What Is a Bill of Lading?
A bill of lading (BOL) is a legal document that is used as a receipt of goods being shipped, and as a legal document providing evidence of the contract between the shipper and the freight carrier. The bill of lading also serves as a document of title to the goods being shipped, allowing the receiver of the goods to take physical possession of the goods and exercise ownership, if the payment for the goods is satisfied.
A bill of lading is issued by a carrier or a freight forwarder to a shipper, either when goods are loaded onto a vessel or at the time the carrier takes possession of the goods. The BOL is completed with essential details such as the type and quantity of goods being shipped, the shipper, the receiver and the carrier, the pick-up and delivery addresses, the type of transport, and the payment terms.
It is important to note that bills of lading are negotiable instruments, meaning that the title and ownership of the goods can be transferred from one party to another. This negotiable feature of the BOL is important in commercial transactions such as global export and import.
Functions of a Bill of Lading
A bill of lading has many functions, but primarily serves as a contract between the shipper and the carrier. The BOL sets out the terms and conditions under which the carrier will transport the goods, including the cost of the voyage, time of delivery, loading and discharging of the goods, and any penalties that may be incurred.
In addition to serving as a proof of contract, the bill of lading serves as a receipt of goods from the shipper and is a key element in international trade transactions. A BOL also acts as a document of title to the goods and is used to facilitate the customs clearance process in the country of import.
Benefits of a Bill of Lading
A bill of lading has many benefits, but most notably serves to protect both the shipping company and the shipper. It ensures the safe transport of goods while providing a source of evidence of the contract between the shipper and the freight carrier.
The BOL also serves to protect the interests of the receiver of the goods. By providing a legal document identifying the shipper and the receiver, the document provides proof of title to the goods and ensures that the receiver is the rightful owner of the goods.
In conclusion, a bill of lading is a legal document that serves as a receipt for goods being shipped and a contract between the shipper and the freight carrier. The document is used to transfer ownership and title of goods, and also serves to protect the interests of both the shipper and the receiver.