Bill of Lading definition

A Bill of Lading (BoL) is a legal document issued by a carrier or transporter of goods to a shipper, such as an international shipping company, to acknowledge the receipt of cargo. It details the type, quantity, particulars and destination of the goods, the route taken, and the type of transport used, such as a ship, lorry or plane.

A BoL is transferable by endorsement (the legal transfer of ownership from one party to another), ensuring exporters are paid and importers receive their goods.

It serves three primary purposes:

• As a receipt for the shipped goods, acknowledging that the carrier has loaded them onto a mode of transport.
• As evidence of the contract of carriage between the shipper and carrier.
• As a document of title to the goods, indicating who legally owns the cargo.

A crucial part of international trade, the BoL ensures that the shipper receives payment and the consignee gets the goods as agreed.

Types of Bill of Lading

There are several types of Bill of Lading, each tailored to specific shipping needs. Choosing the correct BoL is essential to avoid delivery delays and to track and manage shipments properly.

Types of BoL include:

• Inland Bill of Lading: for land transportation, typically domestic shipments or the first leg of an international journey.
• Ocean Bill of Lading: for sea transport, often required for international shipments.
• Through Bill of Lading: allows the shipment to pass through different forms of transport, such as a truck to a ship.
• Negotiable Bill of Lading: transfers ownership of the goods — a key document in international trade, as it can be bought, sold, or traded while the goods are in transit.
• Non-negotiable Bill of Lading: does not transfer ownership of the goods but serves as a receipt. It's commonly used when the buyer and seller have a direct relationship.
• Clean Bill of Lading: demonstrates the goods arrived in acceptable condition, with no visible damage or shortages.
• Claused Bill of Lading: indicates that goods were received in an unacceptable condition, such as visible damage or discrepancies, often resulting in delays or additional inspections.

Who issues Bill of Lading?

A Bill of Lading (BoL) is issued by the carrier (the company responsible for transporting the goods) or their authorised agent. This could be a shipping, logistics or freight company or a third-party transporter. The BoL is created once the goods are loaded onto the chosen method of transport, whether it's a truck, ship, or plane. It is signed by both the shipper and the carrier, confirming that the goods are ready for shipment.

The BoL is then forwarded to the buyer's bank or directly to the buyer, depending on the terms of the sale. In transactions involving a letter of credit, the buyer's bank needs the BoL to verify that the carrier has shipped the goods before releasing payment to the seller. Upon arrival, the buyer or consignee uses the BoL to claim ownership of the goods and arrange for final delivery.

Who is the consignee on a Bill of Lading?

The consignee on a Bill of Lading is the person or company receiving the goods, typically the buyer. Details, such as their name, address and contact details, are listed on the BoL to ensure accurate delivery. Upon collection at the destination, if it's a negotiable BoL, the consignee must present the appropriate documentation, such as an original BoL, photo identification and an invoice, to ensure the carrier hands it to the correct party.

If the BoL is non-negotiable, the consignee may not need to provide additional documents, as the carrier releases the goods based on the information in the BoL itself.

What is a Bill of Lading number?

A Bill of Lading number is a unique identifier assigned to each BoL document. It allows shippers, consignees, carriers, and customs officials to track shipments' journey from origin to destination. The BoL number also provides access to detailed information about the goods, including the shipment's history, current location, customs clearance, payment status and delivery updates.

In addition to tracking the shipment, the BoL number links to other crucial shipping documents, such as commercial invoices, packing lists and certificates of origin. These documents are essential for customs clearance and compliance with international regulations.

BoL numbers are increasingly integrated into electronic tracking systems, providing real-time updates across global logistics processes. They play a vital role in managing large-scale logistics operations across multiple countries and transport modes, including reducing the risk of theft or misplacement of goods.