Can anyone issue a House Bill of Lading..??
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..
Evidence of Contract of Carriage
Receipt of Goods and
Document of Title to the goods
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..
When an HBL & MBL are involved in the transaction, the matrix changes slightly as below..
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 one 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..
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