Shipping Release Cargo Bill of Lading Format

A bill of lading also serves as evidence of a contract of carriage and a receipt for goods issued by the carrier. These three functions of the bill of lading have been repeatedly confirmed by court precedents internationally. However, does the form in which the carrier issues the bill of lading affect these three functions?

It is well known that in international trade, especially in transactions conducted through letters of credit, customers often require the shipping company to issue an original bill of lading. When an original bill of lading is issued, its three functions are beyond doubt. However, in some international trade scenarios, the parties involved do not need to apply for a letter of credit from a bank for the transaction. The shipper and consignee may be in a parent-subsidiary relationship or a principal-agent relationship. In such cases, there is no necessity to issue an original bill of lading, as using one also presents several inconveniences. First, the shipper incurs additional international postal costs. Second, there is the risk of the bill being lost during transit. If the bill of lading is lost, it is troublesome and complex for the consignee to reconfirm their entitlement to receive the goods. Third, mailing the bill of lading consumes time. A fast ship from a Chinese port to the West Coast of the United States takes only 15 days, while express mail from the post office takes 5-6 days, even longer during holidays.

To expedite and facilitate the release of goods, shippers often request carriers to use telex release or express release methods for issuing bills of lading. Telex release means that the shipper surrenders the original bill of lading, already signed by the carrier, to the carrier or its agent at the port of loading, and the carrier at the port of loading sends a telex release instruction (nowadays, internal email notifications are used) to the agent at the port of destination. The consignee at the port of destination can take delivery of the goods under the bill of lading without presenting the original bill. This form of release does not alter the three functions inherent in the original bill of lading. However, the legal consequences of a bill of lading issued under express release are significantly different from those under original bill release and telex release. Under express release, the carrier never issues an original bill of lading, and the various terms of carriage typical of a bill of lading have never appeared on the bill used for express release. So, can the terms of carriage from the original bill of lading bind both parties? Does the bill of lading used for express release also possess the three basic functions of an original bill of lading?

The bill of lading is a document of title, and clearly, the bill of lading used for express release has lost this function. This is because bills of lading issued for express release are already printed with the phrase "non-negotiable." However, can such a bill still serve as evidence of the contract of carriage? This is a point of significant dispute between the carrier and the shipper/consignee. Cargo owners argue that when they entered into the contract, upon receiving the express release bill of lading from the carrier or its agent, they were never made aware of any terms of carriage, and the carrier never claimed that any such terms would bind the parties. According to the general principles of contract law, the carrier's limitation of liability clause, time bar clause, transshipment clause, and notice of claim clause cannot bind the consignee and shipper because they were not informed. The carrier counters that the express release bill of lading was issued at the shipper's request, and it is a well-known fact that the standard terms printed on it are intended to bind both parties. A prudent shipper should be aware of this and, if not, should inquire with the carrier or its agent. All terms of carriage can be found on the carrier's website and have been filed with the U.S. Federal Maritime Commission. Most clauses in a bill of lading originate from relevant international conventions and domestic laws. For instance, the carrier's limitation of liability and the time bar have already been affirmed by law. The carrier argues it has no obligation to explain these to every shipper.
 
Take the well-known case of RUBY V. RICHSHIPPING as an example. The parties disputed whether the carrier could claim a limitation of liability under an express release bill of lading. When the U.S. Supreme Court hears the case, the judges may not necessarily be fully familiar with maritime operations' details or the nuanced differences between express release, telex release, and original bill release. If the shipper, or even the consignee, claims they were unaware that the express release bill of lading contained so many contractual terms, the judges might accept this perspective. According to general principles of legal interpretation, in ambiguous situations between parties, judges often rule against the party that drafted the contract. Furthermore, the consignee had no opportunity to understand the so-called contractual terms throughout the process; they only received an express release bill of lading devoid of any terms. To protect consumer interests or vulnerable parties, judges are also likely to rule against the carrier.
 
To protect their own interests, carriers should make necessary amendments to bills of lading used for express release. Regardless of the release method, paramount clauses should be printed on the bill. Below the paramount clause on the express release bill of lading, necessary clauses can be added, stipulating that all terms contained in the original bill of lading apply to this bill and that the shipper/consignee may inquire with the carrier at any time. If a carrier includes such protective clauses on the express release bill of lading, it would be beneficial in handling similar disputes that may arise in the future.