Bill of Ladings (BOLs) are a crucial part of freight shipping, regardless of the mode of transport.
Essentially, Bill of Ladings are legally-binding documents which act as a contract between the parties involved in the transportation of goods.
In short: Whoever has the BOL is in control of the goods. Freight shipping without a BOL is like traveling without your passport. You will be stuck.
There are three parties involved in BOLs. They are:
- Consignor: also known as the Supplier
- Carrier: otherwise known as the Transporter
- Consignee: or better known as the Purchaser
Why do we use Bill of Ladings?
There are three main reasons why we use BOLs:
- To have proof or acknowledgment that the goods have been handed over and loaded in an acceptable condition.
- It outlines the terms of the shipping agreement. This written proof serves as a contract between the parties and declares the start and end points of the agreement.
- The BOL grants the holder rights to 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 one of two things:
- Surrender the Original BOL for a Telex Release. We’ll talk about this further in the next section.
- Courier the Original BOL to the Consignee so they can present it 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: if you find this overwhelming or confusing, we’d love to help. Get in contact with the experts today.
Ocean Bill of Lading vs Sea Waybill
It’s important to understand the difference between these two ocean cargo documentations for ocean freight transactions, as they serve different purposes, and have varying pros and cons.
Essentially, a Sea Waybill is evidence of a contract, as well as a receipt of goods;
Whereas an Ocean Bill of Lading is a contract, receipt, and acts as a document of title.
Sea Waybills are not documents of titles, and so whoever is in possession of the Sea Waybill will 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 shipping payment has been made.
Sea Waybills are best used when there’s a little amount of risk involved. Here are some instances where Sea Waybills can be utilised:
- Freight shipping transactions where there is a high level of trust between the parties
- When the goods are already paid with an approved line of credit
- When the goods will not be traded or sold during transport
What is a Telex Release?
A Telex Release is a logistics technology that allows for faster processing 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 shorter travel time, leaving little space for the documents to be couriered.
With 40 years of experience backing McHugh & Eastwood, we can provide options with your freight shipping needs. Whether it’s paperwork, or actual freight shipping, we’d love to help.
Get in contact with the McHugh & Eastwood specialists today!