House Bill of Lading versus Master Bill of Lading

As we saw in the last article, there are several types of bills of lading. They can be issued as a House Bill of Lading or a Master Bill of Lading. So let us discover the differences between them.

House Bill of Lading (HBL)

A house bill of lading (HBL) is created by a sea freight intermediary (an NVOCC operator or a forwarding company). It is issued to the shipper of the goods once the cargo has been received. The HBL is an essential document in transport. It is the formal confirmation of receipt of the goods shipped.

NVOCC is an acronym for Non-Vessel Owning Common Carrier (companies that operate without ships). NVOCC agencies sign contracts with shipping lines that allow them to offer sea freight services to importers and exporters.

On an HBL:

• The shipper will usually be the actual sender/exporter of the cargo;
• The consignee will usually be the actual receiver/importer of the cargo;
• The notify party may be the same as the consignee.

As soon as the NVOCC/forwarding company receives the transport order from the shipper of the goods and makes sure that all the customs documents have been completed, it releases the House Bill of Lading to the shipper.

A letter of credit, or documentary credit, is a promise by a bank on behalf of the buyer (applicant/importer) to pay the seller (beneficiary/exporter) a specified sum in the agreed currency. The condition is that the seller presents the required documents within a set period.

The letter of credit is the most common method of payment among sellers and buyers. These transactions go through a bank and offer a degree of comfort and security. Unless prohibited by the letter of credit, the HBL is treated as a negotiable document and can be regarded as fulfilling the roles of a bill of lading.

The negotiable bill of lading provides clear instructions for the goods to be delivered to whoever holds the original copy of the HBL bill of lading. It is itself the document of title to the goods (the right of ownership of the goods) and gives control of the transport. With this type of document, the buyer/consignee or its agent must present an original copy of the bill of lading at the port of discharge. In the absence of the original copy of the bill of lading, the goods carried will not be released.

Master Bill of Lading (MBL)

An MBL bill of lading is issued by the carrier (VOCC = shipowner or sea transport operator) to the NVOCC operator or the forwarding company. It represents the contract of carriage between them. It is important to remember that the shipper of the goods will receive an MBL only if it works directly with a main carrier.

The MBL is one of the most trusted documents in sea transport. It is printed and signed by the carrier. Once the carrier confirms that it has received the cargo, the MBL is released to the entity that made the booking. VOCC is an acronym for Vessel Owning Common Carrier (companies that operate with their own ships).

On an MBL:

• The shipper will usually be the NVOCC operator, or its agent, or the forwarding company;
• The consignee will be the agent at destination, or the NVOCC operator's office at destination, or the forwarding company;
• The notify party may be the same as the consignee or any other party.

As soon as the NVOCC/forwarding company receives the transport order from the shipper of the goods, it books space for exactly the same cargo with the carrier. Once the carrier confirms that it has received the cargo, it releases the Master Bill of Lading to the entity that made the booking (the NVOCC/forwarding company).

In the interest of the NVOCC operator/forwarding company and of their insurance cover, it is recommended that all the details on the HBL and the MBL remain the same. The only difference should be in the details of the shipper, the consignee and the notify party.

The main difference between the HBL and the MBL is that an HBL is issued by an NVOCC or a freight forwarder. It usually shows the actual shipper and consignee. The MBL is issued by the carrier. The shipper, the consignee and the notify party are the only details that will differ from the HBL.

The similarity between the HBL and the MBL is that both contain exactly the same information about the cargo (the number of containers, the weight, etc.).

Honexpres offers complete sea freight services. From the shipper’s door to your door, including inland transport and customs procedures.

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