How many original bills of lading must I surrender to get release of cargo..??

How many original bills of lading must I surrender to get release of cargo..??

This question popped up on my comments and emails quite a few times since the beginning of this year and therefore I decided to write this short note to answer it..

Before I get to the answer to the above question, let me refresh your memory as to what is a bill of lading and what are the functions of a bill of lading..

Bill of Lading (abbreviated to B/L or BL) is one of the MOST important documents in the whole shipping and freight chain..

A bill of lading has 3 basic purposes or roles..

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

Functions of Bill of Lading

The answer to the above question lies in identifying :-

  1. What type of bill of lading was issued
  2. How many originals were issued

When I say type of bill of lading I refer to a bill of lading being issued as a

  • Straight Bill of Lading or
  • Seaway Bill of Lading or
  • Negotiable Bill of Lading

There is a big difference between these 3 types of bills of lading and it is therefore important to identify the type of bill of lading issued and understand how each of it works before understanding how many original bills of lading are required for release of cargo..

Quoting from my previous article about “What is a Bill of Lading“,

1) When a B/L is issued in Original(s) to a “named” consignee it is referred to as a “Straight B/L” and a straight B/L is a NON-NEGOTIABLE & NON-TRANSFERABLE DOCUMENT..

Release of cargo at destination may be issued ONLY to the named consignee and ONLY upon surrender of at least 1 of the original bills issued..

This B/L satisfies roles 1 & 2 above fully and does not satisfy role 3 (Document of Title) as the document is not negotiable or transferable..

2) When a B/L is issued to a “named” consignee but without any originals it maybe considered as a “Seaway B/L“.. This B/L is also a NON-NEGOTIABLE & NON-TRANSFERABLE DOCUMENT..

A Seaway B/L is usually issued

  1. for inter company shipments like from ACME Company Hollywood to ACME Company in the Middle of the Australian Outback or
  2. where the shipment takes place between two different companies but there are no negotiations required between the two either directly or via bank for release of the cargo and
  3. the shipper doesn’t need to submit an original B/L to anyone to secure his payment

Since no originals are issued in the case of a Seaway B/L no surrender is required and the release may also be termed as an Express Release and is mentioned as such on the body of the B/L and manifest..

This B/L satisfies roles 1 & 2 above and does not satisfy role 3 (Document of Title) as the document is not negotiable or transferable..

3) When a B/L issued is in Original(s) and consigned “TO ORDER” or “TO ORDER OF SHIPPER” or “TO ORDER OF XYZ BANK” it is termed as “Negotiable B/L or Order Bill“..

What is a bill of ladingOne of the most important aspects of a B/L is that it can be used as a negotiable instrument for payments between a buyer and seller using Letter of Credits.. You can read how a Letter of Credit works here..

A negotiable B/L must be treated like gold and due care must be taken not to lose it.. There are several cumbersome procedures to be followed if an original B/L is lost..

Another notable feature of this type of B/L is that it contains the Terms and Conditions of the Carrier on the 1st Page of the B/L..

The 1st page is what we all commonly refer to as the “back of the B/L”..

Seaway bills issued by some carriers do not have these Terms and Conditions on the back (also known as “blank back short form B/L“)..

Destination port agent may issue release of cargo only after at least 1 of the issued originals are surrendered and after checking the endorsements on the back of the B/L as it is possible for this type of B/L to be endorsed or transferred to another company.. This B/L satisfies all of the above 3 roles..

Read the permutation and combination regarding the consignee in one of my previous articles..

Ok now to the question “How many original bills of lading must I surrender to get release of cargo..??

 

There are only two types of bills of lading that involve the issuance of original bills and they are Straight Bill of Lading and Negotiable Bill of Lading..

In either case, the ruling is the same as shown below in the screen grab of a Hapag Lloyd bill of lading..

This shows how many bills of lading are required for the release of a cargo (wherein a Negotiable Bill of Lading or Straight Bill of Lading has been issued)..

original bill of lading and release of cargo

If you look at the highlighted parts, you can see that release of cargo (delivery order) will be granted to the authorised consignee after presentation of 1 of the number of original bills of lading issued..

But there are also cases wherein the shipping line might require the surrender of all the issued originals, specially in cases where they maybe making some exceptions on the endorsements required on the bill  of lading..

Standard number of original bills of lading issued seems to be 3 Originals, so assuming 3 originals have been issued, upon surrender of a duly endorsed original bill of lading, the other 2 becomes null and void..

So the answer to the question “How many original bills of lading must I surrender to get release of cargo..??

  • if it is a Negotiable Bill of Lading, AT LEAST one duly endorsed original bill of lading
  • if it is a Straight Bill of Lading, AT LEAST one original bill of lading

In the case of a Straight Bill of Lading however, there are several opinions and cases relating to whether ANY (whether 1 or more) original bill of lading is required for the release of cargo, depending on the country and which COGSA has been used..

For example the US COGSA does not require the presentation of the original straight bill of lading for release of cargo whereas certain Scandinavian and Chinese jurisdictions require same.. UK COGSA has also been shown to be fickle in this aspect..

Hariesh Manaadiar

Hey all, this is me Hariesh Manaadiar - your friendly neighborhood shipping blogger.. After having been in the shipping industry for around quarter of a century, I thought it was time that I shared some of what I have learnt over the years.. There you go, now you know something about me.. :) You can get to know more about me and what I know by following my blog for free.. :)

21 thoughts on “How many original bills of lading must I surrender to get release of cargo..??”..

Be part of the discussion and share your views about the article here..

  1. Just wanted to say I happened on to your blog by accident. I have been working in logistics for 40 years. Your blog, your explanations,and yr answers were so clear and so understandable. You are a really good teacher and it was a pleasure to read your explanations. I will direct people to your blog to learn. Your sharing is really great and thank you.

  2. Hi Sir,i am very new to import ad export and just started working as a sales executive
    i always have questions and i always look up for your answers.Thank you sir
    My question is what is the meaning of surrender 50% of BL ?

  3. Hi Hariesh,

    Can I ask whether we can surrender BL when payment method is LC? if yes, in which case?

    Appreciate your explanation.

  4. Is there any difference between the three types of bill of lading as quoted by you and the Multimodal Transport Document ? Is MTD also a type of bill of lading ?

  5. YOU HAVE TO SURRENDER ALL THREE ORIGINALS, THAT IS IF YOU WANT TO CHARGE FROM B/L ISSUED TO A TELEX RELEASE. BUT FOR RELEASE AT THE SHIPPING LINE YOU WILL NEED ONE OF THE ORIGINAL B/L ISSUED TO GET YOUR CARGO RELEASE. THANKS

  6. Thanks again.
    there is no Karim in the transaction, the consignee is JOHN SMITH, and the LC asks for BL to the order of applicant, which is JOHN SMITH.
    So what is the difference between TO THE ORDER OF JOHN SMITH in consignee box, and simply JOHN SMITH in consignee box, as i said the goods are for John Smith.
    the BL’s are sent to the bank of John Smith.

    1. Hi Karim, let me rehash it for you..

      If it says “To the order of John Smith” it means the bill of lading is negotiable and this means John Smith can sell the goods further on to anyone else (if he wishes) through an endorsement of the bill of lading to the new buyer.. If consignee shows TO ORDER, it usually means that the applicant wants to trade the goods further and hence asks for the bill of lading to be claused accordingly..

      If it says “John Smith” that makes it a Straight Bill of Lading which means cargo release will be in the name of John Smith and only John Smith can take release..

    2. Hi Hariesh
      Thank you for the explanation and i do understand.
      so basically, since JOHN SMITH is the final receiver of the goods, of course it will be to sell them on later, after cargo release, so it means there is no difference in this case between TO THE ORDER OF JOHN SMITH or simply JOHN SMITH, because JOHN SMITH will only sell the goods after cargo release, correct?

      If i understand correctly, TO THE ORDER OF only works if the consignee wants to sell the goods BEFORE cargo release, is that correct?

    3. I may add, that i think TO THE ORDER OF usually is for the banks, because on some L/C it asks for BL Shipped on Board to the order of the XYZ Bank ( which is usually the bank of the applicant / importer ).
      In this case the goods belong to the bank, until the applicant gets the BL from his bank he can’t get the goods.
      Correct me if i’m wrong

      Thank you

    4. Hi Karim goods never really belong to the bank, but yes your understanding is correct.. Unless the consignee gets the endorsed bill from the bank, he can’t get release of his cargo from the line..

    5. Hi Hariesh
      I see many BL’s TO THE ORDER OF THE BANK.
      On the BL the consignee is the bank, and the Notify is the applicant.
      In this case the goods belong to the bank untill the applicant gets the endorsement from the bank, correct?

      So when the BL is to the order of the applicant, say JOHN SMITH, or for example the consignee is JOHN SMITH without TO THE ORDER OF, who endorses the bill? or is the endorsement not necessary ?

      Thank you

  7. Hi
    Very interesting article, as usual on your blog.
    May i ask, i normally work with letters of credit, that require BL to the order of ( sometimes that bank, sometimes a named consignee ).
    in the case on named consignee, what is the difference between BL with consignee “To the order of John Smith” and BL with consignee “John Smith” ?
    I mean sometimes on the consignee box, they don’t write “to the order of” even though on the L/C it says so.
    With these BL’s, i always get 3BL original, and 3 Copy not negotiable.

    Thanks

    1. Thank Karim for the simple question.. Simple answer..

      If it says “To the order of John Smith” it means the bill of lading is negotiable and this means John Smith can endorse the bill to release cargo to Karim..

      If it says “John Smith” that makes it a Straight Bill of Lading which means even if Karim bought the cargo from John Smith, John Smith cannot endorse the bill of lading to release cargo to Karim.. The cargo release will be in the name of John Smith..

      An L/C instruction must ALWAYS be followed for successful negotiation with the bank..

      Trust this explains..

  8. If it is surrendered B/L no need to produce any original B/L for cargo release. just ask for telex message that B/L has been surrendered.

    1. Hi Asha, there is no bill called a “Surrendered Bill”.. It is merely a Negotiable Bill of Lading or Straight Bill of Lading that has been surrendered at POL.. The question here relates to original bills where there is no surrender taking place.. 🙂

  9. Sir,

    As per your note Straight B/L is non-negotiable and non-transferable. goods to be released only to the named consignee in the bill of lading. My question here is that whether straight bill of lading can be used for High sea sale in the case of imports into India?

    Your valuable advice on this will be highly appreciated

    Thanks / Raghu

    1. Hi Raghu, no, HSS cannot be done on a Straight Bill of Lading as it is “non-transferable”.. 🙂 HSS can only be done on a Negotiable Bill of Lading..