Arguably, the most significant document in ocean freight is the bill of lading, a document that contains all the information related to the goods being exported, their destination, details about the exporter and importer, and other vital data that help quicken the logistics of ocean freight-based shipments.
A bill of lading has several variations depending on the type of trade, number of routes in the shipping process and the issuer. Among the several different types of them, the two of the most prominent types are the Master Bill of Lading and the House Bill of Lading.
What is a Master Bill Of Lading?
A master bill of lading is a legally binding document that a shipping carrier issues before undertaking a shipment. This document acts as the contract of carriage for goods in international trade. Normally, the carrier issues this document when it receives the deliverable goods from an exporter. The carrier issues a master bill of lading to the party that booked the freight (in most cases, the freight forwarder partnering with the exporter on their shipments).
There are multiple distinctions that separate a Master Bill of Lading from a House Bill of Lading — the former is issued by shipping carriers, whereas the latter is issued by freight forwarders.
We’ve covered this article on a house bill of lading (HBL), its issuing process, sample format and more that is worth checking out.
Features of a Master Bill of Lading
- While signing a master bill of lading, the actual carrier of the goods specifies the terms and conditions of their carriage service in the document. So, the consignee will have better protection if the goods get damaged while in transit.
- The carrier of goods or an agent on behalf of the carrier issues and signs a master bill of lading.
- The carrier issuing the master bill of lading generally does so on a pre-printed bill of lading form.
- In the master bill of lading, the shipper can be an NVOCC entity or a freight forwarder working for the exporter of goods. In most general cases, the shipper is the actual exporter of a given consignment.
Importance of Master Bill of Lading
A master bill of lading helps smoothen shipments in several ways as listed below.
Control of the original documents: The carrier of goods through the ocean freight route need not require all the original documents to be submitted before the delivery process gets underway. Bills of lading enable exporters to retain control over all their vital original documents until payment for their goods have been processed, or a bill of exchange or another assurance for payment has been made.
Payment documentation of carriage services: A master bill of lading is a vital document while shipments are being made. Apart from being the service contract between a carrier and an exporter for the transportation of goods internationally, it also acts as a receipt for the carriage service that the carrier issues to the shipper.
Optimization of shipment process: A master bill of lading, just like a house bill of lading, possesses vital information related to a shipment. This enables shippers and transporters to conveniently process a freight shipment through different countries across global maritime channels and invoice every aspect of the process without errors.
Possession of vital information with all parties: The original copy of a master bill of lading is given to the exporter. Various authorized stakeholders can also receive a copy of the same. This increases the level of information transfer and transparency while shipping goods.
The common benefit of a master bill of lading, as specified earlier, is that, through multiple avenues, it reduces the lead time of logistics involved in ocean freight transport of goods and improves transparency and efficiency.
Also Read: Surrender Bill of Lading (BL) in shipping
What Documentation is Required in an MBL?
In a master bill of lading, documents containing the following details must be attached, or the data should be filled in the appropriate place in the form.
- Details related to the shipper or the NVOCC, including company name, contact information, postal address, and other location-related data.
- Importer details, including their company name, address, contact information, Tax ID numbers (Only if necessary. For example, the CNPJ number will be necessary for shipments destined for Brazil-based ports).
- Notify details, such as company name, postal address, and contact information.
- If the exporter uses the service of a freight forwarder, then the full company name of the freight forwarder, their address, contact information, and FMC number.
- The booking number and internal reference numbers for the shipper, consignee, or shipment. The carrier will provide the booking number.
- Documents containing multiple details, including the vessel name and voyage reference number, as well as the port of load and discharge.
- Documents containing the container number and seal number. Additionally, documents that validate the piece count, package type, and commodity description need to be included.
- Documents that denote the weight and volume of the container used for transportation.
- Details such as total piece count, weight, and volume of all containers about to be used for a given shipment.
- Documents containing the vital shipping details such as AES/ITN number (if applicable), HS Code, payment terms (mode of payment used for carriage services), BL release type (OBL printed at origin or destination, Express, others).
- Documents that provide other necessary information, such as L/C terms such as free time at destination and other reference numbers, among others.
How Does a Master Bill of Lading Work?
When an NVOCC receives a shipment from an exporter, it books it with shipping carriers. Once this transporter confirms that it has received this cargo, it issues an MBL — or master bill of lading — to the person or company who has made the shipping reservation. In this case, the reservation maker is the NVOCC. The entity that makes the reservation can also be a contracted freight forwarder.
What Does a Master Bill of Lading Template Look Like?
While there may be slight deviations on a global level, the standard template of a master bill of lading resembles this image:
How to fill out a master bill of lading?
An MBL is filled by the shipper but issued by the carrier. Different regions and countries may have their own set of rules regarding how a bill of lading form needs to be filled. However, as per the widely accepted best practices regarding that procedure, the following sequence can be used:
1. Shipper (Exporter/From)
This includes the company name and address of the shipper (also known as the consignor or exporter).
2. Master Bill of Lading number
This includes the unique control number to reference the Bill of Lading.
3. Carrier booking number
This step includes entering a unique control number to reference the shipment with the carrier.
4. Export references
This step includes entering various reference numbers (such as PO numbers) if necessary. This allows shippers and carriers to track their shipping reference numbers.
5. Consignee details
Filling the required details for the final recipient of the shipment (the final customer). This is useful if the end customer location is different from the shipment destination. This is used for carrier notification purposes.
6. Notify party
Filling in the information for the recipient of the shipment. This recipient may be the same or different from the consignee.
7. Release agent
The next step involves filling in the name of the agent the consignee should contact to obtain cargo release, arrival notices, and other details at the final destination. Notably, these agents may offer customs clearance and delivery services but are not obliged to fulfill them.
This involves filling in the details of the port where the cargo will be loaded.
9. Place of receipt by carrier
This includes filling in the location where the cargo will be received from the shipper.
10. Vessel and voyage number
The next step involves filling in the vessel name and voyage number, which will be delivering the shipment to the consignee at the destination.
11. Port of loading
This involves filling in the details of the port where the cargo will be loaded. For example, Manchester Port (MNC), UK.
12. Point of origin
This includes filling in the country of the actual shipping point.
13. Port of discharge This involves filling in the port where the cargo will be arriving. For example, Miami Port (MIA), US. Shippers may also be required to name the country of discharge.
14. Place of delivery
This includes filling in the city where the carrier will be delivering the cargo to the consignee.
15. Marks & numbers/container numbers
Filling in the total number of packages per line item; whether the packages are consolidated on a pallet or in an outer container. Noting down the container seal number is crucial in this process.
16. No. of trailers/containers and/or packages
Filling in the total number of trailers, containers, and/or packages.
17. Description of shipment
This includes filling in the description of each line item, noting down the type of package (boxes, barrel, trays) and the quantity in each package. There must be a separate line item for each different freight classification description. If more than one type of packaging is used per freight classification, a separate entry must be used for each type of package. This also includes handling instructions.
18. Gross weight
This involves filling in the total gross weight, in pounds, for each line item in the overall delivery package.
This step involves the filling of the size-based measurements for each line item.
20. Without recourse
This detail states that containers’ demurrage fees and detention charges at the destination are payable by the receiver. Storage expenses or any other dues or taxes need to be paid by the receiver too.
21. Shipper’s declared value of goods
This section needs to be filled with the monetary value of the goods being shipped.
22. Rate per line item
This detail involves the unique two-digit class-based rate per line item in a package.
23. Base Cost
This figure is the base cost of shipping goods internationally.
24. Prepaid Amount Received
This data is the service amount prepaid by the shipper before a shipment, if any.
25. Merchandise amount
This is the amount that needs to be collected for the merchandise itself. Essentially, all freight charges must be included in one form or another in the document.
This is the currency used in transactions during shipments. Clear specification of this detail eliminates unnecessary exchange rate risks in shipments.
27. Number of Original Bills of Lading
This includes filling in the number of Bills of Lading for an entire shipment.
28. Place and date of issue
This includes filling in the city and date of where and when the Bill of Lading is accepted.
In this step, a signature is required by the respective Department of Transportation of a zone after this statement for all shipments.
30. Total Amount
The next process involves filling in the total money charged for transporting the cargo.
31. Date of Shipment
This detail includes the date the vessel is projected to depart and travel internationally.
What are the differences between the Master Bill of Lading and the House Bill of Lading?
Although they may have certain similarities, master bill of lading and house bill of lading are fundamentally different. Here are some differences.
Every master bill of lading can be identified and tracked with a unique master bill of lading number. With this number, transport companies and shippers can track shipments across oceans all over the world.
Yet another difference between master bill of lading and house bill of lading is that both documents have completely different bill of lading number.
All fields on the Master Bill of Lading and House Bill of Lading including vessel information, description of cargo, container seal numbers, weight, number of containers, sail date, and others should be the same. The only differences should only be in the shipper, consignee, notify party, and pickup location fields.
A master bill of lading is a bare minimum requirement in an age of fast and simultaneous shipments in international trade. It is helpful for everyone in some or other measure: carriers can accurately document the costs of their services and enable customers to keep track of their shipments, shippers get legal proof of their deliveries, and the shipping process becomes transparent for the end customer.