The bill of lading, often shortened to B/L, is the most important document in ocean shipping. Whoever holds it can claim the cargo at the port of discharge. Whoever has lost it, or did not receive it in time, watches the container run up demurrage. Here is what it does, how to read it, and what the law applicable in Senegal says.
The three functions of a bill of lading
1. A receipt. The carrier acknowledges taking charge of the goods, in a given number of packages, under a given description, in a given apparent condition.
2. Evidence of the contract of carriage. The terms of carriage, often printed on the back, apply between shipper, carrier and consignee.
3. A document of title. This is its most powerful function. The original bill represents the goods themselves: they can be sold by transferring the document, and the carrier only delivers to whoever presents a valid original.
Its forms
To order. The bill is made out "to the order of" someone, often the bank financing the deal, and is transferred by endorsement. This is the form used in letters of credit.
Straight. It names a specific consignee and cannot be transferred by simple endorsement.
Bearer. Whoever holds it can collect the goods. It is the riskiest form: one lost or stolen original is enough to lose the cargo.
There is also a distinction between a "shipped on board" bill, which states that the goods are on board a named vessel, and a "received for shipment" bill, which only confirms the carrier has taken charge. Banks normally require the former.
An example, line by line
Here is what to check on a bill of lading for an import into Dakar:
| Field | What it should contain | What should raise a flag |
|---|---|---|
| Shipper | The seller or its agent | A name not in the contract |
| Consignee | "To the order of" the bank, or your company | Your name when the bank is financing |
| Notify party | You or your forwarder, with contact details | An incomplete address, which delays the arrival notice |
| Vessel, ports | Named vessel, port of loading, Dakar | A port different from the contract |
| Description | Goods, number of packages, weight, container and seal numbers | A weight or package count different from the invoice |
| On board notation | Date the goods were loaded | A date after the contract's latest shipment date |
| Freight | Prepaid or collect | "Collect" when you bought CFR or CIF |
| Number of originals | Usually three ("3/3") | An incomplete set handed to the bank |
| Clauses | No remarks on the condition of the goods | "Packaging damaged", "packages wet" |
A bill with no remarks on the condition of the goods is called "clean". A claused bill may be rejected by the bank and often signals a dispute.
The bill of lading and the letter of credit
Under a documentary credit, the bank pays against documents, not goods. The International Chamber of Commerce's Uniform Customs and Practice (UCP 600) sets what it checks: article 20 requires, among other things, that the bill indicate the carrier, shipment on board a named vessel at the stated port, the port of discharge and the full set of originals. Unless otherwise stated, documents must be presented no later than 21 days after the shipment date.
A badly drawn bill of lading means a blocked payment and, meanwhile, a container waiting in port.
Modern variants
The sea waybill is not a document of title: the cargo is delivered to the named consignee without presentation of an original. It suits shipments without bank financing.
Telex release: the shipper surrenders the originals to the carrier at origin, which authorises delivery at destination without them. Convenient, but it assumes the seller has been paid.
The law applicable in Senegal
Senegal ratified the United Nations Convention on the Carriage of Goods by Sea, the Hamburg Rules, on 17 March 1986, as did Burkina Faso (1989) and Guinea (1991). These rules set, among other things, the carrier's liability for loss or damage: it is limited to 835 special drawing rights per package or 2.5 special drawing rights per kilogram, whichever is higher.
Our reading
A bill of lading is a document of a few boxes that decides who owns the goods and who pays. A badly completed bill, an original that arrives too late or a wrongly named consignee is enough to block cargo in port, even when customs is ready. It should be checked before the vessel sails, not when it arrives.
Frequently asked questions
What is a bill of lading?
The document issued by the ocean carrier that serves as a receipt for the goods, evidence of the contract of carriage and a document of title: its lawful holder can claim delivery.
What is the difference between a to order and a straight bill of lading?
A to order bill is transferred by endorsement and is used for bank financing; a straight bill names a specific consignee and cannot be transferred by simple endorsement.
How many original bills of lading are issued?
Usually three, marked "3/3". Under a letter of credit, the bank normally requires the full set.
What is a clean bill of lading?
A bill that carries no remarks on the apparent condition of the goods or their packaging.
What we do
GraceRoad reviews your transport documents before the vessel sails, tracks the arrival of the originals and prepares clearance so the cargo leaves port without waiting. Send us a draft bill of lading: we will tell you what will block in Dakar.
Read next: demurrage vs detention and letters of credit in West Africa.
Sources: United Nations Commission on International Trade Law, status of the United Nations Convention on the Carriage of Goods by Sea (Hamburg, 1978), ratification dates; Hamburg Rules, article 6 (limitation of liability); International Chamber of Commerce, Uniform Customs and Practice for Documentary Credits (UCP 600), articles 14 and 20, and Banking Commission opinions.