Now that you have concluded your first international sales, and everything is in order. All that is left is to ship the cargo to your customer. You know that you need a shipping document, a Bill of Lading. But, where do you get it? Who issues the Bill of Lading? In this short article, we will explain what the next step for you is, and who issues the bill of lading.
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Who Issues the Bill of Lading?
In all cases, the logistics service provider issues the bill of lading to you. A logistics service provider assists you in providing a door-to-door delivery service for your consignment. Now logistics service providers can come in the form of: –
- Freight Forwarder (3PL, 4PL)
- Non-Vehicle Operated Common Carrier (NVOCC)
- Vehicle Operated Common Carrier (VOCC)
Each logistics service provider has a range of services and expertise that can cater a solution to you.
However, as an exporter, does it really matter which form of logistics service provider offers its service to you? The answer is, not really.
So long as they are one of the three that we have mentioned above, they are required to issue a Bill of Lading to you as proof of receipt of the cargo transported.
Nevertheless, from a prospective exporter, it is good to know the difference between those three logistics service providers.
Freight Forwarders
Freight Forwarders are akin to a middle person responsible for arranging an end-to-end logistic solution. They may not necessarily own the infrastructures such as ports, warehouses, trucks, and ships, but they subcontract those services and package them to serve an exporter’s transport need.
Freight forwarders issue a House Bill of Lading to the exporters. The term “House” Bill of Lading is an indication that they issue the Bill of Lading “in-house”.
The House Bill of Lading issue has no difference in function as opposed to the Bill of Lading issued by other service providers, the House BL only indicates that the freight forwarder is the main contracting party with you.
Since the contracting party is between you and the freight forwarder, you would bring up any claims to the freight forwarder.
Non-Vehicle Operated Common Carriers (NVOCC)
Precisely what the name suggests, NVOCC operates using a “Common Carrier” that the entity does not own (“Non-Vehicle Operated”).
Between NVOCC and the Freight Forwarders, NVOCCs contracts with VOCCs for freight spaces in bulk. The NVOCCs then sell those freight spaces to Freight Forwarders or the exporters directly.
So, in essence, NVOCCs are freight consolidators, similar to retailers that buy in bulk at a cheap and sell it to consumers.
NVOCCs too issue Bill of Lading, but because NVOCC’s customers may be freight forwarders or exporters, they issue the Bill of Lading to freight forwarders and exporters. NVOCCs issue Bill of Lading called “Ocean Bill Of Lading”.
Freight Forwarders then mirrors the Ocean Bill of Lading and issues a corresponding House Bill of Lading to the exporter.
Vehicle Operated Common Carrier (VOCC)
Vehicle Operated Common Carriers are amongst the most recognizable, you wouldn’t miss companies such as: –
1. Maersk Line
2. CMA-CGM
3. Hapag-Lloyd
These shipping lines are Vehicle Operated Common Carriers. But, these shipping lines are in the realm of sea transportation.
Airlines are also Vehicle Operated Common Carrier (VOCC), here are a few you may recognize.
1. DHL
2. FedEx
3. Cathay Pacific
VOCCs issues Bill of Lading, they issue “Master Bill of Lading” to exporters, NVOCC, freight forwarders.
And there you have it, a list of logistics service providers that issues the Bill of Lading to the exporters. But what comes next? What do you do once you receive the Bill of Lading?
What to Check After Receiving a Bill of lading
Here is a checklist of things you should check once you receive the Bill of Lading from service providers.
1. Check to see if the description of the cargo is accurate,
2. Ensure that the cargo’s weight (gross weight and net weight), and packaging are accurate,
3. Check that the details on the Bill of Lading are the same as the shipment’s packing list,
4. Monitor the shipping details are accurate (Port of Loading, Port of Discharge),
5. Check if the details of the shipper and consignee are correct,
6. Read through the Bill of Lading contract to know the carrier’s limited liability,
7. Make sure the number of free days for detention and demurrage are spelled out correctly.
Elaboration
(1) The description of the cargo is important to validate that the cargo you delivered to the logistics service provider reflects what they receive. Any discrepancy in the description of the cargo, your commercial invoice, and your packing list is a red alert to you, the importer, and customs. The same concept applies to gross weight, net weight, and packaging.
(4) Shipment details are also closely monitored by your importer, they are familiar with their local geography and knows which port of discharge is the most cost-effective and time-efficient. So, always consult with your importer on which port of discharge is preferred in their country and make sure the arrangement is correct. You can do so by checking the shipment details on the Bill of Lading.
(5) Shippers and Consignees indicate who the cargo is finally intended to be. The key issue here is that the consignee or the importer details have to be triple-checked, in our experience, we may come across instances where you see two consignees.
Consignee A “ACME company Pte Ltd”
Consignee B “ ACME & ACME company Pte Ltd”
Though both companies may seem the same, it isn’t. So be sure that the consignee details reflect accurately.
(7) In the case of sea transportation, you are most likely to be using a COC container, (Carrier-Owned Container). This means that the carriers are lending you its containers for your shipment. They would need to give you a few days to load the cargo at the port of origin, and unload the cargo at the port of destination.
So, make sure that the free days given are sufficient for both you and your importers.
What’s Next After Receiving the Bill of Lading
The common practice in the logistics industry is that the services providers do not issue the Bill of Lading directly to you. They would first issue a draft BL to you to check the information that we listed above to make sure that there is no breakdown in communication.
The exporters would then need to confirm the drafted bill of lading before requesting the logistics service providers to issue the final bill of lading to you.
Conclusion
And there you have it, an answer to who issues the Bill of Lading to you. We hope that you find this article useful. Good luck!
Further Reading
When is the Bill of Lading Issued
