What is a bill of lading
In the world of shipping and logistics, you’ll find quite a few different pieces of documentation — all used to establish the legality of your shipments, and to enable easier shipment tracking. Among these, however, there’s one document that’s more important than most others — and that’s your bill of lading.
This type of document is something that’s an absolute requirement for moving a shipment and any kind of freight. Your bill of lading is essentially a receipt for the shipping services you employ. Think of it as a contract between an owner of the goods and a freight carrier that’s going to transport them. In fact, the bill of lading creates a legal obligation and gives the carrier all of the shipment details required for the correct processing and transport of the shipment.
Bill of Lading Contents
The real question here is — what does a bill of lading contain? Firstly, there are the addresses and names of the receiver and the shipper of the goods; both of these represent some of the most fundamental pieces of information found on the bill.
Then, you’ve got the reference numbers and purchase orders; these are important for freight processing at various points, as they are needed for identification when the freight is formally accepted at its designated delivery point, or first released at pickup.
Next up, a bill of lading also contains special instructions, if there are any, except for requests for extra services such as delivery notifications. The document also provides dates — like the pickup date, for obvious reasons.
Perhaps most importantly, the bill of lading provides information on the shipping inventory; the number of item units found in the shipment, as well as their weight and other spatial dimensions. It even lists the materials found in the shipment.
This document also notes the type of packaging that is used for the shipment — such as drums, pallets, crates, cartons, etc. In terms of budgeting, the bill of lading also contains another important piece of information — the freight classification of your shipment. Depending on a wide variety of factors, every piece of cargo is classified according to NMFC (National Motor Freight Classification) standards.
If there are any hazardous materials found within your shipment, there is also a special designation for the materials issued by the Department of Transportation.
Why Is A Bill Of Lading Important?
Considering all of this information, what makes the bill of lading so incredibly crucial for the process of shipping goods across the world? It fulfills three primary goals:
- It’s a document that denotes a legal obligation between a carrier and a shipper
- It’s a physical receipt for the goods and services provided
- It can serve as evidence for goods ownership
So, in the first case, this document gives the carrier and driver all of the necessary details regarding your cargo shipment. This includes the most elementary information, such as the exact goods that you need to be transported, the destination point of your shipment, and the point of origin.
It is not a legal contract per se, but it is the most important piece of evidence for the existence of a contract. In almost every case, the carrier and the shipper agree upon a contract before they issue a bill of lading. The carrier must be given a bill of lading once they pick up the agreed-upon shipment, and they’re supposed to present it at the delivery point.
As we have mentioned above, the bill of lading can also be a receipt for the goods. In case of damage or an insurance dispute, this bill of lading acts as proof that the shipper has turned over the goods to the carrier in proper condition. That’s why a shipper should always have a copy of the document signed by the carrier, as this is proof of their liability if the shipment happens to be destroyed, damaged, or even lost.
The crucial importance of the bill of lading becomes readily apparent once we take this into account; there’s no chance of receiving compensation through claims of loss, damage, or other ownership disputes. If your bill of lading isn’t valid and properly completed, any legal arbiter would throw your case out on a technicality.
Carriers may change the class of your freight if your provided information isn’t correct, and they may change other information if they find it to be inaccurate. For instance, a carrier may reweigh your freight to make sure that the provided specifications are correct. If there are any errors, shippers may need to pay additional charges or experience delivery delays.
All of this makes the bill of lading a crucial document when it comes to easy shipping and hassle-free transportation of goods and services. If you don’t fill it out accurately and completely, you may face significant setbacks in your logistics chain. It should also be noted that the shipping industry is being altered by digital innovations, like electronic bills of lading.
This type of electronic document is designed to be a digital equivalent of the physical bill of lading, with the same functional and legal responsibilities. It emulates the physical bill of lading, and it also functions as ownership evidence, contractual evidence, or as a receipt.
The bill of lading is an incredibly important piece of documentation for the successful completion of any kind of shipping or transport. It acts as irreplaceable legal evidence and a source of shipment information for procedural purposes.
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