The bill of lading is receipt, contract and document of title, and an order bill's holder holds the cargo claim
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Ossiano Guides · Documents and risk
About 45 million bills of lading are issued each year. Whether a bill can be traded, who holds it and when the carrier releases the cargo decide who a bank or trader can look to when goods go missing.
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01 · Three jobs in one paper
One paper does three jobs: it is a receipt, a carriage contract and the claim to the goods
A is a document issued by a or a . The carrier is the shipping line that moves the goods. The forwarder is a firm that arranges the shipping for the seller. The bill shows that the carrier has received the goods for shipment. That is how the Uniform Commercial Code (UCC), the main body of US commercial law, defines it.
So the first job of the bill is to be a receipt. Its second job is to be a contract. The US International Trade Administration (ITA) calls the bill a contract between the owner of the goods and the carrier, in its guide to Common Export Documents.
The third job matters most for finance. A bill of lading is a . In business, it is treated as giving the person who holds it the right to receive, hold and dispose of the goods, as the UCC puts it. In plain terms, the paper stands for the cargo.
The law names the bill as a core trade document. The UK lists it among eight example trade documents, per section 1 of the Act. The list also includes the bill of exchange, the promissory note and the , a carrier's promise to deliver goods to a person it names.
The contract job can hold firm when other contracts change. In UniCredit v Euronav (2023), the Court of Appeal held that a bill still contained or evidenced a contract of carriage after the charterparty was novated. A charterparty is the contract to hire the ship. Novation means a new party takes over that contract.
02 · Negotiable or straight
Whether a bill runs "to order" decides if the claim to the cargo can change hands while the goods travel
Ocean bills come in two common types, the ITA says. A is non-negotiable. A , also called a shipper's order bill, is made out "to order".
The difference is who can claim the goods. A negotiable bill says the goods go to the order of a , under US law in 49 USC 80103. The consignee is the person the goods are delivered to. "To order" means that person can pass the claim on to someone else, by signing the bill over. This signing over is called . A straight bill names the consignee and is marked non-negotiable. The goods go to that named person.
The person who has the bill is its . A holder has both possession of the bill and a property right in it, under 49 USC 80101. The is the person the carrier received the goods from, usually the seller.
A is a simpler paper. It is a receipt that evidences a contract for carriage by sea. It names the person the carrier must deliver the goods to, under the UK Carriage of Goods by Sea Act 1992.
An order bill can also protect the seller. Under UK law, a bill may make the goods deliverable to the seller's own order. The seller is then presumed to keep the , per section 19(2) of the Sale of Goods Act 1979. That means the seller still decides what happens to the goods after they ship.
Figure 1 · Interactive
Follow the bill from loading to release
Pick a bill type. Each step shows who holds the paper and who can claim the cargo.
Steps are drawn from US International Trade Administration, Common Export Documents, February 12, 2025; UK Sale of Goods Act 1979 s.19; 49 USC 80101; and Standard Chartered Bank v Dorchester LNG (2) Ltd [2014] EWCA Civ 1382. The steps combine UK and US law sources. Steps marked structural are the Research Desk's sequencing.
03 · Banks as holders
A bank that pays against the bill can step into the claim to the cargo
Banks often end up holding bills of lading. Under a , a bank pays the seller against documents, and the bill can be one of them. Once the bank holds the bill, it can hold the claim to the goods.
The Erin Schulte case shows how. Standard Chartered Bank was the on a credit for a sale of gasoil. It paid the seller on July 7, 2010. The Court of Appeal held that the bank became holder of the bill of lading on that day. That gave the bank rights of suit, meaning the right to sue the carrier, under the Carriage of Goods by Sea Act 1992. See the judgment, paragraph 28.
Payment dates are often counted from the date on the bill. In Taurus Petroleum v SOMO, the credits paid by deferred payment 30 days from the bill of lading date. In Sivakumara v People's Bank, a Sri Lankan case, sugar was sold on terms, or D/A. Under D/A, the buyer gets the documents by accepting a draft, a written promise to pay later. The first shipment was due 45 days from the bill date. The second was due 20 days from the bill date.
The calculator below turns those terms into dates and money. It counts interest on a 360-day year. That is the standard US money market , as used by the ARRC and the Federal Reserve.
Figure 2 · Try it
When is payment due if the term runs from the bill date?
Pick a payment term. The 20 and 45 day terms come from Sivakumara v People's Bank, and the 30 day term from Taurus v SOMO. The due date and the cost of waiting for the money update.
Payment term, days from the bill of lading date
Bill of lading date (illustrative)
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Payment due date
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Cost of waiting for the money at 5.00% a year
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Formula: due date = bill of lading date + term in days; cost of waiting = invoice x annual rate x term days / 360. The bill of lading date (March 2, 2026), invoice (US$1,000,000) and annual rate (5.00%) are illustrative.
Our Research Desk used simple interest on a 360-day year and the payment terms stated in the cited judgments. The rate shown is for illustration and is not Ossiano pricing.
This calculator explains the concept only. Actual payment terms and funding costs vary by contract, bank, buyer, currency and market rates.
The bill also shaped the latest Incoterms rules. The ICC revised the rule in Incoterms 2020 to cater for goods sold FCA and carried by sea, per the ICC. Read more in our guide to Incoterms.
04 · Delivery without the bill
When cargo is released without the bill, the loss question goes to court, and time limits apply
The holder of the bill expects the cargo to be released against it. Sometimes cargo is released without the bill. This is often done against a , a written promise to cover the carrier's loss if things go wrong. Three cases show what can follow.
In FIMBank v KCH Shipping (2024), FIMBank held bills for about 85,510 metric tons of steam coal. The coal was discharged at Indian ports in April 2018 against a letter of indemnity, without the bills. FIMBank began arbitration more than 12 months after delivery. The UK Supreme Court held that the one-year time limit in the applies to misdelivery after discharge (paragraph 107). Misdelivery means handing the goods to the wrong person.
In MSC v Glencore (2017), Glencore shipped cobalt briquettes to Antwerp. The carrier's electronic release system gave out pin codes in place of taking the bills. Two of the three containers were taken by someone with no right to them. The Court of Appeal held that giving out pin codes was not delivery under the bill (paragraph 42).
In UniCredit v Euronav (2023), UniCredit financed a fuel oil purchase under a letter of credit. It took the bill of lading as security. The cargo was discharged by ship-to-ship transfer without the bill. The Court of Appeal found a breach, but the claim failed on causation. That means the court did not find that the breach caused the bank's loss.
Figure 3
Four court rulings on bills of lading
Each row gives the case, the year and what the court held.
Sources: Court of Appeal of England and Wales; UK Supreme Court. Judgments dated 2014 to 2024.
05 · Going electronic
Electronic bills are moving from pledge to practice, backed by carrier targets and new laws
An , or eBL, does the same jobs as paper but is issued and passed on in digital form. Only 1.2% of bills of lading were electronic in 2021, according to the , the Digital Container Shipping Association. About 45 million bills are issued each year, the DCSA estimates.
On February 15, 2023, nine DCSA member carriers made a pledge, per the DCSA press release. They committed to issue 50% of their bills electronically within five years, and 100% by 2030, according to the DCSA commitment page.
By November 2025, eBL usage in container shipping had reached 12.8%, per a DCSA and FIT Alliance webinar deck. The 2021 and 2025 figures come from different reports, so treat the rise as a broad trend.
The law is catching up. is a UN model law from 2017. It lets electronic transferable records, including bills of lading, be used legally at home and across borders, per UNCITRAL. Thirteen jurisdictions have laws based on or influenced by it, per the UNCITRAL status page. They include Singapore (2021), the UK (2023), France (2024) and China (2025, for bills of lading only). The UK's Electronic Trade Documents Act came into force on September 20, 2023, per legislation.gov.uk.
Figure 4 · Interactive
Electronic bills of lading: share of issuance against the carrier pledge
Tap a point to see the share and its source. The dashed line marks the 2030 pledge.
Sources: Digital Container Shipping Association, February 15, 2023; DCSA and FIT Alliance webinar, November 27, 2025. The 2021 value covers all bills of lading; the 2025 value covers container shipping. The pledge points are targets.
Read more in our guides to electronic bills of lading and MLETR and digital trade law.
06 · Ossiano view
The bill of lading is where a trade's paper and its cargo meet, and the electronic version is catching up
OBSERVATION 01
Holder status carries the claim
In The Erin Schulte, a paying bank became holder of the bill on the day it paid and gained the right to sue. Control of the paper ties straight to the options for recovery.
OBSERVATION 02
Release practice is part of the risk
FIMBank and MSC v Glencore both turned on cargo released without the bill. The one-year Hague-Visby time limit makes timing part of every file.
OBSERVATION 03
Digital issuance is rising from a low base
Electronic bills went from 1.2% of bills in 2021 to 12.8% container eBL usage in November 2025. Thirteen jurisdictions now have laws along MLETR lines.
Summary
A bill of lading is a receipt, a contract and the claim to the goods, and the holder of an order bill holds that claim
A bill of lading is issued by a carrier or freight forwarder and shows the goods were received for shipment. It is also a contract of carriage and a document of title. A straight bill sends the goods to one named consignee. A negotiable, or order, bill lets the claim to the goods pass from hand to hand. The holder has possession of the bill and a property right in it.
A bank that pays against the bill can become its holder and gain the right to sue. When cargo is released without the bill, courts decide who bears the loss, and the one-year Hague-Visby time limit can apply. About 45 million bills are issued a year. Electronic use reached 12.8% in container shipping in November 2025, against a carrier pledge of 100% by 2030.
Related guides: Incoterms, the trade documents checklist, title and ownership in commodity trade, electronic bills of lading, MLETR and digital trade law and letters of credit. Instrument cards: letter of credit (sight), letter of credit (usance, acceptance, deferred payment), documentary collection, documents against acceptance (D/A) and documentary collection, documents against payment (D/P). Every term is defined in the Trade Finance Glossary.
For questions on how these shifts affect existing or planned trade finance exposures, contact the Ossiano Research Desk.
Sources
- Uniform Law Commission and American Law Institute (UCC text hosted by Cornell LII), UCC 1-201, General definitions, undated; accessed September 29, 2026. Supports: definitions of bill of lading and document of title (UCC 1-201(b)).
- US International Trade Administration, Common Export Documents, February 12, 2025. Supports: the bill of lading as a contract between the goods owner and the carrier; straight (non-negotiable) and negotiable (shipper's order) ocean bills; Figure 1.
- UK legislation (legislation.gov.uk), Electronic Trade Documents Act 2023, section 1, 2023. Supports: the eight example trade documents in section 1(2), including the bill of lading and ship's delivery order; in force September 20, 2023.
- Court of Appeal of England and Wales, UniCredit Bank AG v Euronav NV [2023] EWCA Civ 471, May 4, 2023. Supports: the bill remained a contract of carriage after novation of the charterparty; discharge without production of the bill; claim failed on causation; Figure 3.
- Office of the Law Revision Counsel, US House of Representatives, 49 USC 80103, Negotiable and nonnegotiable bills, undated; accessed September 29, 2026. Supports: definitions of negotiable bill of lading (80103(a)) and straight bill of lading (80103(b)).
- Office of the Law Revision Counsel, US House of Representatives, 49 USC 80101, Definitions, undated; accessed September 29, 2026. Supports: definition of holder of a bill of lading; Figure 1.
- UK legislation (legislation.gov.uk), Carriage of Goods by Sea Act 1992, section 1, 1992. Supports: definition of sea waybill (section 1(3)).
- UK legislation (legislation.gov.uk), Sale of Goods Act 1979, section 19, 1979. Supports: a bill making goods deliverable to the seller's order presumes the seller reserves the right of disposal (section 19(2)); Figure 1.
- Court of Appeal of England and Wales, Standard Chartered Bank v Dorchester LNG (2) Ltd (The Erin Schulte) [2014] EWCA Civ 1382, October 22, 2014. Supports: the confirming bank became holder of the bill on July 7, 2010, vesting rights of suit under the Carriage of Goods by Sea Act 1992 (para 28); Figures 1 and 3.
- UK Supreme Court, Taurus Petroleum Ltd v State Oil Marketing Company [2017] UKSC 64, October 25, 2017. Supports: credits available by deferred payment at 30 days from bill of lading date (para 9); Figure 2.
- Supreme Court of Sri Lanka, M.D. Sivakumara v. People's Bank, SC/CHC/APPEAL/102/2018 (PDF), March 26, 2026. Supports: D/A terms at 45 days from bill of lading date for the first shipment and 20 days for the second (page 2); Figure 2.
- Alternative Reference Rates Committee, SOFR "In Arrears" Conventions for Syndicated Business Loans, July 22, 2020. Supports: Actual/360 as the standard US money market day count, used in Figure 2.
- Board of Governors of the Federal Reserve System, Selected Interest Rates (Daily), H.15, September 29, 2026. Supports: money market rates annualized on a 360-day year, used in Figure 2.
- International Chamber of Commerce (ICC), Incoterms 2020, January 1, 2020. Supports: FCA revised for goods sold FCA for carriage by sea.
- UK Supreme Court, FIMBank plc v KCH Shipping Co Ltd (The Giant Ace) [2024] UKSC 38, November 13, 2024. Supports: bills for about 85,510 metric tons of steam coal discharged without production of the bills; the Hague-Visby one-year time bar applies to misdelivery after discharge (para 107); Figure 3.
- Court of Appeal of England and Wales, MSC Mediterranean Shipping Co SA v Glencore International AG [2017] EWCA Civ 365, May 24, 2017. Supports: pin codes under an electronic release system were not delivery under the bill; two of three containers misappropriated (para 42); Figure 3.
- Digital Container Shipping Association, DCSA's member carriers commit to a fully standardised electronic bill of lading by 2030, February 15, 2023. Supports: about 45 million bills of lading issued a year; 1.2% electronic in 2021; nine carriers' commitment of February 15, 2023; Figure 4.
- Digital Container Shipping Association, 100% eBL by 2030, February 2023. Supports: carrier targets of 50% digital bills within five years and 100% by 2030; Figure 4.
- DCSA and FIT Alliance (deck hosted by BIMCO), DCSA FIT Alliance webinar deck, November 27, 2025. Supports: container eBL usage of 12.8% in November 2025; Figure 4.
- UNCITRAL, UNCITRAL Model Law on Electronic Transferable Records (2017), 2017. Supports: MLETR purpose, covering documents such as bills of lading.
- UNCITRAL, Status: UNCITRAL Model Law on Electronic Transferable Records, 2025. Supports: 13 jurisdictions with legislation based on or influenced by the Model Law, including Singapore, the UK, France and China.
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