If you are new to importing or exporting goods to or from Australia, you want to know about ‘House Bill of Lading ‘. It’s the safest type of ‘Bill of Lading’ and the most important type of document when freighting goods internationally.
Hang on! First, what’s a Bill of Lading?
The Bill of Lading is a document that shows the agreement between businesses, groups or individuals and contains specific information such as:
- Who owns the goods
- The shipper
- Who will receive the goods
Three Bill of Lading copies are issued: one for the shipper, one for the consignee and one for the banker, broker or third party. The consignee is the party financially responsible for the shipment and is usually the buyer. Generally, but not always, the consignee is the same as the receiver.
Losing a Bill of Lading is a nightmare
If one of the Bill of Lading copies is lost, stolen or destroyed during the shipping then things can become very difficult and complex. It can add considerable expense and time to complete the shipment. A new Bill of Lading cannot be created without an original copy. If an original copy cannot be obtained then a letter of indemnity for special cases might be able to be organised with the help of a freight forwarder. The letter of indemnity makes the shipper liable for all aspects of the shipment. If this is not possible then a court order must be obtained to direct the carrier to deliver the goods. Hefty storage costs at the port are incurred for each passing day. It’s a nightmare. The costs from such a delay often exceed the value of the cargo.
So why is a House Bill of Lading the safest type?
The best way to explain this point is by example. Tony (buyer) in Australia wants to import products from a supplier (seller) in China. Let’s look at one case where Tony acts as the consignee and organises the shipment himself, then another case where Tony instructs Franklin Customs and Freight Forwarding to act as consignee to handle the shipping.
Tony as consignee (Bill of Lading)
Say Tony is to organise the international freight for these products. He has to coordinate the transport of goods from the supplier to a port in China and have the goods clear customs. He also needs to make the payments for transport and clearance in China. Only then is the cargo ready to be freighted by a shipper via plane or ship. The shipper needs to organise a Bill of Lading and courier a copy from the port in China to Tony in Australia. Tony needs the Bill of Lading in order to organise customs clearance and pickup in Australia. If his Bill of Lading gets lost, it’s a nightmare. Not only that – if anything goes wrong or he has trouble with any of the other parts of the international freight process, it’s difficult to get help and resolve issues, as he has no physical representation in the port of China.
Franklin’s as consignee (House Bill of Lading)
The best way to handle a Bill of Lading is organise your shipping so you don’t even need it! You can make the whole international freight process so much simpler by instructing a freight forwarder like Franklin Customs and Freight Forwarding to take care of it for you. To do that, Franklin’s uses a House Bill of Lading to execute shipment.
While a Bill of Lading is used is where the consignee is the buyer, a House Bill of Lading is the instrument where the consignee is the freight forwarder appointed by the buyer. The House Bill of Lading is issued by the Franklin’s office in China and couriered to the Franklin’s office in Australia. Tony never needs a copy of the bill, as the international freight process is managed completely by Franklin’s. The international freight process is easier for Franklin’s to control. Issues can be resolved easily as they have physical representation in the Chinese port or origin.
How does a House Bill of Lading work
Let’s stay with our example where Tony is importing products from China to Australia. You will see that at no stage is Tony required to manage a copy of the Bill of Lading. That’s because Franklin’s does all the work using a House Bill of Lading to execute the shipment.
Note that the Tony’s payment for the goods from the supplier is an agreement that is separate from the shipping of the goods.
We shall go through the process step-by-step.
Step 1 – Tony instructs Franklin’s
Tony (buyer) instructs Franklin’s (forwarder at destination) to ship goods from a supplier (seller) in China to Australia after accepting a quote.
Step 1 – Buyer instructs forwarder
Step 2 – Franklin’s Melbourne contacts China
Franklin’s Melbourne office gives details to its China office (forwarder at origin).
Step 2 – Contact forwarder at origin
Step 3 – Franklin’s China contacts supplier
The China office contacts supplier and confirms shipment details, pick up and re-measure. It also confirms the payment for all costs involved in processing the shipment to make it ready to leave China.
Step 3 – Forwarder at origin contacts supplier
Step 4 – Franklin’s China issues House Bill of Lading
When the China office has the shipment clear customs so it is ready to leave the country, it generates a House Bill of Lading. The China office will issue an original version of the House Bill of Lading and send it to the supplier and the Melbourne office.
Step 4 – Forwarder at origin generates and issues House Bill of Lading
Step 5 – Franklin’s ships to Melbourne
With the House Bill of Lading issued, the shipment then departs via ship or airplane to Australia. The Melbourne office then prepares the customs clearance for the shipment just before it arrives in Australia and issues invoice to Tony for payment of shipping and customs fee.
Step 5 – Ship goods from origin to destination
Step 6 – Franklin’s delivers Goods to Tony
When payment is made by Tony, the Melbourne office releases the goods for delivery to the final point of destination.
Step 6 – Goods delivered to final destination
Go with Franklin’s and the House Billing of Lading
The advantage of the House version of the Bill of Lading is that you don’t need to know about it. You don’t need a copy; you don’t need to hold it and you don’t need any details from it. This vital document is handled by Franklin’s, as per your instruction.
All you need to do is give us some notes, allow us to fine tune the details and you accept the quote. We then take care of the rest.