Shippers, customers, and freight carriers want to ensure shipments reach their destinations safely based on specified deadlines. Typically, these players reach an agreement regarding what types of shipments to oversee, the origin and destinations of the shipments, and who holds responsibility for the shipments during the trip. To document the shipping details, shippers and freight carriers use what’s called a bill of lading. Check out the following post as we define bill of lading and when you may use this document.
What Is a Bill of Lading in Shipping?
The bill of lading is one of several charge term definitions used by freight shippers and carriers to describe a contract and title document. A typical bill of lading provides details regarding the type of products being shipped. In addition, the document goes over where the shipper will provide the shipment to the carrier, called the origin location. This origin location can include a warehouse, port dock, rail yard, or other sites. The shipper also defines the destination of the shipment.
Shippers and freight carriers also use a bill of lading for other purposes. At the beginning of the supply chain, a shipper uses a bill of lading as a contract with a freight carrier to define the shipment and logistical strategies used for transporting the goods. Then, the carrier uses the document as a title. In this manner, the document gives the person in charge of the freight at certain points of the trip possession of the shipment. So, if the shipment changes hands from a driver to a rail or ocean carrier, the bill of lading allows that person to take charge of the freight.
Lastly, a bill of lading also acts as a receipt for the shipper. A carrier issues a bill of lading when the recipient picks up the shipment. So, the bill of lading meaning changes based on different stages of the supply chain.
The Importance of the Bill of Lading
The bill of lading offers written documentation to all parties who may encounter your freight. It defines the responsibilities each party has when transporting the shipment to various destinations and holds people accountable if a problem arises during the transportation process. A carrier may also use the bill of lading to correctly invoice the shipper for the provided transportation work. A shipper may use the bill of lading to ensure the correct amount of goods has reached the destination in a safe condition.
A shipper should always consider using a bill of lading to avoid shipping disagreements. If for some reason the shipment is damaged while in the carrier’s possession, you could seek compensation from the involved party if you used a bill of lading.
Using Specific Bills of Lading
A carrier can issue different types of bills of lading depending on the shipping method for the freight. Types of bills of lading include:
- Straight Bills of Lading: This is a document used to ship freight to customers who have paid for the goods.
- To Order Bills of Lading: When bills of lading are “to order,” they become negotiable and allow ownership transference to other parties who are endorsed by a document’s consignee.
- Inland Bills of Lading: You can use these documents for shipments traveling by either road or rail, as it is the first document for international shipment.
- Air Waybills: This non-negotiable document provides air carriers the authorization to ship the goods through air transport.
- Ocean Bills of Lading: This document authorizes ocean carriers to take possession of the shipments. The documents may be straight bills of lading or order bills of lading.
- Multimodal Bills of Lading: If shipments travel using various air, sea, rail, or land transportation services, you would use a multimodal document.
You must fill out the bill of lading correctly to ensure shipments reach their destinations without shipping delays or delays in payment. The document contains fields such as addresses, special reference numbers, the date, item descriptions, packaging types, special instructions, NMFC freight classes, and DOT hazardous materials designations. If the document contains errors, you may have a hard time getting compensated or holding the right party accountable for the shipment.
Shippers and carriers rely on bills of lading to transport goods to any location, whether by land, sea, rail, or air. These documents allow everyone to understand their role in the transportation process and offer a receipt when performing invoicing work.
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Let’s find out more about your transportation needs. Reach out to WSI today to get started.