What is a Bill of Lading

A bill of lading, otherwise known as a BL or BoL, is a legally binding document that is issued by a carrier and given to the person making the shipment that outlines what type of goods they will be delivering, the quantity of those goods, and where those goods will be sent to. It will also be signed by the receiver of the goods confirming that all required goods have been collected.

A bill of lading is used as a receipt of the shipment and has to travel with the shipment at every phase of the delivery no matter what mode of transportation is being used. An authorized representative on part of the shipper, carrier, and receiver has to sign this document.

For e-commerce merchants, a bill of lading may appear more so when ordering supplies or goods in bulk/overseas or when shipping out orders in bulk/overseas.

What Is In a Bill of Lading

A bill of lading will always include the name and address of the entity making the shipment and the entity receiving the shipment. There will also be a spot to include what day the shipment was made, the quantity and weight of whatever is being shipped, and the freight classification.

Other areas to be filled out in the document is the type of packaging being used, identifying if the goods can be classified as hazardous, a complete description of the goods being shipped, specific tracking numbers, and any specific instructions for the carrier.

Examples of a Bill of Lading

A bill of lading can be seen in any type of business that is involved in freight shipping. But let’s take a look at a couple of different examples for e-commerce merchants.

Let’s say your e-commerce business also has a retail store. The store manager notices they are running low on a certain item. They fill out a purchase order to replenish that item and send the purchase order to the vendor they work with.

The vendor will then gather the required number of items, pack them, and get ready to ship them to you. Before they do, they and the carrier will sign a bill of lading. Once the shipment arrives at the retail store, a representative will check to see if the information on the purchase order and bill of lading matches and if the items requested are in fact in front of them. If all looks good, the receiver will sign off on the bill of lading as well and pay the vendor.

This process ensures that your business only pays for what it receives and leaves no room for items to slip through the cracks.

In a different example, let’s say your e-commerce business doesn’t have a retail store but you do have a location in which your products are being made. You may need to order supplies or raw goods in bulk. When you do, the same principles apply.

You would send a purchase order to a vendor, they and the carrier would sign a bill of lading stating what they are shipping, and then you would confirm all information is correct on delivery.

Blank Copy of Bill of Lading

Types of Bills of Lading

There are three types of bills of lading.

Straight — This means the carrier delivering the shipment was already paid before they begin shipping.

Order — This means the goods are shipped and payment is received after they have been delivered.

Endorsed — The document is signed by the shipper and transfers the title of goods upon delivery. These can also be used as a financial instrument and be traded as a security.

Why Having a BoL is Important

Having a BoL is extremely important as it protects all parties involved from theft. It is a legally binding document so in the event that something goes wrong with a shipment, it will be used in court. If you’re shipping items, be sure to fill out the bill of lading carefully, and if you are receiving items, be sure to inspect the delivery carefully before you sign off.

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