Bill of lading
B/L
Meaning
A bill of lading (B/L) is the document issued for cargo loaded on a ship: a receipt, evidence of the carriage contract and a document of title.
Also written as BL, Bill of loading
Bill of lading explained
The master or agent issues the bill of lading at the load port, stating the cargo quantity and condition. Because it is a document of title, whoever holds the original bills is entitled to the cargo, which is why oil traders sell cargoes by transferring them.
Cargoes often change hands several times during a voyage, and the original bills frequently don't reach the discharge port in time. That is why discharge against a letter of indemnity is so common in the oil trade.
Watch out for
Delivering cargo without the original bill exposes the owner to a claim from whoever does hold it. P&I cover may not respond unless the delivery was made against a proper letter of indemnity.
Related terms
Letter of indemnity
A letter of indemnity (LOI) is a charterer's promise to compensate the owner for any loss from delivering cargo without original bills, or at a changed port.
Freight earned on loading
Freight earned on loading means the owner has earned the full freight once the cargo is loaded, even if it is later lost, and it is not returnable.
Cargo shortage
A cargo shortage is a difference between loaded and discharged quantities; many tanker charters let charterers deduct losses above 0.5%.