We have written extensively on the topic of Bills Of Lading lately. If you haven’t yet read up on what a Bill Of Lading is, make sure to learn the different types and the difference between master bills of lading and house bills of lading. That should help you to get a better grasp on the concept before we answer our million dollar question.
What is a Bill Of Lading For?
With the assumption that you have already read up on what a Bill Of Lading is and what it is responsible for, we will keep this rather short and simple. A Bill Of Lading serves 3 primary purposes: 1) It serves as a receipt which indicates that your goods have been properly loaded on their international departure vessel, 2) as a contract of carriage to detail the amount, type, condition, and destination of the goods, and finally, 3) as a title of the goods, which serves as proof of ownership.
Customs Entry Bonds and Bills Of Lading
Any time you import goods to the United States, you are required to purchase a customs bond. Customs bonds come in one of two forms: single-entry or continuous. You can either repurchase a customs bond for every single shipment or purchase an annual/continuous bond for the entirety of the year. In either instance, a “shipment” is legally recognized per Bill Of Lading. In other words, you could have multiple containers listed on one Bill Of Lading. Although there is more than one container, this would still be legally recognized as one “shipment”. Which leads us to our big question…
Is it Possible to Have Multiple Shippers with One Bill Of Lading?
In short the answer is “yes”, however, there are a variety of different ways it can be done and each has it’s own pros and cons. Let’s approach this from the standpoint of both an importer and exporter:
Take the case of a single importer importing from multiple suppliers in China. Suppose you have 5 suppliers in China who you are purchasing from, however, you would like to import these 5 suppliers’ goods under one BOL. This would be possible through the practice of building your own “consol box” (short for consolidated box). Here’s how it works:
Some forwarders such as Interlog USA can arrange for a foreign agent to receive the goods from these 5 suppliers, consolidate them into one box (or a series of containers) which will be listed on the Master Bill Of Lading (MBL). Since the MBL operates between the local and foreign forwarder, the consol box can be imported under one MBL. However, there would still be 5 House Bills Of Lading (HBL) issued to each supplier, since each HBL details the specifics of the cargo, their condition, and serves as a title of the goods indicating a transfer of ownership from each individual supplier to the importer/buyer.
You can also perform the flip-side of example #1, whereby 5 local businesses are importing from 1 foreign supplier in China. This is essentially just re-distribution. One of the 5 importers vouches to be the front-man for the transaction by purchasing a customs bond, either a single-entry or continuous customs bond, and then distributes the goods amongst the other 4 importers once they arrive.
The key here is to make sure the Importer Of Record has a credit or payment process set in place to receive money from the other 4 businesses. In addition, you should make sure you are in agreeance regarding whether you will solely pay for the customs bond or if it will be split amongst everyone.
A slightly more complicated method of Example #2 would be to list each importer as a separate Importer Of Record with their own HBL and Commercial Invoice. For example, if you are importing a container of 5 bags of ping pong balls from 1 Chinese supplier to be split amongst 5 U.S. importing companies, each company would be issued their own HBL and Commercial Invoice displaying “1 bag of ping pong balls”.
In order to make this work, a process would need to be set in place to have the container imported to the U.S., sent to a Container Freight Station (CFS), deconsolidated into separate trailers, and shipped to the door of each supplier. Depending on the location of the importers, this may be more expensive per importer since it is being shipped from the CFS.
On the export side, suppose you are responsible for shipping goods to 5 different customers out in South Africa. As before, this can be done by consolidating the 5 buyers’ goods into one container, exporting it under one Master Bill Of Lading and 5 House Bills Of Lading, and then deconsolidated on the foreign side. As mentioned previously, the HBLs, Commercial Invoice, and Packing List need to be unique to each customer, since they contain details that specifically mention that buyer’s goods.
It’s rather rare that any business(es) would need to import or export goods under one Bill Of Lading to collaborate with each other, but it’s not unheard of. It’s especially important when businesses often work to together to build products or supply to a large company in a foreign location. Having multiple shippers with one bill of lading can be cost effective and efficient for transit time.
If you have any import or export questions, our team at Interlog USA is highly experienced and ready to answer any and all questions you might have! Give us a call and we’d be happy to help!