The workflow of a House Bill of Lading when the seller has LCL (Less Container Load) Cargo and approaches a consolidator to consolidate their goods with other seller’s goods to accommodate a fully loaded container.
What is a Bill of Lading ?
A Bill of Lading is a legal document between the shipper of goods and the carrier detailing the type, quantity and destination of the goods being carried. The Bill of Lading is a receipt of shipment when the goods are delivered at the predetermined destination. This document must accompany the shipped goods, no matter the form of transportation, and must be signed by an authorized representative from the carrier, shipper and receiver.
In this video we will be looking at How a House Bill of Lading works in International Trade.
A House Bill of Lading is a document created by Freight forwarder or Non-Vessel Operating Company (NVOCC). What is NVOCC? NVOCC is a company that organizes shipment for sellers that have Less Container Load Cargo also known as LCL Cargo which is when the seller does not have sufficient cargo to fully accommodate a loaded container.
A House Bill of Lading provides the information of the shipper, who delivers the shipment to the Freight forwarder, and the Consignee, who the Freight forwarder delivers the shipment to. The document also includes specific information about the items shipped.
Summary on How a House Bill of Lading works video
- On the left hand side you have the Seller, on the right hand side you have the Buyer.It begins with the Seller 1 having LCL cargo. LCL stands for Less Container Load Cargo . The Seller 1 then approaches the Freight forwarder to ship out the goods to the particular place for example Taiwan.
- The Freight forwarder who happens to be also be a consolidater of Cargo will advertise in the newspaper for sellers that have goods that they intend to ship out to Taiwan. As a result of the newspaper advertisement, this attracted other sellers that have LCL cargo , we have now Seller 2 & Seller 3 having LCL cargo that should be shipped to the same destination, they surrender their cargo to Freight forwarder A .Freight forwarder A will consolidate the cargo and put them into a container and subsequently surrender the container to a shipping agent at the designated port.
- The Shipping Agent will ship out the goods to Taiwan.
- After receiving the goods from the Freight forwarder, the Shipping Agent will issue a Master Bills of Lading – whereby on the document the Shipper will be the Freight forwarder A and the Consignee will be Freight forwarder B. And this Bill of Lading will be sent to Freight forwarder A and Freight forwarder A will then forward this to their counter party Freight forwarder B in Taiwan.
- Freight forwarder A will issue to the rest of the seller what is known as a House BL so for eg in the House BL for Seller 1 the Shipper is listed as Seller 1 and the Consignee is listed as Buyer 1. This is done similarly for Seller 2 & 3 correspondingly. The correct Shipper’s name and the Consignee name would be mentioned, the respective Seller will forward this to the respective Buyer so when the goods arrive at the port in Taiwan.
- The Freight forwarder B will be able to clear the goods from the port and then he will distribute the parcels of the goods to the respective buyer 1 , 2 ,3 against the House BL.