Bill of lading – what is it?

The simplest way to put it is that the bill of lading is a contract between the owner of the goods and the carrier indicating what goods are being shipped, where the shipment is coming from and where it’s headed. The bill of lading is a necessary document to move a freight shipment. It works as a receipt of freight services, a contract between a freight carrier and shipper and a document of title. It provides the driver and the carrier all the details needed to process the freight shipment and invoice it correctly. A bill of lading indicates a particular carrier through which the goods have been delivered to their final destination and the conditions for transporting the shipment. The bill of lading is issued by the carrier. It is issued when, for instance, a driver signs it. Bills of lading are valid for the land, ocean and air transportation. What kind of information should be included in a bill of lading?

  • Names and addresses: the names and addresses of the shipper and receiver shouldn’t be difficult to locate on the document. 
  • Purchase orders or special reference numbers: these numbers might be a necessary reference in order for freight to be released for pickup or accepted at delivery.  
  • Special instructions: a space to note instructions for the carrier that are not extra service requests (such as liftgate or delivery notification).
  • Date: the day of the pickup, might be needed to track the freight or while reconciling the shipment invoices. 
  • Description of items: what should be written down are: the number of shipping units, the dimensions, weight and information about the material. 
  • Packaging type: write down the type of packaging that you’re using (cartons, crates, pallets, drums).
  • NMFC freight class: freight shipments are broken down into 18 classes based on weight, value, dimensions, ease of handling, density, storage capability and liability.
  • Department of Transportation hazardous material designation: hazardous shipments must be clearly pointed out, special rules and requirements apply during the shipment.

What kind of bills of lading are there? Let’s take a closer look at some of them:

  1. Straight bill of lading –  it’s non-negotiable, the goods are consigned to a concrete person, this type of bill of lading is not the safest and is prominently used for military cargo.
  2. Open bill of lading – a negotiable bill of lading where the name of consignee can be changed with consignees’ signature and then transferred (even multiple times).
  3. Bearer bill of lading – states that delivery should be made to whoever holds the bill, can be negotiated by physical delivery, used for bulk cargo turned over in smaller amounts.
  4. Order bill of lading –  uses express words to make the bill negotiable, is only delivered to the bonafide holder of the bill, has to be verified by an agent who issues the delivery order and the verified bill of lading. 

An electronic bill of lading is still a novelty but it’s being used more and more often thanks to the modern solutions.