What's The Difference Between OBL And BL?
In the complex international trade and logistics transportation system, the Bill of Lading (BL) and the Ocean Bill of Lading (OBL) are extremely important concepts. For a professional international freight company such as Jiaxing Heyuan Supply Chain Co., LTD., a clear grasp of the difference between the two is the key to providing qua/lity services. The differences are detailed in a number of ways.
1. Differences in definition and nature
1.1 Definition and properties of OBL
Proof of Contract of Carriage: OBL is the proof of the contract of carriage of goods by sea, which clarifies the carriage agreement between the carrier and the shipper, and specifies the basic rights and obligations of both parties in the process of carriage of goods. For example, the contract will agree on the port of departure, port of destination, transportation time and other key information.
Cargo receipt: It is also a receipt that the goods have been taken over by the carrier or loaded on board, indicating that the carrier has received the goods and has begun to assume responsibility for the carriage. For example, after receiving the goods, the carrier will indicate the quantity of the goods on the OBL, packaging conditions and other details.
Non-title document: The most significant feature of OBL is that it does not have the title document function. This means that the consignee does not need to present the original OBL when picking up the goods, and can pick up the goods only with identification and delivery notice, and the ownership of the goods is not transferred with OBL. For example, Jiaxing Heyuan Supply Chain Co., Ltd. deals with the European short sea shipping business, because of the short voyage and high trust between the trade parties, OBL is often chosen to improve the delivery efficiency.
1.2 Definition and nature of BL
Cargo receipt Function: The BL serves as the cargo receipt, which records the detailed information of the goods, including the name, quantity, weight, and packaging of the goods. This provides the shipper with proof that the goods have been received by the carrier and will be transported as required. For example, if the goods are damaged during transportation, the original condition of the goods recorded on the BL can be used as the basis for claims.
The proof of the contract of carriage: it is also the proof of the contract of carriage between the carrier and the shipper, which clarifies the rights and obligations of both parties, covering important terms such as transport costs, transport routes, and delivery time of the goods.
Document property: The most important property of BL is as a document of title. The lawful holder of the BL has the right to take delivery of the goods at the port of destination, and can also transfer ownership of the goods by endorsing the bill of lading. In bulk commodity trading, BL's certificate of title attribute ensures that goods can be bought and sold during transportation, ensuring the flexibility and security of transactions, which is also an important reason why Jiaxing Heyuan Supply Chain Co., Ltd. uses BL in most conventional shipping businesses.
2. Liquidity differences
2.1 OBL's liquidity characteristics
Non-transferability: Since OBL is not a document of title, it cannot be transferred in the market. No sale, mortgage or other form of transfer is allowed, which limits its circulation in the trading market.
Specific deliverability: OBL directly points to a specific consignee, and the goods can only be delivered to the consignee indicated on the OBL, which makes it suitable for transport scenarios where the recipient is clear and does not need to transfer the property right, such as the allocation of goods within a multinational company. When Jiaxing Heyuan Supply Chain Co., Ltd. handles such business, OBL can avoid the risk of bill of lading circulation and ensure accurate delivery of goods.
2.2 Circulation characteristics of BL
Endorsement transfer: BL is highly negotiable, and the shipper can transfer the bill of lading to other trade-related parties by endorsing on the back of the bill of lading. The name of the endorsee needs to be indicated in a written endorsement, while blank endorsements do not need to be indicated, so that the bill of lading can be freely circulated in the market.
Trade flexibility: This liquidity brings great flexibility to international trade. During the transit of the goods, the seller can sell the goods by transferring the BL, and the buyer can also obtain the ownership of the goods by virtue of the transferred BL. At the same time, banks can also provide financing services for both sides of trade according to the liquidity of BL in L/C business. Jiaxing Heyuan Supply Chain Co., Ltd. makes full use of this feature of BL in L/C settlement business.
3. Comparison of delivery process
3.1 Delivery process of OBL
Arrival notice: After the goods arrive at the port of destination, the carrier will send the arrival notice to the designated consignee according to the information on the OBL, informing the goods have arrived at the port and related matters.
Identity verification: After receiving the notice, the consignee shall carry a valid identity certificate to the carrier's designated location. After verifying the identity of the consignee, the carrier can handle the delivery procedures without presenting the original OBL. When operating such business, Jiaxing Heyuan Supply Chain Co., Ltd. will inform customers of the delivery process in advance to ensure that the consignee can quickly pick up the goods and reduce the detention time of the goods in Hong Kong, such as in the Southeast Asian maritime transport business.
3.2 BL Delivery process
Holding of original Bill of Lading: The consignee must hold the original BL to take delivery of the goods to the carrier. The original bill of lading is usually in multiple copies, with the same legal effect, but only one copy is used for delivery, and the other originals are automatically invalid.
Endorsement (if required) : If the BL is an order bill of lading, the consignee is required to make a legal endorsement. That is, the holder of the bill of lading signs or seals on the back of the bill of lading and indicates the name of the endorsee to complete the transfer of the rights of the bill of lading. Only when the bill of lading is correctly endorsed will the carrier recognize the rights of the shipper. When dealing with bill of lading business, Jiaxing Heyuan Supply Chain Co., Ltd. will strictly control the endorsement link, ensure the legality and security of bill of lading circulation, and avoid delivery disputes caused by endorsement problems.
4. Risk characteristics analysis
4.1 Risk of OBL
Risk of misdelivery: The biggest risk of OBL is that the goods may be incorrectly delivered. Since the delivery of goods does not require the original OBL, the carrier only verifies the delivery of goods by identity, and once the verification is wrong, it may give the goods to the non-real consignee, causing losses to the shipper or legitimate consignee.
Preventive measures: In order to reduce this risk, Jiaxing Heyuan Supply Chain Co., Ltd. will strengthen communication with the carrier and establish a strict identity verification mechanism for the consignee, such as requiring the provision of multiple identity documents, telephone or email confirmation. At the same time, customers are reminded to choose a reputable carrier and clarify the responsibilities related to the delivery of the goods in the trade contract.
4.2 BL Risks
Risk of loss and theft: BL as a document of real right, once lost or stolen, criminals may falsely claim the goods through forged endorsement, causing economic losses to the holder of the legal bill of lading. In addition, bills of lading may also be lost in the process of circulation due to poor storage.
Counterfeiting risk: Counterfeiting BL is a serious fraud. Criminals may forge bills of lading to defraud goods, or use forged bills of lading for financing fraud. This risk is very harmful to all parties in international trade.
Response strategy: Jiaxing Heyuan Supply Chain Co., Ltd. will remind customers to properly keep bills of lading, use safe transportation and storage methods, such as the use of specialized logistics insurance services. At the same time, strengthen the ability to identify the authenticity of bills of lading, cooperate with professional institutions, learn the latest anti-counterfeiting technology and identification methods, in order to deal with the possible risk of forged bills of lading.
5. Distinguish application scenarios
5.1 OBL Application Scenarios
Goods with high timeliness requirements: For some goods with high delivery speed requirements, such as fresh products, electronic products, etc., OBL's simplified pick-up process ensures that the goods are delivered as soon as possible and reduce the loss of goods in transit. For example, when transporting fresh seafood from Japan to China, using OBL enables the goods to reach the market quickly and ensures the freshness of the product.
Transport of specific consignee: When the identity of the consignee is clear and fixed, and there is no need to transfer property rights, such as the transport of goods between different branches within a multinational company, or the transport between long-term cooperation and high trust trading partners, OBL can improve transport efficiency and reduce operating costs. Jiaxing Heyuan Supply Chain Co., Ltd. will choose OBL according to customer needs when dealing with such business.
Short sea transport: In short sea transport, because the voyage is short and the goods arrive at the destination port quickly, the use of OBL can avoid the delay of delivery due to the untimely transfer of bills of lading. For example, for shipping between coastal cities in China, OBL enables fast delivery of goods.
5.2 BL Application Scenarios
L/C settlement business: In international trade involving L/C settlement, BL is an important basis for bank financing and settlement. According to the authenticity and integrity of BL and the validity of endorsement, the bank provides financial support and settlement services for both sides of the trade, protects the rights and interests of both sides, and ensures the safety and reliability of the transaction. Jiaxing Heyuan Supply Chain Co., Ltd. will handle BL related matters in strict accordance with the requirements of the letter of credit when dealing with the letter of credit business.
Complex trade scenarios: In complex trade scenarios where the ownership of goods may be transferred several times during transportation, such as transit trade, multi-party trade, etc., the circulability of BL enables the smooth circulation of goods between different trade entities to meet the diversified needs of international trade. For example, in some trade chains involving multiple countries and regions, BL's endorsement function enables the flexible transfer of ownership of goods.
To sum up, OBL and BL have their own characteristics and application scenarios in international trade and logistics transportation. Jiaxing Heyuan Supply Chain Co., Ltd. with its professional team and rich experience, can accurately select the right documents according to customer needs, provide high-quality international freight services, and help the smooth development of international trade.
