Master Bill of Lading VS. House Bill of Lading

The main bill of lading (MBL) and the house bill of lading (HBL) are common transport documents in international trade used to confirm the transportation contract and ownership of goods. The MBL is issued directly by the carrier and serves as proof of ownership, playing an important role in payment and cargo release. On the other hand, the HBL is issued by a freight forwarder or logistics agent on behalf of the shipper or forwarder, confirming the existence of the transportation contract and providing detailed cargo information and shipping arrangements. This article will explain the characteristics and differences between the MBL and HBL to help readers better understand and correctly utilize these two transport documents.

Main Bill of Lading (MBL) and House Bill of Lading (HBL)

In practice, you will encounter two types of bills of lading: the Main Bill of Lading (MBL) and the House Bill of Lading (HBL). As international traders, it is important to understand the differences between the MBL and HBL.

Concept of Main Bill of Lading (MBL)

The Main Bill of Lading (MBL), also known as the Carrier's Bill of Lading or Ocean Bill of Lading (OBL), refers to the ocean freight bill of lading issued by the shipping company. It can be directly issued to the shipper (in which case, the freight forwarder does not issue a bill of lading), or it can be issued to the freight forwarder (in which case, the freight forwarder issues a house bill of lading to the shipper).

The carrier, also known as the shipowner, is a freight company that owns its own ocean vessels. An ocean freighter is valuable, and a company with its own fleet of ocean vessels naturally has considerable strength. Since they operate on a long-term basis, they prioritize their reputation over small profits and tend to have more formal operations. As the owner or operator of the vessel, the carrier assumes responsibilities and obligations during the vessel's transportation process.

Concept of House Bill of Lading (HBL)

Another type of freight company is a freight forwarder, commonly known as a forwarder. The difference between carriers and freight forwarders, as wholesalers and retailers, lies in the fact that the cargo is the space on ocean freighters. Carriers wholesale the space to freight forwarders, who then retail the space to the shipper.

The House Bill of Lading (HBL), strictly speaking, should be referred to as a Non-vessel Operating Common Carrier (NVOCC) bill of lading issued by a freight forwarder that has obtained NVOCC qualification through approval and filing by the Ministry of Transport. It is generally issued to the direct shipper. Sometimes, there are cases where the bill of lading is used by peers. When the bill of lading is issued to a peer, the peer will issue their own bill of lading to the direct shipper.

Nowadays, house bills of lading are more common in exports, especially to Europe and the United States. For exporters, both types of bills of lading can be used as negotiable documents and accepted by banks. But what are the differences between the two types of bills of lading? Let's continue to learn below!

Issuing Process of Master Bill of Lading

The issuing process of the Master Bill of Lading can be summarized as follows:

1. Cargo handover: The cargo is delivered by the shipper or freight forwarder to the carrier (shipowner) for transportation.

2. Transportation agreement reached: The shipper or freight forwarder reaches a transportation agreement with the carrier, including transportation details, costs, responsibilities, and conditions of the goods.

3. Bill of lading preparation: The carrier fills out the bill of lading based on the transportation agreement and cargo information. The bill of lading includes relevant information such as cargo description, quantity, packaging method, loading port, destination port, vessel name/voyage, and bill of lading number.

4. Signing and stamping: The carrier signs the completed bill of lading and affixes the company's seal to confirm the validity and legal effect of the bill of lading.

5. Delivery of the bill of lading: The carrier delivers the issued bill of lading to the shipper or freight forwarder, or directly provides it to relevant parties, such as banks, customs, as agreed upon.

6. Cargo transportation: The carrier transports and delivers the goods in accordance with the terms and conditions stated on the bill of lading. The bill of lading plays a crucial role as proof and instruction during the transportation of goods.

7. Delivery and handling of the bill of lading: Upon arrival of the goods at the destination, the shipper or freight forwarder processes the bill of lading according to the requirements, which may include payment of freight charges, delivery of bill of lading copies, etc.

It should be noted that the issuing process of the Master Bill of Lading may vary depending on different countries, regions, and modes of transportation. It may also be influenced by specific contractual agreements and industry practices. Therefore, in practical operations, specific actions should be taken based on the specific circumstances and relevant regulations.

Issuing Process of House Bill of Lading

The issuing process of the House Bill of Lading can be summarized as follows:

1. Cargo consignment: The shipper entrusts the cargo to a freight forwarder or logistics agent for transportation and management.

2. Transportation agreement reached: The shipper reaches a transportation agreement with the freight forwarder or logistics agent, including transportation details, costs, responsibilities, and conditions of the goods.

3. Bill of lading preparation: The freight forwarder or logistics agent fills out the bill of lading based on the transportation agreement and cargo information. The bill of lading includes relevant information such as cargo description, quantity, packaging method, loading port, destination port, vessel name/voyage, and bill of lading number.

4. Signing and stamping: The freight forwarder or logistics agent signs the completed bill of lading and affixes the company's seal to confirm the validity and legal effect of the bill of lading.

5. Delivery of the bill of lading: The freight forwarder or logistics agent delivers the issued bill of lading to the shipper or directly provides it to relevant parties, such as the agent of the freight forwarder or the buyer, as agreed upon.

6. Cargo transportation: The freight forwarder or logistics agent is responsible for the transportation and delivery of the goods according to the requirements stated on the bill of lading. The bill of lading plays a crucial role as proof and instruction during the transportation of goods.

7. Handling of the bill of lading: The shipper processes the bill of lading according to its requirements, which may include payment of fees, cargo retrieval, or transfer to the buyer.

It should be noted that the issuing process of the House Bill of Lading may vary depending on the requirements of different countries, regions, and freight forwarder companies. Additionally, the specific process of the House Bill of Lading may also be influenced by relevant international trade regulations, transportation methods, and contractual agreements. Therefore, in practical operations, the shipper should communicate with the freight forwarder or logistics agent and comply with relevant regulations and contractual requirements.

The differences between Master Bill of Lading and House Bill of Lading

1.Issuing Party:

• Master Bill of Lading: Issued directly by the shipping line (carrier) to confirm receipt of the goods and agreement to transport them according to the terms and conditions stated on the bill of lading.
• House Bill of Lading: Issued by a freight forwarder or logistics agent on behalf of the shipper or forwarder.

2.Contents of the Bill of Lading:

• Header and seal: The carrier's name and seal differ. The carrier's seal on the Master Bill of Lading shows "AS CARRIER." In the Master Bill of Lading issued to the actual exporter, the shipper field is filled with the exporter's information, and the consignee field is filled based on the information provided in the shipping instructions. In the Master Bill of Lading issued to the forwarder, the shipper field is filled with the forwarder's information, and the consignee field is filled with the agent at the destination port.
• The House Bill of Lading is issued in the name of the freight forwarder, and the seal shows "AS AGENT FOR CARRIER." The shipper on the House Bill of Lading is usually the actual exporter (direct shipper), and the consignee is typically filled in according to the requirements of the letter of credit, often as "TO order."

3.Authorization Relationship:

• Master Bill of Lading: Confirms the carrier's acceptance of the goods and agreement to transport them according to the terms stated on the bill of lading.
• House Bill of Lading: Represents the transportation contract between the shipper or forwarder and the carrier.

4.Proof of Ownership:

• The Master Bill of Lading serves as proof of ownership and is used for payment and cargo release in international trade.
• The House Bill of Lading generally does not serve as proof of ownership.

5.Delivery at the Destination Port:

• With the Master Bill of Lading, cargo can be directly claimed from the shipping line.
• With the House Bill of Lading, it is necessary to exchange the House Bill of Lading for the shipping line's bill of lading through the agent of the freight forwarder at the destination port, commonly known as "switching the bill." Alternatively, the consignee at the destination port can claim the cargo directly from the agent of the freight forwarder based on the House Bill of Lading.

6.Contents of the Document:

• The Master Bill of Lading mainly includes detailed information about the goods, loading port, destination port, vessel information, etc., and usually does not mention the name of the freight forwarder.
• The House Bill of Lading typically lists detailed information about the goods, transportation route, payment terms, etc., and the name of the freight forwarder is often mentioned on the bill of lading.

7.Applicability:

• The Master Bill of Lading is applicable for full-container-load (FCL) shipments. If your goods are less than a full container load (LCL), the shipping line will not assist with consolidation at the origin or deconsolidation at the destination port. In such cases, a House Bill of Lading or a negotiable Bill of Lading may be used.
• The House Bill of Lading is applicable for both FCL and less-than-container-load (LCL) shipments.

In summary, the Master Bill of Lading and House Bill of Lading differ in terms of the issuing party, authorization relationship, proof of ownership, and contents of the document.

The different operations of Master Bill of Lading and House Bill of Lading

Internationally, it is common practice for the shipping line to deal with the freight forwarder, and the freight forwarder to deal with the customer. When importing goods from overseas, customers typically receive House Bills of Lading. This means that customers are only involved with the freight forwarders, while the shipping line handles information related to the freight forwarders. This can be seen as an advantage of issuing House Bills of Lading by the freight forwarders. There are several benefits to issuing House Bills of Lading:

1. For FOB shipments or freight collect shipments, the freight forwarder usually needs to provide the consignee information from the Master Bill of Lading to their agent at the destination port. Then, the freight forwarder issues the House Bill of Lading to the customer. In the future, the agent will collect the freight charges from the consignee. This practice allows the freight forwarder to handle the collection of freight charges more efficiently, which can be challenging if only the Master Bill of Lading is issued.

2. For DDU (Delivered Duty Unpaid) or DDP (Delivered Duty Paid) shipments, the shipping line is responsible for delivering the cargo to the destination port. If the shipper requests a door-to-door service from the freight forwarder, the freight forwarder issues the House Bill of Lading to their agent at the destination port. The agent then takes care of customs clearance, delivery, and even advances payment of duties if required. This is known as a door-to-door service, where the freight forwarder manages the entire logistics process from the shipper's door to the consignee's door.

3. For air freight shipments to North Africa or South America, due to restrictions imposed by airlines and flight availability, and considering cost factors, freight forwarders often choose to use Dubai or Miami as transit hubs. In this case, the freight forwarder arranges for the cargo to be transported to Dubai or Miami first, and then their agent in Dubai or Miami organizes the onward transportation to North Africa or South America. The Master Bill of Lading is consigned to the freight forwarder's agent at these two hubs, and the freight forwarder issues the House Bill of Lading to the customer. This demonstrates how close international cooperation between freight forwarders allows for segmented operations and ensures a seamless experience for the customer.

4. For triangular trade transactions, domestic freight forwarders may request the shipping line to issue a through Master Bill of Lading to themselves. They then issue a set of House Bill of Lading with the shipper as the supplier and the consignee as the middleman. The middleman then conducts a switch bill of lading at their location, where the shipper becomes the middleman, and the consignee becomes the actual consignee at the destination port.

5. In the case of consolidating multiple customers' small shipments into one container bound for the same destination port, the freight forwarder adopts the practice of a Master Bill of Lading with multiple House Bill of Lading. The consignee on the Master Bill of Lading is the agent at the destination port, and separate House Bill of Lading is issued to each customer, using different numbers such as 001A, 001B, 001C, etc. The agent at the destination port then releases the container, and each customer can clear their portion of the cargo using their respective House Bill of Lading.

In summary, issuing House Bills of Lading is a manifestation of international cooperation among freight forwarders, allowing for segmented operations and better serving customers. It demonstrates the freight forwarding industry's efforts to improve services and meet customer requirements.

House Bill of Lading (HBL) considerations

1. The usual format of an HBL is 3 originals and 3 copies, but it can also be 2 originals and 3 copies. If the letter of credit has specific requirements, it should be communicated to the freight forwarder.

2. The front side of the HBL should display the full name of the carrier. If the carrier's name is shown on the front side, it should be stamped and signed by the carrier in the lower right corner. If the carrier's name is not displayed on the front side and the HBL is signed by the shipping line, the signatory's identity should be indicated at the time of signing. If the carrier's full name is displayed on the front side but the HBL is signed by the shipping line, the shipping line's identity should be indicated at the time of signing.

3. Types of HBLs: "Shipped on Board" HBL: Issued after the goods have been loaded onto the vessel. "Received for Shipment" HBL: Issued when the goods are received by the carrier but before they are loaded onto the vessel. This type of HBL does not prove the actual loading date of the goods ("Received for Shipment" date is not the same as the actual loading date). It can only be converted to a "Shipped on Board" HBL when "Shipped on Board" is stamped on it along with the loading date.

4. The HBL should not have any unclean remarks.

5. The consignee and notify party on the HBL must be strictly filled in accordance with the letter of credit.

6. Issuance, date, and number of copies: The HBL must be issued by the carrier, captain, or their agent, and the issuing person's identity should be clearly indicated. Common expressions include "CARRIER," "CAPTAIN," or "AS AGENT FOR THE CARRIER: XXX," among others.

Why Choose JIKEship as a Freight Forwarder

JIKEship plays a crucial role in the process of issuing Bills of Lading as a freight forwarder. Acting as an agent for the shipper, JIKEship communicates with the shipping line and issues House Bills of Lading. They work closely with the shipper to ensure accurate information on the Bill of Lading and compliance with relevant regulations and requirements. JIKEship provides professional logistics services, helping shippers manage the transportation, supervision, and control of goods, and coordinating transportation details with the carrier to ensure the safe and timely delivery of goods.

For shippers, partnering with JIKEship means leveraging their extensive experience and expertise to handle Bill of Lading and cargo transportation matters more efficiently. By providing accurate House Bills of Lading and meticulous cargo management, JIKEship offers reliable transportation solutions to shippers, helping them reduce risks, improve efficiency, and ensure the secure transport of goods.

Conclusion

In conclusion, understanding the characteristics of the Master Bill of Lading and House Bill of Lading and choosing the right freight forwarder like JIKEship for collaboration is essential for the smooth transportation and delivery of goods. By partnering with a professional freight forwarder, shippers can enjoy convenient and reliable logistics services, achieving efficient transportation and management of their cargo.