Bill of lading (B/L)

BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED 2026-11-06

// THE SHORT ANSWER

A bill of lading is the document a carrier issues for goods shipped by sea: a receipt for the cargo, evidence of the contract of carriage and, when made out to order, a document of title that passes by endorsement and must be surrendered to collect the goods. That third function is why trade banks care: under a letter of credit or a collection, the bank holding the full set of original order bills, often consigned to its own order, controls who can take delivery. A straight bill to a named consignee, or a sea waybill, cannot be transferred by endorsement, so it gives the bank far less control.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.