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Straight Bill of lading

types of bill of lading

What is straight bill of lading?

Straight Bill of Lading falls within the category of non-negotiable bill of lading. It is specifically used when the commodities which are being delivered have been already paid for, or are some sort of donations or gifts that don’t require any kind of payment. Using such a bill, the consignee is delivered the consignment on the presentation of authentic identity to the shipping company.

How does straight bill of lading work?

A straight bill of lading is a legal document in which a supplier agrees to use a particular transportation option for shipping the products to a certain location, and further the bill is assigned to a named consignee or a specific party. Because of the non-negotiable nature, it cannot be easily assigned to any other party. This ensures the accuracy in the delivery of the products. The straight bill of lading provides details about the type, quality and quantity of the goods as well for clarity.

When the receiving party presents proper identification, which they agreed upon earlier in advance, the shipping company hands over the consignment.

Sometimes a straight bill of Lading is also termed as Consignment Bill of Lading or a Sea Waybill.

WHAT ARE THE RISKS OF USING A STRAIGHT BILL OF LADING?

  • ▪ The buyer doesn’t have to present the original bill of lading in order to receive the goods. This can also run risks in terms of payment if specific payment methods such as letter of credit and cash against documents are used.
  • ▪ In case of fraud risks the issuing, banks are left vulnerable especially under a payment associated with letter of credit as the banks can lose specific required control over the goods during the involvement of Straight Bill of Lading.

WHAT ARE THE BENEFITS OF USING A STRAIGHT BILL OF LADING?

As the buyer or the importer don’t have to present the original bill of lading, and can directly get the goods from the carrier, which helps in eliminating certain demurrage as well as detention charges. This can be highly beneficial for the exporters and importers where there is no issue amongst the parties regarding the payment and the transit time seems to be short between the port of loading and port of discharge.

When to use Straight bill of lading?

Generally, a straight bill of lading is used for shipping consignments to customers that have already been paid for. In the case of gifts, donations and other items which do not require any kind of payment such as exchanges or returns, a straight bill of lading is seen as the easiest to use.

Straight bill of lading can be seen as a transport document that is issued under a standard BoL contract of carriage and it restrain surrendering of an original bill of lading in terms for obtaining the products from the carrier.

Let’s summarize the specifications of straight bill of lading all at once:

  • ● Straight bill of lading is issued under a negotiable bill of lading template
  • ● Issued in the case where the consignee has to give original bill of lading for obtaining consignment from the carrier.
  • ● They cannot be issued as made out "to order" but can only be issued as a made out “to a named consignee”.

Straight bill of lading is not considered as a traditional bill of lading or a non-negotiable sea waybill but it is seen as a transport document which tends to stand in the middle.

The major problem while using a straight bill of lading is that the carriers cannot decide whether to deliver the cargo to the importer against an original bill of lading or just by a simple proof such as consignee identification.

Conclusion

Various documents are needed for exporting the products across country borders, like Letter of Credit, transport documents, Bill of Exchange, etc. that usually facilitates fair trade. Bill of Lading is one of such documents and acts as an authentic proof of ownership.

Want more information about bill of lading? or looking for any other export import services? Talk to our global trade experts now.

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