Order Bill of Lading
An order bill of lading is a negotiable transport document that allows ownership of the cargo to be transferred from one party to another through endorsement. Instead of naming a fixed consignee, it is issued “to order” or “to the order of” a specific party. This flexibility makes it commonly used in international trade and trade finance transactions. It represents legal title to the goods while they are in transit.
Because it is negotiable, the Order Bill of Lading can be endorsed and passed on to banks, buyers, or other parties before the cargo arrives. This feature supports sales made while goods are already moving and is often linked to letters of credit. The carrier releases the cargo only to the party presenting the properly endorsed original document. This adds a layer of control and security.
The order bill of lading plays a key role in commercial risk management. It protects sellers by ensuring payment conditions are met before cargo release. At the same time, it enables buyers to take ownership through proper endorsement. Accurate handling of this document is critical to avoid disputes or delivery delays.
Frequently Asked Questions about Order Bill of Lading
Clear answers to the most common questions people have when learning about Order Bill of Lading.
Ownership of the cargo can be transferred by endorsing and handing over the original document to another party.
It is widely used in international trade, especially when shipments are financed through banks or sold while in transit.
Without the properly endorsed original document, the carrier will not release the cargo, which can lead to delays and storage charges.