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Bill of lading

Bill Of Lading

Bill of lading can be considered as a contract between the owner of the goods and the carrier. It is the document which is used to provide proof or evidence of shipment. It serves as a shipment receipt and contains details such as type, quality and destination of goods. It can be further categorized as straight bill of lading (non-negotiable) and a negotiable or shippers order bill of lading.

Key points

  • A bill of lading is a legal document that is issued by a carrier to a shipper which includes the type, quantity, and destination of the products being carried.
  • It is a bill of title, a receipt for shipped products, and acts as a contract between a carrier and shipper.
  • This document must accompany the shipped products and should be signed by an authorized representative from the carrier, shipper, and receiver.
  • If managed and reviewed properly, it can even help to prevent asset theft.

Roles of bill of lading

Bill of lading plays three important and totally different roles:

  • 1) Acts as an evidence of contract: bill of lading acts as a proof or evidence with including details of the amount, type, and destination or even condition of the freight being shipped.
  • 2) Receipt: Acts as a receipt that the consignment has been properly loaded for shipment onto the transporting vessel.
  • 3) Title of goods: Provides the consignment a title which requires the carrier to turn over the products to the consignee (receiving party) noted on the Bill of lading.

Segregation of Duties

Internal controls are need of every business in order to prevent theft. Segregation of duties is one of the key components, which prevents to have too much control of one employee in the business.

There are no two internal control systems which are the same. However, a standard set of philosophies that are core are supposed to be followed. Streamline operations and frauds can be prevented by the implementation of internal controls.

Real World Example

Among several key documents, the BL must be managed properly and to prevent staff theft it should be reviewed properly.

Let us now consider an example. An XYZ Dining receives shipment of fish and fresh meat five times a week. The determination of the amount and type of meat and fish is done by the manager of the restaurant. The purchase order is then filled by him, while the review is done by the XYZ’s owner. Owner also initials each PO before the order is placed. Finally, the vendor gathers the required goods, and both he and a representative sign a BL.

Next, the food is delivered to the restaurant. Manger is supposed to compare the information on the BL to what was requested by PO. PO and the BL will be sent to the owner, if the information matches who will review the document and write a check payable to the food vendor.

In the above given example, a check of payment is not issued by the owner without the review of the purchase order and the BL. This step ensures that the owner pays only for what they have ordered and received. If there is any mismatch in the two, the owner will ask the vendor about any exceptions. Finally, a third employee from the XYZ Dining reconciles the bank statement and make the necessary deposits.

All the above steps must be in their place in order to prevent any possible theft.

Negotiable bill of lading:

This is a type of bill where a clear instruction is given in order to make delivery of the goods to anyone who is having the possession of the bill (original copy), which itself signifies the control of the freight and the title. In negotiable bill, the receiver/buyer or his/her agent has to present an original copy of the BL at the discharge port itself. The freight will not be released if no original copy of the bill is available.

Non-negotiable bill of lading:

This type of bill where a fixed specific consignee/name of the receiver is there to whom the freights will be delivered. It doesn’t serve the ownership of goods. Under Non- Negotiable bill the receiver/buyer can also claim the cargo, but by confirming the identity.

Purpose of Bill of Lading:

The BL also meant to act as a transport document, which also enact as the evidence of the contract goods. A negotiable BL has the following legal qualities:

  • For the carriage contract containing the terms and condition, it acts as a piece of evidence under which the goods transportation will be carried out.
  • It represents as a receipt which endorses that the carrier has received the cargo as per the contract and the goods are received in good condition.
  • It is a document of title, permitting the sale of goods in transit and the raising of financial credit.
  • Most of the local as well as international system does not consider a BL as a document of title. It also provides the right to the delivery to be made to the possessor.

Who issues bill of lading

The bill of lading issued by a freight forwarder or shipping agent when the freight receipt is properly acknowledged.

When bill of lading is issued

Bill of lading is issued at the time of loading goods. In the case of ocean freight, bill of lading will be issued when ocean container is loaded. This is possible only after the inspection of the consignment at the dock before loading the consignment for final shipment.

The bill of lading includes the following:

  • Purchase order and/or account number
  • Shipment date
  • Shipper’s name and address
  • Recipient’s (buyer) name and address
  • Port of loading
  • Port of discharge
  • Temperature control
  • Number of units being shipped
  • Description of consignment being shipped
  • Declared value of products being shipped
  • Shipment packaging mode– cartons, crates, pallets, etc.
  • Notation if good in shipment is a Department of Transportation hazardous material, which has special requirements
  • Exact shipment weight
  • Pickup or delivery specifications

The bill of lading can be used for both domestic as well as international shipments.

Why outsource bill of lading data entry to connect2india

Connect2India helps you with bill of lading entries for facilitating quicker and more efficient movement of consignments and data for logistics as well as transportation businesses.

  • check_circle_outlineOur costs are very economical.
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  • check_circle_outlineWe carry out end-to-end customer’s support and assessments at all levels.
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Want more information about bill of lading? or looking for any other export import services? Talk to our global trade experts now.

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