If you ship anything in your business, you are familiar with a bill of lading. This form documents what is in your shipments. It is issued by the transportation company or ship carrier and specifies that goods have been received to be sent somewhere else. The bill contains specific information and disclaimers about the delivery of the goods. It is considered a legal document because it is part of the contract made between a shipping company and company.
There are two main types of bill of lading forms. A regular bill of lading form documents a shipment that occurs on one mode of transportation. A through bill of lading form documents a shipment made on two or more modes of transport (such as plane and railroad, or truck and boat). There are also international bill of lading forms. These include customs information for the country of delivery.
What it Does
A bill of lading acts as a contractual form for the company and shipper, as discussed above, but it is also does two other things. It is used as a receipt to ensure the contract has been fulfilled and the goods received and delivered on time. It can also transfer ownership of goods (usually to the party who receives them). This is true in shipments of consumer goods, coal and other items.
Why it is Needed
If you are shipping something, you need a representation of the legal contract that has been set up. During shipments, cargo can be damaged, stolen or misplaced. A bill of lading that notes what was being shipped helps companies keep track of their merchandise. When the cargo is delivered, there must be a document that relieves the shipper of responsibility. Once it arrives and is in possession of the new owner, if something happens to it, the bill of lading shows that it has been transfered to the other party and is now their responsibility.
There are more specific types of bills of lading. The first is the straight bill of lading. This guarantees rights to the shipment for the receiver, aside from any other interests in the goods. If someone has a lien on the goods, this prevents the lien holder from losing her interest if the goods are shipped somewhere else. A bearer bill of lading gives the rights of the goods to whoever bears the bill. A surrender bill of lading means when the goods are delivered, the rights to the goods are surrendered to the recipient.
A bill of lading is also referred to in business documents as a BOL, or B/L. Both terms mean bill of lading. Other similar bills are called sea or air waybills. These bills are similar to straight bills of lading, in that they dictate the terms of the delivery of the goods. However, unlike a bill of lading, they do not dictate ownership or title of the goods.