When you ship any item around the world, you can find yourself facing a great deal of paperwork and documentation. While you don’t want to forget any of those documents (no matter how tedious and numerous they are), there is one specific document that you should become familiar with, which is the Bill of Lading Document.
The Bill of Lading document is one of the most important in the international transportation and logistics industry. It has been a key aspect of global commerce for centuries, but sometimes can be overlooked.
Bills of Lading are easily the single most important transport document in transport and logistics.
What is a Bill of Lading Document?
Bills of lading can be abbreviated as B/Ls or BoL. It is a legal transport document issued by a carrier to an exporter (shipper). It serves the following functions:
- Evidence of the carrier’s contract containing the details of the quantities, types and destinations (and sometimes even the shipping conditions) of the cargo
- Proof of receipt of the goods that have been correctly shipped to the ship
- Title of goods, which is often required by the carrier to deliver the goods to the (receiving party) consignee denoted in the B/L.
Primarily, the document serves as a legal agreement that enables the carrier to process the cargo under the original terms of the contract established by the carrier and the shipper or cargo owner.
Also, since most B/Ls are considered property titles, these documents (as well as the cargo listed) can be used in negotiations. Because of this, some B/Ls can be endorsed and transferred to third parties while the cargo is still in transit, thus providing control of the cargo to different parties along the way. This also means that if the carrier has not paid the full amount of the cargo transportation, the shipper can retain the goods and the cargo document until the terms of sale are finalized.
What does a Bill of Lading (B/L) document contain?
Depending on the type of B/L, it should contain different information, including:
- Name and signature of the shipper, the ship’s captain, or a legal representative of one of the parties.
- Date and indications of the goods that will be loaded onto ships
- A notation of the port of loading and the port of destination
- The terms and conditions of the load or the reference of these conditions in another document
- Detailed description of the transported goods (value, quantity, weight, size, marks / numbers, among others)
- Name of consignee
- Special transport instructions
- Name of vessel (for ocean B/L)
Note: The information listed above only includes some of the items that can be requested in a B/L.
What Are the Different Types of Bill of Lading Documents?
There are several types of B/Ls, but only a few are the most used:
- Direct: As its name implies, this B/L is used when the goods are paid for in full and are sent directly to the consignee or consumer. Direct B/Ls are not negotiable.
- Shipper order: This B/L is used when cargo is purchased on credit with bank facilitation. Shippers’ B/Ls are negotiable documents. A buyer will require an original copy of the B/L to take possession of the cargo.
- Air waybill: These B/Ls are only required for goods transported by air, and are not negotiable.
- Originals: Some of the B/Ls are issued in what is known as a “set of originals”, and are used to help control cargo when the consignee / buyer has not fully paid the manufacturer of the goods. Once the buyer submits the complete set of original documents and pays the manufacturer, the goods can be released to the consignee.
- Land: When the cargo is only transported by land (railways or roads)
- Multimodal / combined transport: This type of B/L means exactly what it sounds like: it is a document issued for a shipment that requires more than one mode of transport (sea, air, land, among others) to reach its destination.
- Until the End: This B/L is similar to the multimodal / combined one, but it is more complex since it specifies that the cargo will pass through different distribution centers, as well as it will have several modes of transport.
- Alternate: This type of B/L is commonly used in shipments abroad, where the shipper requires the supplier to keep the information private. During this shipment, there will be two sets of alternate documents to protect the information from the supplier to the consignee and vice versa.
There are other different types of B/Ls that are used less frequently:
- Blank Endorsement: This is a B/L that has been endorsed but does not name an endorsee. In essence, this means that the document holder can claim possession of the property, and as such this document is considered negotiable. A buyer / shipper who is in possession of the original B/L can claim the carrier’s goods at the port of destination as long as they show at least one original copy of the B/L.
- Clean: This document is used to simply indicate that the cargo was in good condition at the time of shipment, similar to a final carrier closure.
- In clause: Bill of Lading documents in clause are the opposite of a clean B/L, since they indicate failures or damage to the loaded cargo. They are also known as “dirty” B/Ls.
- On Board: Also known as “Shipped on Board”, this is usually a note placed in a B/L to indicate that the goods are in good condition reiterating that they are in the mentioned vessel. Banks that transport funds typically require this type of B/L.
- On deck: A B/L on deck is used to check cargo and may be required by an exporter or cargo manufacturer to be paid.
Another important concept related to bills of lading and their use, would be the telex release.
Bill of lading documents may seem complicated at first, but in reality, you will only have to deal with one B/L per load. This allows you to focus on the document and ensure that it is as accurate as possible during the negotiation and logistics process. A properly processed B/L will ensure you receive the products as ordered and in good condition. You can also learn more about who issues the bill of lading in our other article.
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