Ocean Bill of Lading

Key takeaways
* An ocean bill of lading (B/L) is a legally binding shipping document used for transporting goods by sea.
* It functions as (1) a contract of carriage between shipper and carrier, (2) a receipt for goods, and (3) evidence of title (when negotiable).
* Common variants include non‑negotiable (straight) bills and negotiable (shipper’s order) bills. Inland bills are required when goods continue overland after arrival.

What an ocean bill of lading is

An ocean bill of lading is the primary document for international sea shipments. It records the type, quantity, packaging, destination, and value of the goods and sets out the contractual terms between the shipper and carrier. When issued, it serves as the carrier’s receipt and—depending on its form—may transfer title to the goods.

How it works

• Issuance and signatures: The shipper and carrier complete and sign the bill when the goods are handed over for shipment. The receiver signs when the goods are delivered.
• Functions:
• Contract of carriage — defines responsibilities and liabilities of shipper and carrier.
• Receipt — confirms goods were received for shipment.
• Document of title — a negotiable B/L can be endorsed and transferred to give the holder rights to claim the goods.
• Negotiability:
• Non‑negotiable (straight) bill: Names a specific consignee; only that named party may claim the goods.
• Negotiable (shipper’s order) bill: Typically reads “to the order of” and can be endorsed or used with a letter of credit; used when payment or release conditions must be met.

Special considerations: inland transport

If the cargo must travel overland after sea arrival, an inland bill of lading (or combined transport document) is required for the land leg. Inland bills are usually arranged with a domestic carrier or third party; the ocean B/L covers the sea carriage only.

What information an ocean bill of lading contains

Typical data on an ocean B/L include:
* Date and method of shipment
* Shipper’s and consignee’s names and addresses
* Description, quantity, packaging, and value of the goods
* Destination port and routing instructions
* Any special handling or transport requirements

Who pays for the bill of lading

The shipper customarily provides and pays for the bill of lading, though parties can agree otherwise (for example, buyer payment arrangements).

Example

A car manufacturer in Japan ships vehicles to a U.S. dealership. The ocean bill of lading covers sea transport to the U.S. port (e.g., Seattle). If the cars must be moved further inland to a place like Billings, Montana, an inland bill of lading or other land‑transport document is required for that leg.

Conclusion

Ocean bills of lading are essential legal documents in international maritime trade. They clarify the rights and responsibilities of shippers, carriers, and consignees; act as receipts; and, when negotiable, function as documents of title that control delivery of the goods.