The Latest Stage in the Bill of Lading's Evolution

Reprinted with permission from Marine Digest and Transportation News

The bill of lading's evolving style and format reflect the progression of transportation as an industry, culture and technology-dependent business over thousands of years. That's fitting, inasmuch as the bill of lading's purpose since Roman times has been just that: to be an alter ego of the freight it documents.

Millennia ago, a carrier had a tough time being sure who a cargo's proper consignee was. An ocean shipment (the only mode available for long haul throughout most of history) could be en route weeks while any number of merchants bought and sold (i.e., "negotiated") ownership of the freight. But only the guy who produced a properly endorsed bill of lading from underneath his toga could get the goods, lest the carrier be held liable for misdelivery. And if the vessel owner didn't come up with exactly the freight documented, the consignee could hold the carrier accountable (thus was born the clich "fit the bill"). The bill of lading was the world's first document of title, and has been ever since. It was far from a perfect system, but there probably weren't many better ideas in an era of limited long-distance communication.

It's no surprise that the history of international trade finance tracks closely that of shipping documentation. The letter of credit system's genesis was the bill of lading, as banks realized that guaranteed payment for shipped goods whose delivery is reliably documented was a marketable financial product. To this day, international commercial transactions often are premised on issuance of precisely stated bills of lading.

As time progressed and organized systems of shipping law took shape, the bill of lading grew into a concurrent second role. In addition to being a receipt for freight which could be tendered in exchange for transported goods, the document became the written manifestation of the shipper/carrier contract. Shipping terms had become more uniform, and the invention of the printing press in 1436 enabled players to mass produce form documents. No, the early forms didn't have the plethora of those tiny words on the back connoting shipping terms (although some of the contractual clauses we see today were already in use), but we were well on our way to commercially reliable consistency. Marine insurance was becoming the norm, loading and lashing practices were tried and true, and soon we even began seeing government regulation.

But it...