Can anyone issue a House Bill of Lading..??

Say what..!!!!!!!!

Yes my thought exactly when I got this question from a reader..

But then I said to myself this is a very valid and interesting question..

Can anyone issue a House Bill of Lading..?? Before I answer that question, I want to refresh your mind about the what is a Bill of Lading and what is a House Bill of Lading..

Are they different..?? Let’s see..


A bill of lading is issued by a carrier (in the case of seafreight – referred to as Ocean Carrier).. An ocean carrier is someone who has undertaken to provide the transportation of goods from point A to point B using the waterways as the primary mode but also combining rail and road services..

A Bill of Lading, is an important transport document that has 3 basic purposes or roles.. I will refer to this bill of lading as a normal BL throughout this article..

  1. Evidence of Contract of Carriage
  2. Receipt of Goods and
  3. Document of Title to the goods

roles of a bill of lading

A House Bill of Lading (HBL) is a bill of lading issued by an NVOCC operator or a Freight Forwarder to their customers.. An NVOCC is similar to an Ocean Carrier except that they don’t operate the vessels used for the transportation.. I will refer to this bill of lading as a House BL or HBL throughout this article..

Although it is a House BL, by virtue of being declared, signed and issued as a Bill of Lading, the HBL performs all 3 of the above roles of a Bill of Lading albeit to different people/entities..

Let me explain what I mean by above..

In any bill of lading, the details shown in the address area of the bill of lading (as discussed in Part1 of the Parts of a Bill of Lading) such as Shipper, Consignee and Notify decides who gets release of the cargo from the carrier..

Below is a matrix when a normal bill of lading is issued by the carrier..

Bill of Lading

 

When an HBL & MBL are involved in the transaction, the matrix changes slightly as below..

House Bill of Lading and Master Bill of Lading

 

As you can see from the above matrices, unless disallowed by the Letter of Credit, the HBL is also used/treated as a Normal Bill of Lading.. When a House Bill of Lading is involved, the Master Bill of Lading takes a back seat as far as the trade is concerned and does not play any main role in the documentation between the buyer and seller..

However, there is one very important area where the master bill of lading has an advantage over the house bill of lading and that is at the time of release of the cargo..

For example even if the customer has paid the NVOCC/Forwarder, surrendered the HBL (where applicable) and has done all the documentation relating to the HBL, unless the NVOCC/Forwarder has paid the ocean carrier, surrendered the MBL (where applicable – as shown above) and has done all documentation relating to the MBL, the consignee on the HBL CANNOT secure release of the cargo as the cargo is still under the custody of the ocean carrier..

So what are the reasons and circumstances under which an HBL is issued..??

As per market practice,

  • HBL maybe issued by a Groupage operator – Groupage operator books an FCL with the shipping line.. Once the cargo is packed, they issue their own HBL to their clients and collect the MBL from the shipping line..
  • HBL maybe issued by an NVOCC or Freight Forwarder who handles the cargo on behalf of their clients, who might be using them for the cost benefit they can provide as compared to booking directly with the shipping line.. The freight forwarder issues their HBL and collects the MBL from the shipping line.. HBL maybe used by a NVOCC or Freight Forwarder to mask the identity of the actual shipper/consignee from the shipping line..

Now that there is a bit of background about the House Bill of Lading and the various roles it can play, let us look at the original question “Can anyone issue a House Bill of Lading“..

To be quite honest, there seems to be no “global” regulations or rules relating to the issuance of House Bill of Lading and who can issue a House Bill of Lading, although there are countries (like USA, India) that require a bill of lading (normal or house) to be registered with the relevant authorities before it can be used..

There are many “groupings” of freight forwarders who operate a global network to offer their clients a global service.. These networks have their own house bill of lading templates for use between their agency networks.. Only members belonging to those paid networks can issue those specific house bills of lading.. NVOCC/Freight Forwarders outside of these paid networks have no access or are not allowed to use/issue these specific house bills of lading..

The House Bills of Lading are issued by the issuing entities as “Carriers” and as long as the conditions of the contract of carriage are suitable and acceptable to all, there seems to no restriction for anyone or any group/network to create and issue their own house bill of lading.. 

The terms of the contract of carriage in these house bills of lading maybe similar or different, but What is your opinionone can only assume that those who issue their own house bills of lading, take all necessary precautions, suitable insurance, fraud and risk covers before doing this..

One can also only assume that the customers who ship cargo using these house bills of lading understand the requirements and take the necessary precautions to safeguard themselves suitably..

*** End of Article ***

44 thoughts on “Can anyone issue a House Bill of Lading..??”

  1. Hi,

    I work for a register freight forwarder in South Africa and have been asked to try and find out about the the issuing of HBL’s as forwarder and if we are to be registered with NVOCC in order to do so.
    1. What are the requirements for an agent / freight forwarder to issue house bills
    2. What are the risks and penalties if HBL’s are issued without being registered / legal allowance to do so
    3. What is the process and with who to register in order to issue HBL’s

    Reply
  2. Thank you for your answer, Hariesh. I understand that NVOCC stands for Non Vessel Operating Common “Carrier,” so that it does indicate in the title that you are acting as a “carrier” on behalf of the shipper or consignee, but my question is, if you have an NVOCC license, are you still technically able to conduct freight forwarding business, as well as issuing your own house bill of lading in the eyes of the FMC? Does it not violate any FMC regulation to be doing so? Or do we need to have both the NVOCC “and” an OFF license to be able to conduct freight forwarding business in the U.S. while having the capability of issuing own house bill of lading? We see of lot of freight forwarders who has just an NVOCC license on file with the FMC, but when we ask FMC, they just reply that you should have both. Nowhere is there a clear cut answer, not even in the CFRs.

    Reply
  3. We are currently in the process of applying for OTI license and confused about the exact difference between an NVOCC and an Ocean Freight Forwarder (OFF). Do we need both the NVOCC and an OFF license to conduct ocean freight forwarding business?

    Reply
  4. Hi,
    We are a newly FMC licensed OTI. My question is regarding foreign to foreign transaction. Can we as NVOCC issue a house bill or will our agent need to issue? If we can issue our own bl, are there any details we should be aware of?

    Reply
  5. good article…thank’ s a lot, this blog is very useful, could you please give me permission to copy and paste, i will state your name and blog as the source of knowledge to share

    Reply
  6. I have a questions. We are a US NVO FMC registered company who work with various FMC registered agents in China. What is the advantage of requesting the FMC registered agent in China to issue the HBL under our name? Is this a negotiated factor when deciding to work with each other? Any insight will be greatly appreciated

    Reply
  7. We start up company. 2 years old. We have only few shipment in a month. Is there any special procedure required to Get HBL.
    Please advise

    Reply
  8. Very useful article – but a follow-up question.

    As the HBL will often be issued in the context of delivery to the actual buyer by the freight forwarder’s partner organisation in the buyer’s country, how will this work when the HBL is negotiable?

    The final leg of the journey will probably be by road. So where does the surrender by the buyer (or other holder of the HBL) take place? Presumably it will be before the goods get loaded onto the truck for the final leg of the journey?

    Reply
  9. This is a precious article as far as Bill of lading is concerned. It has been illustrated in a very fine and lucid manner. Such things will definitely benefit the reader immensely.

    All the best to you for your great work.

    Can you please advise me in mail that is a shipper can be an individual in China for the purpose of HBL only. The consignee in India is a genuine company but in
    China it is an individual. If you could advise in my email id uschauhan12@gmail.com, it would be of great and immediate help to me.

    Reply
  10. Hello, I am John Paul Working in Saudi Arabia.
    Actually I was seeking this articles since Last month. It was really Very Useful to us.

    Once again Thank you Very much Mr. Hariesh

    Reply
  11. Dear Manaadiar, congratulations for the superb articles and contents. Therefore, here in Brazil, the NVOCC,s must be entitled to issue the HBL by Customs authorities. Before the release the cargoes a set of import documentos, included the HBL must be presented to the Customs authorities, with consignee or importerers payed the duties and taxes and as result receiving by the Customs the realeasing import certificate. Things get to be worst when the cargoes is under LCL/LCL terms. Which means that carrier will be issuing a master bill of lading and the container will be discharged at destination port and cargoes after unstuffed from the container shall be under port trustee custody. Thereupon, NVOCC agents will issued House bill of lading HBL for stakeholders to collect their cargoes according to the HBL concerned. In no way the container shall be released to leave the container yard, unless as empty unity. The cargoes shall be surrendered according to the HBL consignee.

    Reply
    • Thank you Manaadiar. Hope that you continue to provide us and the whole maritime comunity with yours usefull and superb articles. All the best,

      Paulo.

    • Paul,
      “Thereupon, NVOCC agents will issued House bill of lading HBL for stakeholders to collect their cargoes according to the HBL concerned. ”
      destintaion agents will issue DELIVERY ORDER-DO upon payment of Post Landing Charges-PLCS.
      got it?

  12. Dear Mr. Manaadiar,
    Your every article adds to my knowledge on shipping and transport.
    I request you to write an article to cover the following issues:
    – the difference between FOB vs laden on board vs shipped on board, the interpretations being as per the ICC Incoterms Rules vis-a-vis maritime practices (if any)
    – if ‘shipped on board’ is a simple statement of fact (e.g. “the goods have been shipped on board the vessel MV XYZ, destination ABC), or if it refers to a date on which the vessel moved out of port.
    – if there are other areas of confusion which an ordinary banker should know about.
    Thanks in davance

    Reply
    • Glad to be of assistance Rupnarayan and thank you for the topic suggestions.. Reg your first point FOB is an Incoterm still being referred to or used for containerised cargo which is incorrect.. It has no direct connection to laden on board or shipped on board.. If this question relates to any specific case study, pls let me know the details either here or on manaadiar@shippingandfreightresource.com so we can discuss..

      Reg your second point – Shipped on Board refers both to the action and the date on which it was loaded on board..

  13. Dear Hariesh,
    This is very useful and valuable blog for me as i engaging with issue licenses for freight forwarders and NVOCC Operators.Really appreciate your articles and to be honest ….. your details and explanations are very useful for me to handle day to day issues. As the licensing authority, we take a local insurance cover from these parties as a requirement for issue licenses.Recently, NVOCC Operators have requested to remove -the requirement of submission of local insurance cover telling that they issue their NVO principal’s B/L which have already been insured by foreign party, not HBL. Kindly tell me whether NVOCC Operator can take necessary guarantee/insurance cover through his NVO principal’s B/L.

    Reply
    • Hi Roshini, thank you for your kind words.. You mentioned you are the licensing authority.. Are you from the MTO or which other body do you represent..?? In terms of your question about insurance and local operators (presume you mean local agents of NVOCC operators), to protect their own interest, all NVOCCs should have relevant insurance and risk cover before they decide to start issuing their own bills of lading..

  14. Well written….. as a suggestion, a copy of a House Bill of Lading can be attached so that blog followers can view how it actually looks like…

    Reply
  15. “…although there are countries (like USA, India) that require a bill of lading (normal or house) to be registered with the relevant authorities before it can be used..”
    Where we can get registered the HBL in India and USA?

    Reply
    • hi … This is Dharmendra Rajpara from Gujarat – India ..
      so you mean to issue HBL , forwarders must be registered in MTO ?
      is MTO is any govt body ? where one can be registered?
      also advice after registered in MTO one can issue HBL , no other registration is required.

      thxs.

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