The bill of lading is one of the most important shipping documents you’ll encounter as you begin to move your cargo around the world. In this article we explain what it is and why it’s the key to unlocking international logistics.
Before we get into it, let’s quickly go over the key players involved:
- The shipper is the party supplying the goods being transported. They are responsible for packing and preparing the shipment for transportation. This might be your supplier, or your own warehouse/manufacturer.
- The carrier is the party that moves the cargo. For example, this could be Maersk, or any other shipping line, haulage company or airline that carries your cargo.
- The consignee is the party designated to receive the shipment. This could be your company, or a manufacturer who uses parts you’re shipping.
What is a bill of lading in shipping?
A bill of lading is a legal document that is issued by a carrier to the shipper. It contains details about which goods are being shipped, where the shipment is coming from and going to, as well as details of the shipper, carrier, and consignee.
The bill of lading has three main functions:
- Evidence of a contract of carriage
- Receipt of goods i.e. an acknowledgement that the carrier has received the freight
- Document of legal title to goods
What information is in the bill of lading?
The bill of lading contains details about the type and quantity of goods, the parties involved in the shipment, and the terms of the shipment.
After a booking is placed with a carrier, the shipper needs to submit Shipping Instructions with accurate information about the shipment, which the carrier uses to create a bill of lading.
The bill of lading includes, for example:
- Party details — shipper, consignee and/or notify party
- Cargo description
- Cargo weight, package count, and volume
- Terms of payment
- Port of loading
- Port of discharge
- Bill type
When is a bill of lading issued?
The bill of lading is only issued after the vessel has departed from the port of loading.
Why is the bill of lading important?
A bill of lading is important because it acts as the legal document of title which allows the person holding it to claim ownership of the cargo.
The bill of lading is also evidence of a carriage contract, which details the responsibilities of the carrier with the parties involved in the transportation of the cargo.
How many types of bills of lading are there – and when is a bill of lading required?
There are many different types of bills of lading, depending on where you are shipping to, what commodity you are shipping, and your needs. The type of bill of lading you encounter might be based on who issued it, the mode of transport, or the relationship between yourself and the shipper – for example, if you’ve paid for goods or transportation upfront or on credit.
Two types of bills of lading you’ll come across at Maersk include:
- Original bill of lading: The primary document used in sea transport. It functions as evidence of a contract of carriage, transport goods receipt, and a legal title to the goods. To receive the cargo, the buyer (consignee) will need to present the original bill of lading.
- Seaway Bill: The sea waybill is a type of bill of lading. It is a key document used in sea transport when the supplier (shipper) decides to release ownership of the cargo to the buyer (consignee) immediately. This means that the cargo can be picked up by the party identified in the waybill without presenting a document of ownership. A sea waybill is evidence of a contract of carriage and a transport goods receipt but does not give title to the goods.
What is a telex release?
It's worth a quick note here on something else you might encounter in your shipping — a telex release or electronic cargo release. The telex release is not a type of bill of lading, but a method of releasing a bill of lading electronically. A telex release is only relevant to shipments where an original bill of lading has been issued. It is a message that authorises the carrier to release the cargo to a named party at the destination, without the presence of the original bill of lading.
Summing up
So, the bill of lading is the key to unlocking international logistics. It’s the pass that gets you through the door, but it relies on having correct information provided and being correctly issued. Take your time getting to grips with the documentation before you book. You can read more about the bill of lading in our FAQs.
Feel ready to tackle your logistics? Why not sign up to Maersk today to explore the platform, browse routes and start booking.
FAQs
A bill of lading is a contract issued by a transport company to a shipper that spells out the quantity, type, and destination of the goods being shipped. It serves as a receipt of the shipment and can help prevent the theft of goods being transported.
What is a bill of lading and why is it important? ›
A bill of lading is evidence of a contract between you, the owner of the goods, and the carrier stating what goods you're shipping, where the shipment is coming from and where it's headed. It also serves as a receipt issued by the carrier once your shipment is picked up.
Why is the bill of lading the most important shipping documents? ›
The Bill of Lading (B/L) is an important shipping document that serves as a receipt, contract of carriage and proof of ownership of the goods being transported. Without this document, it is not possible to enter or leave many ports/countries. Unlike a Sea Waybill, a Bill of Lading can be assigned to other parties.
What are the four main functions of a bill of lading? ›
A bill of lading is a document that lists the goods being transported, the destination, the name of the shipper and consignee, and other important information. A bill of lading is used as a receipt of goods, a contract between the shipper and carrier, and a document of title.
What is a bill of lading Quizlet? ›
What is a bill of lading? a document issued by a carrier acknowledging that specified goods have been received as cargo for carriage to a named place for delivery to the consignee who is usually identified.
What two purposes does a bill of lading serve? ›
A bill of lading serves two purposes: first, it is a receipt for the goods; second, it is a contract between the shipper and the carrier. Was this information useful? Thanks for your feedback! Sorry we couldn't help more, please review the related FAQs below.
Who needs a bill of lading? ›
The Importance of Bills of Lading
The bill of lading is one of the most important documents in the entire logistics industry. It protects the needs of all 3 major parties in a shipping transaction. Shippers, carriers, and consignees ensure protection during all stages of the process.
What is one purpose served by a bill of lading? ›
It functions as a contract for the movement of the goods, with the fine print – the terms of the contract – frequently outlined on the back of the bill. It also serves as a receipt for the cargo and can act as proof of ownership of the goods being transported.
What is the purpose of the original bill of lading? ›
An original bill of lading (OBL) is a shipping document or a contract of carriage which serves as the title of the cargo and a shipment receipt. This document confirms the carrier's receipt of the cargo.
Why do you order a bill of lading? ›
In a situation when the importer does not pay for goods in advance, a seller usually issues a 'to order' Bill of Lading. It is an instrument with which the carrier takes responsibility for the goods during transit and the importer is assured of delivery even if he has not paid in advance.
A bill of lading (BL or BoL) is a legal document that's issued by a transportation company to a shipper. It details the type, quantity, and destination of the goods being carried. A bill of lading also serves as a shipment receipt when the carrier delivers the goods at a predetermined destination.
Who keeps the bill of lading? ›
The bill of lading is typically given to the carrier or driver when it's picked up and is also attached to the freight. Shippers should keep a signed copy of the bill of lading after the carriers receive the shipment for transport. It is considered proof of carrier liability, in case of damage or loss of the freight.
Is the bill of lading evidence of the contract? ›
The bill of lading is evidence of the contract of carriage, it is not the contract of carriage itself. That contract between the carrier and the shipper is created when the goods are loaded on board the ship and will therefore already exist before the bill of lading is issued.
What are the three purposes of a bill of lading? ›
The bill of lading has three main functions:
Evidence of a contract of carriage. Receipt of goods i.e. an acknowledgement that the carrier has received the freight. Document of legal title to goods.
What is the explanation of bill of lading? ›
A bill of lading is a document accompanying freight that states the agreement between the shipper and the carrier and governs their relationship when goods are transported. It details the cargo in the shipment and gives title or ownership of that shipment to the receiving party specified on the document.
What information can be found in a bill of lading? ›
The bill of lading must include the name and address of the shipper, the name and address of the consignee, a description of the goods being shipped, the quantity of the goods, the method of transportation, and the date of shipment.
