What Is a Bill of Lading? Definition and Guide - Shopify Nigeria (2024)

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What Is a Bill of Lading? Definition and Guide - Shopify Nigeria? ›

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.

As a legal document, the Bill of Lading (BL) serves to ensure that the shipper receives payment for the goods exported, and the consignee or importer receives goods ordered. As a receipt, the bill of lading confirms to the shipper that the carrier (transporter) of goods or consignment has received such goods.

A bill of lading is a legal document that's issued by a carrier to a shipper detailing the type, quantity, and destination of the goods being carried. A bill of lading is a document of title, a receipt for shipped goods, and a contract between a carrier and a shipper. 1.

The purpose of Bill of Lading (B/L) is to outline the journey of your cargo from the origin to the destination.

As you know, a waybill describes the origin, destination, shipper, and sender. However, a sea waybill is not a legal contract, whereas a bill of lading is. A bill of lading essentially acts as the title to the goods in question, so if you have possession of the bill of lading, you have possession of the goods.

In most cases, the shipper (seller) supplies and pays for the BOL, as it acts as a receipt and title to the goods. But if specific arrangements exist between the parties, such as a free on board (FOB) contract, the buyer may be responsible for obtaining and paying for the BOL.

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.

A BOL is generally issued by the broker or carrier. It's your job to fill out the bill of lading details on the blank BOL form. Some freight services will allow you to make your BOL for LTL shipments, but for FTL (full truckload) shipments, the shippers must always use their BOL.

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.

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 bill of lading same as invoice? ›

The documents serve different purposes. A bill of lading is a shipping document issued by a carrier that outlines the terms of shipment and serves as a receipt of goods, a contract, and a document of title. An invoice is a financial document requesting payment for goods or services provided.

A paper Bill of Lading has multiple important purposes:

It acts as your receipt and shipping label. It contains the details of your shipment, including content, origin, and destination.

A shipping bill is a document that is used to declare the value, quantity, and type of goods that are being shipped. A bill of lading is a document that is used to acknowledge the receipt of goods and states that the goods will be delivered to the specified party.

When the buyer is entitled to receive goods from the carrier, the bill of lading in this case performs as a document of title for the goods. In simple words, the function of BL as a document of title shows who owns the cargo. Whoever has the duly endorsed BL is the rightful owner of the cargo described in the BL.

BOL could be considered a receipt, a proof of the contract between the shipper and the carrier. It is legally binding and contains all of the details required to process and invoice a freight shipment.

What is the difference between the bill of lading and a shipping bill? A shipping bill is a bill for shipment needed for custom clearance while you are exporting products. Bill of lading is issued by the shipping company to the transporter when the transporter loads goods to the ship.

The Bill of Lading is sent to the buyer or consignee by the shipper. The buyer or consignee will forward the Bill of Lading to the shipping agent at the destination country (the US, in this example). The shipping agent will issue a Delivery Order to the port for the release of the cargo.