Cargo shipments have become a major part of the logistics industry as the transportation of goods from one location to another is a key element in connecting nations all over the world to have access to products and resources. The process of cargo shipping is a complex phenomenon and involves the fulfillment of a lot of official documentation which includes the Bill of lading and its various types.
The Bill of Lading is a document required to move the shipment of the goods. It is a contract between the owner of the goods and the freight carrier and states information related to details about what goods are being shipped, the departure and arrival destination of the shipment, and acts as a document of title.
If you are also a container supplier who wants to sell cargo containers or an importer who is looking to buy shipping containers, you need to understand the importance of the Bill of Lading in cargo shipments.
What is a bill of lading?
A Bill of Lading (BOL) is a legally binding document that provides required information to the carrier of freight in order to process the particular cargo shipment and invoice it accurately. It is an undisputed proof of shipment of cargo. The bill of lading must accompany the products that are being transported from one location to another at all times, irrespective of the mode of transportation. It is crucial for BOLs to be signed by an accredited official from the shipper, freight carrier, and the receiver of the goods shipment.
The bill of lading has three major functions.
- First, it is a document of title for the goods that are explained in the bill of lading.
- Second, it acts as a receipt for the products that are to be shipped.
- Thirdly, the bill of lading also characterizes the terms and conditions that were pre-decided for the transportation of the goods.
Every business that requires the export and import of cargo in different locations on a regular basis needs to have certain policies in mind to protect and safeguard their cargo against theft. Cargo theft is one of the biggest supply chain challenges faced by shippers in today’s date. There is a standard set of philosophies set by the management as a preventative measure to help ensure the safety of cargo and prevent any form of fraud. A bill of lading is one of the many key documents that need to be accurately managed to prevent cases of theft of the cargo while in transit.
What is in a Bill of Lading?
Researches have suggested that more than 10,000 shipping containers are lost in the sea annually. This becomes easier if there are bills of lading to safeguard the cargo contents.
Once the cargo has been shipped, the physical possession of the goods is transported to the carrier from the exporter. As a result, the BOL becomes a crucial document of that operation. In International Trade, the bills of lading allow the exporter to successfully transfer the control of the cargo packages to the freight carrier.
The following details are commonly found on a bill of lading:
- BOL number
- Complete name and full official address of the shipper and receiver
- Details of the shipping port of destination and arrival
- Details of the shipping line
- Information about the freight forwarder
- Pick-up date of the shipment
- Details of the goods that are being transported including the name, quantity of units, weight and dimensions of the cargo
- Packing material used to store goods in the freight container
- Special instructions if the shipment includes hazardous materials
- Specific instructions for the carrier and receiver of cargo, if any.
Different Types of Bill of Lading
This BOL is used when the cargo is already paid for and is being directly shipped to the customer. It is also called as a non-negotiable bill of lading and is assigned to a particular party and that party cannot re-assign it to anyone else.
This is the category of BOL that is brought in when the freight is sold on trade credit and that shipment can be distributed to a customer or seller.
In the case of a bearer bill of lading, the bearer is the owner of the goods and there is no named consignee of that particular cargo shipment. It is not a very commonly found bill as it involves a lot of risks. It is a negotiable document as the ownership can be transferred.
It is the duplicate bill of lading for the cargo shipment for which the bill was initially issued. This BOL is commonly asked for by the consignee from the owner of the shipping vessel so as to avoid the revealing of the identity of the freight shipper.
Combined/ Multimodal BOL
This BOL involves the usage of more than 2 means of transport to carry cargo via shipping containers.
This gives information while re-assuring that the cargo is delivered in a secure and sturdy cargo container from the port of origin to another port.
This shipping document allows the shipping carriers to transport their cargo shipment by utilizing several modes of transportation or distribution centers. This BOL requires an Inland BOL and Ocean BOL depending on the delivery location. The multimodal BOL and through BOL are not the same.
It is an official document that is issued by the carriers for shipping companies while indicating the terms of the mode of transportation used and also comprises of details about the consignor, consignee, and the individual who is in possession of the freight shipment.
It is provided by the shipper and states that the cargo has been loaded on the shipping vessel and approves that the cargo is in good condition to be shipped. It does not bear any testimony regarding any defected goods in the shipment.
This BOL indicates that there is some sort of damage to the shipment or a part is missing altogether. The cargo carrier conducts a thorough inspection of the cargo and draws a list of the damages or inconsistencies to the goods. This gives the receiver of the shipment a right to reject the shipment or even refuse to pay for the same.
These are the most commonly used types of bills of lading and they are an important element of the trade transactions that are carried out between shippers and receivers of the cargo.