GlossaryEN1 min readUpdated: Jun 26, 2026
Order Bill of Lading
In international sea trade, the order bill of lading comes into play whenever cargo may change ownership while still in transit.
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Source: https://www.investopedia.com/terms/b/billoflading.asp
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Definition & Explanation
In international sea trade, the order bill of lading comes into play whenever cargo may change ownership while still in transit. Issued to a named consignee or to order, it allows title to be transferred to third parties by endorsement – signing the reverse of an original and physically handing it over. The carrier is legally bound to release the goods only against presentation of an endorsed original. This feature makes the order bill of lading the instrument of choice in documentary letters of credit and documentary collections: the bank holds the original as collateral and releases it only once payment conditions are met. It stands in direct contrast to the straight bill of lading, which names a fixed consignee, cannot be negotiated, and is therefore unsuitable as a security instrument in trade finance.
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