If you are an importer/exporter who are starting to transport freight by sea, the terms bill of lading, telex release and express release will become more or less ingrained into the back of your hand. However, for those who are new to the shipping process, Jarrod, our Customer Service Manager, goes through the differences between these terms in this blog post.
What is a Bill of Lading?
The Bill of Lading is the transport document commonly used for sea freight shipments. It is a legal document under which cargo is accepted for carriage on board a vessel. A Bill of Lading is both evidence of the contract of freight movement, and a document of title.
HBL and OBL are abbreviations that are currently used within the freight industry.
- Ocean Bill of Lading (OBL) – When shipping direct with a shipping line.
- House Bill of Lading (HBL) – When shipping with a freight forwarder.
These two terms are used when referring to the type of bill of lading you'll be receiving. When booking directly with a shipping line, you will receive an OBL (ocean bill of lading), whereas if you book through a freight forwarder, you will receive a HBL (house bill of lading).
The 3 common types of bill of ladings (based on cargo) are Original bill of lading, Telex release, and Express bill of lading. These three types differ on the basis of the documents needed for import/export clearance and are completely different from OBL or HBL (see image below).
Original Bill of Lading
The original Bill of Lading is produced once the cargo is confirmed on board the vessel and provided to the shipper in 3 x Originals and 3 x Copies. The shipper will usually hold the original Bill of Lading until they have received payment from the importer before they send the originals to them. The importer must surrender a duly endorsed original Bill of Lading with either the freight forwarder or shipping line to secure the release of the cargo.
'Original' means the bill of lading documents must be printed in hard copies at origin, and once signed and stamped, the originals must be sent in the mail (via a courier) to the final destination. Once at final destination, the consignment will only be released if original copies of the bill of lading are present. Original bill of ladings are most commonly used when shippers are under a letter of credit or the consignee is on payment terms with the shipper.
The original Bill of Lading is produced once the cargo is confirmed on board the vessel and provided to the shipper in 3 x Originals and 3 x Copies. Compared to Original bill of lading, Telex release differ as the shipper does not need to send original documents to destination. The shipper will usually hold the original Bill of Lading until they have received payment from the importer.
Once payment has been received the shipper will surrender the original Bills of Lading to the office of the freight forwarder or shipping line that issued it rather than forward it on to the importer.
The origin freight forwarder or shipping line will then electronically message their destination office to inform them that the Original Bill of Lading has been surrendered and to authorise release of the goods to the importer without them having to surrender a duly endorsed original Bill of Lading. In other words, the origin office will send a telex notification to destination, saying the goods can be released. If there are any charges outstanding to the origin, the cargo will not be released until its paid.
Telex Release is the most common type of bill of lading for sea freight shipping.
Seaway / Express Bill of Lading
The Seaway or Express Bill of Lading is produced once the cargo is confirmed on board the vessel. This means no Original Bill of Lading is required and goods are automatically authorised for release at destination. This is a common form of documents when the importer is on account terms with the supplier and origin freight forwarder or shipping line.
With Express bill of lading, no original documents are printed, and cargo is automatically released at destination. Express bill of lading are usually used when the consignee is on account terms and doesn't require payment of goods to be paid before receiving the goods at destination.
If you liked this blog post, stay tuned as our staff introduces more commonly asked issues on our Whale Knows series. Subscribe to our blog to get sent free updates weekly! And if you still have questions regarding bill of ladings, contact Jarrod or one of our friendly Customer Success Managers here.
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