Bills of lading are transport documents that, in general, cover movement by sea
or where the major portion of the total distance covered is by sea. Unlike other
transport documents Bills of Lading are ‘documents of title’, i.e. they are the
prime evidence of who has title to the goods covered by the document. Bills of
Lading are issued in ‘sets’ of numbered originals (e.g. 1/3, 2/3, 3/3). The sets
can be made up of any number of originals but 2 or 3 are the most usual. The
Bills can be made out as follows:- to the order of the shipper (the exporter); to
the order of a named party; to a named party. In order for the Bills of Lading be
‘negotiable’, they require signed endorsement by the party to whom they were
made out ‘to the order of’. Endorsement can be either ‘blank’ or to the order of
another named party. Blank endorsement means that whoever has possession of
one or more of the endorsed original bills can claim title to the goods. For this
reason such Bills of Lading need to be kept secure and forwarded by a secure
method. Bills of Lading that are consigned to a named party (i.e. not ‘to the
order of’ a named party’) are known as ‘straight consigned’. In most countries
this means that only the party named can collect the goods and the Bills of
Lading cannot be endorsed over to any other party.