A BOL - which stands for bill of lading - contains multitudes when it comes to freight, serving as a shipping form which acts both as a receipt for property and a contract for delivery of goods by a carrier. The BOL records the chain of custody of a shipment and contains all details required to ship a product properly and correctly invoice the shipment. It even serves as a formal, legally binding contract between the carrier and shipper in the absence of a separate contract. Perhaps the most confusing piece of the term to the uninitiated is "lading." Lading can either refer to the goods being shipped themselves, or the act of loading cargo for shipping. Its origins trace to approximately 15th century Old English, where lading meant loading a boat.
The functions of a bill of lading include its use as documentation of the title of transported goods, evidence of a contract of carriage between parties, and an acknowledgement of the receipt of cargo. Signing off on a BOL signifies the transportation of a load has been completed as stated. That means it's vital for whomever receives the shipment to validate the item count listed on the document and ensure it is damage-free before signing off. Once signed, the receiving party has little to no recourse for any issues that may have occurred, as there's no way to prove the complication occurred while the load was in the carrier's custody. Conversely, an unsigned BOL can spell trouble for the party carrying the freight with no proof of delivery. In other words, you don't want to drop the ball on the BOL, as it provides important documentation and protection to all parties.
How to make a bill of lading
Making up a bill of lading involves inclusion of several key elements. The vital components of a thorough BOL are:
- Name(s) and Address(es)
- Ship From
- Ship To
- Third Party Bill
- Freight Description
- Freight Class
- BOL #
- PRO (progressive rotating order) #
- Freight Charge
- 3rd Party
- Purchase Order or Special Reference Numbers
- # of Pieces, Packages, Cartons, Skids
- DOT Hazardous Material Designation
- Special Instructions
While traditionally a paper process, more and more those in freight turn to EDI - electronic data interchange - with assistance from their TMS - transportation management system - software to automate the process, cutting down not only on the paper trail, but on human error as well.
What are bills of lading types?
There are five principal bills of lading. The five primary types of BOLs are:
- Clean — Either a straight or order bill of lading issued by a carrier declaring that the freight has been received in an appropriate condition, without the presence of defects or shortage.
- Exchange — A bill of lading issued by the carrier or agent that is substituted for the original bill of lading, where the middleman is shown as the shipper and protects the identity of the original freight supplier.
- Export — A bill of lading that is issued to cover a shipment consigned to a foreign country.
- Order — A negotiable document that is issued to the order of a shipper or consignee for the delivery of the freight and can be transferred by endorsement to third parties in accordance with its terms.
- Straight — A non-negotiable document that is issued to a specified consignee for the delivery of the freight and that cannot be endorsed by another party. Surrender of the original bill is not required upon delivery of the freight unless necessary to identify consignee.
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