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A Bill of Lading (BOL) is a legally binding document used in a freight shipment. Freight shipment is the process of shipping goods, commodities, or cargo from a shipper to a consignee by sea, land, or air.
A Bill of Lading is a transportation contract containing the names and addresses of the consignee, carrier, and shipper. It also includes the purchase orders or special reference numbers, special instructions, delivery date, description of freights, packaging type, and the freight classes or National Motor Freight Classification (NMFC).
The term “Bill of Lading” consists of the words “bill” and “lade,” which mean the cost of goods delivered and to load cargo on board.
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Provide accurate information to avoid shipment delays or rejection.
Enter the number of the trailer or car used to deliver the goods.
Enter the date of the Bill of Lading.
Enter the recipient's information.
Enter the name of the consignee or the recipient.
Enter the consignee's street address.
Enter the delivery destination.
Enter the city, state, and ZIP code of the place of delivery.
Enter the route or the course taken in getting from the starting point to the delivery destination.
Enter the shipper's information.
Enter the shipper's name.
Enter the shipper's street address.
Enter the country of the actual shipping point.
Enter the city, state, and ZIP code of the shipping point.
Enter the shipper's special instructions for the carrier regarding the delivery. Do not give special instructions that are considered as additional service requests.
FOR PAYMENT, SEND BILL TO
Enter the shipper or the person to receive the payment's information.
Enter the shipper or the person to receive the payment's name.
Enter the shipper or the person to receive the payment's company name.
Enter the shipper or the person to receive the payment's street address.
Enter the shipper or the person to receive the payment's city, state, and ZIP code.
Enter the shipper's instructions or additional service requests for the carrier.
- The following freight classifications (NMFC) must be filled out by the carrier company.
- Item refers to the goods, commodities, or cargo for shipping.
NO. OF SHIPPING UNITS
Enter the shipping container unit numbers.
Enter the time or date when the carrier received the items.
DESCRIPTION OF ARTICLES SPECIAL MARKS & EXCEPTIONS
Enter the description of articles, special marks, and exceptions per item.
Enter the weight of each item in pounds.
Enter the two-digit class rate per item.
Enter the shipment charges for each item.
Enter the time duration or the carrier's remittance cycle.
C.O.D. AMOUNT: $
If the shipper wants the carrier to collect a cash-on-delivery amount from the recipient, enter the value.
Mark the box if the shipper will pay a C.O.D. fee.
Mark the box if the shipper will pay the freight cost and any additional charges incurred during shipment.
Mark the box if the shipment recipient will pay the shipping fee and any additional charges incurred during shipment.
Enter the total charges of the shipment.
Enter the name of the shipment recipient.
Enter the address where the shipment will be delivered.
Signature of Consignor
Enter the signature of the consignor or shipper.
Enter the declared value of the property.
Freight Charges are collected unless market prepaid
Mark the box if the freight charges were prepaid.
Enter the name of the shipper.
Enter the signature or initials of the shipper.
Enter the name of the shipment carrier.
Enter the signature or initials of the shipment carrier.
Enter the date when the Bill of Lading was signed by the shipper and the carrier.
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What is the purpose of a Bill of Lading?
A Bill of Lading provides the carrier all necessary information to process a shipment. All information must be correct to avoid delays in shipment.
While a Bill of Lading serves as a legal contract between the shipment carrier and the shipper, it is also a receipt proving that the recipient has received his or her order.
A Bill of Lading is also a document of title. If the recipient does not present an original copy of the Bill of Lading, he or she cannot claim the freight.
What is the National Motor Freight Classification (NMFC)?
The NMFC is a standard that streamlines freight categorization and pricing across the industry based on the four transportation characteristics — density, handling, stowability, and liability.
The NMFC was established by the National Motor Freight Traffic Association (NMFTA), a nonprofit membership organization in the United States that represents interstate, intrastate, and international motor carriers and helps set industry standards in commodity packaging and transport.
What are the four transportation characteristics?
Here are the four transportation characteristics based on the NMFC.
- Density. Density is the weight per cubic foot of each product. If the density is high, the freight class is low. Most shipment carrier companies charge their clients based on density. It is important for shippers to know the accurate weight of their shipment to avoid pricing discrepancies.
- Handling. Any special handling requirements outside normal procedures pertain to the handling characteristic. Most shipment requires proper handling due to fragility, hazardous conditions, and other properties that might affect the shipment.
- Stowability. Stowability refers to how the freight will fit into a container with other freights based on their dimensions.
- Liability. Liability is the probability of shipment theft, damage, or damage to other freight loaded in the same container. Until the freight is delivered to the recipient, the carrier is responsible for any liabilities during shipping. Thus, before the shipping date, the carrier must ensure that all aspects of delivery, including the vehicle and its driver, are fit to operate to avoid such liabilities.
Who provides a Bill of Lading?
A Bill of Lading may be provided by either a shipper or a carrier. A shipper is a person or entity that tenders goods to be shipped, while a carrier is a transportation company transporting the goods the shipper has tendered for shipment.
A carrier may provide a Bill of Lading to a shipper. It often happens when the shipper is contracting for transportation services on a "carriage paid to" (CPT) or, similarly, "carriage and insurance paid to" (CIP) basis. In such a case, the carrier will provide the goods by issuing a Bill of Lading, which identifies the contract of carriage.
A shipper may also provide a Bill of Lading to the carrier when contracting on a "freight paid to" (FPT) basis, a form of carriage contract common for ocean shipments but less common for other modes. In such a case, the shipper will provide a Bill of Lading to the carrier to document that a contract for carriage has been established.
Is a consignee a shipper or a receiver?
In general, a consignee is a receiver or customer. A consignee is a person or business that receives goods from a carrier.
What is a carrier code?
A carrier code is an alphanumeric code assigned to carriers by ocean bill brokers and agents which represents each carrier. Its purpose is to simplify and standardize the Bill of Lading process and identify the transportation process.
Whose responsibility is it to add carrier codes?
Carrier codes should be added by carriers themselves. Some services can help them receive their carrier code, but it is ultimately the carrier's responsibility to obtain one and maintain it.
Who is required to have a Bill of Lading?
Anyone involved in a shipment of goods must have a Bill of Lading. It includes but is not limited to a shipper, receiver, and any intermediary carrier involved in transporting or handling goods.
A shipper of goods needs a Bill of Lading to prove that goods were shipped. A receiver of the goods needs a Bill of Lading because it represents proof that they own the shipment. Any intermediary carrier or third party involved in transporting or handling goods must have a Bill of Lading in order to establish evidence of their responsibility for the custody, care, control, and release of the goods.
What is a Clean Bill of Lading?
A Clean Bill of Lading means the goods listed on it have not been subject to any damage or loss.
A carrier prepares a Clean Bill of Lading to give to a shipper as proof that goods have been shipped and received in good condition.
Is a Bill of Lading the same as an Invoice?
No, a Bill of Lading is not an Invoice. They are two separate documents used in different ways.
A Bill of Lading details the terms of shipment for a specific consignment aboard one carrier. An Invoice is an accounting document that itemizes goods or services supplied to another party.
While an Invoice is an accounting document, it is not considered a legal document. A Bill of Lading is a legal document that serves many purposes, including the following:
- Proof of ownership
- Delivery instructions
What should I prepare first, a Bill of Lading or an Invoice?
It is not uncommon for an Invoice to be prepared before goods are shipped. Arranging transport is often done while the shipment is being arranged, so an Invoice or some other document referencing the shipment may be completed before a Bill of Lading.
Since all of these operations can take time, documentation may be done in an order different from the intended sequence.
Additionally, a Bill of Lading and an Invoice must be issued to a receiver concurrently on the delivery or shipment date.
Who is responsible for a damaged shipment?
A party or agent who signs a Bill of Lading is responsible for any damage incurred to the shipment. If there is no initial carrier, one who has possession of the goods at the time of shipment, then the signature authority may lie with any person who had custody over the good. However, the person taking responsibility must be able to prove that they had custody.
The signature on a Bill of Lading signifies that the signer has accepted the goods for transport and agreed to any terms related to their carriage, including liability for loss or damage. It is important to understand what signing a Bill of Lading means before taking this step.
Is a Bill of Lading required for all shipments?
It is common practice to use a Bill of Lading for higher value or larger or heavier goods.
However, there are some shipments where legal ownership can transfer without a Bill of Lading. However, even if a Bill of Lading is not issued or signed, a carrier still has a responsibility to deliver goods in good order.
Without a signed Bill of Lading, it may be difficult for the receiver or owner of goods to prove that he or she is legally in possession of the shipment. A Bill of Lading provides valuable information about the shipment, which is essential in processing warranty or insurance claims in case of damage during transport.
Is a shipper responsible for a damaged package?
Depending on the terms of a contract, if there is no Bill of Lading or other signed agreement to the contrary, a shipper may be responsible for loss or damage. A shipper may also be liable if he or she is negligent in preparing packages for shipment, such as failing to pack fragile items appropriately.
If there is a signed Bill of Lading, the shipper has assumed liability for the package while it is in his or her care, custody, or control. The carrier takes responsibility after that point until delivery to the predetermined destination. If the package was prepared properly by the shipper, and it was damaged during shipment, the carrier is held liable for any damage claims.
Can I refuse a damaged shipment?
Yes, you can refuse a damaged shipment or package.
Whether a package was improperly prepared for shipping or was damaged during transport, you have the right to refuse it.
Proper packaging methods are expected when preparing shipments to prevent damage during transportation. If your package or shipment has been mishandled by the carrier, you may do the following:
- Attempt to inspect the package for damage during transit.
- Document any loss or damage with photos, if possible.
- File a claim immediately after the discovery of any loss or damage. The more time that passes, the less chance you have to recover damages.
- If you have a Bill of Lading, communicate with the carrier about your claim. It may lead to a resolution more quickly.
- Consult an attorney who specializes in transportation law for assistance if your claim is not resolved fairly.
The shipper is responsible for loss or damage before delivery. A signed Bill of Lading does not mean that the shipper cannot be held liable for loss or damage after delivery. It means the shipper may have a better chance of avoiding liability.
The carrier takes full responsibility for loss or damage after the package is transferred to their possession during transit. If this has not happened due to mishandling or negligence, then the shipper may be liable.
Can I return an item if I damaged it?
Yes, you may be able to return an item that you damaged. However, it depends on the return policy of the shipper.
If you are dealing with a large shipment company, they will adhere to their return policy which may not allow for returns if an item was damaged due to your carelessness. It would be best to consult their customer service first before returning a damaged package.
Is it legal to Invoice before shipping?
It is not recommended to Invoice before shipping, but it is legal.
If you are providing a shipment of goods or services and want to be paid upfront before you ship, then this is fine as long as the terms of the contract have been agreed upon by all parties involved. If a shipper agrees to pre-payment in good faith, then they cannot change their mind and charge you more for shipment at a later time.
However, do not Invoice before shipping if the terms of the contract were not previously agreed upon, such as charging extra because of weight or size. Doing this can be considered extortion and will likely void your rights to payment.
What are the shipping terms?
Terms of shipping are those agreed upon by the shipper and the customer.
Shipping terms provide clarity as to what the buyer is expecting from a purchase. These terms should be clear so that no confusion or disagreement arises after shipment.
Is a Bill of Lading negotiable?
A Bill of Lading is a contract and is not negotiable.
A Bill of Lading is a bill of sale, and the terms set out in this document are considered legally binding agreements.
However, there is a type of a Bill of Lading that is negotiable. It is called a Negotiable Bill of Lading.
What is a Negotiable Bill of Lading?
A Negotiable Bill of Lading is a document issued by a carrier that entitles the bearer or holder to the items listed on it. The person in possession of a Negotiable Bill of Lading can sell, transfer, and endorse it according to contract law which makes it negotiable.
Authorship does not mean that the original shipper has to be involved in the transfer. A Negotiable Bill of Lading can be sold, transferred, or endorsed by anyone who is in possession of it regardless of whether they were involved with the original agreement.
A Negotiable Bill of Lading requires three signatures from all parties involved:
- Shipper — A shipper holds the goods and prepares the shipment for delivery.
- Carrier — A carrier transfers possession of the items to another party or the holder.
- Holder — A holder receives the shipment, is in possession of the Bill of Lading, and sells it or endorses it to a third party.
Does a Bill of Lading transfer title?
A Bill of Lading does not transfer title.
As a bill of sale, a Bill of Lading transfers legal possession and allows a shipper to negotiate payment. A title, however, remains with the initial seller or owner until terms have been fulfilled through the delivery of the goods.
It means that while a Bill of Lading can be used to transfer goods, the original owner of the items can refuse shipment if certain terms have not been fulfilled.
Once the carrier has signed a Bill of Lading and puts his or her stamp on it, he or she has transferred legal possession of the shipment to the receiver. A title remains with the shipper until the terms listed in the document have been fulfilled by the time of delivery.
Can a shipper be a consignee?
Yes, a shipper can be a consignee.
There is no restriction on who the goods listed on a Bill of Lading will be delivered. If a Bill of Lading does not specify a consignee name and address, it defaults to the original shipper and owner of the items listed on the document.
What is the difference between a Bill of Lading and a Bill of Entry?.
A Bill of Lading and a Bill of Entry are two different documents. A Bill of Lading transfers legal possession to the holder, while a Bill of Entry is an import or export declaration used by customs officials to collect duties, taxes, or fees. A Bill of Entry is a customs document.
Is a Bill of Lading a Packing Slip?
A Bill of Lading is not considered a Packing Slip.
A Bill of Lading transfers legal possession while a Packing Slip provides information about the items inside the shipment. A Bill of Lading should reference what is being shipped, where it is going, and other terms agreed upon by both parties involved in the transaction. A Packing Slip does not contain any of this information and states what is inside the shipment.
Does a Bill of Lading expire?
A Bill of Lading does not expire unless it has been voided or nullified.
As long as goods have been delivered, the payment terms have been fulfilled, and the items have not gone missing, a Bill of Lading will not expire.
However, if the terms on a Bill of Lading have not been fulfilled by the time payment is due, it can be voided and nullified so that no further action can take place under it. If this happens, another document must be used to transfer possession of goods or items before they are delivered to the appropriate party.
It usually takes 30 days after a Bill of Lading was issued to be voided or nullified by one of the parties involved. A nullified Bill of Lading is invalid and unable to be used for any further transactions.
Is signing a Bill of Lading mandatory?
Signing a Bill of Lading is not mandatory but is highly suggested.
Even though a Bill of Lading is a legal document that transfers possession, it does not have to be signed by all parties involved in the transaction to be valid. If one party does not sign the Bill of Lading, it will still be considered valid and upheld by law enforcement agencies should it ever need to be used as evidence in an investigation.
In cases where the lack of a signature could have negative consequences, such as a shipping service losing or damaging a shipment, it is recommended that all parties who are able to sign a Bill of Lading do so before handing over possession to the carrier.
As with most legal documents, signing a Bill of Lading prior to handing over possession of the shipment may save a lot of trouble in the future if something happens that requires it to be used.
How many Bill of Lading do you need for one shipment?
There is no limit to how many Bill of Lading you can have for one shipment.
A Bill of Lading is a legal document that transfers possession of items, but it does not define how many copies are necessary for the transaction. Each party involved in the transport or shipping process may request their own copy if they choose. There is no rule about who needs to have a copy of the Bill of Lading.
However, all copies must be identical so that each party has a replica of what was signed by everyone involved in the transaction. It reduces the risk factor should one of the documents become damaged or lost. To prevent confusion if something happens, having identical copies is highly recommended.
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