A Bill of lading is a legal transport document issued by a carrier company. It contains details about the sender and recipient's names and addresses, the number of goods, packages, weight, and type. When the carrier delivers the goods to a destination point, the Bill of lading also acts as a shipping receipt.
A bill of lading is a legally binding document between the shipper and the carrier that provides all the required attributes to process the shipment properly. It also serves as the property document of the goods described in the paper, carrying the receipt statement and representing the agreed terms and conditions for the carriage of the goods.
Seaway bill, Airway bill, and Bill of lading have the same meaning. The main difference is the transfer medium. Only ship owners, freight forwarders, or non-vessel operating companies (NVOCC) are authorised to issue a Bill of Lading.
What is the Purpose of a Bill of Lading?
A bill of lading is a record showing the goods' ownership. The importer cannot start customs procedures at the destination port without submitting the Bill of lading.
Although commonly used as a printed set of three original and three copies, the use of digital BOLs is increasing quickly. The Express Release BOL, a fully digital version, is especially preferred if no particular situation requires printed documents.
Benefits of express release bill of lading:
- No printing costs
- No courier costs
- No risk of losing BOL during the transfer
- A faster process
How to Prepare a Bill of Lading?
Bills of lading is a commercial shipping document divided into numbered sections. In each section, the headings summarise the necessary information. Shipping companies prepare the first draft. Then, after the exporter's control and approval, the original copy of the Bill of lading is created.
While drafting the Bill of lading, you should pay particular attention to the following information:
- BOL issue date.
- Consignee & Consigner name and address.
- The shipping company details.
- Freight payment information.
- Number of products, packages, pallets
- Weight information.
- Title and description of products (including their weight, dimensions, HS code, etc).
What is a Bill of Lading Number?
Bill of Lading no is a unique number explicitly created for each shipment, also used in shipment tracking. BOL no is indicated at the top of the Bill of Lading, usually on the right. Shipment tracking can be done with container number, reference number, and Bill of lading no. However, tracking with BOL is more practical for a shipment containing many containers simultaneously.
At the top of the BOL, you will see spaces for both the shipment reference and offer ID numbers. These numbers help to determine and track your shipment as it travels to its final destination.
Who provides the Bill of lading?
Shipping firms prepare the Bill of lading. However, standard practice is to send exporters a loading note to fill out. The information on this note then helps to compose the final BOL.
The shipper (consigner), receiver (Consignee), and notify party fields describe the company names and other relevant contact information. The notify part field is not mandatory and can be filled with additional relevant information. For example, sometimes, one may write the name of a customs broker or a bank in this section. On the other hand, occasionally, it's required because of the terms in the letter of credit. However, notify party on the Bill of lading could be the same as the consignee.
There are three different types of companies that have the authority to prepare BOL:
- Ship owner company.
- Freight forwarder.
- Non-vessel operating company (NVOCC)
What's in a Freight Bill of Lading?
BOL is an obligatory document required to receive the container when the freight arrives at the destination port. Since the Bill of lading is a document that delivers the transfer of ownership of the cargo between two companies, it should contain all freight details and the information of the companies that are party to the trade.
To avoid confusion at this point, we should explain the definitions of "the freight bill" and "the Bill of lading freight." A freight bill is an invoice showing freight charges. It includes the transportation costs incurred as a result of the transportation service. Whereas BOL does not have product prices, it is not an invoice and only a freight document.
What is a BOL In Shipping?
In the shipping operation, BOL is the document that shows how the process will take place and transfers the ownership of the goods from the exporter to the importer. The phrase "freight collect or freight prepared" on BOL shows who will pay for the transportation cost.
Another classification for bills of lading depends on who prepared the BOL. For example, ship owners can only prepare Master BOL. So the different freight companies can only make a bill of lading called House BOL.
- Ship Owner (Carrier): MBL (Master Bill of Lading)
- Ocean Transport Intermediary (OTI): HBL (House Bill of Lading)
- Freight forwarder: HBL
- Non-vessel operating company (NVOCC): HBL
Is a Bill of Lading the Same as an Invoice?
BOL is a transport document. However, product prices are not specified on BOL. It only contains consigner, consignee, and product details except for price details. So you cant use it as an invoice. Another issue is that the Bill of lading is not a "bill of shipping." The shipping cost is forwarded to the party that has to pay the freight costs with a separate shipment bill. The agreed incoterms between the exporter and the importer will determine who will pay the freight cost.
BOL is a transport document with international validity. On the other hand, it is also used for cargo tracking. In an overseas shipment operation, container tracking can be done with the BOL number.