Bill of lading: In simple terms

Bill of Lading or BOL is a legal document containing the details of the type, quantity, and destination of the cargo that is being shipped. The BOL is generated by the carrier that represents the agreed terms and conditions for the shipping process.

BOL: Technical definition

ClickPost defines BOL (Bill Of Lading) as a legal document containing the details of the cargo, including but not limited to type, quantity, and destination, that binds the carrier and the sender to the agreed terms and conditions of the shipping process and also acts as a receipt for the consignment.

What are the purposes of BOL

The primary function of BOL is as a receipt generated by the carrier once the goods are loaded on the shipping vessel. The Carriage of Goods by Sea Act 1992 declares a BoL to be conclusive evidence of receipt for loading and unloading of goods. The other purposes of BOL are:

  • As a "clean bill of lading" that acknowledges no discrepancies between the details filled by the shipper and the goods being transported, this also indicates that the cargo has been appropriately loaded according to the terms and conditions agreed by the shipper and carrier.

  • A "dirty Bill of Lading" indicates a difference in quality and quantity from the description mentioned in the agreement. 

What are the different types of BOL?

Straight bill of lading: This type of document states that the cargo is delivered to a specific consignee and cannot be transferred. It is also known as a non-negotiable bill of lading.

Open bill of Lading: This document is negotiable in nature where the rights can be transferred with the signature from the consignee, which can be done multiple times.

Bearer bill of lading: This document states that anyone who holds the bill of lading can receive the delivery. This type of bill of lading can be created explicitly and may be used for bulk cargo that are turned over in small amounts.

Order bill of lading: This document contains express words like “delivery to X” to designate the consignee. With this bill of lading, the cargo is delivered only to the bonafide holder of the bill, which is approved by a field agent.

Who prepares Bill of Lading

BOL can be generated by the shipper, carrier, or third-party logistics partner working on behalf of the shipper.

  • If you work directly with a carrier, they will generate the BOL. In that case, the carrier might have basic information on the BOL for completing the shipping.

  • A 3PL partner will also generate a BOL which can be customized for the purpose of the shipper to add in reference numbers for shipping.

  • The primary generator of the BOL will be the shipper, who will put in all the specific information covering all the required details.

How much does a BOL cost, and who pays for it ?

BOL is the charge payable by the shipper to the carrier of goods, and it is generally priced anywhere between 5 USD to 20 USD for each shipment.

What is the importance of BOL

  • It acts as proof to acknowledge that the goods have been loaded onto the shipping vessel.

  • The shipper can hold the carrier responsible for any mishap during the shipment.

  • The shipping company can be protected from false damage claims during loading, which can be put forward either by the shipper or the buyer.

  • BOL acts as a document for the importer to collect the cargo from the customs.

  • Incentives like duties paid can be claimed with the presentation of BOL.

  • It enables the shipper to provide guidance to the importer regarding the cargo 

Why is BOL quasi-negotiable

Bill Of Lading is quasi-negotiable precisely because of the fact that it is transferable as a document of title. This makes BOL one of the most versatile instruments that can be used in international commerce transactions. Moreover, BOL cannot give the transferee a better title than the transferor holds, thereby making BOL a quasi-negotiable instrument.

What is different between BOL and Manifest

BOL is a legal document capable of transferring ownership between parties. In contrast, the Manifest is a non-legal document that represents the contents of the cargo with details of the type, dimensions, and quantity, operator name, and shipping route. In no case are the documents interchangeable, but officials review both these BOL and Manifest documents for cargo release. In case of liability issues, BOL is the de facto document referred to, not the manifest document. Furthermore, Manifest cannot represent a receipt that the goods have been loaded or unloaded on and from respectively from the shipping vessel. Further, the Manifest contains essential details to make shipping operations more precise and straightforward.

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