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Ocean freight is the most widely used form of transportation in international trade.It still has the attraction of being a cheap mode of transport for delivering large quantities of goods over long distances.
The ocean bill of lading is an extremely important document that serves three purposes.It is a cargo receipt issued by the shipping company to the shipper,it is also a document of title of the goods;finally,it forms the evidence of a contract by the shipping company to carry the goods from the port of shipment to the port of destination.
The exporter obtains the bill of lading from the shipping company and completes it himself or gets his freight forwarder to do it.It is then returned to the shipping company.Bills of lading are usually made out in sets,which consist a number of originals(usually three)and a number of copies.
The originals are signed by the shipping company and therefore become the negotiable title to the goods that the bill of lading covers.Each original is negotiable ,but once one has been negotiated the others are void.
When the goods are loading on board the vessel,the shipping company checks the details on the bill and hands it to the exporter.As soon as the bill of lading is received by an exporter,he must arrange it to be sent to his customer.The exporter can mail the bill to the customer----either direct or through a bank,depending on the method of payment.
If the handing over of the bill of lading is linked with a term of payment,it is important that all originals are kept together.When payment is arranged under a documentary credit,the terms of credit usually state that the goods must be clean,shipped,in order and blank endorsed.This means that the goods must be in apparent good order,be loaded on board the ststed vessel and that the bill gives title to any besrer.Great care must be taken to see that this legal document is made out in the proper way.
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