One of the biggest causes of shipment delays everywhere is improper paperwork. Forgetting one piece of information or making errors when filling out paperwork can cause huge setbacks to the delivery date. One of the most important forms included with freight shipments is a bill of lading. This document has been used across the globe for centuries to facilitate shipping between countries. However, just because companies frequently use this form, that doesn’t mean everybody is familiar with it or aware of its importance. Here is everything you need to know about your bill of lading.
Simply put, a bill of lading is a document that lists the conditions under which the shipment has been made. It includes the details of the shipment, such as its amount, the type of product being shipped, and the destination of the freight. Though it can also spell out the conditions under which the shipment will arrive, this is less common. The bill of lading acts as a receipt of sorts, so all parties have documentation of the sending and receiving of the product. The bill can also serve as a title of ownership, with delivery being considered the fulfillment of the contract.
A bill of lading is important because of the documentation that it provides to the shipper, carrier, and buyer. It is a legally binding agreement that all parties must follow under penalty of law. It is also a form of protection for the carrier. Because the document is legally binding and is seen as a title of the goods, it enables the carrier to maintain possession of the shipment until payment arrangements have been completed. Another benefit for shippers is that it allows them to follow the chain of possession for the shipment, enabling them to transfer ownership of the shipment to other parties along the route.
On the flip side, a bill of lading opens up the carrier to potential consequences if everything is not delivered as specified. These consequences can range from fines to jail time, depending on the severity of the infraction. This type of protection allows for a more open and honest relationship between buyers and sellers because of the role that shippers play as intermediaries.
There are many things that you can learn about a shipment if you know where to look. Due to the complex nature of international shipping, this information should be readily available and in a format that is easy to read and understand by all. Some of the information on a bill of lading includes the carrier information, the date the shipment was loaded, the port that the freight left from, a log of what is being shipped, and any special shipping requirements. While these all seem like very basic pieces of information, they allow shippers and importers to quickly see what is coming in and where it should be heading next. Making this information as easy to find as possible will speed up the process for everybody.
In use around the world since ancient Rome, the bill of lading has seen many variations over the ensuing centuries. Though many have come and gone, these are the most popular variations currently in use that you should know about for your freight. This is everything you need to know about your bill of lading types and what each is good for.
A straight bill of lading is used for goods that have been paid for before delivery and are shipped directly to the customer. These are non-negotiable, as the conditions have already been agreed upon before the shipping process was completed. While some may confuse them with the package slips that come with their online orders, a straight bill of lading is actually a binding contract for ownership over everything in the shipment and is usually created by the transportation company. On the other side of the coin, a packing slip is essentially a glorified receipt that shows what was shipped, and it is created by the seller of the goods. Ownership of the property cannot be transferred to another party if there is a straight bill of lading.
A bill of lading that is “to order” is negotiable by the carrier, and it allows for the transfer of ownership of the shipment from one carrier to another. This is typically helpful when the shipment is purchased with a letter of credit from a bank. This type of bill of lading is useful when there will be many companies involved in the shipment of your freight, as it allows for ownership to move between parties as they obtain possession of the shipment.
A switch bill of landing is useful for shipments in which the information of the person who sent the shipment needs to remain anonymous. During the shipping process, there will be two sets of bills of lading that are switched during transit to protect this information from whoever is receiving the package. This format is often used to protect the identity and location of the factory where items are produced, particularly if the seller doesn’t choose to disclose this information.
There are a few other varieties of bills of lading that depend upon the mode of transportation required. An inland bill of lading is used for international shipments that will travel by road or rail but not water. An ocean bill of lading is for international shipments that require transport overseas. As you can probably guess, an air bill of lading is for shipments that travel by air, but unlike the other two, it is non-negotiable most of the time. If a shipment uses a combination of these methods, it is referred to as having a multimodal bill of lading.
With so many varieties of this document, it can be challenging to remember everything you need to know about your bill of lading. At Diversified Transportation Services, we are here to help you in all matters of freight transportation services that can help bring your business to the next level.
Whether you're a company looking to improve one facet of your supply chain, your entire supply chain, or simply looking for a transportation and logistics consultation, we can help.
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