Consignee vs Consignor: What's the Difference When Shipping Freight?
What's the Difference in a Consignor and Consignee when Shipping Freight?
Every freight transaction involves two parties: consignor and consignee.
The terms consignor and consignee are often flipped in people’s minds, so why doesn’t the freight industry not just use shipper and receiver. We’ll get back to that question shortly, but let’s start with the definitions of both.
Definition of Consignor
The consignor is the company shipping the product. A consignor can be a factory, distribution center or drop ship origin location.
When shipping internationally, the consignor is the exporter of record.
Definition of Consignee
The consignee is the recipient of the goods being shipped. A consignee is a customer or client.
The ultimate owner of the product is the consignee, so it is important to keep in mind that shipments destined for a 3rd party logistics company would not list the 3PL as the consignee.
The consignee is the importer of record in international shipments.
So, with the above definitions in mind, the reason the terms consignee and consignor are used is because a company ships its products on consignment. The owner of the cargo consigns the product to a freight carrier for transporting it to the consignee. The ownership of the freight does not legally change until the recipient of the goods signs the BOL.
The bill of lading (BOL) is the document required in the shipment process that provides all parties, the consignor, consignee and carrier. The BOL contains all the pertinent details required to ship the product and then invoice the transaction correctly once the transaction is completed.
3 Key Functions of the BOL
- Acknowledges the Receipt of Cargo
- Provides Evidence of Contract of Carriage
- Documents Title of Goods
Key Elements of a BOL
- Name(s) and Address(es)
- Ship From
- Ship To
- Third Party Bill
- Freight Description
- Freight Class
- BOL #
- PRO #
- Freight Charge
- 3rd Party
- Purchase Order or Special Reference Numbers
- # of Pieces, Packages, Cartons, Skids
- DOT Hazardous Material Designation
- Special Instructions
For more on bill of ladings, we recommend reading Bill of Lading (BOL) Defined & Its Importance where you will learn the difference between negotiable and non-negotiable BOL’s and the different types used for shipping product.
Knowing that the BOL is a legal document, another good article to read is the Legal Implications of a Bill of Lading.