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An on board bill of lading is a legal document kept on board a shipping vessel that both acknowledges the receipt of goods to be shipped and provides the shipper legal authority to transport those goods to a prearranged destination. In its most general sense, a bill of lading — often abbreviated BOL, BL, or simply B/L — is essentially a transport contract for the carriage of goods. It names both the purchaser and seller, but focuses on the means through which the goods will get from one place to the next. The condition and quantity of the goods must be established, as well, along with the date of loading and intended delivery.
On board BOLs are most common in international shipping arrangements. In these situations, no one country’s contract laws govern the transaction. A bill of lading is a way for the parties to set out the terms of their purchase agreement and to make requirements when it comes to how the goods will be transported and delivered.
In nearly all cases, import agreements necessarily involve more than just an importer and an exporter. A third-party shipper is usually required to actually coordinate and facilitate the transportation from one place to the next. This shipper is not usually party to the contract, but nonetheless becomes liable for the goods once it receives and signs an on board bill of lading.
The main purpose of an on BOL is to certify that the goods were actually loaded onto the vessel as promised by the exporter. It can be hard for the exporter to physically escort the goods to the importer, but this does not usually mean that the exporter ceases to be responsible. The on board bill of lading is one way for the exporting company to cover its bases and fulfill its shipping obligation.
In some sense, the on board bill of lading is like a shipping receipt. It states what was loaded and proves that the exporter dropped off the goods as promised. Shipping companies must usually endorse the on board BOL the moment goods are loaded into the cargo holds. Agents must count the goods and investigate their quality, noting any damage or spoilage. The bill usually also contains clauses shifting responsibility for safe delivery to the carrier, but this can vary by party, agreement, and jurisdiction.
Unless the on board bill of lading is specifically deemed negotiable, it also obligates the shipper to deliver the goods to the receiver named in the contract. The receiver, called a consignee, is usually the importer or a designated agent of the importer. This person is responsible for examining the on board bill of lading and comparing it to the BOL drawn up at the deal’s inception. He or she must sign for receipt of the the goods if they meet the description or refuse them immediately if there are any discrepancies. In some cases, a consignee can receive defective goods under protest or with rights of refusal reserved, though these conditions must usually be noted on the bill when the goods are first unloaded.