate

01 focus 02
03difficulty04

Definition Bill of Bill of lading

and types lading preparation
of bills of preparation and
lading and business
business
02 Definition and
types of bills of
lading
1 . Basic knowledge of
bill of lading
1.1 Definition of bill of lading and related parties

Ocean Bill of Lading (Marine Bill of Lading or Ocean Bill of

Lading) , or simply Bill of Lading (B/L) , is one of the most
important documents in international settlement.

Article 71 of the Maritime Law of the People's Republic of

China ( implemented on July 1 , 1993 ) stipulates: "A bill of
lading refers to a contract used to prove that the contract of
carriage of goods by sea and the goods have been received or
loaded by the carrier, and the carrier guarantees delivery in
accordance with which Documents of the goods. The terms
stated in the bill of lading to deliver the goods to the bearer
of record, or to the order of the instructing person, or to the
1.2 The
function of the
bill
(1) Aof
billlading
of lading is a
cargo receipt that proves
that the carrier has taken
over the goods and that
the goods have been
loaded on board .
(2) The bill of lading is
the carrier's guarantee to
deliver the goods and a
transferable document of The
function of
title .
the bill of
(3) The bill of lading is lading
 1.3 Liquidity of
bills of lading
• A bill of lading, as a document of title, can be transferred as
long as certain conditions are met. There are two transfer
methods: blank endorsement and registered endorsement.
• However, the liquidity of a bill of lading is less than that of
a bill of exchange. Its main manifestation is that the
assignee of the bill of lading does not enjoy the rights
superior to the previous endorser like the legitimate bearer
of the bill of exchange. Specifically, if a person fraudulently
obtains a negotiable bill of lading and assigns it by
endorsement to a good-faith assignee who has paid the
price, the assignee cannot thereby obtain title to the goods,
It can't be used against real people.
• On the contrary, if this happens during the circulation of
 1.4. International
Conventions on Bills
of Lading
• (1) Hague Rules : The full name of the Hague Rules is the
International Convention for the Unification of Certain Rules
of Law Relating to Bill of Lading , which was issued on
August 25 , 1924 by the International Convention for the
Unification of Certain Rules of Law Relating to Bill of Lading.
Signed in Brussels by 26 countries and entered into force on
2 June 1931 .
 1.4. International
Conventions on Bills
of Lading
• (2) Visby Rules (Visby Rules) : The full name is " The 1968
Brussels Protocol " (The 1968 Brussels Protocol) , adopted in
Brussels on February 23 , 1968 , in It entered into force in
June 1977. At present, more than 20 countries and regions
including Britain, France, Denmark, Norway, Singapore and
Sweden have joined this convention.
 1.4. International
Conventions on Bills
of Lading
• (3) Hamburg Rules : The Hamburg Rules are the United
Nations Convention of the Carriage of Goods by Sea (1978) ,
which was drafted by the United Nations Commission on
Trade Law in 1976 and approved by the United Nations in
1978 . It was deliberated and adopted at the Plenipotentiary
Conference hosted by 71 countries in Hamburg .
 2. Types of bills of lading

• 2.1. According to whether the goods have been shipped

• (1) On board B/L or shipped B/L refers to the bill of lading issued by the
carrier after the entire shipment has been loaded into the cabin or on the
deck. " Shipped " is a sign that the seller has delivered in accordance with
the contract.
• (2) The bill of lading (received for shipment B/L) is referred to as the bill
of lading to be shipped . It is a bill of lading issued to the shipper after the
shipper has handed over the goods to the carrier and the carrier has taken
over the goods waiting to be loaded on board. Usually such a bill of lading
to be shipped is recorded with words such as "received for shipment in
apparent good order and condition..." , which means that when the bill of
lading is issued, the carrier only takes the goods in charge and prepares it
for shipment soon, but the actual time Not yet shipped.
 2. Types of bills of lading
• 2.2 According to whether there are bad comments on the appearance of
the goods
• 2.2.1 Clean B / L _ _
• This refers to a bill of lading in which the goods are in good apparent
condition when they are loaded on board, and there is no Superimposed
Clause or additional clauses to the " in apparent good order and
condition" printed on the bill of lading. The bills of lading required by the
letter of credit are clean bills of lading. Banks should pay attention to
whether they are clean bills of lading when reviewing documents. If the
word "clean" is not marked on the bill of lading or the word " clean "
originally printed is deleted by the carrier, it does not affect the bill of
lading becoming a clean bill of lading.
• 2.2.2 Unclean Bill of Lading ( foul B/L )
• This refers to a bill of lading that the carrier has added to the bill of lading
 2. Types of bills of lading

• 2.3 According to the filling method of the consignee column in the bill of lading
• 2.3.1 Bill of Lading ( straight B/ L )
• This refers to a bill of lading that specifies the name of the consignee on the bill of
lading. There are the following registration methods: ( 1 ) Consigned to A Co. Ltd.
( 2 ) Deliver to A Co. Ltd. ( 3 ) Onto A Co. Ltd.
• The named bill of lading can only be picked up by the designated consignee, and
the bill of lading cannot be transferred, which can avoid possible risks during the
transfer process, and is generally used for the transportation of valuable
commodities, exhibits and foreign aid materials.
• 2.3.2 Order B/ L
• "Order" ( by instruction ) in the consignee column on the bill of lading. A common
negotiable bill of lading in practice is an instruction bill of lading. The order bill of
lading must be transferred by endorsement, either in blank or in name.
 2. Types of bills of lading

• 2.4. According to the complexity of the bill of lading content

• (1) Full bill of lading (long form B/L)
• This refers to a bill of lading detailing the rights and obligations between
the carrier and the shipper. Due to the variety of terms, it is also called the
traditional bill of lading. In international trade, the bills of lading currently
used are all such bills of lading.
• (2) Short form B/L
• This means that the words "short form B/L" are printed on the bill of
lading , only the front of the bill of lading is included, and the back is a
blank bill of lading. Generally, the back of the bill of lading records the
responsibilities, rights and obligations of the carrier and the shipper, but
the blank back of the simple bill of lading affects its liquidity to a certain
extent, so some letters of credit clearly stipulate that the simple bill of
 2. Types of bills of lading
• 2.5 Divided by different modes of transportation
• (1) Direct B/L
• This refers to the bill of lading issued by the carrier that after the goods
are loaded from the port of departure, they are directly transported to the
port of discharge without changing ships on the way. In the basic content
of the transportation record in the direct bill of lading, only the Port of
Loading and the Port of Discharge are recorded, and the approval
language for transshipment is not allowed.
• (2) Transshipment B/L
• This refers to the bill of lading issued by the carrier when the goods are
loaded at the port of departure and the ship does not directly sail to the
port of destination of the goods, but needs to be transferred to the port of
destination at other intermediate ports.
 2. Types of bills of lading

• 2.6 Classification by ship operation mode

• (1) Liner Bill of Lading (liner B/L)
• A bill of lading issued by a liner shipping carrier or its agent is called a liner
bill of lading.
• (2) Charter Party Bill of Lading (charter payer B/L)
• Chartered shipping is another way of ship operation compared to liner
shipping. Its main features are: sailing around the world, without fixed
routes, fixed sailing schedules and fixed loading and unloading ports
 2. Types of bills of lading

• 2.7 Divided by the time when the bill of lading was issued
• (1) Advance B/L
• This refers to the on-board clean bill of lading that the shipper requires
the carrier to issue in advance when the validity period of the L/C is about
to expire and the goods have not been loaded on board or have not been
loaded on board. That is, the onboard clean bill of lading borrowed by the
shipper from the carrier in order to settle the foreign exchange in time.
• (2) Backdated bill of lading (anti-date B/L)
• This means that the carrier or its agent, at the request of the shipper,
takes the date of the bill of lading as the date of issuance of the bill of
lading after the completion of the shipment of the goods. When the actual
loading time of the goods is later than the shipping period stipulated in
the letter of credit, the shipper often requests the carrier to sign the bill
03 Bill of lading
preparation and
business
 3. Contents of the bill of lading

• 3.1 The positive content of the bill of lading

• (1) Items to be recorded
• (2) Terms on the front of the bill of lading
• The terms on the front of the bill of lading refer to the contractual text in
printed form, which will be listed on the front of the bill of lading.
Common terms are:
• ① Shipment ( or receipt ) terms.
• ② Content not aware of terms.
• ③ Acknowledgment of acceptance of terms.
• ④ Sign the terms.
 3. Contents of the bill of lading
• 3.2 The reverse clause of the bill of lading
• One is a mandatory clause , the other is an arbitrary clause.
• (1) Definition : In the bills of lading of various shipping companies, there are
generally definition clauses, which stipulate the meaning and scope of the "
merchant " as a party to the contract of carriage. The " merchant " is defined
as " Including shipper, consignee, consignee, holder of bill of lading and owner
of cargo " .
• (2) Paramount clause : Explain the legal basis to which the bill of lading
applies, that is, in the event of a dispute, which country's law and court should
rule.
• (3) Carrier 's responsibility clause: Describes the responsibilities and
obligations of the carrier who issued this bill of lading for the carriage of the
goods.
• (4) Carrier 's period of responsibility clause: The terms of each shipping
 4. Drafting of bills of lading

• The ocean bill of lading generally refers to the port to port shipped on board
marine bill of lading (Port to port shipped on board marine bill of lading) , which is
commonly referred to as the ocean bill of lading. The format of the ocean bill of
lading, each shipping company has its own different format, but the columns and
content are basically the same.
• The basic requirement for exporters to make bills of lading and banks to review
bills of lading is " document compliance " .
• 4.1 Shipper , Shipper
• The shipper is also called the consignor , which refers to the party who entrusts the
transportation. If there is no special provision in the letter of credit, the beneficiary
should be the shipper. If the beneficiary is an intermediary and the goods are
shipped directly from the place of origin, the actual seller can also be the shipper.
Because according to UCP600 regulations, if there are no special provisions in the
letter of credit, the bank will accept the bill of lading with a third party as the
• 4.2 Consignee , Consignee
• to the stipulations of the letter of credit , the consignee can be registered, anonymous and instruction .
” . The former is called anonymous instruction, also known as “blank header”, and the latter is called
anonymous instruction.
• Example 1. If the proof requires Full set of B/L Consigned to ABC Co. , then fill in Consigned to ABC Co.
in the consignee column of the bill of lading .
• Example 2. The applicant requires B/L issued to order of Applicant , and if the applicant is Big A Co. ,
then fill in to order of Big A Co. in the consignee column of the bill of lading .
• Example 3. The proof requires Full set of B/L made out to our order , check the name of the issuing
bank as Small B Bank , then fill in to order of Small B Bank, or fill in to Small B Bank's in the consignee
column of the bill of lading order . The filling of the consignee column must be exactly the same as the
letter of credit requirements. Any careless and greedy filling method may be a document inconsistency.
• Examples of discrepancies: B/L issued to the order of ABC Co. Ltd. Whereas L/C required “to ABC Co.
Ltd.” . ( The bill of lading is issued under the instructions of the designated person of ABC company,
while the letter of credit requires " instruction of the ABC company " . The name of a specific company
is completely different from the designated person of this company. The former can only take delivery
of goods by this specific company, and the bill of lading Not transferable, the latter bill of lading can be
transferred after endorsement by this company.
• 4. 3 Notify party , the person to be notified
• Almost all bills of lading have the name of the notifying party. When the
consignee and the notifying party on the named bill of lading are the
same, the column of the notifying party should be filled with " THA SAME
AS CONSIGNEE"; but on the instruction bill of lading, because it is not
written Specify the name of the specific consignee, so that the agent of
the shipping company at the port of discharge cannot contact the
consignee and go through customs declaration and delivery procedures in
time. The shipper often writes the name, address or company name of the
notifier in the Notifier column . The notifier generally has the intended
consignee or the consignee's agent.
• 4.4 Pre-carriage by
• If the goods need to be transshipped, fill in the name of the first ship in
this column; if the goods do not need to be transshipped, leave this
column blank.
4 . 5 Vessel/voy.No Vessel Name / Voyage
If the goods need to be transshipped, fill in the ship name and voyage of the
second leg; if the goods do not need to be transshipped, fill in the ship name and
voyage of the first leg.
4.6 Port of Lading , port of shipment
(1) It should be filled in strictly according to the provisions of the letter of credit.
If there is an administrative area before or after the port of shipment, such as
Xingang/Tianjin , it should be added accordingly.
(2) Some letters of credit issued from abroad generally specify the name of the
port of shipment, only " Chinese ports " (Chinese ports,
Shipment from China to…) , this kind of regulation is more flexible for the
beneficiary, if it needs to be shipped from other nearby ports, it can be selected by
the beneficiary. The specific port name should be filled in according to the actual
situation when making the bill. If the letter of credit stipulates "Your port" , the
beneficiary can only ship at the port in this city. If there is no port in this city, the
issuer must change the letter in advance.
• 4.7 Port of Discharge , port of discharge
• Fill in the name of the port where the goods were last unloaded, which should be
consistent with the requirements of the letter of credit. In the case of a bill of
lading that selects the port of discharge, assuming that the port of choice is Kobe /
Yokohama in Japan, then fill in " Option Kobe/Yokohama" in this column . If the
letter of credit generally specifies the name of the port of discharge, such as "
European Main Port " , then Fill in the specific port name according to the actual
situation.
• In multimodal transport, the place of receipt and place of delivery can be filled
with specific names, or only one of them can be filled with specific names, and the
other column can be left blank. However, they must not be blank, otherwise the bill
of lading will become a Hong Kong - Hong Kong bill of lading. rather than a
multimodal bill of lading.
• 4.8 Final destination , the final destination
• Fill in the name of the final destination.
• 4. 9 No. of Original B/L , the number of copies of the original bill of
lading
• This column should be issued according to the number of copies stipulated
in the letter of credit, generally 3 copies of the original bill of lading. If
there are no special provisions in the letter of credit, only a full set of
original bills of lading are required, and one copy can also be issued .
• Example 1. Full set of B/L refers to a full set of bills of lading, which is
interpreted in two originals according to custom.
• Example 2. Full set (3/3) plus 2 N/N copies of original forwarded through
bills of lading , this certificate requires the submission of three original
copies of all productions. Here (3/3) means: the number in the numerator
refers to the number of shares of the bank, and the number in the
denominator refers to the number of shares to be made. N/N (Non-
Negotiation) means non-negotiable, that is, a copy.
• Example 3. Full set less one copy on board marine bills of lading , which
• 4 . 11 Number and kind of packages
• Fill in the packing quantity and packing unit in this column. For example "
100CARTONS ", " 300CASES " etc. Below the bill of lading, the quantity
should be increased, and the quantity should be consistent.
• 4.12 Description of goods , commodity name
• The product name should be filled in according to the product name
specified in the letter of credit and other documents such as the invoice
product name. Care should be taken to avoid unnecessary descriptions, let
alone add superfluous content. If the commodity on the letter of credit is
Shoes ( shoes ) , it must not be described in detail as Men's canvas shoes
( men's canvas shoes ) , or Ladies' casual shoes ( women's light shoes ) .
• 4.13 Gross Weight ( kos ) _
• Gross weight refers to the weight including packing materials and should
match the invoice or packing list. Unless otherwise stipulated in the letter of
credit, the unit is generally in kilograms and rounded up. If the naked goods
have no gross weight but only net weight, the Net weight or NW should be
added first , and then the specific net weight quantity should be noted.
• 4.14 Measurement , size . the volume of the cargo
• It should be filled in according to the actual data, usually in cubic meters,
with three decimal places reserved.
• 4.15 Freight clause , freight clause
• Shipping terms should be specified in accordance with the letter of credit.
If the letter of credit is not clear, you can decide how to remark according
to whether the price conditions include freight. There are mainly the
following situations:
• (1) If it is CIF , CFR and other price conditions, if the freight is paid before
the bill of lading is issued, the bill of lading should note Freight paid
( freight paid ) or Freight prepaid ( freight prepaid ) .
• (2) FOB and other price conditions, if the freight is paid at the port of
destination, the bill of lading should indicate Freight collect , Freight to
collect , Freight to be collected ( freight to be paid or freight to be
collected ) , or Freight payable at destination ( freight payable at
destination). payment ) .
• 4 . 16 Place and Date of Issue, the place and date the bill of lading was
issued
• 4.17 Signature, the signature of the bill of lading
• The bill of lading must be signed to take effect. In addition to the master, the
person authorized to sign the bill of lading can also be the carrier, or an agent
authorized by them.
• Qualifications of signatories: According to the provisions of UCP600 ,
multimodal transport documents are issued by the carrier or its agent, or the
multimodal transport operator or its agent, or the master or its agent.
• Signature requirements: The signature of the bill of lading must be
identifiable, that is, its name and identity must be displayed in addition to the
signature. ① When signed by the carrier, in addition to the name of the
company, it should also be indicated as the carrier ( Carrier ) . ② When
signed by the master, in addition to the name of the master ( master ), it must
also be indicated. ③ When signed by an agent, in addition to the name and
identity of the agent, the identity and name of the principal must also be
indicated. For example , carrier : ABC Shipping Company.
 5. Ocean bill of lading business

• 5.1 Correction and Reissue of Bill of Lading

5.1.1 Correction of Bill of Lading
• ( 1 ) Correction before the bill of lading is signed
• ( 2 ) Correction after the bill of lading is signed
• 5.1.2 Reissue of bill of lading
• ( 1 ) After the original bill of lading is settled, it is lost during delivery. Once
this happens, the consignee can pick up the goods at the port of
destination with a copy of the bill of lading and a letter of guarantee
issued by a creditworthy bank, and declare that the bill of lading is invalid
in accordance with certain legal procedures, without the need to reissue
the bill of lading.
• ( 2 ) The bill of lading is lost before foreign exchange settlement. At this
time, the shipper should provide a written guarantee, and with the
 5. Ocean bill of lading business

• 5.2 Issues related to bills of lading in the documentary credit mechanism

• 5.2.1 Circulation procedure of bills of lading in the documentary credit
mechanism
• 1 ) The exporter obtains the bill of lading after delivering the goods to the
carrier according to the requirements of the letter of credit.
• 2 ) The exporter pays the bills for negotiation.
• 3 ) The foreign exchange settlement bank will send the bill of lading and
other documents to the issuing bank.
• 4 ) The consignee pays the redemption note to the issuing bank.
• 5 ) The consignee submits the order to pick up the goods.
• 5.2.2 The role of the bill of lading in the documentary credit mechanism
• The " goods sale " of buying things in local shopping malls is often one-
handed payment and first-hand delivery, and both parties deliver in
person.
 5. Ocean bill of lading business

• 5.2.3 Problems existing in the documentary credit mechanism for bills of lading
• ( 1 ) Forged bill of lading. If the goods are not shipped, the exporter forges the bill
of lading to negotiate the payment to the bank. As a rule, the bank only
determines whether it is in line with the terms of the letter of credit from the
surface conditions of various documents. The bank generally does not bear any
responsibility for whether the bill of lading is forged.
• ( 2 ) Backdated bill of lading. The carrier accepts the shipper's letter of guarantee
to reverse the date of the bill of lading, so that the exporter can successfully settle
the foreign exchange within the period specified in the letter of credit and obtain
the payment for the goods. A backdated bill of lading is a fraudulent act of the
carrier and the shipper in partnership with the consignee, and will not be
protected by law. The freight forwarder must not issue a letter of guarantee to
assist the exporter in falsifying, but should actively contact all parties to ensure the
shipment date or extend the shipment date on the letter of credit.
• ( 3 ) Bank guarantee delivery. In the current international trade, some exporters
request the issuing bank of the importer to issue a forward letter of credit after the
04 practice and
think
practice
and think bill of lading

Thinking questions:
Make bills of lading.
Welcome to
study