If you’re an importer or exporter, you know there are many documents you need to ship products from one country to another. Some of them include bill of lading, product list, commercial invoice, bill of entry and certificate of origin.
So, in today’s article, we will explain everything related to the bill of lading.
Definition of Bill of Lading
If we talk about bill of lading, this is basically a legal agreement between you (shipper) and carrier of the products. You will get this paper by the carrier of goods or the transportation agency. They are the ones who provide you shipping services. In this case, you as a shipper will supply products for moving from one country to another.
So, BOL is a document which you must submit to the customs authorities of origin and destination ports. Otherwise, the goods can’t be shipped internationally or nationally.
Main Functions of Bill of Lading
The following are the primary purposes of BOL in shipping:
1. Goods Receipt
The bill of lading functions as the proof of shipping of goods. It shows that the carrier received the cargo for further transportation.
2. Delivery Confirmation
BOL is a proof that the goods are delivered to their receiver or consignee at the destined location.
3. Contract of Carriage
It shows that there is a contract between the shipper and the carrier company to transport the cargo to the specified location.
4. Title Proof
The Bill of Lading or BOL is a document that proves who owns the goods. It transfers the ownership of the goods from the carrier to the receiver at the delivery point.
What Information Does Bill of Lading Contain?
Your bill of lading contains the following information:
Goods Description
The BOL contains all the details of the cargo such as its dimensions, number of units, total weight, and what type of goods you are shipping.
Packaging And Freight Class
The Bill of Lading also shows the type of packaging, such as cartons, pallets, drums, or crates. In addition, it includes the NMFC freight class for shipping, which ranges across 18 different classes. These classes are based on factors like the cargo’s type, size, weight, density, and how easy it is to handle.
Information of Parties Involved
Shipping involves three parties: the shipper, the carrier, and the consignee. The shipper provides the goods, the carrier transports them, and the consignee receives them. The Bill of Lading includes their details, such as names, addresses, and contact information.
Departure & Arrival Location
This document includes the address of the origin point and the final destination. These locations may be the seaports, airports, or railway stations. It depends on what you choose for shipping your cargo.
Order Number
The reference number and purchase order number must be included in the BOL. Why? Because they are necessary for releasing your cargo at the delivery point.
Special Guidelines
If there are any specific guidelines related to handling the goods, they must be added to the bill.
Types of Bill of Lading in Shipping
There are various types of bills of lading, classified on the basis of their function. Let’s have a look at the purpose of each one.
Bill Based on Transfer of Ownership
You can use one of the following bills for getting the title of goods:
1. Negotiable Bill of Lading
This bill allows the ownership or title of the cargo to be transferred by presenting the original copy. In shipping, the title of goods transfers from the shipper to the consignee once the items are received. The consignee, now holding the BOL, can sell the goods to another party.
It is also known as an open bill of lading as it allows the transfer of ownership among various owners. Additionally, the Switch BOL is one of its types, and it allows for changes in the destination point as well.
2. Non-negotiable Bill of Lading or Straight Bill of Lading
This type of bill proves the ownership of cargo, but it cannot be transferred to someone else. The person or company named in the BOL is the only one who can claim the goods. It is not like a negotiable BOL, where ownership can change hands.
Therefore, at the time of issuance, the consignee is designated as the owner of the goods. Moreover, a specific location is already selected for the delivery of cargo. No further changes are accepted to it.
This document specifies that the consignee is the person who presents the documents at the receiving port. No specific name or details of the consignee are mentioned on the bill. Whoever holds the documents can claim the cargo from the carrier.
4. Order Bill of Lading
Under this bill, the cargo is delivered to the location specified by the receiver or consignee. It is a negotiable bill, and the delivery is made to the person who holds the documents and has been properly verified. This finally ensured a secure transfer of the cargo.
Lading Bill Based on Shipping Methods
The following types of bills are used for different modes of transport:
1. Ocean Bill of Lading
As the name shows, this bill is issued when your cargo is shipped by ocean.
2. Inland Bill of Lading
It is used when cargo is transported over land, such as through railway routes.
3. Multimodal or Combined Bill of Lading
You will receive this document when you use multiple ways of transportation. They are for instance sea, air, and land for shipping cargoes.
4. Through Bill of Lading
This document is used when goods are shipped using multiple carriers or methods of transport, such as a combination of sea, rail, or road. It covers the entire journey from the point of origin to the final destination (For example from China to the UK).
Bill of Lading Based on Shipment Status
The below bills are used in different cases of shipping:
1. Received For Shipment Bill of Lading
It is issued by the carrier when they receive the goods but before they are loaded onto the ship. Plus, this also confirms that the carrier has received the cargo and will transport it to the destination. However, it does not yet confirm that your products are on the ship.
2. Shipped Bill of Lading
It is issued when the goods are loaded on the vessel for transportation. This type of bill serves as proof that the cargo is on its way to the destination. At this point, the risk of damage is transferred from the shipper to the carrier.
3. Claused Bill of Lading
It is normally issued if any damage or theft happens to the shipment during the journey. We also call this paper the dirty bill of lading.
4. Clean Bill of lading
The Clean Bill of Lading means that your goods loaded onto the ship are in the same condition as when they were received. There is no visible damage or harm to them.
Lading Bill For Specific Purposes
Some other bills used in the shipping industry include:
1. House Bill of Lading (HBL)
If you’re a shipper, you normally get this document by your freight forwarder like Bansar. It’s used when the freight forwarder combines multiple shipments from different shippers into one larger shipment or single container. The HBL can also be issued by a Non-Vessel Operating Common Carrier (NVOCC).
2. Master House Bill of Lading (MBL)
This bill is produced by the shipping line or carrier to the freight forwarder. In this case, the carrier is responsible for transporting the goods. You also used it for consolidated shipments.
3. Surrender Bill of Lading
It is an official document used when the person receiving the goods (consignee) doesn’t need the original BOL to pick up the cargo. In contrast, your goods will be released by presenting alternative documents to the carrier.
4. Short-term Bill of Lading
It is mostly used for short-distance shipments. This document lacks detailed information and specific terms of the transportation contract.
Bill of Lading Example
Now you have a clear picture in your mind about this important lading bill. We also told you about the things which are mentioned on this billing document. You can further have an idea of BOL from this image:
FAQs
Who Issues The Bill of Lading (BOL)?
The BOL is usually issued by the freight forwarding company or carrier of your goods.
Who Receives The Bill of Lading?
The shippers (sellers of goods) commonly receive the BOL. They may either send it to the consignee (buyer) or retain it for themselves.
How Is The Bill of Lading Prepared?
It is prepared by collecting the necessary details and filling out the form. After that, the bill is reviewed and signed by the shipper and carrier.
What Is The Difference Between a Shipping Bill and a BOL?
A shipping bill is used for customs clearance and hence declares the value of the cargo being shipped. In contrast, BOL confirms receipt of goods and promises delivery to the specified party.
Who Covers The Cost of The Bill of Lading?
The cost is mostly paid by the shipper, but in some cases or as per agreed terms, the consignee can also clear the amount.
Final Thoughts
We have tried our best to give you the relevant shipping details for your lading bill. However, if you want more help in preparing this document or shipping from China, our team is ready. You can contact us 24/7 to get a free quote for transporting your cargo.
