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The bill of lading as a receipt for goods

T
Typography

The bill of lading as a receipt for goods. This is the historical reason for the document, which became known as a “bill of loading” and later as a “bill of lading”.

Originally, merchants would take a sea voyage with their goods to marketplaces and attempt to sell the goods directly in face-to-face transactions. At that time no bills of lading were necessary, the merchant merely paying for his passage. However, when trade developed the merchant may have been able to send the goods to an agent in a foreign port for the agent to arrange to sell. The ship was used as the transport vehicle and a receipt was necessary from the ship’s master to prove that the goods were in fact received by him and would be in his safekeeping until delivery to the consignee. This characteristic of “receipt for goods” is indeed the primary characteristic of the bill of lading even today. This is brought out clearly in Art. III, r. 3 of the Hague Rules or Hague-Visby Rules or, perhaps more clearly, Art. 14 of the Hamburg Rules. The former states that:

“After receiving the goods into his charge the carrier or the master or agent of the carrier shall, on demand of the shipper, issue to the shipper a bill of lading showing...”

The bill is issued only on demand of the shipper (as is usual) and must show the marks necessary to identify the goods and the quantity of the goods, both furnished in writing by the shipper and also the apparent order and condition of the goods. The information inserted in the bill of lading consists of factual admission, two guaranteed by the shipper and the third by reasonable inspection of the goods by the master or agent of the carrier. (See Apparent good order and condition.)

If the shipper is also the charterer of the vessel, the terms and conditions of the contract of carriage or hire of the vessel are contained in the physical document which is the “charterparty”. There is no need for the physical document of the bill of lading to be the contract between the charterer and shipowner. Therefore, the bill of lading is merely a receipt for the goods carried under the relevant charter. Of course, if the goods carried under the charter are transacted to a third party, the bill of lading can also become a document of title.

In the situation of any other type of shipper, for example, one using part of the vessel to ship small quantities of goods, the “receipt for goods” characteristic is still primary. The intending shipper may use a standard form of bill of lading or the carrier’s own form or even the shipper’s form if it is a big shipper, and insert the details describing the quantity and identification marks of the goods. This may be done after the goods are actually received by the carrier or on behalf of the carrier. At the time of actual receipt another document may be used: a “mate’s receipt” or “dock receipt” which shows the actual quantity, marks and condition of the goods. When the shipper requires a formal bill of lading he will present the form he completed, together with the appropriate “receipt”, to the carrier, master or authorised agent. The details will be compared and checked and the formal bill of lading will be signed and returned to the shipper. The goods may not yet be loaded on board a vessel. The bill of lading is then called a “received for shipment bill of lading”.

After the goods are actually loaded, the bill of lading to be issued on the demand of the shipper is a “shipped bill of lading”. This is a receipt of the goods, as described in the bill of lading, on board the ship.

Under the Hamburg Rules the carrier must issue, on demand of the shipper, a bill of lading after taking the goods into his charge. This can happen well before or even without receiving the goods for shipment or even without the goods actually being shipped. This bill of lading shows more factual detail, including the nature of the goods, as furnished by the shipper. This may include the ‘‘order and condition’’ of the goods.

The “receipt for goods” characteristic has four aspects, three of which have been mentioned elsewhere:

Receipt as to quantity. See Cargo - Quantity.

Receipt as to condition. See Apparent good order and condition and Cargo - nature and condition.

Receipt as to quality. See Cargo - Quality.

Receipt as to identification marks. Such “leading marks and numbers”are inserted by a shipper on a bill of lading and are helpful for identification of the goods both when they are received for shipment or loaded on board the vessel and also when they are delivered to the consignee or indorsee of the bill of lading. The marks must be ”... stamped or otherwise shown clearly upon the goods if uncovered, or on the cases or coverings in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage”. (Art. III, r. 3(a) of the Hague-Visby Rules.) Naturally some goods or cargoes cannot bear identifiable marks, such as bulk shipments of say, grain.

The marks should generally be accurate in identifying the goods described on the bill of lading. However, at common law a different result may occur. In Parsons v. New Zealand Shipping Company, 1901, the bill of lading stated that 608 carcasses of frozen lamb were shipped, and the marks on all the carcasses did not match the marks specified in the bill. At the place of delivery, the indorsees refused to take delivery of the carcasses that bore marks different to the marks in the bill. They claimed against the carriers for short delivery of the cargo of carcasses marked as on the bill. The decision of the court was in favour of the shipowners because the different marks were used by the shippers for their own reasons. The shipped cargo was 608 carcasses and 608 carcasses were delivered. The marks had no market or commercial meaning and did not indicate to a buyer the nature, quality or quantity of the goods. While identification of the goods is made more difficult, a mistaken mark does not affect the existence or identity of the goods. The Hague-Visby Rules require the marks to be “necessary for the identification of the goods” and can be demanded by the shipper to be inserted in the bill of lading. The issuer of the bill of lading may refuse to insert such marks if he reasonably suspects them to be inaccurate or if he has no reasonable means of checking them. 

 

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