Definition, meaning, and explanation of

Bill of Lading

What does Bill of Lading mean?

The Bill of Lading (BOL) is a legally-binding document which serves as a receipt given by the carrier of the shipment to the recipient. It provides details like the type, quantity, and destination of the goods being carried.

The signature by the carrier acknowledging the shipment is aboard the carrier be it a truck, train, air, or ship. This basically means that goods are as mentioned on the bill of lading. It also acts as a proof of delivery. 

What’s included in the Bill of Lading?

  • Shipper’s name and address
  • Recipient’s name and address
  • Number of units being shipped
  • Purchase order and/or account number
  • Shipment data
  • Declared of goods being shipped
  • Description of what’s being shipped
  • Shipment packaging - carton, pallets. etc. 
  • Shipment weight
  • National Motor Freight Classification (NMFC) for items being shipped
  • Pickup and delivery specifications

Function of Bill of Lading:

A bill of lading (BOL or BL) is a crucial document in shipping and logistics that serves several key functions:

1. Receipt of Goods

It acts as a receipt issued by the carrier or shipper, acknowledging the acceptance of goods for transport. The bill of lading specifies the type, quantity, and condition of the cargo when it's handed over to the carrier.

2. Contract of Carriage

It serves as a legally binding contract between the shipper or consignor (the party sending the goods) and the carrier (the party responsible for transporting the goods). The bill of lading outlines the terms and conditions of the shipment, including the agreed-upon freight charges.

3. Title of Ownership

Depending on the type of bill of lading, it may also act as a document of title, meaning that it represents ownership of the goods. This can be important in cases where the bill of lading is negotiable and can be used to transfer ownership.

4. Evidence of Delivery

It serves as evidence that the goods have been delivered to the consignee (the party receiving the goods) in the specified condition. When the consignee signs the bill of lading, it confirms receipt of the goods.

Example of Bill of Lading:

Imagine a scenario where a manufacturer in New York is shipping a container of electronics to a retailer in California. The manufacturer arranges for a trucking company to transport the goods. The following would occur:

  • The manufacturer creates a bill of lading detailing the goods being shipped, their quantity, value, and the terms of the agreement with the carrier.
  • The trucking company's driver picks up the container from the manufacturer's warehouse and receives the bill of lading, which acts as a receipt for the cargo.
  • During transit, the bill of lading is used as a contract of carriage, specifying the agreed-upon delivery location, the party responsible for freight charges, and other terms.
  • Upon arrival at the retailer's distribution center in California, the consignee inspects the goods and signs the bill of lading to confirm receipt and that the goods arrived in good condition.

In this example, the bill of lading functions as a receipt, a contract, and evidence of delivery, ensuring transparency and accountability throughout the shipping process.

How to Create a Bill of Lading:

Creating a bill of lading involves the following steps:

1. Information Gathering

Collect all necessary information about the shipment, including details about the shipper, consignee, type and quantity of goods, packaging, and any special instructions.

2. Choose a Template

You can find bill of lading templates online or use specialized software. Many shipping companies and carriers also provide their own templates.

3. Complete the Document

Fill out the bill of lading form with the gathered information. Ensure accuracy, as errors can lead to complications during shipment.

4. Signatures

Have both the shipper and the carrier (or their representatives) sign the bill of lading to acknowledge their acceptance of the terms and conditions.

5. Distribution

Provide copies of the bill of lading to all relevant parties, including the carrier, shipper, consignee, and any other stakeholders involved in the shipment.

What’s the difference between an invoice and bill of lading?

A bill of lading is generally a document highlighting the details of shipment like its value, its delivery date, product specifications, receivers’ information, etc. whereas an invoice is a legal document that records each transaction between the business and the customer. An invoice outlines the amount to be paid or paid already for the specified goods from customers to business. 

Explore More: Omnichannel Order Management

Related terms in the

3PL Glossary
cross dock logo white

Fortnightly newsletter covering the latest in commerce, warehousing, and logistics.

Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
By filling the above form you agree to Hopstack Inc's privacy policy and terms of use and consent to receive communication from Hopstack Inc.

Schedule a Demo

By filling the above form you agree to Hopstack Inc's privacy policy and terms of use and consent to receive communication and resources from Hopstack Inc.