Introduction
The world has witnessed the economic expansion of courier, logistics and transportation businesses around the globe (Welch & Nayak, 1992). Fueled by economic reform and large infusion of investments, courier, logistics and transportation businesses has transformed into great progress. Although, there are some restrictions to influence the development the logistic management, but the high demand of value-added logistics encourages every organization to improve their supply chain and to gain competitive advantage.
Basically in logistics procedure, the bill of lading which is also known as the BOL or B/L refers to a document gave by a carrier to a shipper. This document acknowledges the non-specified goods received on board as cargo for transportation to a named place for delivery to the consignee who is usually identified. Usually, the bill of lading considers the use of at least two different modes of transport from road, rail, air, and sea. Actually, the bill was derived from the term or verb “to lade” referring to the load a cargo in certain ship or other transportation form. Moreover, the bill of lading can be considered as a traded object. In accordance to the development of bill of lading and as indicated in the paper of Wyatt (1992), the standard short form bill of lading act as evidence of the contract of carriage of goods and it serves a number of purposes. One of the significant purpose of bill of lading is it serves as evidence that a valid carriage contract, or a chartering contract, exists, and it may incorporate the full terms of the contract between the consignor and the carrier by reference (i.e. the short form simply refers to the main contract as an existing document, whereas the long form of a bill of lading (connaissement integral) issued by the carrier sets out all the terms of the contract of carriage. The bill of serves as a receipt signed by the carrier validating that these goods match the contract description have been received in good condition (a bill will be described as clean if the goods have been received on board in apparent good condition and stowed ready for transport). Furthermore, the bill of laden is also a document of transfer, being freely transportable but not a negotiable tool in the legal sense. Meaning, it also governs all the legal aspects of physical carriage, and, like a cheque or other negotiable instrument, it may be endorsed affecting ownership of the goods actually being carried.
Discussion
As previously stated, a bill of lading is document issued by a carrier to a shipper, signed by the captain, agent, or owner of a vessel, and stating the conditions in which the goods were delivered to (and received by) the ship; and an engagement to deliver goods at the prescribed port of destination to the lawful holder of the bill of lading (Welch & Nayak, 1992). A bill of lading is, therefore, both a receipt for merchandise and a contract to deliver it as freight (Sum, Teo, & Ng, 2001). It is a document of title to the goods, enabling the shipper or owner of the goods to endorse title to other parties, sell goods in transit, and Present to banks with other documents in seeking payment under documentary credits. Abbreviated generally as B/L, it is the most important document for sea transport. There are a number of different types of bills of lading.
With regards to the issue of making the bill of lading as made out “to order” instead of to a named consignee, the bill becomes negotiable. For instance, it states that delivery is to be made to the additional order of the consignee using words such as “delivery to A Ltd. or to order or assigns”. Consequently, it can be by A Ltd. or the right to take delivery can be transferred by physical delivery of the bill accompanied by sufficient confirmation of A Ltd.’s intention to transfer. Bills of lading made out to a consignee whose name is left blank or to “bearer” or to “order” or to “assigns” are transferable (as opposed to truly negotiable) instruments the delivery or endorsement and delivery of which can transfer property in or rights and liabilities concerning the cargo covered. Mere delivery of a blank or bearer bill of lading, or of a bill of lading “indorsed in blank”, can transfer property in or rights and liabilities concerning the cargo covered by that bill of lading whereas both endorsement and delivery are required to transfer property in or rights and liabilities concerning the cargo covered by a bill of lading made out to a named consignee or “indorsed in full” (Welch & Nayak, 1992). A bill of lading is “indorsed in blank” simply by insertion of the name of the shipper or consignee on the reverse of the bill. A bill of lading is “indorsed in full” by the shipper or consignee signing on the reverse of the bill an order to “deliver to X or order”. Transfer of a blank or bearer bill of lading can be restricted simply by filling in the blank or adding a full endorsement. Conversely, transfer of a bill made out to a named consignee or to order or assigns can be facilitated by adding an endorsement in blank.
Delivery or endorsement and delivery of a bill of lading has the following effects, provided that the bill of lading is not “spent” (i.e. that it relates to some cargo that has not yet been finally delivered by the carrier, having regard to the quality of any delivery effected by the carrier rather than to the absolute quantity of cargo so delivered; see Mills, 2005):
Ø by mercantile custom, it transfers such property in the cargo as the parties to the transaction intended it to transfer, e.g. legal title only, for purposes of a mortgage, or absolute transfer, or absolute transfer subject to a right of stoppage in transit (Sewell v Burdick (1884) 10 App. Cas. 74);
Ø by the Carriage of Goods By Sea Act 1971 and Hague-Visby Rules, Article I(b) and Article III, rule 4, where the delivery or endorsement and delivery of the bill of lading is from a charterer shipper, it can operate to create a contract of carriage between the carrier and the transferee that is subject to the Rules and thus, potentially, on terms differing from those of the charter, even though the bill of lading incorporates the terms of the charter;
Ø by the Carriage of Goods by Sea Act 1992, it transfers to a lawful (i.e. good faith) holder of the bill of lading all rights under, and also subjects the lawful holder to liabilities under, the contract evidenced in (or, construing the Act consistent with Leduc v Ward, created by transfer of) the bill of lading. (The Carriage of Goods by Sea Act 1992 thus connects transfer of title to sue with transfer of possession of the bill of lading rather than, as was formerly the case under the Bills of Lading Act 1855, section 3, with the passing of property or risk in the cargo covered by the bill of lading.)
Conclusion
In this paper, an attempt has been made to explain the importance and function of bill of laden and its implications on organizational performance and competitiveness in the global market of the twenty-first century. Considering the importance of flexibility and responsiveness in logistics services, the importance of bill of laden is discussed within the context of improving the performance of logistics services. In order to demonstrate the complexity of logistics operations and this case study illustrates its functions in business operation, with reference to the strategies and technologies adopted (such as strategic alliances, partnership formation based on core competencies and internet technologies). Some of the critical success factors in logistics operations in accordance to bill of laden include:
Ø Strategic alliances with large clients across the world
Ø Web-based information systems
Ø Networking and relationship management
Ø Professional logistics team
Ø Customer relationship management
With the continuously tighter global market competition, companies are increasingly focusing on their operations to gain market leadership and thus increase profitability. In many organizations—and at many business schools—the boundaries between operations and other functional areas is rigid and nearly impenetrable. Yet as competition heats up and cost-cutting pressures mount, corporations are demanding that all functional areas in the organization work together to bring products and services to market quickly and cost-effectively. As business sharpens its focus on productivity and cost control, the future belongs to those companies that considers bill of laden, operations management theory and practice throughout their enterprise.
References:
Mills, Stephen (2005). Bills of Lading: A Guide to Good Practice (2nd ed.), North of England P&I Association, Newcastle-upon-Tyne, UK, ISBN 0-9546537-1-8.
Welch, J.A. & Nayak, P.R. (1992). ‘Strategic sourcing a progressive approach to the make-or-buy decision’, Academy of Management Executive, Vol. 19, No. 8, pp.18–23.
Sum C-C. Teo C-B. & Ng K-K., (August 2001). Strategic logistics management in Singapore, International Journal of Operations & Production Management, Volume 21, Number 9, , pp. 1239-1260(22)
Wyatt, L. (1992). ‘Effective supplier alliances and partnerships’, International Journal of Physical Distribution and Logistics Management, Vol. 20, No. 9, pp.28–30.
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