**B/L Preparation: Standard Method for Filling Out Ocean Bill of Lading**

Typically, the stipulations for bills of lading in letters of credit are exemplified as follows:

Example 1. Full set of clean on board ocean bill of lading made out to order (of…) blank endorsed marked“Freight prepaid” notifying applicant. Example 2. 2/3 set of clean on board marine B/L consigned to accounted, endorsed to the order of ABC Co. Marked“Freight collect” and notify party as Hg Co. Example 3. A complete set of clean multi-modal transport document made out to our order endorsed to ABC Co. Marked“Freight payable at destination” notifying the applicant. A marine bill of lading generally refers to a port-to-port shipped on board marine bill of lading, commonly abbreviated as a marine bill of lading. Each shipping company has its own format for the marine bill of lading, but the various columns and content are essentially the same. The basic requirement for exporters to prepare a bill of lading and for banks to examine it is "consistency between documents". Below are precautions in the preparation and examination of marine bills of lading. (See bill of lading sample.)

1. Shipper. The shipper, also known as the consignor, is the party entrusting the transport. Unless otherwise specified in the letter of credit, the beneficiary should be the shipper. If the beneficiary is an intermediary and the goods are shipped directly from the place of origin, the actual seller may also be the shipper, because under UCP500, unless otherwise specified in the letter of credit, banks will accept a bill of lading showing a third party as the shipper. However, the feasibility of this must be considered. Case: In a certain year, Import and Export Company A received a letter of credit stipulating: "…Hongkong Shun Tai Feeds Development Co. as shipper on Bill of Lading." Company A shipped the goods according to the L/C stipulation, listing Hongkong Shun Tai Feeds Development Co., a re-exporter, as the shipper on the bill of lading. However, when presenting documents to the bank, the document checker found that the bill of lading was made out to order and required endorsement by the shipper. Since the bill named Hongkong Shun Tai Feeds Development Co. as the shipper, it needed to be endorsed with that company's seal. Since the company had no representative locally, communications went back and forth, delaying the endorsement for three weeks until someone from Hong Kong came. The letter of credit expired, preventing negotiation, resulting in a loss.

2. Consignee. This is the heading of the bill of lading and is a key item for bank examination. It must exactly match the "consignee" in the shipping note and comply with the letter of credit stipulations.

Example 1. If the L/C requires "Full set of B/L Consigned to ABC Co.", fill in the consignee column as "Consigned to ABC Co.".

Example 2. If the L/C requires "B/L issued to order of Applicant", and the Applicant is Big A Co., fill in the consignee column as "to order of Big A Co.".

Example 3. If the L/C requires "Full set of B/L made out to our order", and the issuing bank is Small B Bank, fill in the consignee column as "to order of Small B Bank" or "to Small B Bank’s order".

The filling of the consignee column must be exactly consistent with the L/C requirements. Any carelessness or lazy filling could be a discrepancy. Example of discrepancy: "B/L issued to the order of ABC Co. Ltd." whereas L/C required "to ABC Co. Ltd." (The B/L was issued to the order of John ABC Co. Ltd., but the L/C required "to ABC Co. Ltd."). A heading naming a specific company vs. naming that company's order is completely different; the former allows only that specific company to take delivery without negotiability, while the latter allows the bill to be transferred after endorsement by that company. Similarly, if the location in the L/C is abbreviated but the B/L uses the full name, that's also a discrepancy.

For a bill of lading in collection, this column can usually be filled with "To order" or "To order of shipper", and then endorsed by the shipper. It should not be made to the consignee's order, as that would prevent the collecting bank and the shipper from controlling the goods; nor should it be made to the collecting bank's order without its prior consent, as per UCP522 Article 10, which stipulates that goods should not be consigned directly to a bank or made out to a bank's order without prior agreement of that bank.

3. Notify party. This is the buyer's agent, to be notified by the carrier for customs clearance and delivery upon arrival at the destination port.

(1) If stipulated in the L/C, fill it strictly according to the L/C, including detailed address, telephone, telex, fax numbers, etc., to ensure smooth notification.

(2) If the L/C does not specify a notify party, fill in the applicant's name and address in the copy B/L's column, and leave the original B/L's column blank or fill it with the buyer's name. A copy B/L must have a notify party to facilitate the destination agent's contact with the consignee.

(3) If the L/C stipulates "Notify…only", the word "only" must not be omitted.

(4) If the L/C does not specify the notify party's address, and the shipper adds a detailed address after the notify party on the B/L, the bank may accept it but need not verify it.

4. Pre-carriage by; Port of transhipment: If goods need transshipment, fill in the first vessel's name and the transshipment port in these columns.

5. Vessel: If goods need transshipment, fill in the second vessel's name in this column; if not, fill in the first vessel's name. Whether to fill in the second vessel's name depends mainly on the L/C requirements; if not required, even with transshipment, it is not necessary. Only if the L/C explicitly requires, e.g., "In case transshipment is effected. Name and sailing date of 2ND ocean vessel calling Rotterdam must be shown on B/L", should the second vessel's name be entered.

6. Port of Lading.

(1) Should be filled strictly according to the L/C; include administrative regions before or after the port name, e.g., Xingang/Tianjin, should be added as so.

(2) Some foreign L/Cs are general, like "Chinese ports, Shipment from China to…", offering flexibility for the beneficiary to choose from nearby ports. In document preparation, fill in the actual port name. If the L/C says "Your port", the beneficiary can only ship from a port in its city; if there is none, the L/C must be amended.

(3) If the L/C lists several loading ports, only the actual port of loading is filled in the B/L.

(4) For B/L in collection, this column can be filled with the buyer's name as per the contract.

7. Port of Discharge (destination port).

8. Final destination. If the final destination is the port of discharge, leave this column blank. When filling in the port of discharge or destination, note:

(1) Unless FOB price, the destination port cannot be general, e.g., "European main port"; a specific port name is required. If there are duplicate names internationally, add the country name.

(2) If condition follows the port, e.g., "in transit to…", for CIF or C&F price terms, it cannot be added; instead, note this for inland transport at buyer's expense elsewhere or in marks.

(3) Some US L/Cs have "OCP" after the destination port; should add. "OCP" means Overland Common Points.

(4) Some L/Cs have "Free port" or "Free zone" after the destination port; add "Free Zone" etc.

Example: A Chinese exporter shipped from Shanghai to Aarhus, Denmark, completing B/L columns as: Port of Lading: SHANGHAI; Port of Discharge: (blank); Final Destination: AARFUS. The foreign bank rejected it because Aarhus is a port, not just destination. A B/L for sea (port to port) must show the port of discharge specifically.

9. Freight clause is added per L/C, possibly “Freight paid”/“Freight prepaid” if paid before shipment; for FOB, show “Freight collect”/“Freight payable at destination”. If Chartered party allowed, state appropriately. 10. Number and kind of packages.

15. Gross weight, volume, marks. Ensure Bill of lading remains intact conveying rightful information for identification, transport, and claim completion.