Video of This Article
Hello, it’s IINO.
This time, I would like to talk about the role of the B/L in international transportation.
I have made a video on the same subject before, but I would like to explain it more clearly using a different expression.
Let’s get started.
What B/L is ?
First of all, what exactly is B/L?
The official name of B/L is “Bill of Lading” and it is an indispensable document for international trade.
B/L is called “securities” and is considered to have value in themselves.
This is because it is used as a document to pick up a container containing cargo worth for example USD 100,000 at the port of import.
Let’s take a closer look at it.
B/L as securities
Simply put, the importer cannot pick up the shipment without B/L. In addition, B/L allows to control payment and delivery.
What this means is that if the exporter (seller) does not receive payment for the goods from the buyer, they can seize B/L and forcibly stop the import process at the importing port.
The importer can also reduce the risk of unshipped goods by paying after the cargo is loaded onto the ship and B/L is issued.
The Endorsement is When, How, by Whome Used
This is where it gets important.
In order to understand the role of B/L, you must understand when and by whom it is issued, and what “flow” it is used for.
Before explaining “B/L Flow”, let me briefly explain the characters and documents.
In addition to the exporter (seller) and importer (buyer), the forwarders at export and import side also play an important role.
The document called D/O is also important.
D/O stands for Delivery Order which is the document that allows you to pick up your cargo at the port. You are able to obtain D/O by exchanging B/L.
The importer must obtain B/L in order to get D/O which is the cargo delivery document.
By understanding this process, it becomes easier to understand that B/L is securities.
As shown in the first example, a shipment worth USD 100,000 is sent to another country and B/L is exchanged to D/O, cargo delivery document, in order to pick up the shipment.
In this example, you can see that B/L has the same value as USD 100,000.
Flow of B/L
Then, let me explain the flow.
As a prerequisite, we assume that the forwarder issues the house B/L.
1. When the vessel leaves the port, B/L is issued by the exporting forwarder and sent to the seller (exporter).
2. The seller (exporter) confirms the receipt of payment for the goods from the buyer (importer) and sends B/L to the buyer (importer).
3. When the vessel arrives at the port of import, D/O is issued by the forwarder on the import side.
4. The buyer (importer) takes B/L and exchanges it for D/O which is a cargo exchange document.
Flow of Importing Side
Let’s take a closer look at the flow on the import side.
1. The forwarder on the import side has D/O.
2. The buyer (importer) obtains B/L from the seller (exporter).
3. D/O and B/L are exchanged.
4. Then, when the buyer (importer) brings D/O to the port, they can pick up the cargo.
Losing of B/L
B/L is the important document to pick up the cargo.
If you lost B/L and it will be given to a third party, it can be a big problem. Reissuing B/L is not an easy task. For this reason, three copies of the original B/L are issued to prevent the risk of loss.
Recently, eB/L using blockchain technology has emerged, but it seems not to have been penetrated the market yet.
Let’s summarize the important points of B/L.
– B/L is issued at the time of the vessel’s departure.
– The seller sends B/L to the buyer.
– B/L is exchanged D/O, which is a cargo delivery document.
– If B/L is lost, it is not able to pick up the cargo.
In this video, I explained the basic role of B/L.
B/L is the important document for picking up cargo. But in reality, there are different types of B/L and some are more flexible than others to suit speedy trade transactions.
However, the basic concept is the one explained here, so let’s first understand this role and flow of B/L.
That’s all for today! Thank you very much!
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