Understand what is the bill of lading and what is its importance

  • 24/09/2019
  • 11 minutes

Have you ever heard of the bill of lading (B/L)? This is one of the most important documents in the ​​foreign trade area, and has significant impacts on procedures connected to export and/or import.

As this is a very relevant subject for many people that work in the industry, we prepared this article. Throughout the text, we will show you what it consists of and what is its usefulness. Read it through to the end to learn more!

What is the bill of lading and what is its importance?

To deal with this topic in depth, we talked to three experts on the matter: Gabriela Boldrini, who is an agency supervisor; Rafael Chor, a lawyer; and Renata Teglas, whose role is as a support supervisor for the Shared Services Center (CSC) — all three work at the Wilson Sons.

According to Boldrini, the bill of lading constitutes as an extremely important documentation, which is issued by the shipowner and can be signed by the ship’s master, as well as the shipping agency representing the shipowner.

For Teglas, the bill of lading emerges as a central aspect of the shipping universe, as it “attests cargo reception, carriage conditions, and the obligation to deliver to the legal recipient at a previously established point of destination”, she conceptualizes.

“It is also used for import and export customs clearance procedures — because of this, the correct issuance is fundamental for the smooth progress of the clearance process, besides avoiding extra costs with correction and fines”, explains Boldrini. It is usually issued in three original copies and three non-negotiable copies.

In short, the B/L provides evidence of the contract of transport specific cargo between the transporter and the exporter, besides serving as a receipt for cargo delivered for shipment. Therefore, it can be said that it fulfills three basic functions:

  • serving as title deed of the commodity — although it is negotiable and transferable;
  • acting as a delivery receipt to the transporter;
  • highlighting the transportation contract between the user and the shipping company that made the delivery.

What documents and information are required for the bill of lading?

The bill of lading should contain information regarding the goods, such as:

  • name and address of the exporter;
  • name and address of the importer;
  • name and address of the shipping company;
  • places and ports of loading and unloading;
  • description of the merchandise, names, and their respective brands;
  • NCM (Mercosur Common Nomenclature — 8 digit code used to identify the nature of the goods);
  • packing;
  • gross weight;
  • total volumes;
  • name of the person to be notified when the goods arrive at the destination;
  • freight payment method (collect or prepaid);
  • name of the transporter’s agent at the port of shipment (with signature and stamp of the responsible person).

“The data is sent by the exporter or forwarder to the shipowner or to his/her agent in order to make and issue the B/L,” says Boldrini.

Although the above information is the most requested, Teglas warns that “each company can define its bill of lading model, but it is essential that the main fields be filled in correctly”.

What are the most common B/L issues?

“From a legal point of view,” Chor points out, “there are cases of damage and/or lack of cargo. In such cases, law firms usually make extrajudicial protests or distribute reimbursement actions for cargo damage”.

The lawyer explains that these consequences fall on the shipping agent, since his or her signature is on the bill of lading, as the agent of the shipowner. This is most often because the document contains little data — sometimes none — capable of characterizing and/or identifying the owner, who is, in practice, the true transporter.

It should be remembered that the loss or misplacement of the B/L implies the impossibility of removing the cargo. Many shipowners refuse to issue a new bill of lading, “since the document is worth the cargo and it is not possible to have two original B/L sets circulating with only one cargo to be delivered,” Boldrini points out.

On the other hand, there are other professionals who end up issuing it because they take the business relationship into consideration. At such times, they may also require a bank guarantee equal to or greater than the total cargo. Therefore, “if there is an advice to be given to those who work in the shipping business, it’s: never lose your B/L!”, emphasizes Boldrini.

Fraud, in turn, is configured as the falsification of any data present in the document. The good news is that shipowners have been avoiding this practice by using forms ever more protected by watermarks, stamps, QR codes, barcodes, and so on.

There are international organizations that perform random checks on the authenticity of the bill of lading with the shipowners and their respective agents.

When and how is the bill of lading endorsement made?

The endorsement of the bill of lading is a common practice within maritime foreign trade and is nationally and internationally recognized — it is intended to make the circulation of imported goods more dynamic.

Since the bill of lading has characteristics similar to those of a credit note, it is possible to assign the B/L endorsement to a third party who does not need to own the cargo. From this, the rights of the goods mentioned in the document are transferred to the endorser.

It can be made in two ways: in white or in black. The first alternative sends the rights of the cargo to the bearer. The second, which is the most recommended option, can be triggered by the exporter when the B/L is issued “on demand” or by the consignee who will tie the knowledge to a third party.

Which laws are of interest to the subject?

According to Teglas, it is advisable to know some laws on the subject in order to avoid confusion. They are (in Portuguese):

So, there is no doubt that paying enough attention to the bill of lading is essential for those who want to get the best deals and stay away from bureaucratic inconvenience.

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