Bill of Lading: Understanding its Importance and Implications

As a shipper, you know that the shipment of goods is a complex process. It involves a lot of paperwork, risk analysis, and legal complications.

One such crucial document which plays a vital role in ensuring safe shipment is the bill of lading.

In this guide, we’ll cover what a bill of lading is, the different types, how to fill it out, and give you a handy template.

What is a Bill of Lading?

A bill of lading (BoL) is a legal document used in the shipping industry, serving as both a receipt for goods and evidence of the contract between the shipper and carrier.

The BoL provides essential info on the cargo's source, destination, and contents. The BoL also serves as proof that the carrier has received the goods in good condition and has agreed to transport them to their intended destination.

Whether the goods are being transported via sea, land, or air, a bill of lading is essential to ensure they are delivered safely to their intended destination. The significance of a bill of lading is paramount; it performs an indispensable part in global trade by making sure that all parties concerned are conscious of their entitlements and duties during transport.

In addition to acting as legal documentation for customs clearance purposes, this document helps facilitate smooth communication among shippers, carriers, consignees, and banks providing financing or guarantees for transactions involving letters of credit.

What is the Purpose of a Bill of Lading?

Proof of Contract

A BoL serves as evidence that there exists an agreement between the shipper and carrier regarding the terms of carriage. It specifies the types of goods being shipped, the destination, and any special instructions that the transporter must follow. The BoL essentially sets out the contractual obligations between the parties, and it is signed by the carrier and shipper.

Receipt of Goods

A bill of lading acts as a receipt, confirming that the goods are in the carrier's possession and everything is in order. This means that the carrier becomes responsible for the goods from this point onward.

Title to the Goods

The Bill of Lading also serves as a document of title and reflects the ownership of the goods. It determines who can claim and receive the goods at their destination. The consignee named on the document can use the BOL as proof of ownership when claiming the goods.

Protection of Parties Involved

A bill of lading provides legal protection for both the shipper and carrier. It ensures that carriers have fulfilled their obligations and delivered the goods to the correct destination and location. On the other hand, it provides shippers with legal protection in case of damages or loss of goods in transit. The terms and conditions outlined in the bill of lading must be adhered to by the carrier, and failure to do so can place the carrier in a position of legal liability.

Types of Bill of Lading

Clean Bill of Lading

A clean bill of lading is issued when the carrier confirms that the goods have been received without any damage or defect. This type of BoL is considered the most preferred as it ensures that the cargo has been loaded as specified. It also indicates that the carrier has no claim against the shipper or consignee for any damage. A clean BoL is often required when the buyer needs to pay the seller before receiving the goods.

Received for Shipment Bill of Lading

Unlike a clean BoL, a received-for-shipment BoL does not confirm the condition of the goods. Instead, it indicates that the carrier has received the cargo and is ready for shipment. This type of BoL is commonly used when the shipment is not yet complete, and the shipper needs the BoL to secure financing from a bank or another financial institution.

Through Bill of Lading

A through bill of lading is used when the shipment involves multiple modes of transportation, such as air, sea, and land. This type of BoL covers the entire transportation process, from the origin of the shipment to the final destination. A through BoL allows the shipper to use different carriers for different parts of the shipment while keeping a single BoL for the entire transaction.

Claused Bill of Lading

A claused bill of lading is issued when the carrier observes that the goods have defects or damage, such as a torn package or broken seal. The carrier will note this on the BoL, indicating the condition of the goods when they receive them. A claused BoL may make it difficult for the shipper to secure financing and prove the cargo's condition, making it less preferred than a clean BoL.

Container Bill of Lading

A container BoL is used when the cargo is loaded in a container. It contains details of the container used for the shipment and other relevant information such as the container number, seal number, and cargo weight.

House Bill of Lading

A house bill of lading is issued by an NVOCC (Non-Vessel Operating Common Carrier) or freight forwarder. It serves as a receipt of the goods, contract of carriage, and title document. A house BoL is used when the freight forwarder consolidates different shipments from different shippers into one container or vessel.

Master Bill of Lading

The ocean carrier issues a master bill of lading and covers the entire shipment, which includes several house BoLs. This type of BoL serves as proof that the cargo has been loaded onto the ocean carrier and is being transported.

Charter Party Bill of Lading

A charter party bill of lading is used in chartering arrangements between a vessel owner and charterer when a vessel is contracted for a specific voyage. It outlines the terms of the voyage, such as the time, the ports of call, and the freight amount.

Stale Bill of Lading

A stale bill of lading is one that has expired because it was not presented to the carrier for the shipment before the prescribed period (21 days). The carrier may refuse to accept the cargo, and the shipper will have to obtain a new BoL.

Short Form or Blank Back Bill of Lading

A short form or blank-back bill of lading is used when the shipper does not yet know the details of the shipment. The carrier issues the BoL without filling in the full terms and conditions of the carriage.

Straight Bill of Lading

A straight bill of lading specifies the goods' delivery to a particular party, usually the consignee, and is not negotiable.

Order Bill of Lading

An order bill of lading is issued to a specific party, but it can be transferred to another party through endorsement. This type of BoL provides flexibility in the movement of goods as it’s negotiable and is often used in international trade.

Bearer Bill of Lading

A bearer bill of lading is a negotiable document that specifies the goods' delivery to the bearer. It can be transferred through delivery, making it similar to cash.

Surrender Bill of Lading

A surrender BoL is issued when the goods have been delivered, and the carrier requires the original BoL to be surrendered before releasing the cargo to the consignee.

Each type caters to unique shipping scenarios with varying levels of risk management and documentation requirements. Cargoflip's export documentation software can help shippers manage these complexities effectively while optimizing collaboration across supply chain partners.

Understanding the different types of bills of lading is essential for shippers, as it helps you ensure your shipments are properly documented. Let's now delve into the intricacies of accurately completing a bill of lading.

How to Fill Out a Bill of Lading

Filling out a bill of lading correctly is crucial for the successful transportation and delivery of goods. A bill of lading must contain specific information that accurately describes the shipment and its terms to be considered valid. Here’s how to fill out a BoL:

• Shipper information — the shipper's name and address
• Consignee information — the consignee's name and address
• ‍Carrier Details — carrier name
• ‍Shipping method — can be either sea, air, truck, or rail
• ‍Date of loading — ****the ****date when the carrier loaded the goods onto the vessel
• ‍Port of loading — ****ocean or inland port where goods were loaded
• ‍Destination port — ocean or inland port where goods will be unloaded
• Indication of any ports of transshipment
• ‍Incoterms — specify which commercial term will be used
• ‍Shipment details — an itemized list of the goods being shipped with specific descriptions that include quantity, measurements, and total weight
• ‍Name and signature of authorized signatories

Bonus Tips for Filling Out a Bill of Lading:

• Always use clear and legible handwriting when filling out a BoL manually to avoid misinterpretations during the processing stages.
• If possible, use an electronic bill of lading (eBoL) as it minimizes manual data entry errors and streamlines documentation processes
• Maintain copies of all completed bills of lading for record-keeping purposes since they serve as legal documents in case disputes arise later on between parties involved in shipments.

Using electronic BoLs can minimize errors and streamline documentation processes with digital tools like Cargoflip's export documentation software.

Bill of Lading Template

Are you tired of the hassle of creating a bill of lading for your shipments? Look no further than Cargoflip's free bill of lading template. This customizable PDF ensures you have all the required information in one place, saving you precious time and giving you the peace of mind that you're submitting a compliant BoL.

Say goodbye to the days of spending hours filling out paperwork and hello to a streamlined process with Cargoflip's bill of lading template. Get started today and see the difference for yourself.

Bills of Lading Made Simple With Cargoflip

A bill of lading is a legal document with multiple purposes when it comes to shipping goods. It is essential to understand its significance in terms of evidence of contract, receiving goods, title documentation, and legal protection.

If you're looking for an efficient way to manage your bills of lading, look no further than Cargoflip. Cargoflip provides an effortless way to craft, sign, store, and share bills of lading conveniently. Streamline your shipping process by signing up for a free trial.

Bill of Lading FAQs

Who issues a bill of lading?

A bill of lading is typically prepared by the carrier or its agent, such as a shipping line, airline, trucking company, or freight forwarder.

How many copies of a bill of lading do you need?

Typically, three original copies of a bill of lading are required: one for the shipper, one for the consignee, and one for the carrier's files. However, the exact number and format of bill of lading copies required can vary depending on the mode of transportation and the specific requirements of the parties involved in the shipment.

What is a bill of lading number?

A bill of lading number is a unique identifier assigned to a particular bill of lading. It is typically a combination of letters and numbers that is used to track and trace the shipment throughout the transportation process. The bill of lading number can be used by the shipper, carrier, and receiver to track the shipment's progress from origin to destination. It is an important reference number that should be included in all related shipping documents and correspondence.

Who is the consignee on a bill of lading?

The consignee on a bill of lading is the person or company to which the goods are shipped. They are the party authorized to receive the goods at the destination specified in the bill of lading. The consignee is typically named in the consignee field on the bill of lading, along with their address and other contact information.

How to make a bill of lading?

Make a bill of lading with Cargoflip’s template, and you’ll have an accurate and compliant document in a couple of clicks.

When is a bill of lading required?

Essentially, a bill of lading is required whenever you want to move a shipment through any mode of transport.

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