In this article, we’ll take a deep dive into understanding what a bill of lading is, what a lading is not, give you a comprehensive definition and how this documentation helps freight forwarders serve their customers. When importing or exporting goods by sea freight, you, the sender will need a Bill of Lading. Here is everything you need to know about this necessary legal document when you’re shipping goods overseas.
Bill of Lading meaning
In simple terms, a Bill of Lading is a legal document issued by the carrier to the shipper when shipping goods internationally, and it is an essential element of the process. It is delivered to the shipper by the carrier after the cargo have been placed into the (sea freight) vessel, and it ensures that the shipper retains title.
In order to transfer ownership the Bill of Lading will be given to the consignee or buyer upon arrival and delivery of the goods.
This process allows the shipper to release the goods form their care. It must be noted that the Bill of Lading is not a contract but rather demonstrates to the shipper and carrier the presence of a contract.
It is possible there could be one or multiple Bills of Lading for one shipment, depending on whether you are using one mode of transport or multimodal transport for different legs of the shipment’s journey.
The Bill of Lading serves several purposes:
A Bill of Lading assures both parties that the goods have been loaded on to the vessel taking it to its destination port. Any reputable freight forwarder should have oversight of this documentation at any time.
As previously discussed, sometimes there will be multiple Bills which are passed along to different parties involved through separate legs of the journey. Working in this capacity ensures that the control of the cargo is passed on from one party to another and thus the responsibility.
A Title of Goods simply represents ownership of the goods at hand.
With every shipment there are always two parties, the shipper and the buyer, the receiving party.
The Bill of Lading will almost always include the buyer’s details and until the goods have been delivered and the original Bill of Lading has been given to the buyer, ownership of the goods still resides with the shipper.
Once the original BOL has been passed over the buyer then has ownership of the goods transferred over to them. It is important to note that sometimes the buyer will receive a copy of the Bill of Lading to act as proof that the goods have been shipped.
However, only the original Bill of Lading has the power to transfer and hold ownership, and can only do so after full payment for the goods. Your freight forwarder should be able to advise in more detail, if needed.
Any Bill of Lading will be information heavy and contain a variety of details about the goods being shipped from the type of shipment to the quantity of the goods. As stated earlier the Bill of Lading is not a contract but a document that evidences that a contract has been drawn up and signed.
The Bill of Lading contains highly detailed information about the shipment including:
The Bill of Lading is crucial in the shipment process, as a shipment cannot be transported without one.
The Bill of Lading contains information and details about the shipment that are necessary for every party involved, as well as providing proof of the original contract. The Bill also means that whoever is in possession of it assumes ownership of the goods until they have been delivered to the buyer and have transferred ownership to end the shipment process.
The details in the Bill of Lading assure the carrier or multiple carriers depending on your shipment, that the goods contained in the shipment are correct, so that they can be processed to the next stage of the journey.
There is always the possibility that the Bill of Lading can be withheld by the shipper or the carrier if payment has not been made in full. If the shipment has not been delivered correctly, on time or damaged, then the buyer has the right to refuse the Bill of Lading, therefore refusing ownership of the goods.
Obtaining a Bill of Lading can become a highly complicated process when it’s unclear as to which type of Bill is right for you.
Using a reputable and experienced freight forwarder will more than likely relieve you of this stress, as they will be able to advise you on the correct form of Bill and, on occasion manage this part of the process for you.
The variety and wide range of different types of Bill of Lading can be overwhelming, each with their own properties and requirements, which can make the process challenging.
Brief definitions include:
In short, the Carrier is usually the only party who can issue a Bill of Lading to the shipper.
This can prove to be an important issue as misplacing your Bill of Lading may result in you not being able to collect your goods. There is also the likelihood you may incur additional holding fees or other surcharges such as demurrage fees.
Good practice is to contact the company which have misplaced the cargo as soon as possible and enquire as to its whereabouts and whether they are able to find it. Best practice would also be to notify your freight forwarder that the Bill cannot be located. Sometimes the Bill of Lading may not be needed if it is not the fault of the courier, as other documents such as long-term bank guarantees can be enough to secure the release of the goods. However, be prepared for the possibility to pay an additional fee for this.
It is a good idea to prepare the below documents in the event the Bill of Lading cannot be located: