The Bill of Lading (BoL) is an essential multi-purpose document when transporting cargo. Anyone involved in the shipping process should understand the functions and types of BoLs you can find and why they are essential for successful transactions and smooth logistics.
Whether you’re importing goods for the first time or need a refresher, we’re here to help. In this article, you’ll learn what a bill of lading is, the different categories of BoLs, and why these documents are so important.
What is a bill of lading?
A bill of lading is a legally binding document a carrier (like a shipping company) issues to the shipper. It details the goods being transported, their destination, and the terms of the shipment. A bill of lading acts as a proof of contract between the shipper and carrier, and upon delivery, it also serves as a receipt for the consignee.
The BoL is not limited to a specific mode of transportation, and it can be used for goods shipped by road, rail, sea, or air. The document must accompany the shipment at all times, though, and be signed by the shipper, carrier, and consignee to ensure all parties agree on the specifics of the transportation and condition of the goods.
Types of bills of lading
There are various types of lading bills, each serving different shipping requirements. The most common include:
- Inland bill of lading – Used for goods transported over land, either by road or rail.
- Ocean bill of lading – Used for sea freight, this document authorises the consignee to claim the cargo.
- Through bill of Lading – Covers multiple modes of transportation, such as sea and rail.
- Negotiable bill of lading – Allows the transfer of ownership of goods to a third party.
- Non-negotiable bill of lading – Only the consignee specified in the document can claim the goods.
- Claused bill of lading – Notes discrepancies or damage to the cargo during loading.
- Clean bill of lading – Indicates that goods were received in good condition.
Negotiable and non-negotiable bills of lading
A bill of lading can be classified into two main categories: negotiable and non-negotiable.
Negotiable bill of lading
This type of bill allows for the transfer of ownership to a third party, such as a logistics company. The consignee named in the BoL can transfer their rights to the goods, making it useful in global trade transactions. Upon the goods’ arrival at their destination, the holder of the original BoL must present it to the carrier to release the cargo.
Non-negotiable bill of lading
Unlike its negotiable counterpart, a non-negotiable BoL is specific to the consignee named in the document and the rights to the goods cannot be transferred to a third party. This means only the designated buyer or recipient can claim the goods, ensuring direct delivery.
Why is a bill of lading important?
The bill of lading is essential in ensuring that goods are transported according to legal agreements and received in proper condition. Here are three primary reasons why a BoL is critical:
Proof of contract: A BoL is the physical proof of a contract between the shipper and carrier. It outlines the agreement to move the goods from one location to another and stipulates the carrier's responsibility to deliver the cargo to the correct party.
Proof of receipt: Upon receiving the goods, the carrier signs the BoL, confirming that the shipment has been picked up and is in good condition. This protects the shipper and proves the goods were handed over to the carrier.
Proof of title: As a title document, the BoL identifies who legally owns the goods at any point during the transportation. Ownership may transfer along the way, depending on the type of BoL used.
What’s in a bill of lading?
A complete and accurate bill of lading must include several crucial details to ensure proper transportation and delivery of the goods. These details include:
- Party details: Information about the shipper, consignee, and any other parties.
- Cargo description: Information on the shipped goods, including dimensions, weight and quantity.
- Terms of shipment: Incoterms, payment terms, and any specific conditions for the carrier.
- Mode of transportation: The type of transport used, whether road, rail, air, or sea.
- Ports of loading and discharge: The locations where goods are loaded onto and unloaded from the carrier.
All this information must be correct to avoid any delays in shipping or legal complications.
Why accuracy matters in a bill of lading
Errors in a bill of lading can lead to significant problems, such as delays in delivery, insurance complications, or even the loss of legal rights to claim goods.
For instance, insurance claims may be denied if the cargo listed in the BoL does not match what was actually shipped. Additionally, incorrect BoL information may delay payments to the seller, as the consignee may refuse to settle until the proper documentation is in place.
Ship seamlessly with Pro Carrier
The bill of lading is a fundamental document in shipping that functions as proof of contract, receipt, and title. Correct preparation and use are essential for avoiding disputes, ensuring timely deliveries, and protecting the interests of all parties involved.
Whether you’re a shipper, carrier, or consignee, understanding the purpose and content of a BoL is crucial for successful logistics operations. So is partnering with the right international shipping partner.
At Pro Carrier, we can help you ship anything, anywhere. Our reliable freight forwarding solution is backed by innovative, industry-leading technology and exceptional customer service.
Find out more about partnering with Pro Carrier by speaking to one of our experts today.