bill-of-landing

Do you know what is Bill of Lading and how it is used in shipping?

Are you aware of the documents required for shipping in International Trade?

Well, the Bill of Lading is an important document that must be needed for this purpose. It acts as a receipt and a contract to ship any goods. It shows that the carrier has received the freight as described and is responsible to deliver that freight in good condition to the consignee.

As an importer from China, it is very important for you to understand the importance of this document, because any wrong information in Bill of Lading can result in delays in the clearance of your goods.

For this, a deep understanding of BOL or B/L, how its filled, types, and facts are necessary. Read on to learn all about BOL.

Table of  Content

 Chapter 1: Understanding the term ‘Bill of Lading’

 Chapter 2: Roles of The Bill of Lading

Chapter 3: What essential contents Bill of Lading contains?

Chapter 4: Ways to fill Bill of Lading properly

Chapter 5: Things to consider before filling Bill of Lading

Chapter 6: Things to avoid about Fraudulent Bills of Lading?

Chapter 7: Some major types of Bill of Lading and their use

Chapter 8: Frequently asked questions on Bill of Lading

 Chapter 1: Understanding the term ‘Bill of Lading’

In the world of shipping goods across the world, people deal with lots of paperwork. This is when you get familiar with the term ‘The Bill of Lading’. It is most often used in international trading for centuries.

what-is-the-Bill-of-lading

There is even evidence of the existence of receipts for goods loaded aboard merchant vessels used during the roman time. In modern times, the purpose of the document remains the same, however, the information provided in the document is more detailed.

1. What is the Bill of lading?

The bill of lading is the legally required document given by the freight services. It acts as a contract between the carrier (Airline or Shipping line) and the person who is shipping products and contains all the details for completing the process. These are listed below:

  • It has the name and addresses of both the shipper and the receiver present on it and can be tracked down easily.
  • It has the purchase orders or some reference number which plays a vital role in receiving the freight order on pickup point or delivering at pickup points.
  • It also provides the date on which the order is shipped which acts as a reference to track your order.
  • BOL also has the details of the items like their weight, dimensions, and information about the material for freight carriers.
  • The packaging type is also mentioned whether the order is shipped through cartons, pallets, drums, etc.
  • The freight order has classes mainly based on weight, dimension, storage capability, density, handling, value, and liability. All these classes determine the cost of shipping.
  • It also has a separate department for handling hazardous shipping as they need special care during the delivery.

2. Why is the bill of lading important?

For the successful transportation of goods, Bill of Lading plays a vital role. It is the map that shows the path of cargo from its beginning to its goal. It contains the details about the method and the path which should be followed by the shipper.

why-is-the-bill-of-lading-important

It is an agreement between the carrier and the shipper present at the back of the bill. It also works as the receipt when the order is being delivered to the pickup points.

BOLs can be kept by the carrier if the shipper does not pay the full money in this way the claims and criminal prosecution can be controlled.

3. Who is applicable to issue a bill of landing?

The bill of lading is issued by the carrier of freight in shipping the freight orders. It contains all the information about the carrier and the shipper like their name, signature, date, details of items and, details about the receiver.

The carrier will provide the document to shipper at the pickup point and shipper will pass the bill of lading to the consignee at the time of delivery.

who-is-applicable-to-issue-a-bill-of-landing

4.When is the bill of lading issued?

After the buyer has placed the freight order, the freight will issue the contracting document between the carrier and shipper/supplier for the safe delivery of the order.

This is the time when the bill of lading is issued having all the required details about the receiver, and the shipper. The time and date, description of the items are also mentioned on it.

 Chapter 2: Roles of The Bill of Lading

roles-of-Bill-of-Lading

Bill of lading is a formal shipping document that can be used in litigation. It is used in the accurate shipping of freight orders. It has three basic purposes which are listed below:

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

1. The contract of carriage

There are two types of contracts.

  • Between the seller and the buyer
  • Between the carrier and the shipper

Both are entirely different and people are confused in understanding them.

The contract is made between the supplier and the customer when they discuss the product, and the customer agreed to buy it. This agreement is then written down in a contract. In that case, the debate on how, when, and where to get the product and also about the transportation method is discussed. This is one type of contract.

The other contract is between the carrier and the shipper related to the carriage. This is made when the shipper or any third party make the contact with the carrier to transport the freight order. This bill of lading acts as the evidence of contract between them.

2. Receipt of lading products

This receipt is issued by the carrier when he receives the goods from the shipper or any third party. This is proof that the shipper has handed over the items to the carrier in good order and condition.

3. Title of goods

The Title of goods is also called the “document of title”. Generally, this means that whoever has the bill of lading can claim to be its holder. This title can vary from person to person until it reaches the receiver.

Chapter 3: What essential contents Bill of Lading contains?

what-essential-contents-Bill-of-Lading-contains

The bill of lading is an important document issued by the carrier and has some necessary information on it. Below are some essential contents that the Bill of Lading contains.

1. The number on the bill of lading

Every legal document has some significant number on it. Likewise, the bill of lading has a unique purchase number or some reference number for every order that played a role in shipping the correct package to the correct place. This number helps the carrier to drop the freight order at its accurate pickup point.

2. Shipper name and address

Since the bill of lading is a valid document so it must have legal information on it. It has the name and address of both carrier and the shipper along with their signature. The shipper is the person or the entity or company which is responsible for placing the order of shipment and may also be responsible for arranging the freight payment.

The carrier is the person or cargo which is carrying the ordered shipment received from the shipper. Hence the name and address of both these parties are placed on the document so in the case of any mishap the buyer can contact them.

3. Relevant information related to the consignee:

The consignee is the person who is the receiver and the owner of the shipment, who ordered the products. It can be an individual or a company.

Moreover, he or his agent must be present at the pickup place to receive the shipment. The bill of lading contains information about the receiver for example his full name/ company name, address, and contact information.

4. Notifying the party after reaching the destination part

The notify party is the one who is notified about the arrival of the cargo. But he has to check the whereabouts of the cargo himself. The details related to the notify party are available on the instruction of the bill of lading.

There may be a connection between the consignee and the notify party and may not be. Sometimes notify party is the receiver as well.

5. Filling the name of the Carrier

The vessel is the carrier that carries the shipment to the pickup points. It is very crucial to fill in the name and the number of the vessel or the voyage on the bill of lading. Carrier can be a ship going by sea freight or air freight. Anything that is transporting the goods is termed as carrier of the goods.

6. Place of receipt

In this part, you have to fill in the location from where the cargo will be received from the shipper. If you see that this part is filled, then it means that the carrier has moved from this place to the port of loading. In case of any incident or damage to the products, the full responsibility is on the carrier.

7. Port of loading

Port of loading is the point where you have to fill in the details about the port where the cargo will be loaded. For example, if the port of loading is Shenzhen, China then you has to fill in the name of the country as well.

8. Place of discharge

This means that you will fill in the port where the cargo will arrive. For example, your port of loading was Shenzhen, China and the port of Discharge can be Port of Los Angeles, USA. You should write the country name also.

9. Place of delivery

This is the place where the cargo will reach and received by its consignee. In this part, you will write the name of the place where you will receive the shipment.

If you see that this area is filled, then it clearly shows that the carrier has undertaken to move from the port of discharge to the place of delivery.

10. Description of goods

In the section; description of goods, the name of products must be the same as the name on the letter of credit. The bill of lading is the proof that the carrier has received the goods in external apparent good shape and conditions. This means the overall package which he received is in good form.

11. Measurement of products

Whatever the overall condition of the package is, the carrier has no responsibility for the weight, contents, measurement, quantity, quality, description of the item, condition, marks, numbers, or value of the Goods of the products in the package.

The only thing for which he is accountable is about the overall volumetric calculation of the packaging of the shipment.

12. Temperature control instructions

Temperature-controlled shipping is necessary for products that are sensitive to climatic changes and needs special care and handling.

For this, the bill of lading ensures that carrier will provide the basic temperature control measures to that product. For example, if the refrigerator is in the freight order so the carrier must have to look after the temperature fluctuations on the way.

Chapter 4: Ways to fill Bill of Lading properly

ways-to-fill-Bill-of-Lading-properly

Bill of lading is an important piece of paper in the international trading industry. There are different ways followed while filling the bill.

1. Specific instructions to be noted when filling Bill of Lading

The instructions which should be followed for filling the bill of lading are as follows:

  • Write your name and address in the specified locations.
  • Write the purchase number on the bill.
  • Put the name and address of the receiver.
  • Insert some guidelines for the shipper.
  • Mention if you have collected the shipment charges.
  • Write the number and type of packages on the cargo.
  • For the freight of any kind of hazardous product go for the special type of shipment.

2. Sample showing the proper way to fill Bill of Lading

For better understanding and knowledge, it is important to see the sample of the bill of lading. So here is the sample which shows the proper way to fill the bill of lading:

3. Step by step process to fill Bill of Lading

sample-showing-the-proper-way-to-fill-Bill-of-Lading

For better interpreting and knowing the step by step process to file Bill of Lading follow the given procedure:

  • Write down the exact date of shipping along with the billing number.
  • Mention the name and address of the shipper and the receiver and if there is any third party involved in it then also writes the name and address of him.
  • Indicate the time and date of the shipment delivery.
  • If you want your order to be collected by the freight forwarder, mark collect on delivery which is the price of the product on the bill of lading.
  • You have to mention the number of containers along with the type of packages.
  • Also, provide the measurements of the product.
  • Discuss any hazardous material if it has to be shipped.

4. Special rules applied for distant items when filling Bill of Lading

On the bill of lading, there are certain rules which are to be obeyed during filling;

  • Insert the proper description of the item along with its class so that the freight forwarder can consider these specifications.
  • If you want to ship different types of things, then it is good for you to make a list of them with the item number of classification because the charges depend totally on the type of classification of freight.
  • Also, write the exact measurements of the container if you have a freight order of different items so attach the list containing all of them.
  • In case of emergency insert the contact number to which the company can contact. And mention the name of the person who will pay the freight.
  • The name of the shipper and forwarder is also written on the bill of lading and the authorized person from the freight forwarder can sign the BOL.
  • All details related to the shipment and the number of containers is present on the bill of lading.

Chapter 5: Things to consider before filling Bill of Lading

There must be some vital things that need to be considered before filling Bill of Lading. So that if any query or chaos happens in the future it must be eradicated on time. Here are some essential matters to be discussed.

things-to-consider-before-filling-Bill-of-Lading

1. Before filling Bill of Lading verify the shipper’s identity

The shipper is a very crucial person who plays a fundamental role in freight orders. He is the one who belongs to the freight company and searches for the carrier to deliver the container or cargo to the pickup point in any country.

There are people with different services so it is always beneficial to check and verify with the shipper before placing the freight order. In this way, you can avoid many mishaps and get the products safely.

2. Look for the port and date of loading items

The bill of lading is the document containing all the necessary information for the carrier, shipper, and receiver. The person must fill the bill of lading properly keeping the eyes open and focused.

The time and date of loading help the receiver to calculate its delivery time and also helps in any bad incident to manage. The details about the port should be put accurately.

3. Check port of discharge of the container

The port of discharge is the place where the carrier delivers all the containers. This is the point where keen attention is to be paid. Write down the exact place of receiving the cargo for smooth delivery of your freight orders.

4. Do check the condition of goods before loading

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The goods are the main point of matter so all the responsibility goes to the carrier if any harm happens to them. Always check the condition of the goods whether they are in decent form or not. Check the name of the product written on the container with the name on the bill. This will make the task easier.

5. Double-check Bill of Lading to evaluate mistakes and missing fields

When you are filling the legal document, you check again and again whether the information you have provided is correct or not. Same is the case for the bill of lading.

You must check the bill after filling the document to avoid any mistake which can lead to many problems.

Chapter 6: Things to avoid about Fraudulent Bills of Lading?

The bill of lading involves a complicated and long process that involves two or more people; the shipper, the carrier, and the receiver.

Furthermore, the bill which is issued by the carrier is also sent to the receiver so that he can get the delivery of products.

Some people misuse this bill; they change the number of entities and other information written on the bill.

things-to-avoid-about-Fraudulent-Bills-of-Lading

1. Theft of cargo using forged documents

The fraudster tries to fabricate the bill of lading to get the shipping. They manipulate the BOL in the way that they change the port of lading and claim to be his delivery and receive the cargo.

And when the right consignee asks for the delivery the carrier says that he delivered the cargo to the person with the original bill of lading but that was not the actual one. The fraudster made changes according to his thirst.

These kinds of thefts can be reduced by keeping the up-to-date copy of the bill of lading, having the bill on the correct piece of paper, and there should be no spelling mistakes. The watermark is the key fact of the identification of the original bill of lading.

2. Manipulating the date when the cargo was loaded into the ship

The date written on the bill of lading depicts the day when it’s loaded. Some fraudsters manipulate it in order to either delay the shipment or perform some other scams. Make sure to see the exact date when the cargo was loaded into the ship.

3. Giving an incorrect description of cargo

The bill of lading also contains all the details related to the package. So it’s very essential to put the correct details related to the quality, quantity and the appearance of the cargo.

It is the responsibility of the carrier to deliver the cargo undamaged to the receiver. Sometimes they mislead by saying that the cargo which they received was undamaged but it was actually the faulty one.

4. Bill showing the wrong port of loading for cargo

The port of loading is the place from where the carrier receives the package and sometimes incorrect port is written on the bill of lading to avoid any international trade chaos like boycotts or restrictions etc.

5. Inaccuracy in the particulars of the cargo

The bill of lading has all the important details related to the freight order like their weight, volume, etc. But sometimes shipper frauds the consignee by sending inaccurate cargo having the same weight.

And if the weight is felt less or any damaged product will appear the responsibility will lie completely on the shipper, not on the carrier.

Chapter 7: Some major types of Bill of Lading and their use

The bill of lading is differentiated and defines on different standards. It is divided into two criteria:

  • The place from where the responsibility of the carrier starts
  • The owner who can sell its cargo before reaching him.

1. Order Bill of Lading

order-bill-of-landing

This is the type of bill of lading used commercially for international trade. It refers to the consignee who can order the cargo and can also deliver this cargo to the third party with the help of transferring an order bill of lading. Since this is the transfer of the title document so it is a negotiable document.

2. Clean Bill of Lading

A clean bill of lading is used when the cargo is loaded on the vessel and it describes the overall condition of the cargo if it is in its good shape or not.

This means that it is in the correct and same packaging like when it was loaded by the shipper.

3. Inland Bill of Lading

When the cargo is for the same country or the city the inland bill of lading is issued. This is done through the road or the rail freight can also be included. Rail freight is included in the part of inland Bill of Lading.

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4. Straight Bill of Lading

The straight bill of lading involves the direct delivery of cargo to the specified party or the person and that party or the individual has to collect it.

In this type of delivery, the cargo cannot be delivered to any other party like in the order bill of lading.

5. Express Bill of Lading

In the Express bill of lading, the carrier has to deliver the cargo to the consignee without the original bill of lading. It can be made by the freight forwarder and after the clearance on the custom, the freight agent can provide you the bill of lading which can lead you to the destination.

6. Multimodal Bill of Lading

The multimodal bill of lading is based on the paths with more than two or three modes like through air, water, or land. This bill of lading can ship the order through any of these means quite easy and quickly. In this type of transportation, the responsibility lies on the carrier from the point of receipt to the point of delivery.

7. Switch Bill of Lading

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This is the duplicate bill of lading issued to the cargo to which there is an original bill present. It is published when the consignee doesn’t want his position to be shown to any new customer and does not want to let him know about the shipper of the cargo.

8. Bearer Bill of Lading

Bearer bill of lading has only the owner of cargo involved there is no consignee name. This type of bill of lading is risky and people avoid it. Since in the bearer bill of lading the transfer of BOL occurs so it is also a negotiable document.

9. Clause Bill of Lading

The clause bill of lading is opposite to the clean bill of lading because it describes the missing and the damaged cargo. It is also called Bad Bill of lading or Foul Bill of Lading.

clause-Bill-of-Lading

10. Through Bill of Lading

Through bill of lading is much comparable to the multimodal bill of lading but is more complex. It works for different distribution centers and has various modes of transportation.

It is effective for ocean and inland transportation. But the commonly used shipment method is through the multimodal bill of lading. In this type of transportation, the sole burden is on the carrier.

Chapter 8: Frequently asked questions on Bill of Lading

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1. What is the advantage of using an Electronic Bill of Lading?

Electronic bill of lading is the legal document equal in function with the bill of lading and replicates them like the receipt, the evidence of the contract, and the document of title.

The main advantage of the electronic bill of lading is that it has no cost only the charges which are paid are for the carriers which carried the document all over the world.

This bill of lading can be delivered in any part of the world with some clicks. The only thing which is required is the availability of an internet connection and the rest is automated. If the bill of lading is filled properly then it is the easiest process to receive the orders.

2. What is the meaning of negotiable and non-negotiable copies of the signed Bill of Lading?

The negotiable bill of lading is used by the consignee to deliver the cargo to the third party. The signature and stamp of the receiver are very important for the negotiable bill of lading.

After that, the carrier can deliver the cargo to the final destination. Whereas the non-negotiable bill of lading has some specific receiver to whom the cargo has to be shipped.

3. Is it possible for a single consignee to have more than one BOL?

More than one container can be shipped through one bill of lading there is no need to have a separate bill of different containers at the same time. It can be considered as one cargo legally.

But to answer the question, yes there can be multiple bill of lading for a single consignee.

4. What happens if you cannot present the Bill of Lading at the receiving port?

The bill of lading is the sign of contract and if the receiver does not bring the BOL with him then the shipment which was delivered by the shipper cannot be given to him.

And the other case is that when the order of the shipment was sent to him by the carrier and the bill of lading was not provided to the consignee then in this situation, the cargo can be given to the receiver upon showing other proofs that the shipment belongs to him.

5. What is the difference between the Bill of Lading and the Freight Bill?

The bill of lading is a legal document and the freight bill is the invoice of charges and the fees. The bill of lading is the contract paper between the shipper and the receiver. Whereas the freight bill has all the detailed descriptions of charges on it.

Conclusion:

The most trusted option of transporting goods all around the world is a bill of lading which acts as the formal legal agreement between the two entities the shipper and the carrier.

It has all the detailed information related to the receiver, shipper, carrier and the descriptions of products are also available in this bill in the correct manner to avoid any complicity.

We hope that after reading this blog, you are now aware on how to use this document, how it is made and what information must be checked about bill of lading to have a smooth shipping process.