What is a Bill of Lading (BOL) ?
A Bill of Lading is a document that a Carrier (someone who carries and delivers goods) issues to a Shipper (someone who supplies and/or owns the goods, also known as a Consignor), ensuring that the items were received in good order and are prepared for shipment. The transporter will then deliver the items to a Consignee (meaning the person who bought the goods in the first place). A Bill of Lading (BOL) is essentially a contract of transport including the terms and conditions of carriage between the Shipper, Consignee, and Carrier.
What Purposes Do Bill of Lading Serve?
It serves, as a receipt for goods. A Bill of Lading is necessary for the execution of shipments. For products to move from Point A to Point B, BOLs must be granted. They are legally binding documents that frequently serve as evidence of possession of the items being transported.
A bill of lading also serves as the goods’ title
The Bill of Lading serves as a title to the goods once they have reached their destination. The consignee listed will need to present the Bill of Lading in order to secure the release of the shipment by the carrier and claim ownership. In this sense, it is evidence of the confirmation of delivery.
Additionally, Bills of lading guarantee payment to the shipper
The shipper may occasionally be allowed to keep the original invoice until they get paid. The consignee will be prevented from accessing their goods as a result of this until payment has been made and the Bill of Lading has been released.
Who Uses Bills Of Lading?
Typically, bills of lading are provided by all businesses that supply transportation. Owner-drivers, freight forwarders, steamship lines, third-party logistics firms, and others might be among them. They include businesses that carry commodities by any means, including air, sea, rail, and road.
They can be used for both domestic and international deliveries.
What does the bill of lading contain?
- Details of the transportation company (i.e. the carrier), the shipper and/or consignee;
- The place where the goods were loaded;
- Transportation mode (i.e. road, rail, air, sea, etc.);
- The terms of the shipment (incoterms); and
- A description of the goods being carried (including their weight, dimensions, classification, etc).
Who Issues A Bill Of Lading?
(BOL) may only issue by the “Carrier.” The carrier may use a Shipping Line (Vessel Operating Common Carrier) or an NVOCC (Non-Vessel Operating Common Carrier), commonly known as a freight forwarder (although not all freight forwarders are NVOCCs), while carrying goods by sea.
Who Receives A Bill Of Lading?
Bills of lading provided to:
- The shipper;
- A broker, freight forwarder or a third party managing customs; and
- The consignee – this person purchased the goods in the first place.
Process of the Bill of Lading in Examples
If the goods are being imported through a freight forwarder on EXW terms, this is the journey of a Bill of Lading as follow ;
If the goods are being exported, this bill of lading journey is as follows:
Bills Of Lading Types
Bills of Lading come in a wide variety of forms. They are different in a variety of ways, including the person who issues the BOL, the purpose, form of transmission, how the buyer and seller are related, and the protection it provides.
Ocean Bills of Lading, Seaway Bills of Lading, House Bills of Lading, Master Air Way Bills of Lading, House Air Way Bills of Lading, and occasionally Switch Bills of Lading are the primary forms of Bills of Lading used for international transport. Each of them will be discussed below.
Whereas, you need to be aware of the differences between Negotiable and Non-negotiable bills of lading.
Difference between Negotiable and Non-Negotiable BOL
An Original Bill of Lading is a negotiable and legal document as it represents the title of the goods. Non-negotiable Bills are in effect copies of the originals but have no power over the title of the goods.
Originals Bills of Lading (negotiable) must endorsed by the consignee (buyer) when being transferred to a third party such as a freight forwarder and much like a cheque made out to a specific party.
When cargo moves under a Negotiable status, it is the forwarder’s responsibility to ensure it surrendered to the appropriate authority to obtain possession. When cargo moves through the forwarder’s NVOCC services (Non Vessel Owning Common Carrier) on Negotiable Bills, the forwarder too must ensure that the Original Bill (Negotiable) surrendered to them prior to releasing the consignee or their agent.
Failure to follow this procedure would subject the carrier to liability for the value of the cargo in case the shipper/consignee contract not executed.
Samples of Bill of Lading Forms
This (BOL) issued by the Shipping Lines, who are acting as the Carrier in this case for containers transiting by sea. It is typically used when the shipper wants to regulate how a consignee (buyer) will pay for the items. To guarantee that payment has been paid before the goods transferred to the consignee; the original bill of lading will be used.
Once payment receipted, the document can be actioned in several ways, dependent on what the carrier makes available.
Original Bill of Lading surrendered to the carrier for a Telex Release (a digital version of the BOL)
Original Bill of Lading is couriered to the consignee to present to the reciprocating carrier at the destination to obtain release.
Sea WayBill of Lading
As opposed to an ocean bill of lading, which requires the shipper to control the release of cargo, this document is Non-negotiable.
House Bill Of Lading (HBOL)
A House Bill of Lading issued when goods organized for sea freight through an NVOCC/Freight Forwarder. Based on the needs of the shipper, this can be set as a Negotiable or Non Negotiable option. Where a Non Negotiable option can be utilized it can sometimes be arranged/referred to as an Express Bill of Lading.
Master Air Way (BOL)
Airline bills of lading known as Master Air Way Bills (MAWBs) which issued by the airline or freight forwarders. They are Non-Negotiable documents except where the cargo consigned ‘To Order’. This often indicates that the shipment arranged through a bank, in which case a release from the relevant bank must provide before the carrier may release the goods.
Whenever you start a shipping operation, you have to engage an experienced forwarder to guarantee that all documents and the flow of BOLs handled properly.
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