“How do I know the bill of lading issued is a House Bill of Lading or Master Bill of Lading? Is it mentioned anywhere on the bill of lading that it is a House Bill or a Master Bill?”
I really love such basic but curious questions from the readers because it rejuvenates the gray matter..
First, let’s examine the definitions of a few entities that will be involved in the explanation of this answer..
1) Shipping Line: a company engaged in the process of shipping cargo from Point A to Point B.. When operated on established routes and schedules, the operation is known as “Liner Shipping“..
A shipping line may or may not own or operate the ship that they load the cargo on.. The ship could be owned by X (known as Ship Owner) and operated by Y (known as Ship Operator) because either X doesn’t have the capability to operate the ship but has the money to invest in it or doesn’t want the responsibility of operating it and is only interested in the revenues generated..
2) Slot Charterer: an actual shipping line that may belong to a consortium, alliance or service but may not be operating a ship on that service.. Instead, the slot charterer chooses to buy a certain amount of “slots” (space on board a ship) from the principal ship operator on every ship.. These “slots” may or may not be fixed for a voyage or for the duration of the consortium.. Read What is the difference between Slot Charterer and NVOCC Operator..??
3) Freight Forwarder: a multi-function agent/operator who undertakes to handle the movement of goods from point to point on behalf of the cargo owner.. The essence of freight forwarding is to ensure that the cargo is picked up from the seller and delivered to the buyer at the required place, at the right price, and in the same condition that it is picked up from the origin using the most suitable resources and routing possible.. Read Who is a Freight Forwarder..??
4) NVOCC Operator: an entity that is in certain areas accorded the status of a virtual “carrier” and in certain cases accepts all liabilities of a carrier.. An NVOCC can and sometimes do own and operate their own or leased containers..
In certain countries like the USA, the NVOCC operators are required to file their tariffs with the government regulatory bodies (like FMC) and create a public tariff.. Read Who is an NVOCC Operator and the difference between a freight forwarder and NVOCC..
Why am I giving this whole long story in response to a simple question..?? It is because all these above-mentioned entities are capable of issuing their own bills of lading and the bills of lading they issue can be either an HBL (House Bill of Lading) or an MBL (Master Bill of Lading) depending on who is issuing it..
Now for the answer to the question – None of the bills of lading issued by any of the above entities will state anywhere whether it is a House Bill of Lading or Master Bill of Lading..
Bills of lading only display whether it is a Sea-Way Bill, Combined Transport Bill of Lading, or Port-to-Port Bill of Lading as per the below examples from a few of the leading shipping lines..
So how to differentiate between a House Bill of Lading and a Master Bill of Lading
The most common way of distinguishing whether a bill of lading is an HBL or an MBL would be to see who the carrier mentioned on the Bill of Lading is.. You can see this either from the logo of the carrier or where the carrier signs the bill of lading..
Alphaliner provides a constantly updated ranking of the 100 largest container/liner operators taking into account the fleets of virtually almost all container liner operators worldwide.. Take a look at the latest updated ranking of container shipping liners..
If a bill of lading is issued by any of the lines mentioned in the list, it is safe to assume that it would be an MBL as these are liner operators and cover the majority of the world’s containerized cargo..
What are the scenarios under which an HBL is issued and who issues them..?? :
- HBL may be issued by a Consolidator (Groupage Operator) – A Consolidator books an FCL with the shipping line and once the cargo is packed, they issue their own HBLs to their clients and collect the MBL from the shipping line..
- HBL may be issued by an NVOCC Operator or Freight Forwarder who handles the cargo on behalf of their clients.. These entities also issue their HBL and collect the MBL from the shipping line..
When an HBL is issued for a shipment, normally a hierarchy is followed.. When filing a manifest with customs (especially for Groupage or Consolidation cargo), the entity issuing the MBL (shipping line) will have to file their manifest first making reference to the different HBLs issued under the MBL.. The manifest containing all the HBLs issued under the MBL is then filed with customs making reference to the MBL..
Read this previous article Difference between House Bill of Lading & Master Bill of Lading to understand the documentary differences between an HBL and MBL..
Article republished after some necessary updates
B/L is issued in set of 3/3 originals but to obtain the delivery order , only 1 original is sufficient but what happen ifever someone present the second and third original seperately , is the shipping line or freight forwarder liable to remmit a D/O although a D/O has already been issued to the holder of the first original B/L ? What is the responsibility of the Freight Forwarder or shipping line in such scenario ?
Do read an Kindle e-book available on amazon . Title: “A Professional’s Guide to International Trade Operations, Bills of Lading and Payment Methods” it explains all aspects of BLs. More than 1000 copies sold. Best method to know whether the document is HBL or MBL, do internet search and find top 50 container shipping lines in the world and look at the list that shows total ships and total containers they own. If the BL is issued by the company that owns ships and containers you can safely presume that you are holding MBL. If the BL is issued by the company that dosen’t own ships you can safely presume that you are holding HBL.
Do read above book available globally.
It must always be remembered that there is a vast difference in liability between a HB/L and a MB/L. Another problem is that the majority of companies who issue HB/L do not realize that they become the actual carrier and that all claims will be their responsibility. They may have a counter claim against the MB/L but they need to accept and settle the claim in the first instance. The time bar period is also shorter with a HB/L compared to that of a MB/L
Very informative forum.
I have been on the shipper side of the business for 12 years using a nvocc to ship my cars and containers from USA to west Africa.
Can anyone guide me through the process of applying for my own OTI licence and operate on US soil as a Ocean freight forwarder?
What is best secure way to operate or booking goods for import directly shipping line bill of leading
Thank you for this blog, Hariesh! Happy to join it! Impressive amount of useful info.
Can Freight Forwarder ship goods under their own-bills to their client?
Yes, that is called the House Bill of Lading..
Hi ,
I am in Dubai, My supplier supplying from USA . I want to ship goods to Chinese Customer in mainland of china , Is it possible to hide the detail from each others , Also we deal on 30% advance & 70% after the showing the OBL Via mail ….
Hello Shamim, that is one of the main reasons switch bill of lading is used..
Hi Shamim, after switched BL is issued, also please inform your CHA / Forwarder at destination port (e.g. Chinese port) not to share export documents to Chinese customer (issued by your supplier to you) only give documents prepared by you to your Chinese customer.
Recently, many major forwarders refuse to be related with switch B/L to avoid any responsibilty. It might be better for you to make an strict agreement about confidential information with both your suppliers and customers from the beginning. And, you can ask your suppliers to specify your company’s information instead of the suppliers’ as the exporter on HBL. Then, at least, your customers would not be able to get your suppliers’ information.
In case of payment, you can ask your US supplier to apply for Original B/L, instead of Sea Waybill. Once confirmed balanced payment from your Chinese customers, ask your US supplier to surrender B/L (telex release). The Chinese customers would not be able to pickup the cargo until B/L is telex released.
To control all these procedure, incoterms CFR or CIF would be convenient, because the forwarder would follow the instructions of whom pays for local charge. In case of EXW, the forwarder might diclose all the information to your Chinese customers who pay for all the cost.
Anivesh, a Bill of Lading is an important document in International Trade and therefore one needs to be a registered MTO in order to issue a Bill of Lading. This operation is regulated by the Government by an Act of the Parliament and enforced. In my opinion a Bill of Lading however simple cannot be issued by any entity. Will appreciate any diverse views on this matter.
Hi Premkumar, for the sake of our readers, can you clarify what is the ruling in India about NVOCC operators and Freight Forwarders bills of lading..?? Do they also have to register with MTO or is it only liner companies..?? What about tramp vessel operators..?? If someone wants to issue a Congen Bill of Lading, would they have to register..??
Wow.. Your blogs are really very informative.. Wish i can put all this into my small brain! 🙂
Thank you Krithika.. The human brain is capable of absorbing a lot more than you can imagine.. So give it a try.. 🙂
What is the risk for the shipper and consignee when a NVOCC HBL is used instead of Liner’s Master B/L?
can you please advise, can any company issue a simple Bill of Lading without registered as MTO, thanks / regards
Would anybody answer the above questions.I’m interested too.