A Bill of Lading (BOL, BoL, or B/L) is a legally binding document that specifies all of the information required to handle a freight cargo between a shipper and a carrier.
A BOL is required since each shipment begins and finishes with one. It also safeguards the vendor, shipper, and receiver. It will aid in the proper carriage of the commodities intended to be sent, and if there is a problem, the bill of lading will assist the parties in determining where the problem occurred.
A BOL, as a legal document, includes the following:
BOL is an agreement between the shipper and the carrier. It specifies where the freight was picked up, what is being transported, and when/where it will be delivered.
The issuance and signature of the BOL prove that the carrier got the goods from the shipper in proper condition.
Title of the Goods:
A BOL can act as the formal paperwork that transfers cargo control to various parties along the route.
A BOL is not a freight bill or an invoice, which is an essential distinction. Instead, it is an official document that serves as proof of the agreement between the shipper and the carrier. Freight invoices include the same information as a BOL, but they additionally provide any additional costs and accounting details.
When is Bill Of Lading Signed:
A BOL must be signed at various transfer phases to serve the above objectives.
- By the seller or the person responsible for shipping the goods
- Once the freight has been received from the shipper and placed into the truck, the driver signs it
- When the cargo is delivered, the receiver signs it
The freight should always be carefully examined before signing BOL documentation. A signature indicates that all data are correct (quantity, quality, etc.). If a party signs off on the BOL for the freight without verifying overages, shortages, or damages, they may have limited recourse.
For example, if the BOL indicates 15 skids and a carrier signs to confirm that, but only 14 skids are loaded, the driver is liable for the missing skid and its contents. If the other skid is never found, the motorist may be held liable for its value, even if they were not responsible for its loss. Their signature is all that is required to transfer ownership.
The final signature on a BOL converts the document into a POD or proof of delivery. If the receiver signs and states that all products were delivered in whole and good condition. They cannot afterward complain that something was inaccurate. Their signature is a final verification that an order is complete and suitable. Any damage suffered beyond this stage is no longer the carrier’s/responsibility. As a result, receivers should double-check instructions before signing and claiming ownership.
Bill of Lading in Logistics:
Because every shipment begins with a BOL, the originating party is in charge of creating the paperwork.
For brands collaborating with 3PLs, this may imply that either the brand or their 3PL partner must create the BOL. As a result, a discussion about preferences and duties is essential.
Some clients want to supply the Bill of Lading, while others prefer that Custom Crating and Logistics handle all paperwork or interact with the carrier assigned to the shipment.
What exactly is a BOL?
All information on a Bill of Lading must be correct. A BOL is what legal teams will refer to if there is a freight claim because it functions as a legal document.
- Shipper’s name and address
- Name and address of the recipient/consignee
- Bill-to-date Date of pickup
- Purchase orders or identification numbers
- Items description
- Dimensions and weight
- Freight classification
- Type of packaging
- Any particular guideline
Functions of BOL:
The Bill of Lading serves three primary functions:
Carrier hands a Bill of Lading to the shipper in return for the shipment. This exchange demonstrates that the carrier received the items in excellent condition from the shipper.
Evidence of the contract between the shipper and the carrier:
The BOL is the contract of transport between the carrier and shipper to deliver freight that serves as documentation of a contract.
Title to the commodities document:
A bill of lading (BOL) permits the freight to be transferred to the holder of the BOL. The holder of the BOL now has the authority to demand that the items be transferred to another party.
5 Types of Bill Of Lading:
There are two kinds of bills of lading: straight BOLs and order BOLs. There are some less popular categories to consider as well. The distinction between these BOLs is critical because it affects whether the agreement is negotiable in terms of delivery.
Straight bill of lading:
A straight bill of lading is a non-negotiable bill of lading utilized when the goods have been paid for or do not demand payment. Upon confirmation of their identification, the shipping business will deliver the cargo to the consignee. A consignment bill of lading is another name for this type.
Order Bill Of Lading:
An order BOL is assigned to a specific party that did not pay for their cargo in advance. It is a crucial distinction for assessing if the BOL is negotiable. In addition, by its delivery or endorsement, an order BOL might transfer title to the commodities covered by it.
Negotiable Bill Of Lading:
A negotiable BOL can be transferred to a third party by its consignee by signing (endorsement) and handing it to another consignee. The document can be transmitted again by the new consignee, and so on. A negotiable BOL must be issued “to order” of the consignee.
Claused Bill Of Lading:
This sort of BOL indicates that the supplied products have been damaged. If something goes missing or the items are damaged, the carrier may have trouble collecting payment.
Electronic Bill Of Lading:
This category is self-explanatory. It’s a digital version of the bill of lading.
The distinction between a Negotiable and Non-Negotiable BOL:
A negotiable BOL directs the carrier to deliver the items to whoever has the originally endorsed negotiable bill, reflecting ownership and title to the commodities.
A non-negotiable bill of lading specifies the consignee to whom the items will be sent, but it does not indicate ownership of the commodities.
For a documented sale, a negotiable BOL must be employed.
Difference between a bill of lading and a freight bill:
What is the distinction between a Bill of Lading and a Freight Bill?
The bill of lading and the freight bill are two similar papers. They are not, however, the same thing. A freight bill, unlike a BOL, cannot be used as proof in a claim dispute or shipment error. Extra information on accessorial costs, fees, and remarks to explain any data on the BOL should be included in the freight bill. Freight bills are invoices that 3PLs or an internal logistics team may evaluate to save costs, find better solutions, and save time.
When are freight claims made?
Freight disputes arise when the information on a bill of lading does not correspond to the actual service or goods received. If the BOL shows that the items were loaded in excellent condition, but the consignee gets them damaged, the consignee has the right to sue the carrier for the damage. Alternatively, if the bill of lading specifies 100 boxes, but only 75 arrive, the consignee may file a claim for the shortfall. A freight claim may also be filed if the goods do not arrive at their destination.
Types of Freight Claims:
There are four types of freight claims:
The corporation may lose the ability to limit liability for freight damage or shortfall claim.
Loss of P&I Coverage:
If the description of the products is wrong, P&I protection may be unavailable for claims.
No Charterer Indemnity:
There is no duty to sign a bill of lading that incorrectly characterizes the cargo.
These are claims received and processed by the paying party but were deemed unpayable.
The receiver should check the cargo before signing off on the BOL to ensure that the merchandise is not tainted. Before signing, double-check that the BOL matches the delivery of goods and that the cargo description is correct. Make a detailed note of any damage or fault.
Because the bill of lading serves as your boarding card in the freight transportation procedure, every detail is crucial. To avoid additional expenses and claims, properly examine all of the data on the paper. When you are sure that everything is clear and concise, you are ready to ship.
It all boils down to double-checking all of the information on your BOL. Before you sign the document, make sure you won’t be sorry afterward. With these safeguards and measures, you are ready to send freight effectively.
How is the Bill Of Lading issued?
A bill of lading is often given per cargo, container, or truckload. However, this depends on your needs as the shipper. It is decided by the purchase order, the type of products being sent, the letter of credit, and various other criteria.
So it’s likely that you’ll have more than one BOL for your cargo, with two complete truckloads under one BOL or one truckload with two BOLs.
What is the Bill of Lading’s Consignee?
The person entitled to receive the package from the carrier is known as the consignee. The kind of bill of lading determines how the items are transferred.
A straight bill of lading recognizes the consignee as the actual person, and depending on the laws of the destination country, he may not be required to show the original bill when claiming the items. And, more frequently than not, the consignee is required to make an advance payment before receiving the products.
A negotiable bill of lading specifies the consignee as a named party chosen by the carrier, a bank, and the importer of goods. The consignee typically pays with credit or cash against the documents.
A bearer bill of lading says that the consignee is the person who has the original bill of lading and may be discussed in person.
What is essential while completing a Bill of Lading?
In freight transportation, the bill of lading serves as a boarding permit. Thus, it is vital to supply precise information. It will save you time and avoid misunderstanding, and save you money. In many circumstances, inaccurate BOL completion might lead to further costs.
Where can You receive a Bill of Lading?
The bill of lading is issued by the freight carrier. Where do you acquire the document when using a shipping service or a third party to move goods? The documentation necessary for freight shipment is created online. Because the BOL is the most crucial legal document in the transportation process, a professional shipping platform offers it for you and aids you in filling it out. In this manner, even a novice may be confident that the documentation is done correctly. At Custom Crating and Logistics, we offer automatic documentation creation and assistance with filling out the bill of lading. Learn more about our shipping services.
Partnering with a 3PL can help you simplify your shipping:
The bill of lading is a complicated document since it is effectively the contract of service between you and your freight shipping service provider. It is critical to nail almost every aspect so that your shipment arrives with as few hitches as possible.
The easiest method to guarantee you understand the BOL is to work with an expert 3PL who can help you streamline your logistics operations and all of your documentation. By working with Custom Crating and Logistics, you will access our powerful in-house TMS, which can provide a simple electronic BOL. You’ll also have a single point of contact for all of your shipments, which will help you improve your transportation strategy even more. If you need instant assistance with your document, we also offer a resource that explains how to complete a BOL. Our professional team is here to guide you.