From Mate's Receipt to Bill of Lading
As each consignment is loaded, the Mate's Receipt is issued. It records the nature of the consignment, its weight, marks and condition. From these receipts the Bill of Lading is drawn up — so whatever the Mate notes at the rail flows straight into the most important document of the voyage.
The three functions of a Bill of Lading
| Function | What it means |
|---|---|
| Receipt for the goods | The Master's formal receipt for the cargo as loaded. |
| Document of title | Once released to the shipper, whoever holds the B/L owns the cargo. It is negotiable. |
| Evidence of the contract of carriage | The terms under which the goods are carried. |
Endorsements a ship manager will be asked for
"Freight Prepaid" / "Freight Paid"
The B/L then also becomes a receipt for the freight. Some shippers ask for this endorsement against a promise to pay later. Once marked "Freight Paid", the consignee is entitled to demand delivery at destination — and if the promise is not kept, the shipowner has lost the security of his lien on the cargo for that freight. Signing is a commercial decision: you are giving a receipt for what may be a substantial sum you have not received.
"Clean on board"
A statement that the cargo is in perfect condition. Some shippers request it even when the cargo is not. This is fraudulent, and it makes defending a later cargo claim virtually impossible (see Cargo Claims).
A particular pressure arises under a letter of credit calling for "clean on board bills of lading": banks will not negotiate the credit if the B/L is claused for condition — even though the cargo is already in the hold. The commercial pressure is real; the liability, if you sign, is yours.
Signing for quantity
Although Bills of Lading are marked "weight, quality and quantity unknown", the Master should sign only for a quantity he genuinely believes to be on board — using a draft survey to check the shore figure where necessary.
Delivery at the discharge port
He who owns the Bill of Lading owns the cargo mentioned on it.
The Master must deliver only to the proper owner, who surrenders the B/L in return for the goods. If no B/L is available and cargo is released to the wrong person, the carrier becomes liable for the full value of the goods.
To protect himself when the B/L is not available, the Master must insist that the receiver signs a Letter of Indemnity, counter-signed by a bank.
Documents issued after loading
- Cargo Manifest — every item of cargo on board, with B/L number, shipper, and ports of loading and discharge.
- Stowage Plan — a plan of the ship showing where all the cargo is stowed.
Master's quick checklist
- Mate's Receipts reflect true condition — remarks carried to the B/L.
- No "Clean on board" for cargo that is not clean, whatever the letter of credit says.
- "Freight Paid" only when freight is paid, or on a deliberate commercial decision.
- Quantity signed for is supported by tally or draft survey.
- Deliver only against an original B/L — otherwise a bank-countersigned LOI.
- Manifest and stowage plan issued and filed.