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What is an Ocean Bill of Lading?

What is an Ocean Bill of Lading? 1000 698 Transmodal


An Ocean Bill of Lading (OBOL) is a legal document that represents a contract between a shipper and carrier of specified goods. The document acts as a receipt for the load of cargo, and as a legal contract between the shipper and carrier for their transportation.

To name this document an Ocean BOL indicates that the goods are being transported overseas. The type, quantity, condition and destination of the merchandise being shipped is detailed and confirmed by the carrier, so the instrument can serve as a receipt and also as an invoice with legal claim. Because a negotiable OBOL represents ownership, it may be traded, bought or sold during cargo transport.


Providing records for a shipment of cargo is perhaps as old as shipping itself, but the advent of global trade in the Middle Ages made a flexible legal document of title necessary. This legal representation of ocean freight could be traded and sold to other parties without the actual goods on hand. The concept led to the Bill of Lading, making international transport of merchandise much more convenient.

England was an early center of mercantilism and its global trade was overseas—all bills of lading assume sea transport in British English. The term OBOL is specifically used in the US to designate goods being shipped overseas, because a bill of lading in American English can mean any form of transport.


The document can serve in three legal roles, each of which has a different purpose under the law.

Receipt of Cargo

The primary use of an OBOL is as a legal receipt for cargo. The document is prepared and issued by the shipper after the goods are loaded aboard the transporting vessel. This legal instrument provides proof of shipment for insurance and customs obligations, as well as confirmation of a contract’s fulfillment.

Evidence of Carriage Contract

An OBOL may also serve to provide legal evidence of the existence of a contract between a shipper and a carrier. The document is issued by a carrier once the goods are received and carries the obligation to deliver the goods. The shipper cannot receive an OBOL if the goods are not properly shipped, protecting third parties and also the carrier from misrepresentation.

Proof of Title

A properly-executed OBOL grants the lawful holder title to the ocean freight specified in the document. In this usage, the document provides a defensible legal claim.

There are two types of OBOL which can serve as documents of title. In the case of a straight OBOL, the lawful holder is a named consignee—this type is not negotiable. An order OBOL, the second type, does not name a specific consignee and can be negotiated with third parties.

Statement of Carriers General Terms & Conditions

A Bill of Lading will provide the legal terms and conditions that the carrier will undertake the shipment. It’s important to read and familiarize yourself with the Terms and Conditions, so you are aware of the responsibilities you, as shipper or consignee are consenting to.

Indicates the Carriers Limit of Liability

One of the greatest misconceptions in the shipping industry is that cargo insurance is included as part of the shipping price you pay. Quite the contrary, unless specifically quoted or indicated on the Bill of Lading, cargo insurance is not provided, and in the event of theft or damage of your cargo, you may only recover the amount per shipping unit that is indicated by the carriers limit of liability. Typically, the limit of liability, is far less than the goods are worth, which means by not purchasing additional insurance, you are at risk.


The two forms have different uses. The straight OBOL names the consignee, who can take delivery of goods upon arrival with the signed original document. The straight OBOL is appropriate for paid in advance arrangements or open accounts.An Order OBOL is negotiable once endorsed by the shipper, and can be traded or transferred to another party. In practice, the original document is usually endorsed and sent to a banking institution in the buyer’s country, where it is held until the terms of the transaction are fulfilled.