Duly discharged bill of lading – the great debate

Duly discharged bill of lading

From what i have learned so far in shipping, I know that any ORIGINAL bill of lading that is issued has to be duly discharged at the discharge port or final destination.. NO, I don’t mean discharging the cargo covered in the bill of lading..

Cargo covered by a bill of lading maybe released to the entity to whom it is consigned.. Below are the permutations that i have seen so far being used in bills of lading in the consignee field..

Bill of Lading consigned toEndorsements Required on the bill of lading
A CompanyWhen consigned to a named consignee, the bill of lading is known as a Straight Bill of Lading, and in the case of a Straight Bill of lading, the release maybe given only to the named consignee and this bill of lading is not negotiable or transferable..
Individual’s NameWhen consigned to a named consignee, the bill of lading is known as a Straight Bill of Lading, and in the case of a Straight Bill of lading, the release maybe given only to the named consignee and this bill of lading is not negotiable or transferable..Since the consignee is a private individual, release may be effected only after verification of Original ID of the person presenting the OBsL for release..
To Order or To Order of ZYX
Shipper’s endorsement stating DELIVER TO THE ORDER OF “ZYX Client” and ZYX’s company stamp and sign in case he is taking the final delivery or his endorsement stating, DELIVER TO THE ORDER OF “ABC Client” (if the cargo has been further sold)….
To Order of BankShipper’s endorsement stating DELIVER TO THE ORDER OF “XYZ BANK” and banks’ endorsement stating, DELIVER TO THE ORDER OF “ZYX Client” and ZYX’s company stamp and sign in case he is taking the final delivery or his endorsement stating, DELIVER TO THE ORDER OF “ABC Client” (if the cargo has been further sold)..

If anyone else have seen any other permutations or combinations, please let me know..

Duly discharging a bill means that the original bill of lading with all relevant endorsements has been surrendered at the port of discharge or final destination and cargo delivered at which stage the responsibility of the carrier ceases..

Some of the clients are however, debating the requirement of such endorsements because there seems to be a lack of consistency and cohesiveness on the part of the shipping lines on this account..

It is assumed that when a Clearing agent or Forwarder approaches for delivery of the cargo with the above endorsed bills of lading, the consignee will also give the shipping line an original letter of authorisation allowing the clearing agent or forwarder to handle the shipment on their behalf..

Some lines are releasing cargo without the endorsements required as above, some are strictly following above, some are content with releasing cargo to whoever is in possession of the bill of lading and are not seeking any endorsement or authorisation letter (in the case of release to an agent)..

As a shipping line – Are you following the above or what is your process and procedure in regards to the above..

I would like to facilitate a debate and get a consensus on this subject..

What did you think of the above article..?? Comment below..

26 comments on “Duly discharged bill of lading – the great debate

  1. Arif says:

    Wjhat doest “To Order Of Shipper ” means

    for example ABC is Shipper and XYZ is Consignee, Bank is HSBC Bank
    As per instruction of LC ” bills of lading made out to the order of shipper, endorsed in blank, marked: Freight Prepaid (↗), and notify applicant and HSBC Bank –address, country quoting this DC number

    so I this case in consignee column BL should indicate ” TO THE ORDER OF ABC” and notify Applicant and bank??

    is this correct or it should be the same word of LC ” TO THE ORDER OF SHIPPER”

    Please clarify

  2. Alexey says:

    Could you pls clarify- if “to order” b/l , can shipper no to allow discharging if cargo value not payed ( bulk gargo)?

    1. Hello Alexey, in the case of bulk cargo, the bill of lading becomes a contract of carriage and the terms will be as dictated in the Charter Party.. So this must be clearly indicated in the charter party, at what stage and on whose permission discharge can be allowed..

  3. Pls clarify, what checks a Master must to when receiving OBL at dish of cargo

    Sud he
    1) Simply take the BL from agent/presenter and start cargo dish ops

    OR

    2) Master to ask a letter also from the receiver of the cargo confirming to release the cargo against presentation of OBL

    or

    3) Master should demand someone from the receivers company to board the vessel and show his ID card and then only Master to start dish ops

    1. Hello Alok, are you talking about bulk shipments..?? If it is bulk then the receiver must produce the original bill of lading that was issued..

  4. wawang says:

    Dear Hariesh and Readers,
    Regarding Straight BL you said ” some countries do not require original bill to release the cargo and even if you (shipper) have the Originals of the Straight Bill, the consignee maybe able to secure release depending on the country..”

    Please give me example On which country that above role applied ?
    thank you,

    1. Good question Wawang.. While there is no “full list” of such countries anywhere, this rule may apply in different countries but subject to the law under which the bill of lading issued is covered.. For example if a bill is covered under US COGSA, cargo under a straight bill of lading maybe released to named consignee after it is proven they are the actual receiver, without presentation of any original bill of lading..

  5. WAWANG says:

    Dear Hariesh,
    Thank you so much for your prompt help.
    regards,

  6. wawang says:

    Dear Reader,
    1. May i can change consinee name to other buyer in Straigh BL? of course i still keep all of original BL. in this case assume the buyer will not settled the balance payment as agreed.
    2. The new contract said : 90 % payment after cargo arrived and the rest after checking at buyer warehouse.
    What kind of Consignee term I should use for safe seller position?
    thank you
    Wawang

    1. Hello Wawang, normally under such circumstances I would recommend you issue bill of lading with Consignee as “To Order of Shipper”.. The problem with issuing Straight Bill is that some shipping lines in some countries do not require original bill to release the cargo and even if you have the Originals of the Straight Bill, the consignee maybe able to secure release depending on the country..

  7. Kunal says:

    Hi, I am wondering how the “bill of lading” reaches the consignee. From what I read so far, this bill is issue by the shipping line to the exporter (the original document). How does the consignee sitting in another country get possession of the “original”? Does the exporter send the consignee a scanned copy of the bill of lading?

    1. Hello Kunal, the shipper will courier the BL to the consignee if it is original.. If it is not, then an electronic copy is sent to the consignee.. Trust this clarifies..

  8. Fabiano says:

    First of all, I would like to thanks for all posts, it have been very helpfull to me.

    I would like to know, refering to a straight BL, why the endorsement of consignee is required prior discharging of the cargo? What i´ve seen so far, Owners always request consignee signature on the OBL in order to release the cargo, is that just to confirm receipt of the cargo? is there any other reasons?

    thanks you all….

    1. Hello Fabiano, sorry for getting back only now.. In a straight bill there is no requirement for endorsement by consignee as it would be superfluous as the cargo may not be delivered to any one else in any case a straight bill of lading is a non-negotiable and non-transferable..

  9. Prasad Ponnu says:

    I found this site very informative and details explained in a systematic manner.

  10. salmon says:

    could you explain the main differences between “received for shipment bl” & “seaway bl”

  11. Shipping Novice says:

    What is the limitation on 3 OBLs? Why 3….I’ve had customers request 5+ OBLs to be issued. When I said ‘no’….they asked why, and now I’m stumped.

    Not sure if this ties into the debate of properly endorsing the OBL….but if surrendering an endorsed OBL negates the other OBL’s, what’s the issue with producing more than 3 OBLs?

  12. Albert Mhizha says:

    HI Guys. Lets make it work. Please bring in your observations and ideas. This s supposed to be a big debate.

  13. Albert Mhizha says:

    What i have noticed is that most shipping lines require you to surrender all the 3 obls. They will put a release stamp and give you two obl back, one for your record and the other for Customs or Bank. They do not normally look at indorsements, but i have noticed that overseas like China, India Turkey, USA they are very strick on To Order Bills. Shipper must endorse at the back of the OBLs before coouriering same to receiver. Otherwise, cargo will not be released.

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