GLOSSARY
Bill of Lading
The carrier's document for sea freight. Acts simultaneously as a receipt for goods, a contract of carriage, and — when issued in negotiable form — a document of title that controls release of the cargo.
A bill of lading (B/L) is issued by the ocean carrier (or its agent) when cargo is loaded. It serves three functions at once: a receipt confirming what was shipped, the contract of carriage between shipper and carrier, and — for a negotiable "to order" B/L — a document of title that the consignee must surrender to take physical delivery.
Why it matters
A negotiable B/L can be endorsed and traded while the goods are in transit; that's what makes documentary credits work. With UNCITRAL's Model Law on Electronic Transferable Records (MLETR) coming online jurisdiction by jurisdiction, the digital negotiable instrument version is starting to replace the paper original.
Related terms
- MLETR
- Sea Waybill
- Letter of Credit
- Hague-Visby Rules