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What is an Order Bill of Lading?

An Order Bill of Lading is a negotiable document, which is drafted to the order of a particular entity or party involved in the export process. Learn more about its process and an example in this blog.

A Bill of Lading is an important document in the export shipping process. It works as proof of shipment. It states what products are being shipped, where the shipment is from (origin country) and what is the destination of the shipment (destination country). A Bill of Lading helps ascertain the title or ownership of goods as it allows the person who has the Bill of Lading to claim possession of the cargo. There are many types of bills of lading and each one is designed for a specific purpose.

What is an Order Bill of Lading?

An Order Bill of Lading is a negotiable document, which is drafted to the order of a particular entity or party involved in the export process. In this bill, terms like ‘delivery to ABC Ltd’ or ‘to order Bill of Lading’ are used to order from the consignee. The Order Bill of Lading or Shipper’s Order Bill of Lading is the most commonly used type of Bill of Lading in modern international trade.

Why is an Order Bill of Lading issued?

Order Bill of Lading is mainly issued to assure both the seller and the importer that this document can be used to collect the shipment from the carrier. After verifying the Order Bill of Lading, the carrier hands over the possession of goods. In case the Bill of Lading is made ‘to order’, it essentially means that it is a negotiable instrument of title or ownership. In other words, the ownership of the goods can be transferred from one person to the other based on the Bill of Lading and authorized signatories.

How does an Order Bill of Lading work?

In a situation when the importer does not pay for goods in advance, a seller usually issues a ‘to order’ Bill of Lading. It is an instrument with which the carrier takes responsibility for the goods during transit and the importer is assured of delivery even if he has not paid in advance. At the same time, the seller also feels secure because the importer will need to have authorization from the seller to take possession of the goods once they reach the final destination.

Features of an Order Bill of Lading

The key feature of an Order Bill of Lading is the ability to transfer the title of goods based on the possession of the Bill of Lading and the fulfillment of the conditions involved.

What is the format of an Order Bill of Lading?

• Seller details (name, address and contact number)
• Buyer details (name, address and contact number)
• Carrier details (name, address, medium of transport and contact number)
• Shipment details (weight, quantity and dimensions)
• Terms and conditions

What are the benefits of an Order Bill of Lading?

Some of the key benefits of an Order Bill of Lading are:

Security for the seller

As the importer cannot take possession of goods without authorization from the seller, the seller has a level of security in the transaction.

Certainty for the importer

As the importer does not need to pay upfront without any certainty about receiving the goods in order, it is better to opt for an Order Bill of Lading. The importer needs to make the payment only after the goods have reached the final destination.

Possibility of funding

With a ‘to order Bill of Lading’, it is possible for the seller to raise funds from the market by selling or pledging them in the market. It provides an additional possibility of securing funding.

Depending on the requirements of an export business, a particular type of Bill of Lading (straight, multimodal, airway, ocean and inland) is used. Once you have obtained Certificate of Analysis and other required documents for your export business, you can sell internationally from India using e-commerce.

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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 a 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. Straight 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

What is a blank endorsement?

A blank endorsement is where a Bill of Lading is not consigned to any party but is mentioned as ‘to order’ of the seller. The name of the intended party is mentioned as ‘notify party’. The title of goods is transferred when the seller stamps and signs the Bill of Lading.

What is a negotiable Bill of Lading?

A negotiable Bill of Lading is one where it is possible to transfer the title of goods from one party to another.

What is to order consignee?

It is a type in which the Bill of Lading can be endorsed by the named consignee. It helps to gain more control over the export transaction.

Can we surrender ‘to order Bill of Lading’?

The seller can surrender a ‘to order Bill of Lading’ before the title of the goods has been shifted to the buyer.

What is to order shipment?

To order shipment is a document by the carrier that confirms the booking of a shipment to a vessel for transportation.

Published on October 31, 2022.

Sources:
1. https://www.collinsdictionary.com/dictionary/english/order-bill-of-lading#:~:text=order%20bill%20of%20lading%20in,by%20endorsement%20to%20third%20parties
2. https://www.globalnegotiator.com/international-trade/dictionary/order-bill-lading/
3. https://www.shippingsolutions.com/blog/3-things-you-need-to-know-about-the-bill-of-lading-form
4. https://howtoexportimport.com/Consignee-To-Order-in-Bill-of-Lading-281.aspx
5. https://www.indiafilings.com/learn/types-of-bill-of-lading/
6. https://www.letterofcredit.biz/index.php/2019/02/25/to-order-and-blank-endorsed-bill-of-lading/
7. https://optimoroute.com/bill-of-lading/

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