Bill of Lading: Here is What you Need to Know About a Bill of Lading

This post was last updated on September 4th, 2023

What is a bill of lading? This may be your question if you’re new to the shipping world. A bill of lading, also called BoL, is a document that outlines the details of a shipment. It is a document that a transport company gives a shipper of certain cargo.

A bill of lading includes essential information about the cargo. This includes the shipper and receiver’s name and contact information, the shipped goods, and their weight and dimensions. There are different types of bill of ladings, each with specific uses.

In this blog post, we’ll discuss in detail what a bill of lading is. Additionally, we shall look at the different types of bills of lading, why you need one, what to look for when filling one out, and how to complete it correctly. Dive in. 

Bill of Lading Explained: The Complete Beginner’s Guide

The Bill of Lading is arguably the most used document to execute transport transactions by sea, air, roadway, and intermodal rail shipping in the commercial sector. This is the primary document that acts as a contract between the carrier and shipper. It could also serve as an invoice as it shows the freight bill.  

This document must accompany all goods shipped regardless of the shipping method. Moreover, the carrier, shipper, receiver, and their representatives must sign the bill of lading document. All the details on the document are meant to ensure it is safe.

Who Uses a Bill of Lading?

The bill of lading document is used by all the parties that are involved in the cargo transport process. This includes the shipper, receiver, and carrier. The shipper uses the document to list the items being shipped, the quantity of each item, and the destination. The receiver uses the bill of lading to track the shipment and confirm that all items have been received. The carrier uses the bill of lading to transport the goods and track the shipment.

A bill of lading is an essential document in the shipping process, so it is crucial that all parties involved are familiar with its purpose and how to use it.

The Function of a Bill of Lading

The bill of lading document is one of the most important documents when transporting cargo. This document has three primary functions. These functions are:

  1. It acts as a receipt for the cargo being transported.

  2. It acts as a contract and holds the terms and conditions between the freight carrier and the owner.

  3. Has the transfer title of the freight being transported?

Why is a Bill of Lading Important?

The bill of lading document is essential for several reasons. First, it can be used as a contract between the shipper and the carrier. This contract outlines each party’s responsibilities in ensuring the cargo’s delivery and safety. If any damage or loss occurs during transport, the bill of lading can be used as evidence to resolve the dispute.

Additionally, it can help recover lost freight. This is made possible by the vivid cargo description found on the lading bill. There is detailed information that can guide the parties involved in case of misplacement. These details that give conclusive evidence include:

  • Address of name of shipper and receiver

  • Weight of the cargo

  • Cargo space occupied

  • Shippment date

  • Weight of the cargo.

The cargo description used on a bill of lading also helps describe the type of cargo. This gives all the parties involved an idea of how to handle it. For instance, if it is a fragile cargo, the parties involved can be more careful when handling it. 

What is the Process of Filling a Bill of Lading? 

Learning the process of filling a bill of lading is necessary, whether you are a shipper or carrier. Thankfully, this process is uncomplicated. The steps for filling a bill of lading are: 

  1. Find out the parties involved 

  2. Describe the goods

  3. Determine the value of the goods 

  4. Learn the shipping terms of the goods involved 

  5. Learn the shipping charges 

  6. Indicate the shipping charges 

  7. Indicate the lading number 

  8. Indicate the number of units involved in the shipment and have a description of each unit 

  9. Indicate whether there are hazardous materials in the cargo. If the cargo isn’t hazardous, describe its nature. 

  10. Sign the bill of lading and indicate the shipment date. 

There is some crucial information needed when filling out a bill of lading. They include: 

– The name and contact information for the shipper and receiver

– The goods being shipped and their weight and dimensions

– The date of shipment

– The mode of transport (sea, air, truck, etc.).

Fill in the required information if you’re using a bill of lading template. If you are creating your own bill of lading, include all of the necessary information and format it in a clear and easy-to-read way.

Signatures on a Bill of Lading

Once the bill of lading has been completed, it must be signed by both the shipper and the carrier. The carrier’s signature signifies that they have received the goods and they are in good condition. The shipper’s signature indicates that they agree to the terms of the shipment.

It is important to note that an authorized carrier representative must sign the bill of lading for it to be valid.

Is There a Bill of Lading Without a Consignee?

A bill of lading can be issued without a consignee, but it is not advisable. Without a consignee, the bill of lading becomes an open contract, meaning anyone who presents the bill of lading to the carrier can claim the goods. This could lead to confusion and delays in receiving your shipment.

Including the consignee on the bill of lading is always best to avoid any issues. The consignee can also be an authorized representative.

What Happens If the Bill of Lading is Not Signed?

If the carrier does not sign the bill of lading, it is not a valid or legally binding document. This could cause delays in receiving your shipment or even result in losing your goods.

If you are unsure whether or not the bill of lading has been signed, you should contact the carrier and ask for confirmation.

Who Receives a Bill of Lading?

The bill of lading is most commonly used in international trade. When goods are shipped overseas, the bill of lading serves as a receipt for the shipper. It indicates that the carrier has received the goods and lists the type and quantity of shipped goods. It also states the freight bill paid.

Who Issues a Bill of Lading?

The shipping company or carrier typically issues a bill of lading. In some cases, the freight forwarder may issue the bill of lading on behalf of the carrier. The bill of lading must list the shipper’s name, the consignee (the party receiving the shipment), and the notify party (if applicable).

How Many Types of Bill of Lading Are There – And When Is the Bill of Lading Required?

The Bill of Lading is a document that documents the transfer of goods from one ship to another. It’s given out after a cargo container – which comprises the items you’re shipping – has been loaded onto a vessel and travels abroad. There are various types of Bill of Ladings, depending on the goal, commodities, and necessity.

In some cases, the bill of lading may be used as a form of payment for the goods being shipped. If this is the case, it is known as a negotiable bill of lading.

If you’re shipping goods by multiple modes of transport, you’ll need to use a multimodal bill of lading. This type of bill lists all the different transport stages, from loading onto the initial mode of transport to unloading from the final mode of transport.

Whether you’re shipping by sea, air, or land, it is crucial to ensure that you have a bill of lading to avoid delivery delays.

Different Types of Bills of lading

There are three common types of bill of lading: Straight, Order, and Negotiable.

A straight bill of lading can only be issued to the consignee indicated on the bill.

Depending on who pays for the shipment, an order bill of lading can be issued to either the consignee or the shipper.

A negotiable bill of lading can be transferred from one party to another, making it more like a contract.

Each type of bill of lading has advantages and disadvantages, so choosing the right one for your needs is essential. When shipping goods, ensure you have a lading bill to protect your interests.

Other Types of Bills of Lading are: 

  • Blank endorsed bill of lading

  • Inland bill of lading

  • On board bill of lading

  • Master bill of lading

  • Multimodal or through bill of lading

  • Release bill of lading

  • Short Form Bill of Lading

  • Switch bill of lading

Electronic Bill of Lading

An electronic bill of lading (eBL) is created and stored electronically. eBLs have many benefits over paper bills of lading, including increased efficiency and accuracy, reduced costs, and improved security.

Accuracy is Crucial

Regardless of using a traditional BoL or eBL, accuracy is key when filling out the bill of lading. Incorrect information could result in delays, confusion, and even loss of goods. It’s important to take the time to double-check all of the information on the document before signing it. This will help to ensure a smooth and successful shipment.

What is the Difference Between a Negotiable or Non-Negotiable Bill of Lading?

A bill of lading can be either negotiable or non-negotiable. A negotiable bill of lading can be transferred from one party to another, and the title to the goods is passed along with the bill of lading.

Negotiable Bill of Ladings provides clear instructions to deliver to anyone with the original copy of a bill stating ownership of the freight and control of the freight. In such types of bills, the buyer/receiver or the agent must obtain & present an original copy of a bill of sale. The cargo cannot be released without documentation on this document.

A non-negotiable bill: This type of delivery invoice specifies the consignee and the recipient to send and deliver the merchandise for shipment. Nevertheless, this cannot give ownership over the goods.

A non-negotiable bill of lading cannot be transferred, and the title to the goods remains with the shipper. 

A bill of lading is typically used when goods are being shipped by sea, but it can also be used for other modes of transportation.

Do You Need Help Getting a Bill of Lading?

A bill of lading is an important document in the shipping process. It serves as a contract between the shipper and carrier and outlines the terms of the shipment. There are many types of bills of lading, but accuracy is critical when issuing one. Unfortunately, applying for and working with a bill of lading is easier said than done. 

If you need assistance with your intermodal shipping needs from or to Canada, contact Railgateway for a rail quote. We’ll help you understand different lading types and any freight bill you need to pay. Our goal is to make your shipping process as smooth as possible.