A bill of lading is a document that outlines the agreement between the shipper and the carrier during the transportation of goods. It details the cargo and transfers ownership to the receiving party specified on the document. Accuracy is crucial for smooth logistics and legal protection.
The bill of lading accompanying a shipment is signed by the carrier when it picks up the shipment. The signature acknowledges that the shipment is on board the carrier, whether it’s truck, rail, air, or ship. When it’s signed by the recipient, often referred to as the “consignee,” it confirms that the goods were received as described on the bill of lading. It also serves as proof of delivery.
See also: Shipping Resources for Ecommerce Businesses
Types of bills of lading
- Straight bill of lading – used when the shipment has been paid for in advance and the carrier is delivering the freight to the buyer or other appropriate party.
- Order bill of lading – used when the goods are being shipped before they’re paid for. It is expressed as “to order of” on the bill of lading often followed by the recipient’s name. An order bill is considered a “negotiable instrument,” which means that it acts as a substitute for money or as a promise to pay. An order bill of lading might be used if the goods are shipped under an open account or letter of credit.
When the recipient endorses or signs the order bill of lading, the carrier can transfer title to the recipient. Endorsed order bills of lading can serve as collateral against debt.
What is included on a bill of lading?
The bill of lading includes the following:
- Purchase order and/or account number
- Shipment date
- Shipper’s name and address
- Recipient’s name and address
- Number of units being shipped
- Description of what’s being shipped
- Declared value of goods being shipped
- Shipment packaging – cartons, crates, pallets, etc.
- Notation if product in shipment is a Department of Transportation hazardous material, which has special requirements
- The national motor freight classification (known as NMFC) for items being shipped
- Exact shipment weight
- Pickup or delivery specifications
The bill of lading is used with both domestic and international shipments.
What is the difference between a bill of lading and an invoice?
A bill of lading is a document detailing the cargo in a shipment, it's value, delivery specifications, and the receiving party.
An invoice is a legal document that itemizes and records each transaction between your business and your customers. It confirms and logs the products a customer bought and the amount they have agreed to pay for those products. If you would like to see an invoice in action, try our free invoice generator.
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What Is Bill Of Landing FAQ
Who is responsible for filling out a bill of lading?
The shipper is usually responsible for preparing the bill of lading with shipment details, and the carrier signs it at pickup to confirm receipt of the goods. A third-party logistics provider or freight broker may complete the paperwork on the shipper's behalf. Once filled out, both parties should review the details for accuracy since errors can delay pickup or create disputes over liability.
Is a bill of lading legally binding?
Yes, a bill of lading is a legally binding document that establishes the terms of the contract between the shipper and the carrier. It defines each party's responsibilities during transport, and failing to meet those terms can result in liability. Because of this, accuracy on the form is critical — errors in the cargo description, weight, or delivery details can create legal complications or delays.
Is a bill of lading required for every shipment?
A bill of lading is only required when a shipment moves through a carrier, whether by truck, rail, air, or ship. Shipments moved entirely in-house, without a third-party carrier, generally don't need one. For any transportation involving a carrier, the bill of lading remains the standard document used to record the agreement and track the goods from pickup to delivery.
What is the difference between a bill of lading and a packing list?
A bill of lading is a legal, signed contract between the shipper and carrier that also serves as a receipt and proof of delivery, while a packing list simply itemizes the contents of a shipment for reference. The packing list travels with the shipment to help warehouses, customs officials, or the receiving party verify what's inside each package, but it carries no legal weight and isn't signed by the carrier.
Can a bill of lading be issued electronically?
Yes, many carriers now offer electronic bills of lading (eBOLs) as an alternative to paper documents. eBOLs speed up processing, cut down on paperwork errors, and make it easier to share shipment details across a supply chain. Adoption varies by carrier and destination country, so businesses should confirm with the carrier whether an electronic version will be accepted before shipping.
