Shipping Bills of Lading: What You Need to Know

United Kingdom 11.07.25

Shipping Bills of Lading (BOLs) are a fundamental part of international trade. Whether you are moving goods via ocean, air, or multimodal, BOLs remain the document of choice for proving shipment, permitting delivery, and securing payment.

With over 40 types of shipping Bill of Lading, digital advancements, and recent UK rulings providing key lessons, it’s important to understand how BOLs work – and what can go wrong.

In this article, we’ll cover the basics of what a shipping Bill of Lading is, what information it includes, how it can be consigned and released, and how legal scenarios such as the FIMBank v KCH case provide critical lessons for anyone involved in the trade chain.

What is the purpose of a Bill of Lading?

A bill of lading serves three main purposes:

It acts as a receipt of the goods, showing that the carrier has the goods for carriage.
It sets out the contract of carriage, detailing what’s being shipped, where it’s going, and under which terms.
It functions as a document of title, giving the named party, or whoever properly endorses it (depending on whether the type of BOL allows endorsement), the legal right to claim release from the carrier at the destination.

These three functions make the Bill of Lading a key and valuable document.

What information is needed on a Bill of Lading?

Although layouts vary between carriers, every valid shipping Bill of Lading must include core details of the shipment:

The Shipper and Consignee
A description of the goods
Units, weight, and dimensions
The port of loading and discharge
The name of the vessel or voyage number
Freight payment terms (prepaid or collect) – note that this doesn’t always match the commercial invoice or incoterm
The number of originals issued

All of this forms the basis of the contract and helps determine who is liable for what at each stage of transport.

Types of Bill of Lading

Not all Bills of Lading are the same. The type you use not only affects how the goods move, but also how the release chain works.

Ocean Bills of Lading

These are the most commonly used BOL for ocean freight shipments, making them the standard document for container and bulk cargo shipments. Inland delivery is not included in this type of BOL.

Through Transport and Combined (Multimodal) Bills of Lading

These two types of BOL are used when cargo moves across more than one mode of transport with the carrier, but have a key difference regarding the carrier liability. It is important to understand which you are using so that you can book the right kind of marine insurance to cover the remaining part(s) of the transit.

Through Transport Bills of Lading

These cover the inland journey or additional transits, but only hold the ocean carrier liable for the sea freight portion.

Combined (Multimodal) Bills of Lading

Here, one carrier accepts full responsibility for the entire journey, regardless of the modes involved.

House Bills of Lading

Issued by freight forwarders and Non-Vessel Operating Common Carriers (NVOCCs), House Bills of Lading reflect arrangements between shipper and forwarder. These are usually issued as an additional document chain, with a corresponding shipping Bill of Lading between the forwarder/NVOCC and the shipping line – called the Master Bill of Lading (MBL).

Seaway Bills of Lading

Unlike traditional Bills of Lading, these not documents of title and are non-negotiable (they cannot be endorsed or transferred). Waybills speed up release because no physical document is required at destination, but they don’t offer the same financial security for shippers.

How shipping Bills of Lading are consigned and released

The Consignee field of a Bill of Lading tells you what method is being used:

“Consigned” or “straight” Bills of Lading

If the BOL names a specific company as the Consignee (e.g., “ABC Trading Ltd”), the goods will only be released to that named party or on the instruction of that named party. A straight Bill of Lading isn’t negotiable, meaning that it can’t be transferred to another party. For international trade and financial security, this means:

The Shipper can still hold the originals until they receive payment
The Consignee has security that the goods won’t be sold to another party in transit
Banks will generally not accept the BOL as collateral as it is harder to leverage a non-negotiable BOL

“Consigned to order of” Bills of Lading

This format still names the Consignee but introduces negotiability. The shipper or another named party can endorse the BOL to a third party by signature, effectively transferring title. This makes it suitable for trade finance.

The Shipper can still hold the originals until they receive payment
The Consignee has security that the ownership of the goods cannot be transferred without their permission
Banks are able to accept the BOL as collateral, provided that the BOL is endorsed and delivered to them. Depending on the arrangement, they may also be the Consignee, with the Buyer names as the notify party.

“To order” Bills of Lading

Even more flexible, this phrasing allows whoever holds and properly endorses the original bill to claim the goods. It’s commonly used when cargo may change hands in transit.

The Shipper can hold the originals until they receive payment, ship goods without a confirmed buyer, or sell the goods to another party in transit.
The Buyer (as there is no named Consignee) has less security as the goods are not legally theirs or within their control until the BOL is endorsed to them and they hold the Original Bill of Lading (OBL) – if the goods aren’t released electronically.
Banks are able to accept the BOL as collateral, provided that the BOL is endorsed and delivered to them.

It is common for banks to act as intermediaries when using To Order Bills of Lading because they are a trusted go-between for the Shipper and the Consignee. A Letter of Credit (LOC) can be provided to the Shipper to confirm payment will be made on receipt of the originals, and the Consignee has assurance that they will have the originals forwarded to them when the payment is made. This reduces risk for both parties, and can also mean quicker receipt of the originals by the Consignee as a bank in the country of destination can hold the original bills.

How the Electronic Trade Documents Act 2023 changed shipping Bill of Lading processes

In September 2023, the UK introduced a significant change to trade law: the Electronic Trade Documents Act. Under this law, electronic bills of lading (EBOLs) now have the same legal standing as paper originals, provided they’re issued via a “reliable system”.

This helped to simplify and secure BOL processes by reducing the risk of delay or fraud, but it took some time for the marine insurance industry to formally adopt it. Now, most – if not all – major P&I providers recognise EBOLs from approved platforms as insurable.

The obligations and terms for parties remain the same, but this change added another level of efficiency and confidence for carriers, traders, and banks.

When shipping bills of lading processes aren’t followed, and how their protection isn’t absolute – the FIM Bank v KCH Shipping story

Sometimes, even when all seems to be in order, the Bill of Lading doesn’t do what it’s supposed to do. This is usually because a party has acted unlawfully; however, the legal framework means that you may not be able to claim.

This was exactly what happened in the 2024 UK Supreme Court case of FIM Bank plc v KCH Shipping Co Ltd. FIM Bank financed a cargo of coal and held the original bills as security.

The carrier, KCH, released the cargo at the destination without seeing the original bill. Instead, they accepted a letter of indemnity from the consignee, which is essentially a promise that all will be sorted out later and that they can pass on responsibility if it doesn’t. This is not normal procedure and goes against the purpose of the Bill of Lading.

The cargo disappeared. FIM Bank, holding the original BOL and expecting payment, was unaware the delivery had already occurred.

They sued. The court agreed that the delivery was unlawful, but ruled that the claim was time-barred. In other words, the carrier’s actions were wrong, but they were no longer liable because the bank didn’t act in time. By the time they found out, the one-year limitation period under the Hague-Visby Rules had expired. This rule means that claims can only be brought forward within a year of the date of misdelivery – regardless of whether the plaintiff knew or not.

In this case, the law didn’t protect the bank despite no wrongdoing

It’s a harsh outcome, but a legal one. And it’s not hard to imagine scenarios where the situation is even more complicated – such as when a shipper falsely claims the cargo is “still in storage” when in fact it’s already been released behind the scenes. Under current law, even deception may not extend the time limit unless a separate fraud case is made.

This is why it is essential to have backup systems in place to check on the status of undelivered goods. Even though it is rare that goods will remain unreleased for such a long period of time, the charges compound quickly and there are terms on a BOL which mean the shipper could ultimately end up paying them – even when the Consignee is at fault. This is protection for the carrier, who also need to limit their exposure.

Need help with Bills of Lading?

Bills of lading are powerful tools, but only when used correctly. Whether you’re managing your first international shipment or reviewing risk procedures across your supply chain, understanding how bills are issued, endorsed, and released can save your business from major losses.

Furthermore, the right shipping partner can help you to reduce your exposure to risk.

Cory Brothers provides a full suite freight forwarding and liner services, with international expertise and digital solutions that help you stay safe, informed, and compliant. You can rely on us for:

Professional, proactive, and personalised freight services
Full supply chain transparency within our Cory+ platform
Expert advice on using the best type of BOL for your level of comfort

If you’d like advice on shipping Bills of Lading, or want to know more about our comprehensive service portfolio, we are here for you wherever and whenever you need us. Get in touch today.

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