What is a bill of lading?
A bill of lading (B/L) is the document in which the carrier acknowledges that it has received the goods or loaded them on board. It is evidence of the contract of carriage and, in its negotiable form, a document of title that decides to whom the goods are delivered at the port of arrival. It is issued in sea transport, and the cargo is released against presentation of the original by the rightful holder.
Does a bill of lading transfer ownership?
A bill of lading transfers possession of the goods, not ownership. Under Article 1234 of the Turkish Commercial Code, once the goods have been taken over for carriage, handing the bill of lading to the person entitled to receive the goods under it has the same legal effect as handing over the goods themselves, and the person who properly takes over the document becomes the indirect possessor. Whether ownership has passed is a question for the underlying sale contract. The difference matters in practice: a buyer can hold the original bill of lading and still not be the owner if the sale provides that title passes only on full payment. The carrier does not look behind the sale; it must deliver the cargo to the rightful holder of the bill of lading. This is why banks ask for the original bill of lading under a letter of credit: the document works as a security that controls who can take the cargo.
What is the difference between straight, order and bearer bills of lading?
The difference lies in to whom and how the document can be transferred. An order bill of lading is transferred by endorsement and delivery, and it is the type most used in international trade. If the consignee box says only "to order", the bill is issued to the order of the shipper, and nobody can take the cargo unless the shipper endorses it. In a straight bill of lading the consignee is named and the document is not transferred by endorsement. A bearer bill of lading passes by handing over the paper, and because the risk of loss is very high it is rarely chosen in practice. The choice is tied to commercial risk: on cargo that has not yet been paid for, an order bill of lading lets the seller withhold the goods.
- Order: transferred by endorsement and delivery; the standard in letter-of-credit transactions.
- Straight: the consignee is named; it cannot be transferred by endorsement.
- Bearer: transferred by handing over the paper; high risk of loss.
What is the difference between an original bill of lading, a telex release and a sea waybill?
All three govern the delivery of the cargo, but the key to delivery is different. With an original bill of lading, the cargo is delivered only against presentation of an original at the carrier's agent at the port of arrival. A telex release is not a separate type of document but an operation carried out on a printed bill of lading: after the seller has been paid, all originals are surrendered to the carrier's agent at the port of loading, and the carrier instructs its destination agent to release the cargo, so no paper has to be waited for. With a sea waybill no original is printed at all; the document is not negotiable, and the cargo is delivered to the consignee named on it after identity checks. The choice is about commercial trust. The original bill of lading is the strongest security for payment, but if the documents are delayed in the post the container waits at the port and demurrage starts to run. A sea waybill removes that delay but weakens the seller's leverage.
Does the shipper keep the right of control under a sea waybill?
Yes, unless otherwise agreed, the right of control stays with the shipper. A sea waybill cannot be endorsed and is not a document of title, but this does not mean the shipper loses all say over the cargo. Under the CMI Uniform Rules for Sea Waybills of 1990, the shipper has the option to transfer the right of control to the consignee, but only if it exercises that option no later than the moment the goods are handed to the carrier, and this choice has to be noted on the document. As long as it does not transfer the right, the shipper can change the consignee or the delivery instruction by written instruction to the carrier. Some contracts use a "NODISP" notation: the shipper gives up in advance the right to change the consignee, which strengthens the consignee's position. In short, a sea waybill gives no security that can be presented to a bank, but the seller has not left the cargo completely uncontrolled.
Are air waybills and road consignment notes bills of lading?
No. Neither the air waybill (AWB) nor the CMR consignment note is a document of title, and neither can be endorsed. The air waybill is evidence of the contract of carriage and of receipt of the cargo. Three originals are made out, one for the carrier, one for the consignee and one for the shipper, but the document does not represent the goods, and the airline delivers the cargo to the consignee named on it. The CMR consignment note works on the same logic, with three originals under the CMR Convention: one for the sender, one travelling with the goods and one for the carrier. The right of disposal over the goods in road transport is regulated by Article 12 of the Convention. As a result, air and road transport have no equivalent of the sea rule that whoever holds the document controls the cargo; security for payment is built by other means, such as a letter of credit, documents against payment or naming the bank as consignee.
Original bill of lading, telex release and sea waybill compared
| Criterion |
Original bill of lading (B/L) |
Telex release |
Sea waybill |
| Document of title |
Yes |
Not a separate document; an operation on a bill of lading that is a document of title |
No |
| Can it be endorsed? |
Yes, if it is an order bill |
No, once the originals have been surrendered |
No |
| Original needed at delivery |
Required |
Not needed; the carrier's release instruction is enough |
Not needed; the consignee's identity and authority are enough |
| Do the documents have to reach the destination? |
Yes, and a delay creates demurrage risk |
No |
No |
| Fit with a letter of credit |
The most suitable document |
Varies by bank; generally not preferred |
Generally not accepted |
| Typical use |
New or risky buyer, letter-of-credit transactions |
Cargo that has already been paid for |
Shipments within a group, a trusted buyer |
Frequently asked questions
How many original bills of lading are issued?
The most common set is 3/3: three originals and usually three non-negotiable copies. Presenting any one of the three originals is enough to obtain the cargo, and once one has been used the others lose their effect. In letter-of-credit transactions banks usually ask for the full set of originals, and an incomplete presentation is a ground for discrepancy.
Who issues the bill of lading?
The carrier issues it, or its agent or the master on its behalf. When a freight forwarder takes on the carriage in its own name, it issues its own house bill of lading (HBL). The content rests on the shipper's loading instructions, so the risk of mistakes in fields such as the consignee name, the description of goods and the HS code lies with the shipper. A correction cannot be made unless the originals are surrendered.
How is the cargo collected if the original bill of lading is lost?
A lost bill of lading does not become invalid by itself; a court has to cancel the document. Because this takes time, carriers may in practice release the cargo against a bank guarantee. The amount and the period of the guarantee are set by the carrier, which is not obliged to accept. To reduce the risk, the originals are sent in separate parcels.
Is a telex release the same as a sea waybill?
No. A telex release is an operation applied to a printed bill of lading: the originals are surrendered to the carrier at the port of loading. A sea waybill is a non-negotiable transport document from the start, and no original is ever printed. The practical result is similar, because the consignee collects the cargo without waiting for paper, but the legal nature and the control the seller keeps are different.