A surrender bill of lading is a document issued by exporters that allows importers to legally own the items the exporter shipped. When importers pay for a shipment, the exporters surrender their ownership rights to the items so they cannot claim title or power over them; this tends to be a cleaner method of transferring ownership than some other bill of lading documents provide. These documents are typically paired with a documentary collection, although even if this is not used, the entity charged with holding the bill of lading should not surrender it until the importer pays. The surrender bill of lading can present a problem for exporters, because importers who have it can go into a port and take the shipped items, even if they haven't yet paid for them, and the port may charge extra for this type of bill of lading.
With some bill of lading documents, exporters still hold some ownership over the items, the price can be negotiated or a lien can be placed on importers based on previous exchanges. When a surrender bill of lading is used, exporters cannot claim any rights or power over the items after importers pay. As long as importers do not pay, then the bill of lading should remain in the exporters’ hands so the exporters continue to legally own the items.
The document is typically paired with a documentary collection payment method. Exporters use their local bank to forward payment terms and documents to a bank near the importers. When importers pay, they receive the bill of lading. Both banks act impartially, which makes the transaction safer for importers and exporters, and the transaction is more convenient because each party can just visit a local bank.
Regardless of what payment method is used, the surrender bill of lading should not be given to importers until they pay for the merchandise. If an entity gives away the bill without receiving payment, then that entity may encounter legal problems from the exporters. It also means that importers do not have to pay for items if they are not happy with the shipment or price.
Aside from importers not paying, there are several other problems that can occur when using this type of document. Ports typically have to process the paperwork, so they tend to charge a fee. If importers are malicious and avoid port workers, then they can take items from the port without paying exporters anything. Payment also can drag out, so exporters may not collect their money until months or years in the future, if at all. This bill is typically only used if exporters have an extensive, trustworthy relationship with importers.