What is a straight bill of lading? A straight bill of lading is a type of transport document that is non-negotiable. A straight bill of lading can also be referred to as a consignment bill of lading. This type of B/L is best used when the cargo has already been paid for. This type of B/L’s conditions will mention that only a specific consignee can take title to the cargo (i.e. the consignee details will not state “to order”) , hence it cannot be transferred to another consignee.
Is the original Bill of Lading required to take delivery?
The freight forwarder is required to hand over the cargo to the specified consignee as soon as he/she identifies himself/herself with appropriate identification. However, in some countries, it is also expected that the consignee must be able to produce the original bill of lading. Where local courts have set such a precedence, it would be best for shipping companies to maintain that as a requirement when making delivery to customers in that country.
Why use a straight bill of lading?
If the delivery is being made to a customer located in a country where the original bill of lading is not required when a straight bill of lading is cut – the importer can avoid excessive demurrage and other port charges that may arise from documents going missing in transit. Hence, in this case a straight bill of lading is simpler choice than a negotiable bill of lading.
When to use a straight bill of lading?
It is best to use a straight bill of lading when the cargo has already been paid for, or when there is no doubt that the importer will make payment for the products. This type of B/L will also work well for gifts and donations for which no payment is required.
A final word…
Shippers and importers should make it a point to understand the implications of the shipping documents that are being used, especially since documents like B/Ls act as a receipt of cargo and negotiable bills of lading can also affect title transfer. Litigation in cross border transaction is costly and complicated. The best way to avoid the need for it would be to exercise due diligence even in the most mundane of operational activities.