Difference between MBL and HBL. How does MBL work and How does HBL?

This is one of the common questions among readers about house bill of lading and master bill of lading. 

What is HBL?  A bill of lading issued by a freight forwarder or NVOCC (Non vessel operating companies) is called HBL House Bill of Lading. Once after receiving cargo from shipper after necessary customs formalities, the freight forwarder releases House Bill of Lading HBL to the shipper. House Bill of Lading also is a negotiable document and accepted similar to any Bill of Lading. Normally HBL House Bill of Lading is issued as per the terms and conditions of Multi model Transport Document Act. The shipper in House Bill of Lading is the exporter or shipper who delivers goods to freight forwarder and the importer or consignee, the party to whom the cargo has to be delivered by the said freight forwarder.

What is MBL? How does MBL work?  The freight forwarder after receiving goods from shipper, re-book the same cargo to main carriers who are vessel owners. The main carriers, once cargo received, issues Bill of Lading to whom the cargo booked with him. This is called MBL Master Bill of Lading. In a master bill of lading, the shipper will be the freight forwarder who delivers the cargo to main carrier and the consignee, the overseas counterpart party of the freight forwarder who receives the goods from final shipper. 

Once after arriving the goods at destination, the importer approaches overseas counterpart of freight forwarder for cargo and the freight forwarder issues’ delivery order’ to the importer after receiving necessary destination charges. The said freight forwarder approaches the main carrier to release the cargo after paying necessary charges to main carrier if any.

MBL is Master Bill of Lading issued by main carrier of goods on receipt of goods from a freight forwarder to deliver at destination as per agreed terms. HBL means House Bill of Lading issued by a freight forwarder on receipt of goods from shipper agreeing to deliver goods at destination.

Let me explain the above concepts with a simple example. 

A, a freight forwarder acts as a carrier legally accepts cargo from an exporter X agreeing to deliver cargo to Y at New York. A issues bill of lading to X on receipt of goods after necessary export customs formalities. A after receiving goods from X transfers goods to C who is a main carrier of goods. While transferring goods to C, A obtains a bill of lading from main carrier C agreeing to deliver cargo at New York. Here, the bill of lading issued by A to X is called house bill of lading and the bill of lading issued by C to A is called Master Bill of Lading.

How the goods are delivered in HBL and MBL transactions. Let us know the procedures under HBL and MBL.

A has their office counterpart at New York called B. C also has their counterpart in New York called D.  Once after arrival of goods at New York, D who represents on behalf of C delivers cargo to B who represents on behalf of A. B delivers goods to Y who is the consignee of X.    

What is documentation procedures in HBL and MBL.

How HBL and MBL works. How shipper and consignee are mentioned in HBL and MBL. Let us take the same example. When receiving goods from exporter X, A as freight forwarder release House Bill of Lading to X in his specified format. Here, the shipper is X and consignee is Y in the said House bill of Lading. The HBL number and other related reference number is given by the freight forwarder on the House Bill of Lading. All other information in Bill of lading are mentioned based on the legal export shipping documents completed by exporter for customs clearance procedures. Once the cargo transferred to C as main carrier of goods, A obtains Master Bill of Lading from C. Here, in Master bill of lading, Shipper becomes A and consignee becomes B who is the overseas counterpart of A who situates at port of destination at New York.

How goods are transferred to final consignee at destination in MBL and HBL transactions. What is the procedures at destination port under HBL and MBL procedures.

Once after arrival of goods at destination, B approaches D with the original bill of lading received from A issued by C to take delivery of cargo. D issues delivery order after collecting necessary destination delivery charges if any. If Original Bill of Lading was surrendered at origin port, D confirms on such OBL surrender message and issues D.O to B. B in turn, issues delivery order to Y after receiving original bill of lading issued by A with necessary destination delivery order charges if any. If original House bill of lading was surrendered at load port, he confirms on such surrender of OBL and issues D.O.