IDP Cargo

The Importance and Function of Bill of Lading in Global Trade: A Comprehensive Guide

What is Bill of Lading?

A bill of lading is a legal document that serves as proof of shipment and receipt of goods. It is issued by a carrier, such as a shipping company, to the shipper or exporter, and it contains important information about the goods being shipped, the carrier, the shipper, and the destination.

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The Purpose of a Bill of Lading

To provide evidence that the goods have been loaded onto the carrier’s vessel and that they are in transit to the destination. It is also used to transfer ownership of the goods from the shipper to the consignee, who is the party receiving the goods.


In addition to serving as a receipt and proof of ownership, a bill of lading is also used for customs purposes, as it contains information about the type and quantity of goods being shipped, the value of the goods, and the country of origin. It is also used by banks and other financial institutions as collateral for loans, as it represents a tangible asset that can be used as security.


There are three main types of this Document:

  • Straight Bill of Lading

This type is non-negotiable, meaning that it is not transferable to a third party. It specifies that the goods are to be delivered to a specific person or entity and is commonly used for shipments to a consignee who has already paid for the goods in advance.

  • Order Bill of Lading

This type is negotiable, meaning that it can be transferred or sold to a third party by endorsement. It is issued “to order” of a specific person or entity, which means that the goods can be delivered to the holder of the bill of lading upon presentation of the document and proper identification.

  • Negotiable Bill of Lading

This type is also negotiable and can be transferred to a third party by endorsement. However, it is issued “to bearer” or “to the order of bearer,” which means that the goods can be delivered to anyone who presents the bill of lading and satisfies the carrier’s identification requirements.


It is important to note that the type used will depend on the terms of the sale agreement between the shipper and the consignee, as well as the payment terms and the level of control the shipper wishes to maintain over the shipment.


How To Obtain this Document?

The shipper must first provide the carrier with information about the goods being shipped, including the type and quantity of goods, the weight and dimensions of the goods, and the destination. The carrier will then prepare the bill of lading and provide it to the shipper or exporter.


It is important to ensure that the information is accurate and complete, as any errors or omissions could result in delays or additional costs. The shipper should carefully review the bill of lading before signing it to make sure that all of the information is correct.


This document is an important legal document that serves as proof of shipment and receipt of goods. It is used for a variety of purposes, including customs clearance and as collateral for loans. To obtain that, the shipper must provide the carrier with accurate and complete information about the goods being shipped.

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