When Does a Blank Endorsed Order BL Look Just Like a Bearer BL?

Intro:

Bills of lading often carry subtle but important differences in how title to goods is transferred. Among the most debated are the blank endorsed order bill of lading and the bearer bill of lading. At first glance they may look interchangeable — both can be passed along by simple delivery — but the way they originate and the way they can evolve are not the same. Understanding these nuances is essential for bankers, traders, and shipping professionals who deal with negotiable instruments daily.

QUESTION

What are the differences and similarities between a blank endorsed order bill of lading and a bearer bill of lading?

Roshani

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 ANSWER

Hi Roshani,

 A blank endorsed order bill of lading is originally issued “to order” — either to the shipper or to another party. Once the named party endorses it in blank (just signing without naming an endorsee), the bill becomes transferable simply by delivery, effectively functioning like a bearer document.

A bearer bill of lading, by contrast, is a bearer instrument from the outset. The consignee box is either left blank, or it explicitly states “to bearer” or “to holder.”

In practice, the following bills of lading are treated as bearer BLs:

• Consignee box shows “to bearer” or “to holder.”
• An order BL endorsed in blank.
• An order BL endorsed “to bearer” or “to holder.”

Key similarity: Both can be transferred by mere delivery without needing a further endorsement.

Key difference: A bearer BL is a bearer document from issuance, while an order BL only becomes equivalent to a bearer BL once it has been endorsed in blank.

One extra twist: a bearer BL is not permanently “bearer.” If the current holder chooses to endorse it, they can turn it into a straight BL (by inserting a named consignee) or back into an order BL (by inserting “to order of [X]”).

Best regards,

Mr. Old Man