Can anyone issue a House Bill of Lading..??

Say what..!!!!!!!!

Yes my thought exactly when I got this question from a reader..

But then I said to myself this is a very valid and interesting question..

Can anyone issue a House Bill of Lading..?? Before I answer that question, I want to refresh your mind about the what is a Bill of Lading and what is a House Bill of Lading..

Are they different..?? Let’s see..

A bill of lading is issued by a carrier (in the case of seafreight – referred to as Ocean Carrier).. An ocean carrier is someone who has undertaken to provide the transportation of goods from point A to point B using the waterways as the primary mode but also combining rail and road services..

A Bill of Lading, is an important transport document that has 3 basic purposes or roles.. I will refer to this bill of lading as a normal BL throughout this article..

  1. Evidence of Contract of Carriage
  2. Receipt of Goods and
  3. Document of Title to the goods

roles of a bill of lading

A House Bill of Lading (HBL) is a bill of lading issued by an NVOCC operator or a Freight Forwarder to their customers.. An NVOCC is similar to an Ocean Carrier except that they don’t operate the vessels used for the transportation.. I will refer to this bill of lading as a House BL or HBL throughout this article..

Although it is a House BL, by virtue of being declared, signed and issued as a Bill of Lading, the HBL performs all 3 of the above roles of a Bill of Lading albeit to different people/entities..

Let me explain what I mean by above..

In any bill of lading, the details shown in the address area of the bill of lading (as discussed in Part1 of the Parts of a Bill of Lading) such as Shipper, Consignee and Notify decides who gets release of the cargo from the carrier..

Below is a matrix when a normal bill of lading is issued by the carrier..

Bill of Lading

 

When an HBL & MBL are involved in the transaction, the matrix changes slightly as below..

House Bill of Lading and Master Bill of Lading

 

As you can see from the above matrices, unless disallowed by the Letter of Credit, the HBL is also used/treated as a Normal Bill of Lading.. When a House Bill of Lading is involved, the Master Bill of Lading takes a back seat as far as the trade is concerned and does not play any main role in the documentation between the buyer and seller..

However, there is one very important area where the master bill of lading has an advantage over the house bill of lading and that is at the time of release of the cargo..

For example even if the customer has paid the NVOCC/Forwarder, surrendered the HBL (where applicable) and has done all the documentation relating to the HBL, unless the NVOCC/Forwarder has paid the ocean carrier, surrendered the MBL (where applicable – as shown above) and has done all documentation relating to the MBL, the consignee on the HBL CANNOT secure release of the cargo as the cargo is still under the custody of the ocean carrier..

So what are the reasons and circumstances under which an HBL is issued..??

As per market practice,

  • HBL maybe issued by a Groupage operator – Groupage operator books an FCL with the shipping line.. Once the cargo is packed, they issue their own HBL to their clients and collect the MBL from the shipping line..
  • HBL maybe issued by an NVOCC or Freight Forwarder who handles the cargo on behalf of their clients, who might be using them for the cost benefit they can provide as compared to booking directly with the shipping line.. The freight forwarder issues their HBL and collects the MBL from the shipping line.. HBL maybe used by a NVOCC or Freight Forwarder to mask the identity of the actual shipper/consignee from the shipping line..

Now that there is a bit of background about the House Bill of Lading and the various roles it can play, let us look at the original question “Can anyone issue a House Bill of Lading“..

To be quite honest, there seems to be no “global” regulations or rules relating to the issuance of House Bill of Lading and who can issue a House Bill of Lading, although there are countries (like USA, India) that require a bill of lading (normal or house) to be registered with the relevant authorities before it can be used..

There are many “groupings” of freight forwarders who operate a global network to offer their clients a global service.. These networks have their own house bill of lading templates for use between their agency networks.. Only members belonging to those paid networks can issue those specific house bills of lading.. NVOCC/Freight Forwarders outside of these paid networks have no access or are not allowed to use/issue these specific house bills of lading..

The House Bills of Lading are issued by the issuing entities as “Carriers” and as long as the conditions of the contract of carriage are suitable and acceptable to all, there seems to no restriction for anyone or any group/network to create and issue their own house bill of lading.. 

The terms of the contract of carriage in these house bills of lading maybe similar or different, but What is your opinionone can only assume that those who issue their own house bills of lading, take all necessary precautions, suitable insurance, fraud and risk covers before doing this..

One can also only assume that the customers who ship cargo using these house bills of lading understand the requirements and take the necessary precautions to safeguard themselves suitably..


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34 comments on “Can anyone issue a House Bill of Lading..??”

  1. By Anuradha Yuvaraj Reply

    We start up company. 2 years old. We have only few shipment in a month. Is there any special procedure required to Get HBL.
    Please advise

  2. By Roger Kreitman Reply

    Very useful article – but a follow-up question.

    As the HBL will often be issued in the context of delivery to the actual buyer by the freight forwarder’s partner organisation in the buyer’s country, how will this work when the HBL is negotiable?

    The final leg of the journey will probably be by road. So where does the surrender by the buyer (or other holder of the HBL) take place? Presumably it will be before the goods get loaded onto the truck for the final leg of the journey?

  3. By us chauhan Reply

    This is a precious article as far as Bill of lading is concerned. It has been illustrated in a very fine and lucid manner. Such things will definitely benefit the reader immensely.

    All the best to you for your great work.

    Can you please advise me in mail that is a shipper can be an individual in China for the purpose of HBL only. The consignee in India is a genuine company but in
    China it is an individual. If you could advise in my email id uschauhan12@gmail.com, it would be of great and immediate help to me.

  4. By George Koumeen Reply

    Agent of carrier at port of discharge is obliged to obtain Master OBL in order to release cargo yes or no

  5. By hassan Reply

    Dear Mr Hariesh
    i confuse about ( telex release for negotiable b/l ) please can u explain it in details

    Thanks

    Hassan

  6. By John Paul Reply

    Hello, I am John Paul Working in Saudi Arabia.
    Actually I was seeking this articles since Last month. It was really Very Useful to us.

    Once again Thank you Very much Mr. Hariesh

  7. By Paulo Silvano Reply

    Dear Manaadiar, congratulations for the superb articles and contents. Therefore, here in Brazil, the NVOCC,s must be entitled to issue the HBL by Customs authorities. Before the release the cargoes a set of import documentos, included the HBL must be presented to the Customs authorities, with consignee or importerers payed the duties and taxes and as result receiving by the Customs the realeasing import certificate. Things get to be worst when the cargoes is under LCL/LCL terms. Which means that carrier will be issuing a master bill of lading and the container will be discharged at destination port and cargoes after unstuffed from the container shall be under port trustee custody. Thereupon, NVOCC agents will issued House bill of lading HBL for stakeholders to collect their cargoes according to the HBL concerned. In no way the container shall be released to leave the container yard, unless as empty unity. The cargoes shall be surrendered according to the HBL consignee.

    • By Hariesh Manaadiar

      Thank you Paulo.. I think very few people remember that shipping lines used to handle/control LCL/LCL shipments at one stage.. 🙂 Yes LCL shipments are a whole different animal by itself..

    • By Paulo Silvano

      Thank you Manaadiar. Hope that you continue to provide us and the whole maritime comunity with yours usefull and superb articles. All the best,

      Paulo.

  8. By Dean F. Dweh Reply

    Thanks for your excellent article,I really appreciate it.now I can distinguish between them.thanks

  9. By Nicole Reply

    Hi Hariesh

    Could you kindly advise if a Freight Forwarder needs to apply to any authority in South Africa to issue HBL’s?

  10. By Rupnarayan Bose Reply

    Dear Mr. Manaadiar,
    Your every article adds to my knowledge on shipping and transport.
    I request you to write an article to cover the following issues:
    – the difference between FOB vs laden on board vs shipped on board, the interpretations being as per the ICC Incoterms Rules vis-a-vis maritime practices (if any)
    – if ‘shipped on board’ is a simple statement of fact (e.g. “the goods have been shipped on board the vessel MV XYZ, destination ABC), or if it refers to a date on which the vessel moved out of port.
    – if there are other areas of confusion which an ordinary banker should know about.
    Thanks in davance

    • By Hariesh Manaadiar

      Glad to be of assistance Rupnarayan and thank you for the topic suggestions.. Reg your first point FOB is an Incoterm still being referred to or used for containerised cargo which is incorrect.. It has no direct connection to laden on board or shipped on board.. If this question relates to any specific case study, pls let me know the details either here or on manaadiar@shippingandfreightresource.com so we can discuss..

      Reg your second point – Shipped on Board refers both to the action and the date on which it was loaded on board..

  11. By Shanika Reply

    Dear Hariesh,
    This is very useful and valuable blog for me as i engaging with issue licenses for freight forwarders and NVOCC Operators.Really appreciate your articles and to be honest ….. your details and explanations are very useful for me to handle day to day issues. As the licensing authority, we take a local insurance cover from these parties as a requirement for issue licenses.Recently, NVOCC Operators have requested to remove -the requirement of submission of local insurance cover telling that they issue their NVO principal’s B/L which have already been insured by foreign party, not HBL. Kindly tell me whether NVOCC Operator can take necessary guarantee/insurance cover through his NVO principal’s B/L.

    • By Hariesh Manaadiar

      Hi Roshini, thank you for your kind words.. You mentioned you are the licensing authority.. Are you from the MTO or which other body do you represent..?? In terms of your question about insurance and local operators (presume you mean local agents of NVOCC operators), to protect their own interest, all NVOCCs should have relevant insurance and risk cover before they decide to start issuing their own bills of lading..

  12. By Rajendra Bhat Reply

    Well written….. as a suggestion, a copy of a House Bill of Lading can be attached so that blog followers can view how it actually looks like…

  13. By Abdul Majeed Khan Reply

    “…although there are countries (like USA, India) that require a bill of lading (normal or house) to be registered with the relevant authorities before it can be used..”
    Where we can get registered the HBL in India and USA?

  14. Pingback: Can anyone issue a House Bill of Lading..?? | Timothy Jewell

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