GLOBAL SELLING BLOG

What is a straight bill of lading (SBoL)?

Straight bill of lading is a non-negotiable bill of lading that is used primarily when goods being delivered have already been paid for. In this blog, learn about its meaning and process.

Exporting goods beyond country borders requires a list of documents such as letters of credit, transport documents, bills of exchange, and so on – all of which help allow fair international commerce. One such important document is a Bill of Lading (BoL). It works as a proof of shipment. It states what products are being shipped, where is the shipment from (origin country) and what is the destination of the shipment (destination country).

To be successful as a global brand and avoid any challenges during international shipping, it is important to have all necessary export documentation in hand.

What is a straight bill of lading (SBoL) in exports?

A straight bill of lading is typically used to describe a non-negotiable bill of lading. It is a contract in which a seller promises to ship goods to a specified location using a certain mode of transportation and assigns the bill to a specific consignee. It cannot be allocated to anybody except the “designated consignee” due to its non-negotiable character.

One of the most distinguishing characteristics of a straight bill is that the consignee is identified when the bill is issued and cannot be altered later. As a result, approving the bill does not allow the shipper or consignee to transfer legal title and ownership of the goods to a third party.

What is the need for a straight bill of lading?

Straight bill of lading, also known as a ‘consignment bill of lading’, is used goods are being sent to a customer or importer who has already paid for the order. Since the original bill of lading is not required to receive goods, this bill covers products’ kind, amount and condition and can reduce demurrage and detention expenses.

What are the uses of a straight bill of lading?

A Straight Bill of Lading is issued when the consignee has made a full advance payment and can directly receive the consignment⁴. This type of bill ensures that the shipment is exclusively for the consignee, and the right to receive it cannot be transferred to a third party. It is termed a non-negotiable bill because once payment is completed, the consignee maintains sole ownership. Thus, this process is used when the shipper does not want products to be easily transferred or when confidential products are moved.

Contents of a straight bill of lading

Some of the contents in a straight bill of lading are:
• Name of the shipper
• Addresses of the shipper (consigner)
• Address of the receiver (consignee)
• Shipping dates
• Amount of the consignment
• Precise weight of the consignment
• Value of the consignment
• Freight classification

How does a straight bill of lading work?

A straight bill of lading is typically used to deliver products to customers who have already paid for an order. It is usually preferred in the event of gifts or contributions or other products that do not require payment, such as swaps or refunds.

In a straight BOL, the seller commits to using a certain mode of transportation to deliver goods to the destination. The bill is then allocated to a particular party, identified as the ‘designated consignee’. It cannot be allocated to anybody else since it is non-negotiable. This aids the proper delivery of goods.

What are the benefits of a straight bill of lading?

Some of the common benefits of a straight bill of lading are:
• Since the buyer or importer does not need to provide the original bill of lading, they can obtain goods straight from the carrier.
• This bill may result in elimination of demurrage and detention charges.
• It is highly useful to exporters and importers since payment is already done.
• It also reduces the transit time between the ports of loading and discharge is quick.

Risks of using a straight bill of lading

When using a straight bill of lading, there are certain challenges that one should know of. Since the original bill of lading is not required to receive the products, it can get risky for banks when payment agreements such as letters of credit and cash against documents have been used. This makes banks vulnerable to credit risks as consignee can collect their products without adhering to agreed-upon payment terms.

Difference between straight BOL and bill of lading (BOL)

A Bill of Lading (BoL) is an important legal document issued by a transportation company to a shipper. It contains essential details about the products being transported, such as their type, quantity, and destination. This document also doubles as a receipt when the carrier delivers the goods to their destination. On the other hand, Straight bill of lading is a non-negotiable document and is issued when the consignee has completed the payment in advance and gets the consignment directly.

Easy e-commerce exports with Amazon
Global Selling

As an e-commerce exports program, Amazon Global Selling enables Indian sellers and MSMEs to take their products from India to international marketplaces across 200+ countries and territories. Without having to set up a physical store or warehouse abroad, Amazon’s simple registration process and hassle-free logistic support helps you reach global customers in a seamless manner.

Guide to export with Amazon

More blogs on bills of lading

1. What is a surrender bill of lading?

2. What is a multimodal bill of lading?

3. What is an order bill of lading?

4. What is a claused bill of lading: All you need to know about its meaning and format

5. What is a through bill of lading?

6. House bill of lading: All you need to know about its format and benefits

7. Ocean bill of lading: All you need to know about its types and format

8. What is a clean bill of lading: All you need to know about its meaning and format

9. Master bill of lading vs house bill of lading: Everything you need to know

10. Bill of lading: Guide to its meaning and format

11. What is a switch bill of lading: Guide to its meaning and uses

12. What is an inland bill of lading?

Frequently Asked Questions

Who will issue the Straight Bill of Lading?

The shipping company issues a Straight Bill of Lading or by agents concerned with placing goods on board the vessel and signed by the carrier.

Visit Exports Compliance Dashboard to meet your documentation requirements

When should a Straight Bill of Lading be used?

A Straight Bill of Lading is usually considered to make goods delivered to a specific consignee. It is generally used to deliver goods to customers who have already paid for them.

What is the difference between a Bill of Lading and a Straight Bill of Lading?

The difference between a Bill of Lading and a Straight Bill of Lading is that while the Bill of Lading can be negotiable, a Straight Bill of Lading is non-negotiable. It can be delivered only to a specific customer.

What is the difference between a Straight and Negotiable Bill of Lading?

A Negotiable Bill of Lading directs the carrier to deliver goods to any individual in possession of the original signed Negotiable Bill. A Straight Bill of Lading specifies a single consignee, recipient or buyer to whom the items must be transported.

Published on August 30, 2022.

Sources:
1. https://www.google.com/url?q=https://efinancemanagement.com/international-financial-management/straight-bill-of-lading&sa=D&source=docs&ust=1661323853300166&usg=AOvVaw3n5Gxalsa9c9qK7wa0HxQ4
2. https://www.gard.no/web/updates/content/51601/straight-bills-of-lading-not-so-straightforward
3. https://www.shippingsolutions.com/blog/3-things-you-need-to-know-about-the-bill-of-lading-form
4. https://economictimes.indiatimes.com/small-biz/trade/exports/process/how-to-issue-bill-of-lading-and-why-it-is-important-in-exports/articleshow/88159615.cms?from=mdr
5. https://www.documents.dgs.ca.gov/dgs/fmc/dgs/osp208.pdf
6. https://www.investopedia.com/terms/b/billoflading.asp

What is Certificate of Origin (COO) for export?

Guide on how to export from India

Success stories

California Design Den's success journey with Amazon Global Selling

How Shreya Vora expanded her jewelry business with Amazon Global Selling