What is a Bill Of Lading [BoL]: everything you need to know

From 2017-2019, there was an average of 779 shipping containers lost yearly at sea. And one of the biggest reasons is not having the proper Bill of Lading. Using the BoL properly can make things easier for a freight company and reduce the hassle of transporting freight.

Let's understand the followings:

  • What is a Bill of Lading
  • When is a Bill of Lading required
  • What's on a typical Bill of Lading
  • Types of Bill of Lading
  • Why is a Bill of Lading important

What is a Bill of Lading

A Bill of Lading is a legal document (contract) between the carrier (transportation company) and the shipper (supplier of goods), stating what goods are being shipped, where it is coming from, and where they will go. The Bill of Lading is issued also as a receipt and a document of title. The Bill of Lading is also known as - BoL, B/L, or Waybill.

Note: The shipper is also known as the consignor, and the final receiver is known as the consignee.

Let's understand the process through an example.

A logistics company intends to transport oil from a plant in California to a factory in Arizona. A plant representative delivers the oil to the driver of the freight transport company, and after loading the goods on the truck, both (the plant representative and the driver) sign the BoL. Once the driver (carrier) delivers the oil to the factory in Arizona, the truck driver requests the final receiver (factory representative) to sign the document.

When is a Bill of Lading required?

The Bill of Lading is a necessary document for transporting a freight shipment. It has three main functions for the freight transport process. It acts as the title of goods, provides a legal contract, and finally acts as a receipt. It is imperative to have a proper BoL so the freight reaches its destination successfully, and all three main parties (carrier, shipper, and receiver) work harmoniously to make things as smooth as possible.  

What's on a typical Bill of Lading?

The content on a BoL can vary depending on the type and a specific company. It's' advised not to use generic BoL or regular templates found online. Rather, one should spend time creating their own BoL based on their specific needs since they need to deal with it daily. This important document can make the freight-carrying process much smoother and easier if appropriately implemented.

Some of the most common and important content of a Bill of Lading are:

  • Ship from section: this has the shipper's information (consigner).
  • Ship to section: this has the receiver's (consignee) information.
  • Ship via section: this has the information of the carrier (transport company)
  • Order details section: this can have the order number and information that refers to this specific package.
  • Shipment/package information section: this is specific information about the shipment itself; weight, type, commodity/freight class, and others. Different freight classes can have varying impacts on the cost of your shipment.
  • Special information section: any specific information necessary for the delivery but can't be put into a specific category. If you are shipping glasses or any fragile items, you should mention them and put a fragile sticker. This makes sure it is handled properly.
  • Signature section: this is where all the signatures are given. Having all the parties' signatures (shipper, carrier, receiver) ensures everything is done accurately. If problems occur, one can leave a note along the sign, and it can help in identifying and solving problems efficiently.

Types of Bill of Lading

There are different types of BoL. Some of the most common ones are listed below:

  • Clean Bill of Lading
  • Uniform Bill of Lading
  • Claused Bill of Lading
  • Inland Bill of Lading
  • Ocean Bill of Lading
  • Through Bill of Lading
  • Negotiable Bill of Lading
  • Straight Bull of Lading
  • Multimodal Bill of Lading

To know more about different types of B/L and how/when each of them is used, read this.

Why is a Bill of Lading important?

A good Bill of Lading ensures the right shipment is delivered to the right place at the right time. It makes the whole process of freight transportation easier and smoother.

Suppose you have a BoL that has all the necessary information. In that case, it can:

  • Reduce the amount of inspection
  • Increase transparency
  • Reduce the chance of theft or getting lost
  • Save time
  • Increases the satisfaction of all the related parties

An incomplete document can increase the chance of mistakes, which could simultaneously delay the shipment and payment. Having the right information makes everything simple, and there are fewer problems. To make sure the freight delivery process is done right, one must make proper use of the BoL.

The BoL is commonly used in multiple modes of transport. Check our article to understand the concepts and differences in Intermodal vs. Multimodal transport and how to choose between them.

Mehedi Hasan
Logistics content writer
October 31, 2022

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