What is a straight bill of lading?

You have to be very carefull when completing the consignee field of a bill of lading, because it does not only define to whom the goods should be delivered, but also explains delivery procedures of the consignment.

If the bill of lading issued in a negotiable form, to order (shipper) or to the order of a named party, at least one original bill of lading must be surrendered to the carrier's agent at the port of discharge in order to get the consignment.

But what happens if a bill of lading not issued in negotiable form by simply completing the consignee field writing direct consignee's name and address. 

On this article I will be explaining the straight bill of lading, which is a type of bill of lading that is issued in a non-negotiable form.


What is a straight bill of lading?

Bill of lading can be issued in negotiable form only if it is consigned "to order", "to order of" a named Person or "to order of bearer". All other forms of issuance means a non-negotiable bill of lading, which is known as a straight bill of lading.

Let me give you couple of examples for negotiable and straight bills of lading.
Negotiable Bill of Lading Example 1:
United Bank Ltd should be endorsing the bill of lading to the ultimate consignee for delivery of the goods.
Negotiable Bill of Lading Example 2:
Shipper should be endorsing the bill of lading to the ultimate consignee for delivery of the goods.
Straight Bill of Lading Example:
What happens when a bill of lading issued in non-negotiable or straight way?

Where the bill of lading is negotiable, the merchant is always obliged to surrender one original, duly endorsed, in exchange for the goods.

Where the bill of lading is non-negotiable or straight the carrier may complete delivery of the goods to the named consignee upon reasonable proof of identity and without requiring surrender of an original bill of lading.
Important Note: Please kindly keep in mind that applicable law determines delivery of the goods to the consignee. Some local laws may force carrier's to demand original bill of lading for delivery of the goods even under straight bills of lading.
What are the risks of using straight bill of lading?
  • Buyer or importer can get the goods from the carrier without needing to have the original bill of lading, which may risk the payment under letter of credit and cash against documents payment methods. 
  • Issuing banks may loose their control over goods, which may left them vulnerable to various fraud risks especially under letters of credit payments.
What are the benefits of using straight bill of lading?
  • Buyer or importer can get the goods from the carrier without needing to have the original bill of lading, which may eliminate demurrage and detention charges. This may be very beneficial to exporters and importers where the payment is not an issue among the parties and the transit time is very short between port of loading and port of discharge.
Is express bill of lading and straight bill of lading are the same?
  • Express bill of lading and straight bill of lading are not the same concept. 
  • Express bill of lading is a special form of bill of lading, which is issued according to terms and conditions of the carriage created for express bill of lading, that always allows importer to collect goods without surrendering an original bill of lading. If an express bill of lading is issued, then importer always could get the goods from the carrier upon reasonable proof of identity and without requiring surrender of an original bill of lading. 
  • Straight bill of lading is a bill of lading, which is issued according to standard terms and conditions of the negotiable marine bill of lading, that may allow importer to collect goods without surrendering an original bill of lading. If a straight bill of lading is issued, then importer may be able get the goods from the carrier upon reasonable proof of identity and without requiring surrender of an original bill of lading. But in some countries importers may not be able to get goods from the carriers unless they surrender at least one original bill of lading.
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