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What Is a Bill of Lading?

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Last editedNov 20212 min read

Whether you’re a supplier or a new exporter looking to ship goods, there are a number of different things you need to understand about how this process works. As with any aspect of business operations, there are certain regulations to comply with, and you will also need to complete the relevant paperwork for any shipment, such as commercial and VAT invoices.

This is where the bill of lading comes in. This is a document that is issued by the carrier to the shipper to confirm that the goods are in an acceptable condition and are ready to be shipped. Keep reading to find out the bill of lading meaning and everything else you need to know.

Bill of lading meaning

In order to answer the question “what is a bill of lading?”, it’s important to define some of the key terminology. There are three important parties involved in this document: the carrier, the shipper, and the consignee.

The carrier is the entity that is responsible for transporting and delivering the goods, such as a courier service or logistics company. The shipper, who may also be known as the consignor, is the entity that supplies and or owns the goods in question. Finally, the consignee is the entity purchasing the goods.

A bill of lading is basically a contract of carriage between the shipper, consignee and carrier. It provides various details, including the shipping destination and the type and quantity of goods so that the shipment can be accurately processed. In addition to this, it acts as a receipt for shipping, and also details the agreed conditions for the transportation of the goods.

Bill of lading example

A good bill of lading example includes a number of essential details, which include (but are not limited to) the following:

  • A delivery address.

  • The place where goods were originally loaded.

  • Details on the transportation company (carrier) and the shipper and consignee.

  • The mode of transportation, which may be road, rail, air, sea etc.

  • An exact description of the goods that are being carried, including dimensions and weight.

  • The terms of the shipment, which are also known as the incoterms.

For example, imagine that there is a café that receives regular shipments of coffee, cakes and soft drinks. The owner of the café must first determine the amount and quantity of goods that they require, and fill out a purchase order to submit to the vendor, who must then gather the goods and sign a bill of lading.

Following this, the carrier will deliver the goods to the café and the manager can compare their purchase order to the bill of lading. If these are the same, then they can sign the document and make a payment to the vendor. As you can see, the bill of lading is an essential document to verify that the consignee has received exactly what they ordered.

Who has to process a bill of lading?

As previously mentioned, there are three different parties involved in a bill of lading, and each one has a different role in this respect.

The carrier is responsible for issuing the bill of lading, and they should provide this to the shipper, the consignee, and also to a third party such as a broker, freight forwarder or someone who is managing customs. Once the bill has been through these steps, an invoice can be submitted to the consignee and delivery of the goods can be completed.

Why is a bill of lading important?

The bill of lading is a legally binding document that provides all the parties involved with details of a shipment of goods. In most cases, where goods are successfully delivered in the correct quantities and to the correct address, the bill of lading simply serves as a way to verify the delivery.

However, if there are any issues in the delivery of goods, then the bill of lading may be used in litigation. For this reason, it’s essential to ensure that all the details are correct.

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