Negotiable Bill Of Lading

You purchased a shipping container full of superhero-themed underwear, which is currently en route from China. You spent $2 million for the undies, which you plan to sell to retail stores. While the boat with the underwear on it drifts somewhere in the Pacific, you get a call from a competitor. They are willing to pay you $2.5 million for the incoming shipment. You could book a $500,000 profit without having to do any sales. You say, "sure."

Luckily, you have a negotiable bill of lading. It's the official document for the shipment, detailing all the pertinent information about the cargo, including who is supposed to receive it once it arrives in the U.S.

The "negotiable" part means that whoever holds the official bill of lading can receive the shipment. It isn't a specified person or entity. Whoever has the document gets the undies. So you can sell your bill of lading to your competitor and just let them receive it when it comes. You don't have to receive the shipment yourself and then somehow transport the product to the purchaser. It's just a matter of selling them the bill of lading.

The negotiable bill of lading stands in contrast to a non-negotiable bill of lading. That kind of document lists specifically who can receive a shipment. The shipper cannot give the cargo over to anyone other than the party listed in the bill of lading.