A bill of lading is one of the most common yet essential trade documents used in the shipping and logistic industry while dealing in an international trade transaction. It serves as proof of your contract with your carrier, and supplier. Here is what you need to know about bills of lading and their types. Check it out:
What Is A Bill Of Lading?
A bill of lading is a type of shipping receipt that contains the details of the items that have been shipped by the supplier to a receiver through a freight carrier. Also known as BL or B/L, a bill of lading is a legal trade document issued by a carrier ie. transportation company to the shipper ie. supplier while executing international trade transactions. It consists of the information about the shipped goods such as type, quantity, and destination of the shipment, etc.
You can also understand it in this way. The term “bill” refers to a written document of the cost for the delivered goods & services while the term “Lade” refers to loading the cargo onto a ship. In shipping, it is a record of the traded goods which has been received or to be received on board. It serves as an agreement between a shipper and carrier company for the transportation of goods. It helps ensure that the shipped items are the same items that have arrived at their destination.
What Does a Bill of Lading Include?
Names and addresses of both the shipper and recipient
Decided pick-up and drop-offs
Purchase order number
Details of shipped goods such as number, weight, size, or special handling, etc
Freight details
Port of Loading And Discharge etc
Types Of Bills Of Lading
There are different types of bills of lading. Let’s know about them in detail:
Master BOL - This type of bill of lading is issued by the actual shipping carrier, trucking company, or the owner of the transport vessel. This is a bill your supplier has with the carrier. It contains detailed information about the cargo.
House BOL - This is the type of B/L which is issued and signed by the freight forwarder, broker, or the non-vessel operating common carrier (NVOCC) ie. supplier along with the terms & conditions described by them.
Switch BOL - It is another type of BOL issued by the carrier or their agent during foreign-to-foreign shipments where the shipper is supposed to keep the supplier’s information private. In this type of shipment, there are two sets of bills “Switched” to protect the confidential information of the forwarder from the consignee and vice-versa. One more thing, Switch BOl cannot be issued when the first BOL is active.
Original BOL - They are bills of exchange that are issued in “sets of originals” to control the transportation of the cargo when the full amount has not been paid by the consignee/buyer to the manufacturer of the goods. This is why one of the originals needs to be presented at the destination to ensure the secure release of cargo. When the full set of original documents is presented and the amount paid to the manufacturer by the buyer, the goods can be received by the consignee.
Open BOL - Also known as negotiable BOL, in this type of bill of lading, the name of the consignee can be changed through the consignee’s signature and the goods can be transferred multiple times from one consignee to another provided it is signed by the consignee.
Straight BOL - As the name suggests, this B/L is issued when shipment of goods is to be received directly by the customer who has paid for the complete shipment in advance already. They are non-negotiable ie. the goods can only be received by the specified consignee. It cannot be reassigned or transferred to another consignee. But the consignee needs to make an advance payment first before receiving the goods.
Order BOL - It is the most common type of BOL where the cargo is purchased on credit and the payment is pending for the shipment. To ensure the safe & secure delivery of goods, the agent who makes delivery orders needs to verify the bill, and thereby the buyer is supposed to carry the original or a copy of the BOL to take the goods in his/her possession. These BoLs are negotiable documents ie. the shipment of goods can be delivered to another party endorsed by the consignee. It is the most used BOL.
Clean BOL - As the name suggests, these BOLs are used to demonstrate that the cargo is in a good condition or was not damaged or lost during the shipment. It is one of the most frequently used trade finance instruments in global trade among importers & exporters. It cannot declare any further defective or damaged condition of the packaging and/or the goods inside. Therefore it is issued only after examining the cargo for any discrepancies and serves as a guarantee that the cargo has been loaded with a good order & condition.
Received/Received For Shipment BOL - Also known as received BOL, it is issued by a carrier to the shipper stating that the goods have been received but does not confirm whether they are laden onto the ship. This is a temporary BOL.
Shipped BOL - This bill of lading is also known as shipped on board and is issued to confirm that the cargo is loaded on board and the goods are in a good condition.
Airway BOL - This type of BOl is issued by an air freight company or supplier and it is non-negotiable.
Inland BOL - When the cargo is delivered or to be delivered on the land such as over rails or roads, this BOL is issued. Here. the carrier is allowed to ship the goods via land but only within domestic criteria.
Dirty/claused/foul BOL - A dirty BOl is the opposite of a clean BOL as they highlight the fact that the delivered goods are damaged or bear a shortfall. It includes a clause according to which the shipowner can declare the dirty delivery of goods if there is broken cargo, the un-matched quantity of goods specified, or any damage to the packaging, etc. In short, if the goods are damaged or compromised, a dirty BOL is issued.
Through BOL -This type of bill of lading is a legal document that enables cargo for direct delivery through domestic and international borders. Whether it is from one distribution center to another or across multiple transportation modes. Depending on the mode of shipping, it requires an inland and ocean BOL.
Multimodal/Combined BOL - As the name suggests, these types of bills of lading are issued when the shipment is required to be passed through two or more modes of transportations like rail, ocean or road, etc.
Bearer BOL - It is a BOL that states that the delivery of the cargo will be made to the owner of the bill ie. there is no consignee mentioned on the B/L. It is negotiable and thereby the ownership of the bill can be transferred.
Ocean BOL - This type of bill of lading is issued when the goods are to be shipped overseas.
Direct BOL - This B/L is issued when the shipment is to be picked up and delivered by the same vessel.
On Deck - It is used as evidence of shipment by the exporter or manufacturer of the cargo to be paid.
Stale BOL - It is issued when the cargo needs to arrive at the port first before the bill of lading.
Surrender BOL - This BOl is issued by the exporter to the importer implying the transfer of goods once the shipment is received.
Bottom Line
Bills of lading can be complex and daunting at first, but only one BOl can be issued at a time of shipment. So this is easier for you to focus on the terms & conditions of the document and make sure it matches the requirements as mentioned during the process. All of the information on a BOl must be correct & accurate, otherwise, it could result in a delay in payment for your shipment.
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