A Bill of Lading (BoL) is a required legal document that has to be filled to move a freight shipment. It contains information about the quantity, type and destination of the goods that are being shipped.
The BoL acts as an evidence of a transportation contract between the shipper and the carrier. It is typically issued by the carrier to the shipper.
This document must be signed by the
- carrier (entity that transports the goods),
- shipper/consignor (entity that owns and/or supplies the goods), and
- receiver/consignee (entity that receives the goods at the end of the shipment).
The different types of BoL include:
- Negotiable and non-negotiable BoL
- Straight and to order BoL
- Clean and claused BoL
- Mode of transport BoL: Ocean BoL, sea waybill (for sea freight), master air waybill (for air freight), inland BoL, multimodal BoL and house BoL.
Purpose of a Bill of Lading
A bill of lading has 3 basic functions:
- Title of goods
Firstly, it is a document of title to the goods for receivers. It acts as a proof of claim to shipments by the receiver. This will prevent carriers from handing the shipments to the wrong parties.
It is also an important document for use during customs clearance.
- Receipt for contents of shipment
Secondly, it is a receipt for the goods shipped for shippers. It serves as an acknowledgment that the carrier has received the shipment from the shipper and will transport it to the destination.
- Contract of carriage
Thirdly, it represents the agreed terms and conditions between the carrier and shipper for the transportation of the shipper’s goods by the carrier.
BoL is issued by the carrier when the goods are handed from the shipper to the carrier onto a freighting vessel. There will be 3 original BoLs as there is a possibility of losing it when sending BoLs to consignees.
These 3 BoLs will be taken by the shipper, the consignee and the lender (a banker or broker) or a third party who is involved in the freight process.
When the original BoL is lost, a new bill will not be generated until the original is retrieved. In such cases, the shipper, exporter, or importer should prepare and obtain the following documents from the respective parties:
These documents must be forwarded to the carrier, shipowner, or freight forwarder for the release of the shipment.
Bill of Lading Template
Every BoL will consist of the same information needed to prepare for the shipments. Below is a sample of a non-negotiable BoL.
The information that is listed in the document will include:
- Shipper’s and receiver’s names and complete addresses
- Third party’s name and complete address if the receiver is responsible for the freight charges
- BoL number: carrier number and a 8, 10 or 12 digit code, depending on the issuer
- Shipping tracking information: carrier name, trailer number, seal number, standard carrier alpha code (SCAC), and pro numbers
- Customer order information
- Carrier information: a complete description including whether the freight is classified as hazardous and special instructions is required
- Cash on demand (COD) amount
- Signatures of both shipper and carrier
Example of How To Use Bill of Lading
For example, ABC, a rice company, is sending 300kg of rice to EXO, the receiver, with a carrier company, XYZ. An XYZ representative will issue a BoL when the 300kg of rice is loaded onto their vessel for transit.
XYZ will inform a customs representative when the goods have arrived at its destination. The receiver will check the shipped goods and sign that they have received the rice.
When the original BoL is lost, a new bill will not be generated until the original is retrieved. In such cases, the shipper, exporter, or importer should prepare and obtain the following documents from the respective parties:
To prevent these, it is important to fill out details correctly.