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Differences Between Original and Express Bill of Lading
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Get Started ->Every year, more than 11 billion tons of goods are shipped by sea. This massive trade movement is essential to the global economy, and it all relies on the right shipping documents to keep everything running smoothly. The Bill of Lading (B/L) is one of the most important documents in international shipping. It acts as a receipt for the goods, a contract for the transport, and proof of ownership. But did you know that there are different types of B/Ls, each with its own benefits and use cases?
In this blog, we'll break down the fundamental differences between these two types of B/Ls, the advantages and disadvantages of each, and the steps involved in handling them. By the end, you'll have a clearer understanding of which type suits your shipping needs and how to simplify your export process.
What is a Bill of Lading?
Before we explore the differences between the Original and Express Bill of Lading (B/L), let's first understand what a Bill of Lading is and why it's so important in shipping.
A Bill of Lading is an important legal document that serves three key purposes in international trade:
- Receipt for Goods: It proves that the goods have been loaded onto the shipping vessel or are ready for shipment.
- Contract of Carriage: It explains the rules and agreements for how the goods will be transported. It serves as an agreement between the shipper and the carrier (the company handling the delivery of the goods).
- Document of Title: It grants ownership of the goods to the holder of the document. This is crucial because it allows the holder to transfer ownership or claim the goods at the destination.
In essence, the Bill of Lading ensures that the entire shipping process is documented and legally binding, protecting both the exporter and the importer. It's a key part of international trade, especially when goods are being sent over long distances, such as from India to other countries.
Let's now take a closer look at the two main types of Bill of Lading: Original and Express. Understanding their specific characteristics will help you choose the right option for your export business.
Also Read: How To Make Bill Of Lading? Best Tips, Simple Guide
Original Bill of Lading
The Original Bill of Lading (B/L) is a negotiable document that plays a crucial role in international shipping. It serves as proof that the goods were received, a contract for their transport, and a document that lets the holder claim the goods when they arrive. Sellers often prefer this type of B/L when they want to maintain control over the goods until payment is made or other conditions are met.
Characteristics of the Original Bill of Lading
The Original Bill of Lading is a crucial document in international trade, serving as proof of ownership and a receipt for the goods being shipped. Below are the key characteristics that define this important document:
- Negotiability: The Original Bill of Lading is a negotiable document that can be transferred or endorsed to another party, allowing ownership of the goods to shift from the exporter to the importer or a third party.
- Multiple Originals: The document is issued in multiple originals, usually three copies. This ensures that the goods can still be claimed by the rightful owner even if one original is lost or delayed.
- Claim Flexibility: Although only one original B/L is required to claim the goods, having multiple copies offers flexibility in case of issues such as loss or delays.
Use Cases for the Original Bill of Lading
The Original Bill of Lading is especially useful in situations where the exporter wants to retain control over the goods or when there are conditions tied to the release of goods. Here are the primary cases when an Original B/L is typically used:
- Payment Pending: If the exporter wants to make sure they are paid before releasing the goods, the Original B/L can be used to ensure that the importer does not receive the goods until they have made the payment.
- Letter of Credit: In global trade, a Letter of Credit (L/C) is often used to guarantee payment. The Original B/L is crucial here because the buyer needs to present it to the bank to prove they have received the goods before payment is made.
- Collateral for Financing: Exporters can use the Original B/L as collateral if they need financing. They can use the document as collateral to get a loan or credit from a bank or financial institution until the buyer makes the payment.
Process for Obtaining and Handling an Original Bill of Lading
The process of obtaining and handling an Original B/L involves several steps. These steps ensure that the goods are documented properly and the seller retains control until the necessary conditions are met. Here's a breakdown of the process:
- Booking and Shipping the Goods: Once the goods are ready for shipment, the exporter books the cargo with the carrier, and the goods are loaded onto the vessel.
- Issuance of the Bill of Lading: After the goods are loaded, the carrier issues the Original Bill of Lading. This document confirms that the carrier has received the goods for shipment.
- Sending the Original B/L: The exporter sends the original Bill of Lading to the recipient. This is typically done through courier services to ensure that the consignee receives it on time. The B/L can be sent to the buyer directly or to a third party, such as a bank, depending on the terms of the sale.
- Claiming the Goods: When the goods arrive at the destination port, the consignee needs to show the original B/L to the carrier in order to collect the goods. The goods won't be handed over unless the consignee presents the original document.
- Transfer of Ownership: If necessary, the owner of the Original B/L can transfer ownership of the goods by endorsing the document and handing it over to another party, such as a buyer or a financial institution.
While the Original Bill of Lading offers many benefits, there's another option worth considering: the Express Bill of Lading.
Also Read: Understanding The Purpose And Format Of Ocean Bill Of Lading
Express Bill of Lading (Sea Waybill)
The Express Bill of Lading, also known as a Sea Waybill, is a non-negotiable, electronic version of the Bill of Lading. Unlike the Original Bill of Lading, it doesn't require physical documents to claim the goods at the destination. Instead, it simplifies the process by allowing the consignee to receive the goods upon identifying themselves, eliminating the need to present original documents.
This B/L type is gaining popularity due to its convenience and speed, especially when the seller and buyer have a trusted relationship.
Characteristics of the Express Bill of Lading
The Express Bill of Lading offers a more streamlined approach compared to the Original Bill of Lading. Below are the key characteristics of the Express Bill of Lading:
- Non-Negotiable: The Express Bill of Lading is a non-negotiable document, meaning it cannot be transferred or endorsed to another party. Its sole purpose is to confirm the shipment of goods and authorize their release to the consignee upon identification.
- Electronic Format: Unlike the Original B/L, the Express Bill of Lading does not require multiple originals. It is typically issued electronically, allowing the consignee to receive it digitally, which eliminates the need for physical copies.
- Efficiency: The electronic format reduces paperwork and accelerates the entire process, providing a faster and more efficient method for handling shipments.
Use Cases for the Express Bill of Lading
The Express Bill of Lading is more suited to certain shipping scenarios, especially when there's a high level of trust between the exporter and importer and when immediate release of goods is desired. Here are the common situations in which the Express B/L is used:
- Prepaid Shipments: This type of B/L is ideal when the goods have already been paid for before shipment. There's no need to hold the goods until payment is received, as the Express B/L indicates that the transaction is complete.
- Trusted Relationships: If the exporter and importer have a long-standing relationship based on trust, the Express B/L is a faster, simpler option. The goods can be released without requiring physical documents, which is particularly beneficial when time is critical.
- Direct Shipment with No Need for Collateral: The Express B/L is commonly used when there's no need for the exporter to retain control of the goods. It allows for a straightforward transfer of goods without the complexities of endorsements or collateralization.
Process for Obtaining and Handling an Express Bill of Lading
The process for obtaining and handling an Express B/L is much quicker and simpler than that of an Original Bill of Lading. Here's how it typically works:
- Booking and Shipping the Goods: The exporter books the cargo with the carrier, and the goods are loaded onto the vessel as usual.
- Issuance of the Sea Waybill: After the goods are loaded, the carrier issues an electronic Sea Waybill (Express B/L). This document acts as proof that the goods have been received by the carrier and are on their way to the destination.
- Sending the Sea Waybill: Since it is a non-negotiable document, the Sea Waybill can be sent electronically. The exporter or carrier sends it to the consignee, often via email or an online portal.
- Claiming the Goods: At the destination port, the consignee can claim the goods by simply presenting their identification or other reference details. No physical B/L is required for the goods to be released.
- No Transfer of Ownership: Unlike the Original B/L, ownership cannot be transferred through endorsement. The goods are automatically released to the consignee listed in the Sea Waybill.
Now that we've covered both types of Bills of Lading, let's compare their key differences to help you decide which is best for your needs.
Also Read: Understanding What a Waybill Is and Its Use Cases
Key Differences Between Original and Express Bill of Lading
Knowing the differences between both types of Bills of Lading will help you choose the best option based on your business needs, shipping preferences, and how much control you want over your goods.
Here's a comparison of the two B/L types:
This comparison should give you a clearer idea of the Original Bill of Lading and the Express Bill of Lading. Depending on your needs, either option can work, but the key is to evaluate the level of control you need, how fast you need your goods released, and whether you can rely on your buyer to complete the transaction smoothly.
Now that you understand the key differences between the two types of B/Ls, let's discuss the factors that Indian exporters should consider when choosing the right one.
Also Read: Understanding Received for Shipment Bill of Lading and its Types
Considerations for Indian Exporters
Choosing the right type of Bill of Lading isn't one-size-fits-all. Here's what you should think about:
- Payment Terms: If you're waiting for payment or using a Letter of Credit, go with the Original B/L. It gives you control until money hits your account.
- Buyer Relationship: Trust your buyer? If payments are upfront or you've done business together before, the Express B/L can save time and paperwork.
- Shipping Timeline: Tight deadlines? The Express B/L avoids delays linked to document couriering.
- Cost: Want to cut down courier charges and document handling fees? The Express B/L is your friend.
- Bank or Financing Involvement: Need the shipment as collateral? Stick with the Original B/L.
Once you have a clear understanding of what to consider, let's see how Pazago can simplify and enhance your export process.
Also Read: Cross Border Transactions and Transfers
How Pazago Can Enhance Your Export Process
Managing the export process can be overwhelming, especially when dealing with multiple stakeholders and documents. However, Pazago simplifies it all by providing effective features that enhance efficiency at every step. Here's how Pazago can improve your export experience:
- Centralized Document Storage: Pazago allows you to keep all your essential documents in one place, making it easier to stay organized and access any needed files with a click.
- Real-Time Collaboration: Share and get approvals on documents with everyone involved in your shipment process, from your team to freight forwarders and customs agents, all in real time. This keeps everyone on the same page and speeds up decision-making.
Pazago offers much more than just document handling. It helps simplify key parts of the export journey:
- Cost-Effective Logistics: By analyzing routes, Pazago helps you find the most economical shipping options, saving you money.
- Real-Time Tracking: Keep tabs on your shipments as they move, minimizing delays and ensuring on-time deliveries.
- Simplified Payments: With integrated tools for managing payments and currency conversions, Pazago makes international transactions hassle-free.
- Quality Assurance: You can schedule pre-shipment inspections through Pazago, ensuring everything meets quality standards and complies with regulations.
Pazago can help simplify your export process by making documentation, logistics, and payments easier, saving you time and reducing hassle.
Conclusion
Understanding the differences between the Original Bill of Lading and the Express Bill of Lading is crucial for any exporter looking to simplify their shipping process. The right choice depends on factors like payment terms, buyer trust, and shipping timelines. Making the right choice can help you avoid delays, save money, and make the process run more smoothly.
For even more efficiency in your export operations, consider integrating tools like Pazago to centralize document storage, improve collaboration, track shipments, and manage logistics and payments with ease. It's all about making your export process simpler, faster, and more cost-effective.
Ready to optimize your export journey? Book a demo today and see how it can improve your business.
