International trade is a massive industry, and the volume of goods being shipped around the world is increasing every day. In 2021 alone, world trade hit an all-time high of $28.5 trillion. And as companies continue to enter into new global markets and find new ways to work together across international borders, it’s more important than ever to be well-versed with the key shipping documents.
Improper shipping documentation can hold up the shipment and cause unnecessary delays that could cost businesses their time, money, and reputation. In this article, we’re going to focus on one specific shipping document: the bill of lading. Let’s take a look at the purpose of a bill of lading and why it matters for businesses involved in international trade.
What is a bill of lading?
A bill of lading (BoL) is a legal document that outlines the terms and conditions for the transportation of goods. It acts as a contract of carriage between the shipper and the carrier. It’s used to declare the contents of the shipment, where it’s going, and where it came from.
The bill of lading can also include other information, such as the weight or volume of the goods, who they’re being shipped by and to (also known as consignor and consignee), what kind of packaging they’re in, and more.
Who needs a bill of lading?
Well, pretty much anyone who’s involved in moving cargo from one place to another. Every party involved in international trade is concerned with bills of lading, whether they are importers, exporters, or carriers.
What is the purpose of the bill of lading?
The B/L is a critical part of any shipping process because it allows all involved parties to keep track of the shipments as they move from point A to point B. This legal document has three main purposes:
Document of title
The bill of lading is a legally binding contract that serves as a document of title for goods. It gives the carrier authority to transport and deliver the goods, and it confirms ownership of the goods by the shipper.
Shipment receipt
Acting as authoritative proof of shipment, a BoL is used to document the transfer of ownership from a shipper to a carrier or freight forwarder. In the event of damages to the cargo, or if carriers fail to deliver on time, a bill of lading will be a crucial piece of evidence in litigation.
Mutual agreement
A BoL is an important piece of paper, to the extent it also represents the terms and conditions agreed upon by the consignor and the carrier. It includes details on the transported goods, their destination, any special handling instructions, and much more.