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What is the purpose of a bill of lading?

A bill of lading, often abbreviated as B/L, is the ticket outlining the journey of your cargo from origin to its destination. Much like an airline issuing a ticket to a passenger, a B/L is issued by a carrier to a shipper detailing the method and path of a shipment, be it by any combination of air, sea, road, or rail. It functions as a contract for the movement of the goods, with the fine print – the terms of the contract – frequently outlined on the back of the courier bill. It also serves as a receipt for the cargo and can act as proof of ownership of the goods being transported.

In short, it’s an important document!

The Who of your Bill of Lading:

Much like a ticket, it outlines the players involved with your shipment, including:

  • The shipper & consignee of the goods
  • The carrier who issued the Bill of Lading
  • The origin freight forwarder
  • The destination freight forwarder / arrival agent who handles your shipment when it reaches the U.S.
  • The freight payer – either prepaid or collect – which indicates who is paying for the transportation. This will either be the seller or buyer. Who pays is indicated by the Incoterms, a very important part of the negotiation between the seller and the buyer. Look out for a post about Incoterms, coming soon!

The What of your shipment:

The Bill of Lading outlines what goods are being shipped and any specific handling instructions. This information will include:

  • The content of the shipment, e.g. hanging garments, electronics, food
  • The type of inner packaging, e.g. boxes, crates, sacks, drums, rolls or any number of ways that items are packaged
  • The type of outer packaging, e.g. “1000 boxes on 10 pallets,” or “40’ container, said to contain (STC) 32 pallets”
  • Any identifying markings or characteristics
  • If the shipment is being transported by air, each shipment is labelled with the airline’s Master Airway Bill number (MAWB) and, in some cases, the origin freight forwarder’s House Airway Bill number (HAWB).
  • Specific handling instructions, e.g. keep upright, keep cold, avoid freezing, fragile, etc.
  • Any specific requirements should always be addressed with your supplier, forwarder, or carrier before shipping. Additionally, consider obtaining a quote for cargo insurance. Damages happen more frequently than you might think.
  • The weight and volume of your cargo

The Where of your precious cargo

The Bill of Lading maps out the journey that your shipment will undertake to get from your seller to you, with details such as:

  • The shipment’s origination
  • The shipment’s destination
  • The route it is taking to get from one place to the other
  • The date the shipment is received for transport
  • The flights / vessel(s) / trucks the shipment is planned to move on

Like booking airline, shipment bookings can take many forms and routes; like travel, the more stops and the slower it is, the cheaper it is to get there. Thus it’s not unusual for a shipment originating in Indonesia to stop by Singapore before continuing on to a port on the U.S. west coast. Once there, it can be loaded onto a train or truck headed to a de-consolidation warehouse in New York, where it will be sorted for a local trucker to deliver it the last mile to the buyer’s warehouse.