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Bill of Lading: A Comprehensive Overview

Bill of LadingThe bill of lading is an important document, providing much-needed information for the shipper, the carrier, and the arrival destination. Learning to read and understand a bill of lading document is very helpful if you are involved anywhere in the shipping and freight process.

What is a Bill of Lading?

The bill of lading is a document required by law to move freight shipments. It is essentially a receipt of services, acting as a contractual agreement between the fright carrier and the shipper. The bill of lading is legally binding providing both the carrier and the driver with the necessary information to handle and invoice the freight shipment correctly.

Parts of a Bill of Lading

You will find several pieces of information on the bill of lading, important details for the carrier, driving, and receiving party.

The names of both the shipper and received including their full addresses will be listed usually towards the top of the document in a place that is easy to locate and read.

The bill of lading may contain essential reference numbers such as a confirmation number, purchase order number or even an invoice number to release the fright or be accepted.

An area containing special instructions for the carrier may list specific delivery instruction about particular gates or areas preferred or required by the sender and received.

The date listed on the bill of lading is the pickup date, the day the freight was picked up by the carrier and driver. This can be used to track your freight delivery.

A description of items will be found somewhere in the middle of the document usually. It should provide a list of the item names, noting the number of units, dimensions, and weight, and what type of materials it’s made of, if relevant. The packaging type should also be listed, using measurements like crates, cartons, drums, or pallets.

The NMFC freight class will also be listed. This critical classification can impact the cost of shipping. Shipments of freight are categorized by weight, dimensions, density, ease of handling, liability, and storage capability into eighteen different freight classes to determine freight shipping costs.

The bill of lading will also have hazardous materials designations required by the Department of Transportation. Materials that may be hazardous must be designated, and specific rules and measures must take place when shipping based on the type of material.

At the bottom, comments including special notes, general rules, regulations, and agreements between parties may be written, and signature lines for those parties involved are provided.

The Roles of The Bill of Lading

The bill of lading plays three essential roles in the freight shipment process. The bill of lading acts as a receipt of goods. It is issued to the shipper by the carrier in exchange for the freight being shipped. This is proof of receipt between the shipper and carrier.

The bill of lading is a document providing evidence of a contract between the carrier and shipper. The bill of lading is a contract between the shipper and carrier for transportation services of the freight between the buyer and seller.

The bill of lading serves as a document of title for the goods being shipped. The holder of the bill of lading can have the freight transferred to their possession and has the right to move that freight to another.

Keeping Your Documents Straight

The bill of lading is often mistaken for the freight bill, and while both documents have similar information, they are vastly different for many reasons. While both documents will show the same information, the freight bill shows excessive details on fees, and various charges, which is vital information for internal logistics to look at cost savings and budget information. The bill of lading will not have the extensive information. The freight bill cannot be used as evidence in disputes of the fright shipment like the bill of lading can. Freight bills are essentially invoices, while the bill of lading will not provide such information.

Types of Bills of Lading

There are several different types of bills of lading, all of which have the same function but have small differences. A straight bill of lading is non-negotiable and does not require payment upon delivery. An order bill of lading is issued to the shipped and transferable to a third party. A negotiable bill of lading means it can be transferred many times with signatures and must be written. A claused bill of lading is used to show damage to goods being delivered. There is also an electronic bill of lading which is the same document, just paperless.

Overall, the bill of lading is an important document with several different functions and must be in place by federal regulations to ensure all parts of a freight shipment, from carrier to driver to destination are in line.

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