What is a Bill of Lading?

Bill of Ladings (BOLs) are a crucial part of freighting, used across all modes of transport. 

Essentially, Bill of Ladings are legally-binding documents which act as a contract between the parties involved in the transportation of goods.

Long story short: Whoever has the BOL is in control of the goods. If you don’t have it, it’s like travelling without your passport – you’re a bit stuck. 

There are three parties involved in BOLs

You’ve got your: 

  1. Consignor: They’re the supplier of the goods 
  2. Carrier: They’re the transporter of the goods
  3. Consignee: The purchaser of the goods 

Why do we use Bill of Ladings? 

There are three main reasons why we use BOLs: 

  1. Proof/receipt: Proof that the goods have been handed over and loaded in an acceptable condition. 
  2. Outlines the terms of the agreement: Written proof of contract between the parties and a signifier of the start and end points of the agreement. 
  3. Document of title to the goods: Whoever is in possession of the BOL can receive, hold, sell, or otherwise dispose of the document and the goods which it covers. 

Once the terms of the BOL have been fulfilled, including payment, the Carrier can do two things: 

  1. Surrender the Original BOL for a Telex Release (What’s a telex release you ask? Keep reading to find out…)
  2. Courier the Original BOL to the Consignee to present at the destination to obtain release. 

What’s in a Bill of Lading? 

  • Details of the transport company
  • Place where goods were loaded
  • The Destination 
  • Transport mode
  • Terms of shipment (INCOterms)
  • A description of the goods being carried 

This is how your BOL should look: but if it doesn’t, get in contact with the experts today. 

BOL Example

Ocean Bill of Lading vs Sea Waybill 

It’s important to understand the difference between these two ocean cargo documentations, as they serve different purposes and have different advantages and disadvantages. 

Essentially, Sea Waybills is evidence of a contract, as well as a receipt of goods; whereas Bill of Ladings is a contract, receipt, and acts as a document of title. 

Sea Waybills are not document of titles, and so whoever is in possession of the Sea Waybill does not have control over the goods. 

So, why are Sea Waybills used? 

Sea Waybills make the process a lot faster, as the Consignee can pick up the goods once the freight arrives, clears customs, and the freight payment has been made. 

Sea Waybills are best used when there’s a little amount of risk involved – 

In situations where there is a high level of trust between the parties, when the goods are already paid with an approved line of credit, or when the goods will not be traded or sold during transport.  

What is a Telex Release? 

In the age of technology, a Telex Release allows for a faster process in the handover of goods. 

Once the goods have arrived at the destination, the Carrier is able to release the cargo without the need for the physical Bill of Lading document. 

This is done through email, and will communicate that the goods are approved to be released. 

These are often far more advantageous than issuing the Original Bill of Lading, as it ensures that there’s no risk of documentation being lost. 

Sending physical Original Bill of Ladings can cause delays, especially when shipments have a short travel time, leaving little space for the documents to be couriered.  

With 40 years of experience backing McHugh & Eastwood, there’s no one who knows Bill of Ladings like we do. 

Get in contact with your supply chain specialists today! 

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