What is the bill of lading: The Ultimate Guide (2020 updated)

bill-of-lading

A Bill of Lading is a very important piece of Paper in the shipping industry.

If you want to ship your products then check what you need to know about the Bill of Lading for shipping.

Bill of lading guide

What’s the Most Applicable Bill Of Lading types?

Two types of Bills are practically used for shipping Sea bill of lading and the airway bill of lading.

If you want to transfer your products in short transit time and you have a rigid deadline then choose airway Bill of Lading.

Airway BOL is a little bit expensive but meets your deadline.

Another option is Sea/Ocean Bill Of Lading.

Sea BOL is a cost-effective and secure way of shipping.

Ocean Bill of loading is issued exactly at the time of loading products in the ship and right after signature done by the shipmaster.

Keep one thing in mind, Bill Of Lading delivered when payment released under the conditions on the letter of credit.

This type of ocean bill of lading is delivering when payment is conditional on a letter of credit.
 

What is a notify party on Bill of Lading?

Name and address of a specific person are notified who should be updated with the arrival of freight on destination.

When am I tracking my cargo, why Bill Of Lading not found?

There could be some reasons

Maybe you have not enteredBill of Lading Number

If you are using public access tracking service then verify your account number is correct or not.

What is the difference between Bill Of Lading and Seaway Bill?

Both are ownership documents for the shipping by the ocean, but never think BOL and Seaway Bill have the same functionality.

A Seaway Bill is the confirmation proof of shipping products and receipt of transferred goods.

In another side, BOL is ownership document, contract of shipping while also used as a document of title.

1. The meaning of the bill of lading

What is the bill of lading?

The short name is B/L when you start shipping your products transport department give a certificate to the consigner.

The interesting thing is, the word “lading” comes from the word “loading”

In foreign trade, the piece of document (certificate) is called Bill of Lading.

Bill of lading

Another name certificate of ownership of the freight which allows shipping of your products.

The person has the bill of lading allowed to receive & exchange goods.

Bill of lading is the contract which allows the carrier to transfer goods from the loading port to the destination port.

Most important and worthy document in the shipping journey but also the most misused document.

Roll of Bill of Lading

  • The contract of carriage
  • Receipt of loading products
  • Title of goods

The contract of carriage

To transfer freight required details about loading port, destination port, and regulations mentioned in this paper.

The Bill of lading is a simple contract between buyer and seller.

BOL is a negotiable instrument and can be endorsed to the third party without any restriction.

Receipt of carriage

Details, number of loaded products & cost on freight services.

Title of goods

Required names for receiving party mentioned on the bill of lading.

This allows the holder to further transfer the products to someone else.

Who issues a bill of lading?

The bill of lading issued by the freight forwarder or shipping agent after properly acknowledging the freight receipt.

Carrier or agent is responsible for the loss & profit during cargo transfer & consignee is the other party mentioned on air waybill for which shipment is committed.

But keep one thing in mind authorization of carrier or shipping agent must be crystal clear.

When is a Bill Of Lading issued?

Bill of lading is issued at loading time. In case of ocean freight, BOL issued when ocean container loaded.

But there’s another case at the time of rail freight multimodal Bill of Lading issued by the freight forwarder.

2. The contents and filling of the bill of lading

  1. The Bill of Lading NO
  2. Shipper
  3. Consignee
  4. Notify party
  5. Name of vessel or container
  6. Place of receipt
  7. Port of loading
  8. Port of Discharge
  9. Place of Delivery
  10. Description of goods
  11. Number and kind of package
  12. Shipping marks
  13. Gross weight
  14. Freight & Charges Detail
  15. Temperature Control
  16. Freight forwarder or agent signature
  17. Terms and conditions of

The Bill of Lading Number

Check the upper right corner of BOL.

When consigner starts shipping process he should provide ship name & Bill of Lading number to the consignee.

Shipper

Shipper name and address is recommended to fill out in BOL, the code is also necessary.

Shipper detail is mandatory to proceed the process.

Consignee

All the information relevant to consignee is mandatory to fill.

Credentials required to contact the consignee phone number, fax number, and address.

Notify Party

This is about the receiving end, shipping company notify after reaching the destination port.

This section may have the same information Name, detail address, and phone number.

If you provide a wrong address or phone number, then how a company contact consignee to inform about the freight status.

Name of The vessel/Container

Filling the name of shipment, container, and voyage.

Container name is required when the Bill of Lading shipped.

Actual time of loading cargo Fill onto the Bill of Lading.

Place of Receipt

This column is specified for the multimodal transport.

It indicates the location where freight forwarder receives the freight.

Port of Loading

This column should be filled by the name of the port from where cargo is loaded.

Port of Discharge

The column should be filled with the specific name of the destination port.

Port of discharge where all the products unloaded from the container.

You should pay keen attention when you fill this column.

You need to have the exact name of port for smooth shipping process.

Place of Delivery

This column indicates where the freight forwarder delivers the products.

Carrier fills this column under multimodal mode.

The terms of carriage involved are door to door, field-door, and station-door.

Description of Goods

The important thing is the name of products must be the same as the name on the letter or credit.

All the details about products mentioned in the Bill to make shipping process secure.

Gross Weight (Measurement)

If delivery details mentioned in the letter of credit, it should be filled according to rules and regulations.

In another case, weight is mentioned in kilograms & volume in the cubic meter.

 Temperature Control Instructions

If you want to ship a refrigerator, the specific temperature should be mentioned in the column of the temperature control instructions.

Two parts are included in the content of Bill of lading

  1. Positive fact record
  2. Back bill of B/L

Every shipping company formulated the contents approximately in the same way.

How to fill a Bill Of Lading (BOL)

BOL is the legal document of ownership used by shipping companies.

The main purpose of this document is the shipping companies or freight forwarders has received the products.

You should follow some instructions when you fill a Bill of Lading.

  • Put your exact name and location in the appropriate field.
  • Mention your purchase order on Bill of Lading.
  • Insert the name and address of shipment receiver.
  • Include some guidelines for the freight forwarder about the handling of shipment.
  • If you already collect the shipping charges then mention.
  • Mention the number of packages in the container & specify the type of packages.
  • If you want to ship hazardous material then choose a special type of shipment & mention on BOL to avoid any inconvenience.

Check how the BOL filled correctly by an example:

BOL

To get the better understanding to follow step by step.

  1. Put the exact date
  2. If necessary then fill with lading number.
  3. Attach barcode to fill this field.
  4. Enter pro number of freight forwarder.
  5. Insert reference number for official use (optional).
  6. 6 Insert Shipper and consignee’s name and proper address. ( Zip code is mandatory to mention)
  7. If a third party involved paying for shipment then mention the company name, contact and address.
  8. Some of the special notes should be marked on Bill Of Lading
  • Special guidelines for delivery status
  • Purchase order number
  • Account number
  1. Indicate the shipment delivery date and time & mark for the proactive notification.
  2. If you want your freight is collected by freight forwarder mark the BOL as COD (Collect On Delivery)
  3. Insert collect on the delivery amount, this is basically the price of the specific product.
  4. Indicate verification of company for COD.
  5. Mention number of shipping containers. Sometimes you don’t need to mention the individual number of packages and items in a shipment.
  6. Indicate the type of package typically package is boxes, barrels, and skids.
  7. Enter the number if you ship individual pieces.
  8. Mention unit of measures for weight and volume.
  9. If you want to ship chemically hazardous material then first discuss with the freight forwarder.

Special rules applied to such type of products.

Place simply X in this Column to mention products hazardous.

  1. Write a proper description of products with the nature of the material. Your freight forwarder helps you to determine the exact specification of your freight.
  2. Insert item number of National Motor Freight Classification.
  3. Your shipping charges based on the classification of products. Enter correct class specification.
  4. Put exact field in this field. If you want to ship different types of products then prepare the list of things.
  5. You need to mention the exact height and width of the products. If you want multiple products to ship then list of shipment products required to attach with Bill of Lading.
  6. Enter correct contact number in case of the emergency company can contact you.
  7. Mention the name of the person or company who is responsible for the payment of shipment charges.
  8. Insert the declared price of products.
  9. Mention the charges billed to the consignee.
  10. Enter the name of Freight Forwarder Company (as the shipper) and sign the bill BOL by the forwarder.
  11. An authorized person from freight Forwarder Company sign the Bill of Lading and mention the number of shipping containers.
  12. All the details should be mentioned here who loaded the container & counted the shipment packages.

What information must be included on the bill of lading?

Information in BOL

  • Shipper and carrier name and contact credentials.
  • The date and port of shipment
  • Freight Classification.
  • Weight and volume of the shipment
  • Types of Bill of Lading
  • Description of the products according to the material and nature of goods.
  • Special instructions to the freight forwarder.

3. The function of the bill of lading

Read this guide to know the functions of Bill of Lading

  • Bill of Lading is the receipt of shipping products or the ownership documents to allow the goods to be loaded into the container.
  • The function of Bill of Lading is receiving goods, this is not only for loaded freight carrier has issued the obligation to ship the bill of lading.
  • Bill of lading is the proof of loading the cargo in the container, it also indicates the time when products loaded.
  • Loading goods mean seller to transfer the products to the buyer and transit time of shipping also means the time of receiving goods.
  • Bill Of Lading is the legal ownership of freight to transfer products and carrier has right to receive goods on the destination port.
  • If you transfer bill of lading to the third party it means you are transferring the right to transfer goods.
  • The freight forwarder is responsible if any product is damaged during shipping.
  • After transferring the bill of lading from seller to buyer risk of damage products also transfer to the buyers.
  • The document is a legal contract to ship products by sea.

4. Issuance & correction of the bill of lading

Issuance bill of Lading

A Bill Of Lading is the legal document issued by the carrier for the transfer of goods.

Bill of lading terms & conditions

In the year 0f 2013 The Federal Motor Carrier Safety Administration issues new regulations about

New rules established to eliminate double brokers.

You cannot ship without brokerage license and keep one thing in mind freight breakage and carrier responsibilities are not same.

You must follow the regulations, what is acceptable and unacceptable according to the shipper and carrier.

If carrier finds any type of incongruity then shipper must create a new copy of Bill of Lading.

How Bill of lading works?

Bill of Lading works in a different way like:

  • As receipt of products
  • As a contract between carrier & shipper
  • As a title of goods

Receipt of goods

Bill of Lading is a document issued as receipt of products, this is the evidence carrier receive products in good condition.

As Contract between carrier and shipper

BOL is a contract to transport the freight from seller to buyer.

This contract is an evidence for the ownership of the carriage.

  As the title of the goods

A piece of paper is the legal proof of ownership.

The holder of the BOL has the right to claim the products to transfer to another party.

Consequences of an incorrect bill of lading

There’re different things you have to face by the incorrect filing of BOL

  • Freight doesn’t transfer safely to the destination
  • Claims
  • Loss or protection from the loading port to destination port
  • Loss of the right to transfer goods to the third party

Claims and clean bills.

Claims

When the cargo transferred by the shipping company according to the specified time the receiver sign a document (Bill Of Lading).

Bill of lading signed if they are delivered in satisfactory condition.

When products delivered without any damage and in a satisfactory condition not even late then it is called “clean bills”.

The other condition is the late delivery of consignment and your product is damaged during the way then customer intends to fill a claim.

You need to mention nature of your claim on the Bill Of Lading before signing them.

What is the difference between a Bill of Lading and Freight Bill?

Both documents are approximately same but freight bill cannot provide evidence for transferring products from one party to the other.

Fright bills is an invoice with 3PLs which helps to improve costs and resolve different problems.

Bill of lading in import

How bill of lading used in international trade shipments?

  • Bill of Lading helps to maintain economic, social and political stability.
  • Normally shipper support to deliver products and carrier issues the Bill Of Lading.
  • It contributes to improving the domestic goods on the national level.

Transferability of Bill of Lading

The Bill of Lading is ownership document of title, having precise attributes which are commercially important.

These attributes help to improve international trading.

5. Endorsement of the bill of lading

Endorsed

Endorsement Charges in shipping

A legal transfer of goods between parties is called the endorsement. It can be the amendment in contract or legal document.

Shipping Guarantee/Bill of Lading Endorsement helps to avoid high charges and fluctuation of price.

It guarantees the products delivers before Bill of Lading arrives.

You can transfer your goods without advance payment first.

Risk of the blank endorsed bill of lading

Blank endorsement means no owner of BOL.

In this case, the carrier becomes the owner of Bill and has the right to claim the products, and responsible for the shipping of freight.

6. Recommendations of Bill of Lading

What is the importance of creating an accurate BOL?

Bill of Lading included a lot of information, don’t you ever think why BOL is so important?

Let’s read this article to know why

Name and address of the shipper and receiver are important.

If contact is not provided accurately your consignment could be delayed by the freight forwarder.

Date & Time of Shipment is important, you can estimate the transit time of your shipping.

The specific date mentioned on BOL help to track the products.

The number of units loaded in the container is mandatory.

This information help to claim the shipping packages in case of any inconvenience.

Freight Classification helps to find out the exact charges.

Different type of products subjected to different charges according to the nature of freight.

Packing type– another factor to estimate freight charges.

This totally depends on the packing of products (cartons, skids, and drums)

Special Instructions helps to handle all shipping activities and processes.

Things to consider before signing the BOL

things to consider

Some of the points you must keep in your mind before signing the Bill of Lading.

Verify The Shipper’s Identity

Verify all the information provided by the freight forwarder first.

The shipper has to assure the transporter’s service.

So make sure your shipper name, address and contact number should be mentioned on the Bill Of Lading.

Port and Date of Loading

The Date of loading should be mentioned on the Bill of Lading.

Port and date of loading help to calculate customs duty & transit time of shipping.

Port of Discharge

You must know about the port of discharge, it helps to avoid deviation charges.

The condition of the Goods

Confirm the conditions of the products before loading into the container.

Mention the description of the products correctly on Bill of Lading.

After arriving at the destination port you can check the freight condition accordingly.

Commercial Terms

There’s no need to include any type of commercial terms in Bill of Lading.

If you mention these terms in BOL, ideally you should remove from the Bill of Lading.

Proof Reading

Filling the form carefully is an important thing but you need to double check your bill of lading to evaluate the mistakes and missing fields.

You should make sure you fill your loading port and destination port accurately to avoid any type of inconvenience

Checks to be made before signing bills of lading

You must keep some of the points in your mind prior to signing the Bill Of Lading.

Bill Of Lading is the piece of the document approved by the Charterparty.

Put the exact name of the vessel or container.

Provide detail descriptions about products you want to ship, place of loading freight, destination to unload products, cost & transit time for shipping.

Check your Bill Of Lading with the shipping company is it correct to refer to specific places.

7. Common Types of the bill of lading & When to Use Them

Straight Bill of Lading

Normally used when to start shipping to a customer.

Straight Bill of Lading assigned to the specific team and team cannot reassign to any other party.

Straight Bill of lading is for the products that have already paid for & cannot sale again.

Order Bill of Lading

Type of Bill of Lading used for shipping when no advance payment paid.

You can read two important functions of to order Bill of lading

  1. To order Bill of lading helps to prevent shipping to undesired people.
  2. Consignee can ship the title of products to the third party with the endorsement.

Clean Bill of Lading

This type of Bill of Lading indicates carrier receive all the products in good condition and in proper packaging.

The condition of received goods is the same as on loading time.

Unclean Bill of Lading indicates carrier receive the products with slight damage.

Inland Bill of Lading

When freight is totally transported by road or by land then this type of BOL issued

Rail freight is also included in this type.

Ocean Bill of Landing (Port to Port BOL)

Ocean Bill of Lading is a paper issued when your shipment transfer by sea freight services.

This is the ownership letter for shipper and carrier.

Express bill of lading

Express is the type of bill of lading in which carrier is assigned to deliver products to the specific consignee without original Bill Of Lading.

Work mechanism of Express Bill of Lading is you can ask your freight forwarder for the issuance of “Express Bill Of Lading”.

Just right after the customs clearance process, your customs agent send BOL directions to freight forwarders and after that, you will get a copy of Bill Of Lading to reach on the final destination.

advantages-amp-disadvantages

Advantages

  • Consignee doesn’t require original Bill Of Lading so shipping process is speedy.
  • Shipper saves the courier service cost, you can send confirmation by Email.

Disadvantage

  • This’s just a receipt of shipping products, it’s not negotiable.
  • Without Original Bill Of Ladingshipping isn’t secure.

Through Bill of Lading

Different distributors and mode of transport required some documentation

This type of BOL issued if your shipment transfer by different distributors & mode of transport.

Bill of Lading issued for the ocean as well as land freight.

Multimodal Bill of Lading

As according to the name BOL issued, when your shipment transfer by different modes.

Ocean freight, Rail freight, and Road freight.

Mostly industries used multimodal BOL these days

Direct Bill of Lading

Different types of BOL mentioned here but Direct Bill of Lading is the most recommended type.

Your freight is loaded into the container, the same container will deliver your cargo to the final destination.

Stale Bill Of Lading

Bill of Lading presented to the bank administration or delivered to the carrier after safely reached the destination port.

Received Bill of Lading

A simple form of Bill of Lading presented your freight arrived at the port and safely loaded on the container.

You must use some temporary Bill of Lading if your shipment is delayed.

Clause Bill of Lading

“Bad Bill Of lading” or “foul Bill of Lading” in which delivery of your products is totally opposite to the expectations regarding quality.

Bearer Bill of Lading

In this type, a bearer of the BOL is totally responsible for cargo

Consignee name is not mentioned in the Bill Of Lading.

This is the unique type, but be aware chances of misuse are also high in this kind of BOL.

Switch Bill of Lading

Most convenient option Bill of Lading can be replaced with the new one.

This document is issued at the loading time of shipment.

Seaway Bill of Lading

Seaway bill of lading is a document issued to shipper and carrier.

No original Bill of Lading is required products authentication is automatically processed & send to the destination port.

Seaway bill is also known as express release Bill of Lading.

Original Bill of Lading

A very simple document consists of straight Bill of Lading and in order bill of lading assigned to the shipper and carrier to precede shipment process.

8. Mistakes you need to avoid on BOL

shipping doc mistakes

  • Description of the freight wrongly
  • Be concise to write your product description. Name of freight & details should be mentioned carefully on Bill of Lading.
  • Number of freight containers wrongly mentioned
  • You should mention the number of containers/ vessels and in some cases a number of products in one container.
  • Be sure how many products you order to ship and verify on the destination port.
  • No precautionary measures for hazardous material
  • If you want to ship dangerous material, you need to take care of safety measures.
  • Label the Bill of lading appropriately and learn how to ship your hazardous products safely
  • Improper communication with the freight forwarder.
  • Make sure you are providing required information to the freight forwarder. If your carrier needs to ask some questions then answer carefully to make your shipment process easy.
  • Fill wrong information in the contact section
  • Bill of Lading is the document which is the evidence of the carriage. Your freight forwarder may need to contact you in any case of emergency. You must provide the correct contact information to avoid any type of inconvenience.

Missing information in Bill of Lading

Print

Check twice the BOL and make sure all the fields have been properly filled out.

Not Understanding Rules and Regulations on Bill Of Lading.

Understand all the terms and conditions and recognize your responsibilities.

The consequence of Not Used or Inaccurate Bill of Lading

The worst consequence of incorrect filling is you wouldn’t get your shipped products.

But there’re some other consequences which effect badly.

· Exposure to claims

If the products loaded in good condition from loading port but received in damaged condition at the destination port.

Consignee will allow exposing a claim for the damage.

Another example will help you to understand if your shipment consists of 100 boxes but 90 arrived at destination consignee have the right to make claim against the BOL carrier.

· Criminal action

· Loss of the right of protection

Solutions to Ensure Your Bill of Lading is Correct

This’s incredible, shippers and carrier how to deal with risk factors &compete with their opponents.

To ensure your Bill Of Lading correct follows some tips.

Use Standard Bill Of Lading

If you try to find Bill Of Lading form from the internet you can have a varietyof bills to download.

You should choose the most suitable Bill Of Lading you are familiar with.

Triple Check before Signing Bill Of Lading

To avoid any type of inconvenience check 3 times before signing this legal document.

It’s an authorized document so it’s very important to check

Frequently Asked questions about Bill Of Lading

FAQ

I have lost my original Bills of Lading. Can I obtain a new set?

If you lost your original Bill of Lading, normally you cannot get a new copy of the bill.

You need to come with the court orders for the issuance of the new document.

Court contact to the carrier and order to release shipping line & court also order to the shipper to pay the cost of the document.

You are advised to take care of your document to avoid such type of inconvenience.

How do I fill out a Master Bill of Lading?

Master Bill Of Lading document has detail instructions on how to fill out the bill of lading just follow step by step process.

Can I have more than three original Bills of Lading at the same time?

No worry to have more than one Bill Of Lading but three BOL is standard numbers like:

One Bill Of Lading is for Shipper, one for the career and the other is for the broker.

It’s recommended to apply for the issuance of BOL as according to your actual need.

If you applied for the multiple Bills Of Lading, the risk factor of fraud & scam increased.

What is the Relationship Between Incoterms and Bill of Lading?

As you know, the bill of lading is a vital document in international shipping. It serves as proof of receipt of goods for shipping.

Incoterms

Incoterms

Equally, incoterms are quite significant in both domestic and international shipping.

Incoterms are terms of sale that define the buyer and seller’s roles and obligations in a shipping contract.

The terms of sale that buyer and seller agree upon will also be reflected in the bill of lading.

For instance, you can agree to buy goods on FOB terms and make payment upon receipt of the bill of lading.

This means the seller will ship the goods to the shipping port and load them aboard the shipping vessel.

The carrier will then issue the seller with an original bill of lading acknowledging that they have received the shipment.

Owing to the terms of sale, the seller will retain the bill of lading and only email you (buyer) a copy of it and other shipping documents when requesting payment.

Remember that the bill of lading usually has the consignment number that you can use to track your shipment.

Also, note that without a properly written bill of lading, control and ownership of goods cannot be transferred.

As earlier mentioned, Incoterms define who takes responsibility and risk of goods at certain stages of the shipping process.

More so, they define the financial responsibilities of each party.

A bill of lading clarifies the terms under which freight has been shipped, i.e., freight prepaid or freight collect.

These terms define who bears the cost of shipping. If the goods are sent on “freight collect” terms, the buyer pays for the freight charges.

If the goods are shipped on “freight-prepaid terms,” the seller is billed for the freight costs.

Note that shipping companies must receive the freight charges from either party before they can hand over the goods.

Also, incoterms clarify who takes liability for goods at different points. In the event of damage, the liable party must produce the lading bill when processing the insurance claim.

When the buyer and seller agree on payment by letter of credit, the buyer will need a bill of lading to obtain the letter of credit.

When is a Switch Bill of Lading issued?

 International shipping

International shipping

As international shipping is unpredictable, several changes can occur along the way.

These changes can impact a few things in shipping, including the bill of lading document.

Typically, amendments in an original bill of lading may necessitate a new BOL, the switch bill of lading.

This may happen in the following circumstances.

  • Where trade involves three parties, here, a mediator is involved in trade, and in most cases, an importer is not directly involved with the seller.

A trader who acts as middleman ships goods from the seller at an agreed price and terms.

In this case, the trader is issued with the original bill of lading.

However, on the subsequent transaction where the middleman delivers the goods, an exchange bill of lading is issued.

  • If a go-between wants to conceal the buyer from the seller, they can use a switch bill of lading.

They can amend the document to prevent personal dealings that might remove the middleman from the supply chain.

  • You can also use a switch bill of lading when there are changes to the original trade terms.
  • Sometimes, goods can be resold before final delivery to the initial buyer. As a result, the discharge port will change to another port, which will require another bill of lading in exchange.
  • Sellers can use a switch bill of lading when they want to keep their personal information a secret.

They may also consider using this type of lading document when they don’t want the buyer to know the origin of the goods.

In this case, the seller may request that the actual port of origin be named as another port.

  • When the shipment arrives at its destination before the original bill of lading, an exchange bill of lading may be used in its place.

Please note that it isn’t easy to differentiate a switch bill of lading from the original bill of lading.

In most cases, only the shipping agent and the seller may know if the original bill is swapped.

What is an Electronic Bill of Lading?

The shipping industry has seen some emerging trends that have since modernized the way shipping documentation is handled.

For instance, the bill of lading document has always been issued in its traditional paper form.

This is still ongoing, especially where the document is issued as a negotiable contract.

However, recent times have seen the emergence of the electronic bill of lading, also known as a sea waybill.

It serves the same purposes as the traditional bill of lading.

The only difference is that this is a digital document issued by the shipping company to the shipper via email.

And unlike the traditional bill of lading, this electronic version is non-negotiable.

It is also not signed and does not require the presentation of a negotiable document for delivery at destination.

Note that the electronic bill of lading only fulfills two of the three main functions of a bill of lading document.

These functions are; evidence of a contract of carriage and receipt of goods.

The e-document does not fulfill the function of document of tile, which one of the critical roles of a BOL issued as a negotiable contract.

Advantages and Disadvantages of using an Electronic Bill of Lading

An electronic bill of lading offers the following advantages.

  • It saves on costs since there are no papers to produce and carriers to be paid to transport the documents to different destinations, sometimes overseas.
  • The electronic bill of lading can be circulated anywhere in the world with a click of a button.

You only need an internet connection, and the whole process is automated. Therefore, there is an easy transfer of ownership and tracking of the shipment.

  • An electronic bill of lading allows for easy modification whenever necessary. In such a case, it is cost-effective and time-saving.
  • If the electronic bill of lading is written correctly, it is easy to draw audits and keep records. Besides, committing fraud during shipping becomes difficult.

A paper bill of lading slows the shipping process because goods are only released once the bill has been processed.

 It is also easy to forge the paper bill, which leads to huge losses when the delivery of goods is done using a forged bill.

Similarly, an electronic bill of lading is not 100% safe.

If the bill is not secured, hackers can manipulate data leading to the loss of the cargo.

Terminologies in a Bill of Lading

You already know what a bill of lading is and the various types available.

You also understand that a bill of lading document is essential in ensuring the smooth shipping of goods.

In this regard, it is also essential to understand the various terms used in a bill of lading document.

Some of these terms are:

Received for Shipment

The bill of lading serves as a communication link between the shipper, consignee, and the seller.

The ‘received for shipment’ is a statement used by the shipper.

It indicates that the goods scheduled for shipping have been received by the shipper, verified, and scheduled for shipping.

Onboard

Mostly used in rail and truck transport. It shows the date on which the consignment was loaded on the rail or truck for transportation.

Rail Onboard

Denotes the specific date the cargo was loaded on a rail car for transportation.  

On some BOLs, this term may be indicated as ‘onboard rail.’

Should you use One Bill of Lading or Multiple Bills of Lading in the Case of Multiple Containers?

Well, this varies depending on your requirements as the shipper, the consignee, or the seller.

Regardless, a bill of lading can be issued per container or shipment.

When you import goods in multiple containers, the carrier can issue a single bill of lading for the entire shipment or several bills of lading for each container.

There are instances where you may be shipping one container but get multiple bills of lading.

Other times, it may be the reverse where you are shipping multiple containers but get one bill of lading.

Essentially, a bill of lading is to be issued depending on the type of contract and the consignee’s demands.

Bill of Lading Related Problems

The shipping process is never swift and smooth, and sometimes problems arise, affecting the issuance of a bill of lading.

Common problems affecting the issuance of a bill of lading may include:

If Defective Cargo is Presented for Loading

In cases where the seller provides defective goods for shipping, the bill of lading clearly states how the issue is to be handled.

According to the bill of lading rules, the first way is to reject the goods completely.

This, in a way, safeguards the consignee’s interest by ensuring only quality goods are loaded for shipping.

For the goods to be rejected, the shipper must involve an independent cargo surveyor.

The second rule allows for the transportation of such defective goods.

However, the shipper must issue a claused bill of lading that states the goods’ nature at the receipt.

If Shore and Ship Loading Figures Differ

The quantity of goods stated on the packing list may be less than what is loaded for shipping.

In this case, then the correct entry to be entered on the bill of lading is the quantity that is onboard.

Errors in the shipping process are inevitable.

Your supplier can commit or omit counting products and provide confusing figures.

 The bill of lading provides details on the figures counted after loading.

If the shipper’s figures differ from that of the seller, the shipper should inscribe a letter of protest to the shipper indicating the difference in numbers.

They should also indicate that the shipper will go-ahead to sign the bill of lading under protest.

The shipper should then staple the letter of protest together with the bill of lading. 

However, if the loaded goods are more than the shipper’s figures, then the shipper’s figures will be recorded on the bill of lading.

There is no need for a letter of protest.

If the Shipper Requests more than One Bill of Lading

Cargo may be going through multiple ports during shipping.

In this case, two or more sets of bills of lading can be issued.

The same applies to when a shipment is consigned to more than one consignee.

Where cargo from different shippers is consolidated into one container, it becomes difficult to quantify individual shipments.

In such a case, the ship’s master should sign separate bills of lading.

Conversely, where multiple consignments are loaded, and only one figure is provided, the master should consult the shipper on how apportionment is done.

Suppose the shipper fails to provide information on the method of apportionment.

In that case, the total quantity loaded is to be divided in proportion to the original split, and a bill of lading is issued for each.

If a Bill of Lading is Written in a Foreign Language

There is no formal language to be used in the issuance of a bill of lading.

Therefore, multiple instances arise where a bill of lading is inscribed in a foreign language or strange alphabet.

If such a problem arises, an independent translator should be hired to translate the bill of lading to a language that the master can understand.

The translator should not be allied to the seller, buyer, carrier, or shipping agent.

However, if no suitable translator is found, the master should create his bill of lading in English.

After that, provide the bill of lading to the shipper for completion of the shipment.

The created bill of lading can be forged from another model already used.

If Goods are Unclaimed at the Discharge Point

The purpose of the bill of lading is to allow delivery of goods once it is processed.

However, failure to provide the bill of lading will lead to a delay in claiming the goods.

If you fail to claim the goods at the right time, the master can warehouse the goods instead of having them lay in the port.

The costs of demurrage will be charged to you.

However, some goods may be unclaimed for a long time.

According to the local law, such goods are advertised for the consignee in the national press. If the goods are still unclaimed, the carrier may sell the goods. 

Wrong Dating on the Bills of Lading

Dumurrage

Demurrage

A bill of lading should contain the actual loading date or the date of completion of the loading.

However, in some cases, the master may be requested to pre-date or post-date the bill of lading.

When the buyer and the seller agree to trade under a letter of credit, the bank will only release payments as per the date stipulated in the letter of credit.

Therefore, cases arise where the seller wants to evade a delay in obtaining the payment.

What Happens if you Cannot Present a Bill of Lading at the Receiving Port?

At this point, the purpose of a bill of lading document is pretty clear.

That is, to ensure that the seller receives payment for the buyer to receive goods shipped.

It prevents cheating in a trade agreement.

The seller must send the bill of lading document through port or email (for electronic BOL).

Upon receipt of the document, the buyer will present it at the port to obtain cargo.

Otherwise, the port will not release the goods to the buyer, in which case, both sides lose.

The buyer can’t obtain their goods, and the seller will have already delivered the goods without receiving payment.

The best way to avoid losses is for the buyer to pay promptly so that the supplier can send the BOL document in time for cargo retrieval.

When you fail to present the relevant bill of lading document, as already said, the port won’t release the goods.

Instead, port authorities will hold the goods until you can pay the supplier.

 In which case, you will also have to pay the port and terminal handlings for the duration your goods stay at the port.

Understandably, sometimes one may not have the right BOL document for a good reason.

The document may have been lost, delayed, or not received entirely.

For some of these reasons, the port may release the goods on one condition, that you file an acceptable letter of indemnity.

The letter should:

  • Promise to protect the ship owner in cases of delivery to the wrong person
  • Be signed by a bank or cargo insurance that can meet all the claims.

The bank should sign that they will cover all claims that may arise due to such an indemnity letter.

Conclusion

Conclusion

Bill Of Lading is really important for the trade.

It’s an agreement between carrier and shipper.

Carrier sign to give permission for the shipping of products. B

ill holder has the right to transfer their goods to the third party.

This’s the contract between Consignee and consigner to transfer products by the door to door delivery too.

Bill of Lading also helps at the time of documentation and customs clearance, in a way we can check as shipper what is the quality of the service.

Freight forwarder helps in the issuance of Bill Of Lading and how to fill Bill of Lading correctly.

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