A bill of lading also known as BOL or B/L, is a document issued by a carrier to a shipper, to prove that goods have been received on board and ready to be shipped to the consignee to a named place for delivery.
The term Bill of lading drives from the verb “to lade” which means to load a cargo onto any mode of transportation (ocean, rail, air)
The Bill of lading is an evidence to:
- Confirm valid contracts between the consignor and the carrier.
- Confirm that the good matches the description and that the goods are in a good condition.
- It is also a document the governs all the legal aspects of physical carriage, also known as document of transfer, that is negotiable and can be used to transfer the ownership of the goods for the initial owner to another.
- In case a Letter of Credit is acquired, a clean B/L is required by the banks as a prove
A bill will be described as clean in case the product have been received on board in a good condition)
Basic elements that must be included in a B/L.
- Name of the shipping company
- Flag of nationality
- Shipper’s name
- Order and notify party
- Description of goods
- Gross/net/ weight
- Total weight and volume of the goods
What information should be included in a bill of lading?
- Names and full address of the sender (shipper) and receiver (consignee).
- The date of the expedition (shipment).
- The number of shipping units.
- Freight classification.
- The exact weight of the shipment. If there are several loading units, the weight of each item must be indicated.
- Type of packaging, including cartons, pallets, pallets and drums.
- A description of the submitted item includes the manufacturing material and the usual name.
- Order numbers or special account numbers used between companies to track orders
- Special instructions for the carrier.
- A note if the cargo is a dangerous material from the Department of Transportation. (Special rules and requirements apply when shipping hazardous materials.)
- The declared value of the freight sent.
3 major Roles of a bill of lading:
Receipt of the good
Evidence of the contract between carrier and shipper
Document of title that can be transferred from the named owner to another holder
Keep in mind that each shipping line or airline has its own B / L format, but the parts that need to be filled are almost the same. Learning from this template form will be sufficient for you to complete or understand a B / L for your cargo shipment work.
Bill of Lading in details:
B/L is one of the most important documents in the whole shipping and freight chain, that needs to be filled up.
Here you will find the B/L elements explained in detail. In case you are having problems with filling some of the elements the following will guide you.
1.Shipper
Is the name and address of the sender (shipper) that sends the load. This may or may not be the actual owner or manufacturer of the cargo, but it may also be a trader or freight forwarder depending on the type of B/L, but it may also be different from the cargo exporter.
2.Consignee
This is a key entity in the shipping chain. This field indicates the name and address of the person or company legally authorized to receive the cargo covered by the bill of lading.
This may or may not be the owner or consignee of the shipment, provided it is a bank, merchant or cargo agent, depending on the type of bill of lading issued.
The name of the consignee in the bill of lading also carries the risk and responsibility of being held responsible for many issues, such as lack of clearance of goods, late customs clearance, claims.
Notify: it is the name and address details of the person who should be notified of the arrival of the cargo. Depending on the bill of lading that is issued this could be the actual buyer or receiver of the goods, clearing and forwarding agent or the trader. Generally the notice of cargo arrival is to be sent to this notify party
3.Bill of Lading Number
is the unique number provided for the covered shipment in a specific bill of lading. This is assigned by the shipping line and must be quoted by the customer for any request, shipping information, arrival information, claim
4.Reference numbers
this space can be used to update specific reference numbers of clients or forwarders that they will use to track their shipments.
5.Carrier agents
Here, the contact details of the discharge port agents are generally recorded in the shipping line, so that the destination agent / freight forwarder of the customer can communicate with the agents of the shipping line to request the status of the shipment or go for release.
6.Pre-transport by
Assume that there is an inland point which is connected to the mainland port by means of a feeder (connecting) vessel, the name of that feeder vessel is shown here. Most of the times, it’s blank.
7.Place of Receipt
This is the place where the cargo is handed over by the shipper or his agent to the carrier (shipping line) or its agent.
This is very important in terms of the contract of carriage between the shipper and the shipping line. If this area is filled, it is assumed that the carrier has done the movement from here to the Port of Loading and if there any incidents, damages to the container or cargo between the Place of Receipt and Port of Loading, the liability will be that of the .
8.Port of Loading
This is the place from which the container or cargo is loaded by the carrier onto the nominated Ocean Vessel
9.Ocean Vessel/Voyage
This is the name of the vessel and the voyage number that carries the container or cargo from the (mainland) Port of Loading (example Durban) to the Port of Discharge (example Mumbai).
Remember that the combination of vessel and voyage will be unique and never repeated (well almost never).
10.Port of Discharge
This is the place at which the container or cargo is discharged by the carrier from the nominated Ocean Vessel.
11.Place of delivery
This is the final destination of the container or cargo. If this zone is full (example: ICD Bengaluru), this means that the carrier has undertaken to move the container or the cargo from the port of discharge to the place of delivery.
Again, as for the place of reception, the shipping line must be careful not to indicate anything in this field, as it will be responsible for the delivery of the container or the cargo in good condition and at this place of delivery.
If a place of delivery is indicated in the bill of lading, the carrier generally does not allow thecustomer (merchant) to receive the delivery of the container or cargo in the port of discharge and to transfer it to the place of delivery. arrives at the container or cargo en route to the place of delivery, the carrier can still be held responsible.
12.Marks & Numbers
Marks & Numbers are important information in a shipment. The shipper marks his packages with some information identifying the shipment so that the consignee can know what the shipment is. The marks and numbers can have any of below:
- the consignees name and address
- the purchase order number
- the number of the package – 1 of 32 for easy identification
Marks & Numbers play a much more important role in a breakbulk shipment or an LCL/Groupage shipment rather than a full container shipment. In these cases, it is prudent for the shipper to mark the packages in such a way so that identification of the same is easy, as in a breakbulk or groupage shipment there are many packages belonging to many shippers
13.Description of packages and goods
This area is used to describe exactly what cargo is being loaded in the container or LCL. Generally other information like number of packages, freight conditions, HS code are also mentioned
14.Gross Weight
This is the weight of the cargo that is packed in the container or loaded on board. This is generally only the weight of the cargo + the weight of the packaging and does not include the tare weight of the container.
Please note that in most cases, your supplier estimate the weight on the B/L. If they greatly underestimate the weight, the customs could judge the goods and perhaps reweigh the goods when the shipment reaches the port
Types of Bill of lading according to the mode of transportation
Ocean transportation
An ocean bill of lading is issued when goods are transported by ship.
Ocean freight to or from the U.S. is regulated by the Federal Maritime Commission (FMC)
4 common ocean Bill of lading:
Straight bill of lading:
- non-negotiable bill of lading which is consigned directly to the buyer
- The carrier will issue three bill of lading, in which one is endorsed by the consignee
- the straight Bill of lading is issued if the buyer didn’t pay yet for all or part of the goods.
Order Bill of Lading:
- Negotiable form of lading which is addressed to order of a party, instead of being consigned to the buyer.
- The Holder of the order Bill is generally the owner of the goods that being shipped
- Commonly used when the purchase of goods is under a letter of credit, or if the goods are being traded on a mercantile exchange while the shipment is being in transit.
Electronic telex release:
- Eliminates the need for an original B/L at the arrival destination for the release of goods
- The original B/L will be endorsed by the shipper to the carrier’s agent at the origin place. The agent at arrival destination will be notified by the origin agent.
- The notification of B/L is done electronically by email or integrated system
- The Electronic telex is used in case the buyer owes all or part of the goods, but pays before the arrival of cargo
Express bill of lading:
- Non- negotiable document, and no original bills of lading are issued
- The carrier releases the merchandise to the named consignee or notify party
- The express B/L is commonly used is case the importer has payed in advance for his goods, or in case he has credits with the supplier.
Air transportation
Air waybills (AWB) are issued when goods are transported by air.
AWB are non-negotiable bills, which means one the cargo is landed at the arrival destination, it is immediately delivered to the consignee or to the customs broker for custom clearance and final delivery.
Air waybills are evidence for:
- Contract of carriage
- A cargo receipt to prove that the carrier has received the shipment
- Delivery guide, in case of a special handling
IF the goods are being shipped under a letter of credit for payment, or through the shipper bank to receive payments, the AWB may be consigned to a bank and the consignee must pay the bank who in return will provide a bank release to the airline to release the goods.
This process typically takes several days during which the goods will sit at the airline warehouse and possibly incur storage charges.
Land transportation waybill
A document issued by a carrier that provides details and instructions for shipment of goods. It includes the name of the sender (consignor) and recipient (consignee), the point of origin of the shipment, its destination, and the route are displayed.
- Widely used in north America for overland shipments
- Short form contract of carriage that refers to terms and conditions in the carrier’s tariff
- A waybill is a non-negotiable bill and is never consigned “to order”
Be sure to request them – you will want to know the limits of liability under which your shipment moves.
The shipment can be sent under the terms “collect on delivery” in exchange for an additional processing fee for the carrier to protect the interests of the buyer and seller.
Uniform Bill of Lading
A uniform bill of lading is an agreement between an exporter and a carrier regarding property to be transported. The uniform bill of lading provides basic information about the shipment such as the shipper and recipient’s names and the shipment’s origin and destination.
In addition, the document establishes the terms of the carrier’s liability, transport time frame, how to file a claim for a lost or damaged shipment, how insurance will be applied in the event of a claim and how the shipment may be stored or disposed of if the shipment is refused or is not deliverable
Hang Tag
The hand tag is typically used when a truck driver shows up at a shipping dock or door for cargo pickup and fills in a form by hand – hence its name.
- Short form contract, with a brief note of certain terms and conditions.
- It is covered by the carrier’s liability limiy and refers to the carriers underlying tariff.
the hand tag is frequently used in the air freight and local carriage business by courier services and other electronically dispatched trucks that are hired to pick up cargo from shippers who did not prepare a uniform waybill for the driver to sign as a cargo receipt.
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