Most people in freight learn about the house and master bill of lading on the job. Usually it is on the day something goes wrong. The idea is simple. One shipment can have two bills of lading, because two separate deals are made.
The first deal is between the exporter and the forwarder or NVOCC. The second deal is between the forwarder or NVOCC and the shipping line. Each deal has its own bill of lading.
The master bill of lading
The shipping line issues the master bill of lading (MBL). For the line, the customer is the forwarder or NVOCC, not the exporter. So the MBL usually names:
- Shipper: the forwarder or NVOCC
- Consignee: its agent at the destination
- Carrier: the shipping line
The line deals only with the people named on its own bill. It releases the container to the consignee on the MBL.
The house bill of lading
The forwarder or NVOCC issues the house bill of lading (HBL) to its own customer. It usually names:
- Shipper: the exporter
- Consignee: the buyer, or a bank, or "to order"
- Issued by: the forwarder or NVOCC
The exporter gives this document to the buyer or the bank. Often the exporter never sees the MBL.
How the cargo is released
Let us follow one full container from Mundra to Hamburg.
- The forwarder books space with the line. The line issues the MBL to the forwarder.
- The forwarder issues the HBL to the exporter.
- The exporter sends the HBL to the buyer. The buyer pays, or the bank's terms are met.
- The buyer hands the HBL to the forwarder's agent in Hamburg.
- The agent gives the MBL to the line and takes delivery from it.
- The agent gives the buyer a delivery order, and the buyer takes the container.
So there are two hand-overs at the destination, one for each bill. If the agent has no MBL, or the buyer has no HBL, the container waits. Then it may start to cost money.
Do you always need both?
No. If the exporter books directly with the line, there is only one bill of lading. The line issues it, and it names the real exporter and buyer. People call this a direct bill of lading.
Telex release and surrender
Neither bill has to travel as paper. When a bill is surrendered, the originals are given up at the origin. The release is then passed on by message. This is what most people mean by a telex release. It works for both the HBL and the MBL, but each one is done separately. A telex release on the MBL does not release the HBL.
A sea waybill is different. There is never an original, and you cannot use it to transfer title to the goods. It suits a buyer you trust. It does not suit a shipment under a letter of credit.
Letters of credit
If the shipment is under a letter of credit, read what the credit asks for before you issue anything. Some credits accept a house bill and some do not. The bank checks the bill against the credit line by line. So a small difference can hold up the exporter's money.
What to check before you issue the house bill
The two bills are separate documents, but they describe the same goods. These details should agree. This is also where mistakes usually hide:
- Container and seal numbers
- Number of packages, and gross weight
- Vessel, voyage, and ports
- The consignee and notify party, exactly as the customer asked
- Whether freight is prepaid or collect, as agreed on each bill
Mistakes usually happen when the same details are typed twice, once for each bill. Often they are typed in two different files.
In Shipment 360
In Shipment 360, you make a bill of lading from the booking or the job. So you do not type again what is already entered. You choose House B/L or Master B/L, and a house bill can name its master. Both sit on the same job page, beside the containers.