Secrets of International Trade
Bill of Lading -
A document supplied to the exporter by the shipping company that is transporting
the goods to their foreign destination, listing, item by item, the goods being
shipped. It serves three basic purpose:
1. To acknowledge receipt by the carrier of the exporter's goods.
2. To indicate the carrier's contractual obligation to transport the goods to
their destination in exchange for payment.
3. To record transfer of title (or ownership) from the seller to the buyer when
payment for the goods takes place. Airlines use what is called an Air Waybill.
There are two basic types of bill of lading,
the
straight bill and the order bill.
1. A straight bill of lading is a non-negotiable document, made out to a
specifically named consignee, from which the steamship company acknowledges
receipt of the freight and agrees to move it to its destination.
Unlike an order
bill, the straight bill does not have to be surrendered to the carrier in order
for the importer to obtain possession of the goods.
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2. An Order bill
of lading is a document that is made out to the order of of the
foreign importer or its bank, or the order of the export firm, its bank, or
another designated party.
Title to goods being shipped is given by possession of the bill of lading that
bears the exporter's endorsement. Often, this endorsement is in blank, thus
giving ownership of the goods to the person possessing the bill, and therefore
making the bill highly negotiable.
The order bill of lading is handed over only when the foreign importer has paid
for the goods or made acceptable credit arrangements. The customs regulations of
most countries specify the number of copies, either negotiable or
non-negotiable, of the bill of lading that must be supplied for customs
purposes.
Some Latin American countries prohibit or otherwise discourage the use
of order bills of lading. Therefore the export firm should first check as to the
type of bill that is acceptable in the country to which it is planning to ship
its goods.
For each shipment, two or three negotiable or signed bills of lading are usually
issued, plus as many more non-negotiable copies as may be required.
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