A bill of lading is issued by the shipping line or its agent once your goods are loaded. It is a receipt for the goods, evidence of the contract of carriage and, when issued as an original negotiable bill, the document of title. Whoever holds the original controls who can collect the cargo at destination.
That is why it sits at the centre of payment. The supplier keeps the original until you pay, and you get it, or a release, in return. This is general guidance, not legal advice.
What a bill of lading shows
- Shipper, usually the Indian exporter.
- Consignee, which may be you, a bank or "to order".
- Notify party, often you or your customs broker.
- Vessel, voyage, port of loading and port of discharge.
- Container and seal numbers.
- Description of goods, number of packages and gross weight.
- Shipped on board date, which proves when the goods sailed.
- Freight prepaid or collect, matching the Incoterm.
- Number of originals issued, often three.
Why it matters for each payment term
Under advance plus balance against documents, the supplier emails you a copy of the bill of lading as proof of shipment. You pay the balance, then the supplier couriers the originals or arranges a telex release. Until then, you cannot collect the goods.
Under documents against payment through banks, the originals go from the supplier's bank to yours. Your bank releases them only when you pay. Under a letter of credit, the bill of lading is a key document, and it must match the credit exactly.
Once you pay and receive the bill, you control goods you have not seen. Check quality before shipment. Our guide to payment terms for agri imports explains the trade-offs.
Checks before you pay against it
- The draft bill matches the proforma invoice, packing list and contract.
- Container and seal numbers match those recorded at loading.
- The shipped on board date is within the agreed shipment period.
- Port of loading and discharge are as agreed.
- The consignee and notify party are correct for your customs clearance.
- The description of goods is accurate and consistent across all documents.
- Freight prepaid or collect matches the Incoterm.
Common problems
Mistakes in a bill of lading are hard to fix once originals are issued. A wrong consignee, a typo in the description or a weight that does not match the invoice can delay clearance or cause a discrepancy under a letter of credit. Always ask for the draft and approve it before the line issues the final.
Originals can be delayed by courier. If timing is tight, a telex release or sea waybill may be better. See what a telex release or sea waybill is.
How we help
We record container and seal numbers at loading and check the draft bill of lading against them, the invoice and the packing list before you release payment. Ask for a free sourcing review.