Bill of Lading Types - Complete Guide

The ocean bill of lading (BOL) is the most critical shipping document in international trade—simultaneously serving as cargo receipt, carriage contract, and document of title. Yet confusion about BOL types causes costly mistakes: importers selecting wrong document types for letter of credit shipments face bank payment refusals; straight bills issued for trading transactions prevent cargo resale in transit; originals shipped via courier create 5-10 day delays and $150-$300 unnecessary costs when telex release would work.

Understanding which bill of lading type to use—and when—determines whether cargo releases smoothly at destination or gets held pending documentation corrections, whether financing options remain available or close off, and whether you pay expedited courier fees for unnecessary original documents.

This comprehensive guide explains the major ocean bill of lading types used in international shipping: master vs. house bills, straight vs. order bills, seaway bills, telex releases, and express releases. You'll learn what each type means, when to use each, how surrender options work, critical BOL clauses to understand, common problems and solutions, and practical decision frameworks for selecting the right document type for your shipments.

What Is a Bill of Lading?

An ocean bill of lading is a legal document issued by a carrier (shipping line or NVOCC) to the shipper, serving three simultaneous functions:

1. Receipt for Cargo

The bill of lading acknowledges that the carrier has received cargo for shipment. It specifies:

• Number and type of packages (12 pallets, 1×40' container)
• Description of goods (textile apparel, consumer electronics)
• Marks and numbers (container number, seal number)
• Apparent condition (clean vs. damaged)

This receipt function protects shippers by documenting what was delivered to the carrier in what condition.

2. Contract of Carriage

The BOL evidences the contract between shipper and carrier, defining:

• Transport terms (port of loading to port of discharge)
• Freight charges and payment terms (prepaid vs. collect)
• Carrier liability and limitations (typically $500 per package under COGSA)
• Legal jurisdiction and dispute resolution

Standard terms and conditions appear in fine print on the reverse side, typically referencing COGSA (Carriage of Goods by Sea Act) for U.S. trades.

3. Document of Title

For negotiable bills of lading, the BOL represents title to the cargo. Only the party holding the original BOL (or named consignee on non-negotiable bills) can claim cargo at destination. This title function enables:

• Using cargo as collateral for financing
• Selling/transferring cargo while in transit
• Letter of credit transactions requiring documents against payment

Critical distinction: Not all bills of lading are negotiable (documents of title). Straight bills, seaway bills, and express releases are non-negotiable—they're receipts and contracts but NOT documents of title.

Ocean Bill of Lading vs. Inland Bill of Lading

Before diving into ocean BOL types, understand the fundamental distinction:

Ocean bill of lading: Issued for international ocean freight, potentially negotiable (if order bill), serves as document of title, must be presented or surrendered for cargo release. Governed by international conventions (Hague-Visby Rules, COGSA).

Inland bill of lading: Issued for domestic truck or rail transport, non-negotiable, functions only as receipt and contract (not title document), cargo releases to consignee without document presentation. Governed by domestic law (49 CFR for U.S. trucking).

Why it matters: Ocean BOLs have legal weight and negotiability that inland BOLs lack. An ocean order bill of lading is a valuable financial instrument; a truck bill of lading is just a shipping receipt.

This guide focuses exclusively on ocean bills of lading for international maritime shipments.

Major Bill of Lading Types

Ocean bills of lading divide into several types based on issuer, negotiability, and release requirements:

1. Master Bill of Lading (MBL)

Definition: Issued by the ocean carrier (Maersk, MSC, CMA CGM, etc.) to the freight forwarder or NVOCC when cargo is consolidated.

Who receives it: Freight forwarder/NVOCC (not the actual shipper)

Function: Covers the entire consolidated container from origin to destination. One master bill may cover cargo from 5-15 different shippers consolidated by the forwarder.

Example: Freight forwarder ships a 40' container with cargo from 8 customers. MSC issues one master bill of lading to the forwarder covering the entire container from Shanghai to Los Angeles.

Key point: If you work with a freight forwarder (most importers do), you typically do NOT receive the master bill—you receive a house bill instead.

2. House Bill of Lading (HBL)

Definition: Issued by the freight forwarder/NVOCC to the actual shipper for their portion of consolidated cargo.

Who receives it: The shipper/importer (you)

Function: Covers your specific cargo within the consolidated shipment. While the master bill shows the full container, your house bill shows only your 4 pallets or your LCL shipment.

Example: You ship 4 pallets of electronics via freight forwarder. The forwarder issues you a house bill of lading covering your 4 pallets. Your house bill references the master bill number but is a separate document.

Negotiability: House bills can be negotiable (order HBL) or non-negotiable (straight HBL) depending on how they're consigned.

Release process: At destination, the forwarder receives the full container under the master bill, then releases your portion under the house bill terms.

Important: For letter of credit transactions, banks may require the master bill OR a house bill with specific language. Verify LC terms before booking.

3. Straight Bill of Lading

Definition: Consigned to a specific named party and non-negotiable—title cannot transfer via endorsement.

Consignee field: Shows specific company name ("Consignee: ABC Imports Inc., 123 Main St, Los Angeles CA")

Negotiability: Non-negotiable—only the named consignee can claim cargo

Surrender requirement: Original bills typically required but increasingly accepting telex/express release

When to use:

• Direct sales to known buyer with payment secured (wire transfer before shipment, credit terms)
• Parent company to subsidiary shipments
• No financing or letter of credit involved
• Trusted trading partners where title transfer isn't needed

Advantages: Simpler documentation, faster release process, no endorsement requirements

Disadvantages: Cannot sell cargo in transit, cannot use as collateral for financing, consignee cannot be changed easily

4. Order Bill of Lading

Definition: Consigned "to order" or "to order of shipper" and fully negotiable—title transfers via endorsement.

Consignee field: Shows one of these formats:

• "To Order" (shipper retains title until endorsing to someone else)
• "To Order of Shipper" (explicit that shipper holds title)
• "To Order of XYZ Bank" (bank holds title for LC transactions)

Negotiability: Fully negotiable—title transfers by endorsing the document and delivering it

Surrender requirement: Must present at least one original bill to release cargo (out of 3 originals issued)

When to use:

• Letter of credit transactions (banks require negotiable documents)
• Financing scenarios (using cargo as collateral)
• Trading situations (might sell cargo before it arrives)
• Payment on delivery (retain control until payment received)
• Any situation where you want to control cargo release via document control

Advantages: Enables financing, protects seller (no cargo release without document surrender), facilitates trading, provides payment security

Disadvantages: Slower than seaway bill/telex release (requires originals), courier costs ($150-$300), risk of loss/delay of originals

5. Seaway Bill (Sea Waybill)

Definition: Non-negotiable transport document issued to a named consignee without original documents required.

Consignee field: Names specific consignee party

Originals issued: None—single copy printed, no "original" status

Release requirement: Cargo releases automatically to named consignee at destination without presenting documents

When to use:

• Trusted trading partners (parent-subsidiary, established customers)
• Fast cargo release needed (no waiting for courier-shipped originals)
• No letter of credit or financing involved
• Short transit times where originals won't arrive before cargo (Asia-US West Coast 12-16 days)

Advantages:

• Fast release (no document presentation delays)
• No courier costs for originals ($150-$300 saved)
• No risk of lost originals
• Simplified process for routine shipments

Disadvantages:

• No title control (can't stop cargo release once shipped)
• Not acceptable for letter of credit
• Cannot use cargo as financing collateral
• Cannot change consignee easily

Also called: Express release, sea waybill, ocean waybill (terminology varies by carrier and region)

6. Telex Release

Definition: Electronic authorization from origin agent to destination agent to release cargo without presenting original bills of lading.

How it works:

1. Shipper/consignee requests telex release from carrier/forwarder
2. Shipper surrenders all original bills of lading at origin (if already issued)
3. Origin office confirms surrender and sends electronic telex/email to destination
4. Destination office releases cargo to consignee without requiring originals
5. Surrendered originals are stamped "VOID" or "SURRENDERED"

When to use:

• Original bills already printed but won't arrive before cargo (common on fast lanes like Asia-West Coast)
• Want to avoid courier costs ($150-$300) and delays (5-10 days)
• Straight bill of lading (non-negotiable) shipments where document control isn't needed
• Payment secured and no financing involved

Costs: Typically $25-$75 per telex release request (varies by carrier/forwarder)

Processing time: 1-3 business days from original surrender to destination confirmation

Advantages: Eliminates courier costs and delays while providing cargo release flexibility

Disadvantages: Only works if originals were already printed and can be surrendered; carrier must agree to process telex release

7. Express Release / Express Bill of Lading

Definition: Shipment booked from the start as non-negotiable with no original bills of lading ever printed.

How it differs from telex release: Express release means originals were never issued; telex release means originals were issued then surrendered. Functionally they're similar at destination (release without originals) but the documentation trail differs.

When to use: Same scenarios as seaway bill—trusted partners, no financing, fast release desired

Carrier practices: Some carriers use "express release" and "seaway bill" interchangeably; others distinguish based on whether a paper document exists (seaway bill = one paper copy; express release = fully electronic).

Advantages: Fastest release option, fully electronic workflow, no physical document management

Disadvantages: Cannot convert to negotiable if circumstances change (once booked express, cannot get original BOLs)

Surrender Options Comparison

| Release Type | Original BOLs Issued? | Document Presentation Required? | Typical Use Case | Cost | Processing Time | |--------------|---------------------|-------------------------------|-----------------|------|----------------| | Original BOL | Yes (3 originals) | Yes (present 1 of 3) | Letter of credit, financing, trading | Courier $150-$300 | 5-10 days courier | | Seaway Bill | No | No (releases to consignee) | Trusted partners, fast release | $0 | Immediate | | Telex Release | Yes (then surrendered) | No (electronic release) | Save courier costs/time | $25-$75 | 1-3 days processing | | Express Release | No (never printed) | No (electronic from start) | Same as seaway bill | $0 | Immediate |

Key Bill of Lading Clauses to Understand

Several BOL fields and clauses significantly impact cargo release, liability, and financing:

Clean vs. Claused Bill of Lading

Clean bill of lading: No notations about cargo damage, defects, shortage, or discrepancies. Carrier acknowledges receiving cargo in "apparent good order and condition."

Claused bill of lading (also called "dirty bill" or "foul bill"): Contains notations about problems:

• "5 cartons damaged, torn packaging"
• "Container seal broken, resealed with carrier seal 9876-5432"
• "Cargo received with water stains"
• "Shortage: 98 cartons received instead of 100 per packing list"

Why it matters for LC transactions: Letter of credit terms almost always require "clean bills of lading." A claused bill indicates cargo problems, and banks will refuse payment under the LC, leaving the seller unable to collect.

What to do: If cargo is damaged before loading, either:

• Accept the claused bill and expect LC payment issues (negotiate with buyer for payment outside LC)
• Repair/repack cargo before shipping to obtain clean bill
• Document the defects thoroughly for insurance claim purposes

Freight Prepaid vs. Freight Collect

Freight Prepaid: Ocean freight charges paid by shipper at origin before vessel departure. BOL marked "Freight Prepaid."

Freight Collect: Ocean freight charges paid by consignee at destination upon cargo arrival. BOL marked "Freight Collect."

Why it matters:

• Letter of credit terms typically require "Freight Prepaid" to ensure buyer doesn't face unexpected charges
• Freight collect creates cargo release delays if consignee disputes charges or lacks funds
• Under FOB Incoterms, freight is typically collect; under CIF/CFR, freight is prepaid

Best practice: For letter of credit shipments, always use freight prepaid to avoid document discrepancies.

Shipped On Board vs. Received for Shipment

Shipped On Board: Cargo actually loaded on the vessel. BOL dated when cargo loaded (on-board date). Marked "Shipped On Board [vessel name]" or shows on-board stamp/notation.

Received for Shipment: Cargo received at carrier's terminal but not yet loaded on vessel. BOL dated when received at terminal (may be 3-10 days before vessel loading).

Why it matters:

• Letter of credit terms typically require "Shipped On Board" bills to ensure cargo is actually in transit
• Payment terms often tied to bill of lading date; "received for shipment" date is earlier than actual sailing
• Vessel schedule visibility (on-board bills show vessel name and sailing date)

Carrier practices: Modern ocean bills are almost always "shipped on board" type. "Received for shipment" bills are rare except in specific trade lanes.

Notify Party

Function: The party to be notified when cargo arrives at destination (in addition to consignee).

Why it's important:

• For order bills ("to order of shipper"), the consignee field shows the bank or shipper, not the final buyer—the notify party field shows who actually wants the cargo
• Carriers send arrival notices to notify party for cargo pickup coordination
• Customs brokers use notify party as contact for clearance

Best practice: Always include final buyer or customs broker in notify party field, even for straight bills, to ensure arrival notifications reach operational contacts.

Said to Contain (STC)

Meaning: For containerized cargo, the bill of lading includes disclaimer language "said to contain" or "shipper's load, stow, and count."

Why carriers use it: When shippers load and seal containers (FCL shipments), carriers don't verify contents—they rely on shipper declarations. The STC clause limits carrier liability for cargo description accuracy.

Implication: If you declare "200 cartons consumer electronics" but actually shipped 150 cartons, the carrier isn't liable for shortage—you loaded and sealed the container.

For letter of credit: "Said to contain" language is generally acceptable; banks understand container shipping norms.

When to Use Each Bill of Lading Type

Select the appropriate BOL type based on payment terms, financing needs, and trading relationship:

Letter of Credit Transactions → Order Bill of Lading

Requirements:

• Full set of originals (all 3)
• Negotiable (order bill)
• Clean on board
• Freight prepaid
• Consigned to order of opening bank or "to order"

Why: LC terms require negotiable documents for payment security. Banks need original bills to control cargo release pending payment.

Process: Shipper presents full set to advising bank → bank forwards to opening bank → opening bank releases to buyer upon payment → buyer presents original to carrier for cargo release.

Direct Sales with Wire Transfer Before Shipment → Straight Bill or Seaway Bill

Situation: Payment received before shipping, trusted buyer relationship, no financing needed.

Best choice: Seaway bill or express release (fastest, no courier costs)

Alternative: Straight bill with telex release (if carrier doesn't offer seaway bills)

Why: Payment already secured, no need for document control via negotiable bills. Fast release benefits buyer.

Direct Sales with Payment on Delivery → Order Bill of Lading or Straight Bill with Original Presentation

Situation: Want to control cargo release until payment received at destination.

Best choice: Order bill of lading "to order of shipper"

Process: Shipper retains all 3 originals → buyer pays at destination → shipper releases originals to buyer via courier → buyer presents to carrier for release.

Alternative: Straight bill requiring original presentation (similar control but non-negotiable).

Why: Retaining originals prevents cargo release without payment, protecting seller.

Parent Company to Subsidiary → Seaway Bill or Straight Bill

Situation: Inter-company transfers, no financing, trusted entities.

Best choice: Seaway bill or express release (simplest, fastest)

Why: No title transfer needed, no payment risk, prioritize operational simplicity.

Trading Scenario (May Resell in Transit) → Order Bill of Lading

Situation: Buying cargo with potential to resell before arrival, need title transfer flexibility.

Best choice: Order bill of lading "to order of shipper"

Process: Purchase cargo → receive order bills → sell to new buyer → endorse bills to new buyer → new buyer receives and presents for release.

Why: Negotiability via endorsement enables title transfers without reissuing documents.

Cargo Finance (Using Goods as Collateral) → Order Bill of Lading

Situation: Borrowing against cargo value, lender requires security interest.

Best choice: Order bill consigned "to order of [lender]"

Why: Lender holds original bills as collateral, controlling cargo release until loan repaid.

Common Bill of Lading Problems and Solutions

Problem 1: Lost Original Bills of Lading

Situation: Original bills lost in mail, courier delay, or misplaced by consignee.

Impact: Cannot release cargo without originals—demurrage accumulates at $75-$200/day.

Solutions:

Option A: Request telex release

• Contact carrier and request electronic release
• Carrier may require shipper confirmation or indemnity
• Processing time: 2-4 days
• Cost: $25-$75

Option B: Obtain bank guarantee / letter of indemnity

• Bank issues indemnity protecting carrier against claims from original holder
• Cost: 1-2% of cargo value (e.g., $10,000-$20,000 for $1M cargo)
• Processing time: 3-7 days
• Required if carrier refuses telex release

Option C: Wait for duplicate originals

• Request carrier reissue originals (rarely done)
• Can take 2-3 weeks
• Not practical if demurrage accumulating

Prevention: Use telex release or seaway bills whenever original presentation isn't legally required (no LC, no financing).

Problem 2: Claused Bill of Lading Preventing LC Payment

Situation: Cargo received damaged at port, carrier issues claused bill noting damage, LC requires clean bill.

Impact: Bank refuses LC payment due to document discrepancy.

Solutions:

Option A: Negotiate with buyer for payment outside LC

• Explain damage was noted, request payment despite document discrepancy
• May accept price reduction to compensate for damage

Option B: Repair cargo and request amended clean bill

• If damage is minor (torn carton, repaired packaging), repair and request carrier remove clause
• Carrier may agree if satisfied cargo is now in good order

Option C: Insurance claim for damage

• File marine cargo insurance claim for damage
• Proceed with sale despite LC rejection

Prevention: Inspect cargo carefully before carrier receipt; repair any damage before loading; photograph cargo condition.

Problem 3: Cannot Change Consignee on Straight Bill

Situation: Issued straight bill to Buyer A, but now need to ship to Buyer B (buyer changed, error in name, etc.).

Impact: Carrier will only release to named consignee on straight bill—cannot change easily.

Solutions:

Option A: Request amendment with both parties' consent

• Original consignee signs release
• New consignee provides acceptance
• Carrier amends bill (may charge $500-$2,000)
• Processing time: 3-7 days

Option B: Original consignee takes delivery and transfers cargo

• Consignee A receives cargo under original bill
• Consignee A sells/transfers to Consignee B
• Additional costs for local handling

Prevention: Use order bills of lading when any possibility of consignee changes exists—endorsement allows title transfer without carrier amendments.

Problem 4: Original Bills Won't Arrive Before Cargo

Situation: Fast transit lane (China-LA 12 days) but courier shipping originals takes 5-7 days—cargo arrives before documents.

Impact: Cargo sits at port accumulating demurrage ($75-$200/day) while waiting for originals.

Solutions:

Option A: Immediate telex release request

• As soon as shipment departs, request telex release
• Surrender originals at origin
• Destination releases without waiting for originals
• Cost: $25-$75
• Prevents demurrage entirely

Option B: Use seaway bill from the start

• Book shipment as seaway bill (no originals issued)
• Cargo releases automatically to consignee
• No document delays
• Best for future shipments on this lane

Prevention: For trade lanes with transit time <14 days, default to seaway bills or immediate telex release requests.

Problem 5: House Bill Not Acceptable for Letter of Credit

Situation: LC requires carrier bill of lading (master bill) but forwarder issued house bill.

Impact: Bank rejects documents, no LC payment.

Solutions:

Option A: Request master bill from forwarder

• If forwarder is NVOCC, they may issue master-level bills
• Costs $100-$300 and takes 3-5 days
• Only possible if not yet presented to bank

Option B: Amend LC to accept house bills

• Contact buyer to request LC amendment
• LC amendment costs $50-$200
• Processing time: 3-7 days
• Buyer must agree

Prevention: Review LC terms BEFORE booking shipment—confirm whether house bills acceptable or master bill required. Most LCs now accept "forwarder's bill of lading" but verify specific language.

Bill of Lading Decision Framework

Use this decision tree to select the right BOL type:

Question 1: Is this a letter of credit transaction?

• Yes → Order bill of lading (3 originals, freight prepaid, clean on board)
• No → Continue to Question 2

Question 2: Do you need to retain cargo control until payment?

• Yes → Order bill "to order of shipper" (hold originals until payment received)
• No → Continue to Question 3

Question 3: Do you need financing or might you resell cargo in transit?

• Yes → Order bill of lading (negotiable for title transfer)
• No → Continue to Question 4

Question 4: Is this a trusted trading partner with payment secured?

• Yes → Seaway bill or express release (fastest, simplest)
• No → Straight bill of lading (named consignee with original presentation for moderate control)

Question 5: Is transit time <14 days?

• Yes → Strong preference for seaway bill or immediate telex release (originals won't arrive in time)
• No → Straight bill with courier originals is feasible

Conclusion: Master Bill of Lading Types for Efficient Shipping

Bill of lading selection determines cargo release speed, financing options, payment security, and documentation costs. The wrong choice creates 5-10 day delays waiting for courier-shipped originals, $500-$2,000 amendment fees to change consignees on straight bills, or letter of credit payment refusals when non-negotiable documents are presented for LC transactions.

Key takeaways:

1. Master vs. house bills: Working with forwarders means you receive house bills (not master bills)—verify LC terms accept forwarder bills before booking.

2. Straight vs. order bills: Straight bills (non-negotiable) work for direct sales with secured payment; order bills (negotiable) are required for LCs, financing, and trading scenarios.

3. Seaway bill = fast release: For trusted partners without financing needs, seaway bills eliminate courier costs ($150-$300) and 5-10 day document delays.

4. Telex release saves time and money: When originals won't arrive before cargo, telex release costs $25-$75 and prevents 3-7 days demurrage accumulation.

5. Order bills for LC transactions: Letter of credit terms require negotiable documents (order bills), full set of originals (3), freight prepaid, and clean on board status.

6. Clean vs. claused: Claused bills noting cargo damage cause LC payment refusals—inspect cargo carefully before carrier receipt.

7. Lost originals = expensive: Bank guarantees cost 1-2% of cargo value ($10,000-$20,000 for $1M shipment). Use telex release to eliminate this risk when originals aren't legally required.

Practical recommendation: For 70-80% of routine shipments (direct sales, trusted partners, payment secured, no financing), use seaway bills or express releases to maximize speed and minimize cost. Reserve order bills of lading for the 20-30% of shipments involving letters of credit, financing, trading, or payment-on-delivery scenarios requiring document control.

Master these bill of lading distinctions to streamline cargo release, reduce documentation costs, and avoid the expensive delays and amendment fees that plague importers who select inappropriate document types for their shipping scenarios.

Sources

• International Chamber of Commerce (ICC), "Incoterms® 2020 and bills of lading," 2024
• Carriage of Goods by Sea Act (COGSA), 46 U.S.C. § 30701 et seq.
• Federal Maritime Commission, "NVOCC bill of lading requirements," 2024 (https://www.fmc.gov/)
• Trade Finance Global, "What is a Telex Release? [UPDATED 2025]," 2024 (https://www.tradefinanceglobal.com/freight-forwarding/telex-release/)
• Forto, "Bill of Lading vs. Telex Release: Key Differences Explained," 2024
• Container xChange, "Telex Release: An Overview," 2024
• CargoX, "When to use bill of lading, sea waybill, express release, telex, or smart B/L," 2024
• Industry interviews with freight forwarders, customs brokers, and importers, November 2024-January 2025
• Shipping and Freight Resource, "Difference between telex release and express release," 2024

Disclaimer: This content is for educational purposes only and does not constitute legal advice, customs guidance, or trade finance counsel. Bill of lading requirements vary by carrier, trade lane, letter of credit terms, and jurisdictional regulations. Consult qualified freight forwarders, customs brokers, trade finance attorneys, and banking advisors for specific shipping situations. All examples are for illustration purposes based on industry practices current as of January 2025.