January 22 2024

5 Functions of Bill of Lading

What is a Bill of lading (BoL or B\L)?

The Bill of lading is the main document in logistics. It contains all the shipment information including the supplier and vendor details, about transporting vessel, departure times, and more, serving as a comprehensive record of the shipment. It is provided by the carrier or the shipping company transporting the goods.

5 Functions of Bill of Lading

A bill of lading (B/L) has several functions in logistics and shipping. The 5 main functions of a bill of lading are listed below,

1. Receipt of Goods:

Act as a confirmation that the carrier has received the goods specified in the document. This helps in settling disputes over the condition of goods or quantity during shipment.

2. Document of Ownership:

Act as a certificate that represents the ownership of goods during shipment.
This depends on the factor that the B\L is negotiable or non-negotiable.
If Non-Negotiable, Ownership is with the consignee stated on the Bill of Lading.
If Negotiable, Ownership can be transferred through endorsement, allowing for multiple parties to have ownership rights during transit, with the final endorsee having the right to claim the goods.

3. Agreement for Shipping:

Act as a contract/agreement between the shipper and the carrier for shipping.
It includes all the terms and conditions to be followed during shipment.

4. Document for Customs Clearance:

Provide all the necessary information for customs clearance at the port of origin and destination.
Customs brokers check the details like the nature, value, and quantity mentioned in the B\L for issuing duties and taxes and ensuring compliance with trade regulations.

5. Negotiable Instrument for Financing:

Acts as a negotiable instrument in financial transactions if it’s Negotiable B\L.
They can be used as collateral for getting loans from banks and help in the letter of credit process ensuring a secure payment process between the buyer and seller.

What are the details provided in the Bill of lading?

Bill of lading pdf download

Shipper details: Name and address of supplier/exporter/seller.
Consignee details: Name and address of importer/buyer/recipient.
Carrier details: Name and details of the carrier assigned for shipment.
Vessel Details: If goods are transported by sea, the Name of the vessel
Port details: The name port of origin and destination.
Type of Bill of Lading: Specifies whether the Bill of Lading is negotiable or non-negotiable.
Bill of Lading Number and Booking Number: A unique number is assigned to the Bill of Lading for tracking and reference purposes.
Export References: Contains reference number and inquiry number which facilitates tracking, communication, and management of the shipping process.
Type of movement: Specifies the type of movement like FCL or LCL
Shipping Marks and Numbers: Unique marks and numbers of shipping containers that help in tracking and identification purposes.
Goods details: Details about the goods, including quantity, description, weight, volume, etc.
Packaging Information: Information on what type of packaging is used for the goods like boxes, crates, or containers.
Freight and Charges: Details about the freight charges and any additional charges associated with the shipment.
Routing Instructions: Instructions to the carrier on which route to use for shipping to the port of destination.
Date of Shipment: Mention when the goods are loaded onto the carrier.
Terms and Conditions: The terms and conditions between the shipper and the carrier.
Signature and Stamp: The signature of the carrier or its agent, acknowledging the receipt.
Special Instructions: Special instructions or remarks related to handling or delivering goods.
Documentary Credits or Letter of Credit Information (if any): Information related to documentary credits or Letters of Credit associated with the shipment.

Different types of bills of lading

1. Straight Bill of Lading/ Non-Negotiable Bill of Lading:

Straight BoL is a type of bill of lading that is issued to a specific consignee and the ownership cannot be transferred to someone else. So the name Non-Negotible. It is issued by the carrier or shipping company. The main feature of this B\L is they ensure security and the ownership cannot be transferred. It’s a straightforward method. Straight BoL is used in standard shipments where the ownership transfer is not necessary.

2. Order Bill of Lading/ Negotiable Bill of Lading:

Order BoL is a type of bill of lading in which the ownership can be transferred through endorsement. So the name Negotiable. It is issued by the carrier or shipping company. The main feature of this B\L is it facilitates flexibility in ownership transfer during transit. Which in turn helps in smoother and adaptable transactions in complex trade deals. Order BoL is used in international shipments in which several ownership transfers may be required.

3. Bearer Bill of Lading:

Bearer BoL is a type of bill of lading in which the ownership can be transferred by the physical possession of the document. This means anyone with the bearer bill of lading is considered the owner of the goods mentioned in it. It is typically issued by the carrier or shipping company. The main feature of this B\L is it provides a flexible and straightforward method for transferring ownership during shipping. Bearer BoL is used in situations where flexible and easily transferable ownership is required. This can also be used in confidential transactions that do not mention the consignee details.

4. Clean Bill of Lading:

Clean BoL is a type of bill of lading that acknowledges that goods received for shipping are in good condition without any damages. It is typically issued by the carrier or shipping company. The main feature of this B\L is it assures the owner that the goods have no visible defects or issues at the time of loading and helps in a smooth customs clearance process. Clean BoL is usually used when the goods are of high quality or brand new and required to be in perfect condition. They are also issued if the goods are verified to be in perfect condition and if there was an agreement between parties upon the goods that they should be received without damages.

5. Claused (or Foul) Bill of Lading:

Claused BoL also known as Foul Bill of Lading is a type of bill of lading that mentions the damages or issues in the received goods. It is typically issued by the carrier or shipping company. The main feature of this B\L is it alerts the owner about the condition of goods and their visible defects and issues. It may contain information about damaged packing, missing items, or any other visible irregularities. Claused BoL is usually used if any visible damages or defects are found during the inspection of goods. It is crucial for insurance claims during transit.

6. Through Bill of Lading:

Through BoL is a type of bill of lading that covers the entire transportation journey of goods, including multiple transportation modes like air, sea, or land and multiple carriers handling different segments of the shipping process. It is typically issued by the initial carrier and coordinated by the carrier overseeing the entire journey. The initiating carrier may work with different carriers for each mode The main feature of this B\L is it helps simplify the shipping process for the shipper as it offers a single document for the entire journey. It reduces the effort of managing multiple bills of lading for different transportation segments. Through BoL is used in international shipments which require multiple modes of transportation to reach the destination and in complex logistics networks where a single carrier doesn’t handle everything.

7. Combined (or Multimodal) Bill of Lading:

Combined (or Multimodal) Bill of Lading is similar to through bill of lading. It covers multiple transportation modes. It is issued by a single carrier responsible for coordinating multimodal transport. The main difference between the two lies in who coordinates the process. The main feature of this B\L is it provides flexibility for shippers to choose different carriers for different modes based on cost, expertise, or other considerations.

8. Container Bill of Lading:

Container BoL is a type of bill of lading specially designed for containerized goods. It is typically issued by the Carrier or shipping company. The main feature of this B\L is it provides all the details about the container and contents which helps in efficient handling. Container BoL is used in international shipments using containers across oceans and continents.

9. Inland Bill of Lading:

Inland BoL is a type of bill of lading that is used for shipments within a single country. It is typically issued by the carrier or shipping company managing inland transportation. The main feature of this B\L is it Simplifies documentation for domestic shipping within a single country. Inland BoL is usually used when goods are transported inland before reaching a port for international shipping.

10. Ocean Bill of Lading:

Ocean BoL is a type of bill of lading that is specifically used for shipments through the sea. It is typically issued by the carrier or shipping company. Ocean BoL is crucial for international maritime trade. It contains all the important details about the shipment including goods, routes, etc.

11. Received for Shipment Bill of Lading:

Received for Shipment BoL is a type of bill of lading that is issued before the goods are loaded onto the vessel. It serves as an early receipt or confirmation that the carrier is ready to transport the goods. This is used for planning and coordinating the transportation process beforehand. It is issued by the carrier or shipping company handling the shipment.

12. Air Waybill:

Air Waybill is a type of bill of lading that is specifically used in air cargo shipments. It is issued by the air carrier or airline that is transporting the goods. It is typically issued as nonnegotiable and ownership cannot be transferred. It contains all the necessary information about the cargo, routes, departure times, ports, etc.

Straight bill of lading vs bill of lading

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5 Functions of Bill of Lading

5 Functions of Bill of Lading

What is a Bill of lading (BoL or B\L)?