Wednesday, 30 April 2014



 In relation to bills of lading, what is the difference between Possession, Title and Ownership.. Example would be where cargoes are in dispute etc and a totally unrelated party is holding the bills.

The word possession in relation to cargo and BL’s could mean to hold-with or without ownership. In other words, BL possession falls to the party holding them at the particular time or the custodian at time of dispute or discussion. This person might be the cargo owner or another party in the supply chain.

The nature of international trade provides a tendency for BL’s falling in several hands. For instance, the BL’s may be in custody of the cargo supplier who maintains possession in lieu of pending payments or for other reasons before dispatching them to actual cargo owner.

 Freighting agents, shipping agents, customs brokers and forwarders at some point are likely to be in possession of the BL’s to execute the various roles assigned to them. Banks in L/C payments also get to posses the BL’s as they move through documentary credit processes.

Being in possession of BL’s does not give one ‘title’ to the goods unless they are the rightful holder of the BL’s through the necessary provisions such: being the named consignee, through endorsements or through legal provisions such as the rule of law.

In fact there are known occasions where BL’s in possession of wrong hands dubious means such as lost & found and through fraudulent activities

 Title to the goods’ refers to legal right to claim, own and use the goods as one may wish. Title to the goods may come with or without possession. This is simply because ‘title’ is more of a legal right to claim ownership to the goods.

There various ways through which one may gain title to the goods. The most common way is where the title lies to the actual consignee as named on the bills of lading (straight BL’s).

Banks may also gain title to the goods through L/C financing in the event that the consignee is unable to repay the bank money paid out on his behalf as per the L/C terms and conditions.

A trader in international trade may gain title to the goods in the event good are sold and BL’s endorsed in his favor (to order BL’s).

Shipping lines and shipping agents have lien in respect to unpaid freight. The lien may give them title to the goods in the event the freight charges remain unsettled and the owner fails to pay the same within the stipulated period as evidenced by the BL.  Other interested parties may also petition through the courts of law and with enough reason and be awarded title to the goods. Example could be trader owed money by consignee and who may want to recover their amounts through applying for title and ownership to the goods.

The party holding title to the goods is deemed to be the owner of such goods. Actual cargo ownership is obtained by applying for the goods from the person or company holding them on behalf of the carrier. This might be a ship owner, a shipping agent or a port/ terminal authority on appointed by the carrier.

The shipping practice across the world entails one original bill of lading being presented to carrier in exchange of cargo. Upon receipt of the cargo, the consignee gets actual cargo possession and ownership of the goods. During this stage, the bill of lading has served its purpose and is referred to as “an accomplished BL” or “an exhausted BL” and it serves no more important function other than a reference document to both the carrier and the consignee.

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