The Beginner's Guide to Bill of Lading Documents

Amanda CallahanShipping Guide62 Comments

Man reading over document in a container yard

When you ship any goods across the world, you’ll be dealing with a lot of paperwork. While you don’t want to forget any of those documents (no matter how numerous or tedious they may be), there’s one you definitely want to become familiar with: the bill of lading.

A bill of lading is one of the most common – and important – documents in the shipping and logistics industry. It’s been a key aspect of international trade for centuries, and because of its pervasiveness in the industry, it’s easy to overlook this type of document. But to do so would open you up to a world of shipping troubles.

Here’s what you need to know about a bill of lading for shipping and logistics planning:

What is a Bill of Lading?

Typically abbreviated as B/L or BoL, a bill of lading is a legal transport document issued by a carrier to a shipper. It plays three different roles:

1) Evidence of contract of carriage with details of the amount, type, and destination (and even sometimes the condition) of the shipped freight
2) Receipt that the goods have been properly loaded onto the transporting vessel
3) Title of goods, which often requires the carrier to turn over the goods to the consignee (receiving party) noted on the BoL

Historically, the word “lading” comes from an Old English term meaning “loading.” These bills have existed in some form or another since the Roman times, but they became a more common practice during the Medieval times.

Why are Bills of Lading important?

BoLs are vital to the successful transportation of goods. Primarily, the document serves as a legally-binding agreement which helps the carrier process the cargo according to the original contract terms set up by the carrier and shipper or freight owner. This means the BoL can be used in litigation concerns, and inaccurate BoLs can expose carriers to anything from claims to criminal prosecution.

Additionally, since most BoLs are considered a title of goods, these documents (much like the cargo they list) can be used in negotiations. Because of this, some types of BoLs can be endorsed and transferred to third parties while the cargo is in transit, ultimately giving control of the cargo to different parties along the route. This also means that if a carrier hasn’t been paid in full for the transportation of the cargo, the carrier can keep the bill of lading and goods until terms of the sale are finalized.

What’s on a Bill of Lading?

Depending on the type of BoL (see below), various information should be listed on the document, including:

  • Carrier name and a signature from the carrier, the ship’s master, or a legal representative of either of these parties
  • Date and indication of goods being loaded onto a vessel
  • Notation of the port of loading and the port of destination
  • Terms and conditions of carriage or a reference to these conditions listed in another document
  • Detailed description of the goods being shipped (value, count, weight, size, markings/numbers, etc.)
  • Name of the consignee
  • Any special instructions for shipping

This information is just some of the items which may be required on a BoL. A marine/ocean shipping BoL, for example, will also need the name of the ship written on the document.

What are the different Bill of Lading types?

There are several different kinds of BoLs, but only some of them are used on a regular basis:

Straight: As the name indicates, this BoL is used when goods are already fully paid for and shipped directly to the consignee/customer. Straight BoLs are non-negotiable.

Shipper’s order: These BoLs are used when cargo is purchased on credit, and are handled through a bank. Shipper’s order BoLs are negotiable documents and function like a title of goods. A buyer usually needs the original or a copy of the BoL to take possession of cargo at destination.

Air waybill: These BoLs are exclusively issued for goods transported by air, and are non-negotiable.

Originals: Some BoLs are issued in what’s known as “sets of originals,” and are used to help control the cargo when the consignee/buyer hasn’t yet fully paid the manufacturer of the goods. Once the buyer presents the full set of original documents and pays the manufacturer, the goods can be released to the consignee.

Inland: When cargo is only transported on land (such as over rail or roads), an inland BoL is issued.

Multimodal/combined transport: This type of BoL is exactly what it sounds like: a document issued for a shipment which is using more than one mode of transportation (i.e. ocean, air, land, etc.).

Through: A through BoL is similar to a multimodal/combined transport BoL, but it’s more complex in that it accounts for different distribution centers as well as various modes of transportation. Through BoLs require both an ocean and inland BoL to be effective. Despite the existence of through BoLs, multimodals are still more commonly used across the shipping industry.

Switch: This type of BoL is commonly used during foreign-to-foreign shipments, where the shipper requires their suppliers information to be kept private. During this shipment, there will be two sets of bills “switched” to protect the suppliers information from the consignee and vice versa.

Bills of Lading used on a less frequent basis

Blank endorsed: This is a BoL which has been endorsed but doesn’t name an endorsee. Essentially, this means the holder of the BoL can claim possession of the goods, and as such this document is considered negotiable. A buyer/shipper who holds the original BoL can claim the goods from the carrier at destination as long as the holder submits at least one original copy of the BoL.

Clean: These documents are used to simply indicate the cargo was in good condition when loaded onto a vessel, much like a carrier’s official sign-off.

Claused: Claused BoLs are the opposite of a clean BoL, because they indicate a shortfall or damage to the delivered cargo. These are also known as a “dirty” or “foul” BoL.

On board: Also known as a “shipped on board” BoL, this is usually a notation put on a BoL to indicate goods are in good condition and are indeed on board a named vessel. Banks which fund shipments require these BoLs over all other types.

On deck: An on deck BoL is used as proof of shipment and can be required for an exporter or manufacturer of the cargo to get paid.

When ordering products, it’s important you speak to your logistics provider about which type of BoL will be required for your shipment. They’ll be able to discuss the specifics of the BoL with you accordingly.

Bills of lading may seem complicated at first, but you’re only ever going to be dealing with one BoL at a time per shipment. This makes it easier for you to focus on the document and make sure it’s as accurate as possible during your logistics negotiations and process. BoLs which are properly processed will ensure you receive your products as ordered and in working/good condition.

Have you ever dealt with a bill of lading in the past? If so, share with us in the comments below your #1 tip for how you handle the BoL process on your end!

Amanda Callahan

62 Comments on “The Beginner's Guide to Bill of Lading Documents”

  1. Hal Igel

    Depending on to whom this is addressed, it can be quite helpful. It is a nice reminder to those who might neglect the importance of this document. Basically, this is the document that every party involved in a transaction turn to when problems have to solved. It is worthwhile reading it thoroughly again and again to be on the safe side.

    1. Amanda Callahan

      Hello Hal,

      We appreciate you taking the time to read our article and we’re glad you enjoyed it!

  2. Inocencio

    Hi
    We do appreciate the clarifications of your article. It is very useful, otherwise those who usually under-look the importance of this document – he will fully understand and give the actual value to the BOL.

  3. Thomas Kwame Bogya

    I really like this article and I find it as one of the most timely articles for me so far this year. I’m an importer and distributor of a products and we do ship by sea and air from our suppliers whilst we use mostly road for our customers and I think this is an eye opener for me! Thank you

    1. Amanda Callahan

      Hi Thomas,

      We love hearing that our articles are useful for shippers – thanks for the feedback! Are there any other struggles that you experience or topics you wish were explained more clearly?

  4. Ivor Jones

    Further clarification can be gained by reviewing ” INCO -TERMS” this is also a useful document simplifying and defining shipping and other logistics terms and documentation.

  5. kabwe

    Hello I am new in the logistics industry and I find this article very interesting and helpful I am studying global logistics thank you.

  6. D.Y. Song

    Hi Amanda, everybody knows what and why B/L…
    But it is not easy to specify its exact definition without passion and brave.
    Great thanks and it will surely be helpful for beginner and junior staff.

  7. Roger Kreitman

    I am unsure about how a combined transport or mulitmodal B/L works in a journey where the last leg is by road. Is it still possible to exercise control of the goods in a letter of credit or collection scenario?

    Thanks

    1. LILLY + Associates
      LILLY + Associates

      Hi Roger – yes, it is possible to control the release of the goods with a letter of credit. Thanks!

  8. Kim Groth

    Amanda. I am trying to help the Consignee. I am from the US. The BOL stated “freight prepaid” and the shipper agrees to release the delivery Order to the Consignee. Is this straight BOL? Can the agent of the carrier (in Vietnam) require that the Consignee pay for shipping fee before releasing the cargo? The Cargo has been in storage for three weeks. The Consignee is at the wit’s end because of the language difficulty. Thanks.

    1. LILLY + Associates
      LILLY + Associates

      Hi Kim – yes, the shipping agent will require payment of their fees before releasing the goods. If not paid in a timely manner, storage will occur.

  9. arvind

    The best article on the net . I am preparaing for my masters orals in the UK and this helped me a lot .

  10. Dwain

    Hi Amanda,

    I read your article with great interest. Thanks for spending the time to write it.

    One quick question. Is it possible for a container with a single consignee (i.e., not LTL) to have more than one B/L?

    1. LILLY + Associates
      LILLY + Associates

      Hi Dwain – glad you enoyed it! Confirm one container can have multiple bills of lading consigned to the same consignee.

  11. Penta

    Thank you so much , a well written and easily understood article.
    May God bless the work of your hands in global knowledge sharing via this site.
    its inspirational.

  12. Jonathan Slack

    I have paid for my goods in full to the manufacturer, also paid for shipping. However i don’t know what happens next. The manufacturer has asked me for a b/l, i never heard of it but now i know, having read the article, but what do i do now, like how do i get one etc etc… i need urgent help because the goods are supposedly now onboard. I’d of thought the manufacturer would have done this b/l for me!
    Help!!!

    1. LILLY + Associates
      LILLY + Associates

      Hi Jonathon – for the goods to get on the vessel, a bill of lading had to be issued. We would recommend checking with whoever you paid the shipping to. Thanks!

    1. LILLY + Associates
      LILLY + Associates

      Hi Salvador – I believe you mean CY, which stands for container yard. Hope this helps!

  13. Deepak

    Need to know what is the implication if the description contained in BL is not the same as Shipping Bill ? How does it put the Seller to risk if its obligation is FOB ?

    1. LILLY + Associates
      LILLY + Associates

      Hi Deepak – there could be customs implications if customs inspects the container and the goods are different than what was described. This would affect the buyer receiving the goods. Hope this helps!

  14. Caro

    I have a question, do freight forwarders when filling out a BL draft, can they put in the charges the price they are charging their client, and the shipping company will do the official BL with that price?

  15. Annie Par

    Hello!

    May I ask you one thing? We located in Singapore sold a product of one full container to Australia customer, however the manufacturing company is from Malaysia and the product will be shipped out from Malaysia directly to Australia. The term is ex-work Malaysia.

    So, in B/L, who is the shipper? Should I put Singapore address or Malaysia address? We are MNC company.

    Thanks a lot in advance.

    Annie.

    1. LILLY + Associates
      LILLY + Associates

      Hi Annie – the seller of the goods should be the shipper in the bill of lading. Hope this helps!

  16. egor

    Hi Amanda,
    I just received the BoL with two shippers…
    What may that mean?

    Shipper:
    Company A
    BY ORDER
    Company B

    Thank you!

    1. LILLY + Associates
      LILLY + Associates

      Hi Egor – it could mean that you purchased your goods through a third party or trade company. Hope this helps!

  17. Michael

    What could be the reasons why a customer would request for a single B/L per container for a single consignment of goods?. Say we have loaded 8 containers for one particular good
    Please advise

    1. LILLY + Associates
      LILLY + Associates

      Hi Michael – for faster processing at port of arrival, for example in the US if one container is put on hold and there are 8 on the bill of lading, all 8 are on hold. If there is only 1 container per bill of lading, you should incur less charges. Thanks!

  18. Karim Mukadadm

    Hi,
    I am merchant exporter . Importing container load and shipping to directly from my supplier to my customer .
    My shipper has issued Bill of Lading To order ( with no name ) , and notified on the B/l my customers name /address and my name as second notify.
    1) He has sent me the OBL yesterday.. , I am not sure whether he has endorsed the B/L or not . If has not can I still negotiate the B/L through by bank to my customer.. Do I not I need to endorse the B/L .
    2) In case if has endorsed the B/L , do I need to endorse again when I am sending the documents to customer’s bank .
    I would appreciate your advice .
    Thanks ..

    1. LILLY + Associates
      LILLY + Associates

      Hi Karim – if the bill of lading is consigned to order, you are responsible for endorsing. It would be up to your bank if you were able to negotiate with your customer.

  19. MrCan

    Hi, Would it be possible to have a Bank mentioned as Shipper on an ocean BIll of Lading? if No, would like to know the reason. thank you.

    1. LILLY + Associates
      LILLY + Associates

      Hello MrCan, Unfortunately, a bank can not be named as a shipper in an OBL, but it can be named as a consignee, this is because the bank, when named as shipper, means that it is the manufacturer or producer of the goods that are being sent. For a more detailed info don’t hesitate in writing us directly to solutions@shiplilly.com our expert team will be more than happy to help you with your requirements.

  20. seun olulana

    The object of Hague Rules and Hague-Visby Rule was to protect ship owners from wide spread exclusion of liability by Sea carriers. Is this assertion correct and is so, to what extent did the Hamburg rules alter this protection.

    please i need clarity on the above subject matter.
    thanks.

    1. LILLY + Associates
      LILLY + Associates

      Hello Seun Olulana! The Convention on the Carriage of Goods by Sea (Hamburg rules) was hoped to provide a uniform modern commercial code for the international carriage of goods by
      sea. However, after 26 years after the diplomatic conference and nearly 13 years after it came into force, the rules have not been ratified by the world’s major maritime powers.
      The main contention of some maritime powers is that, the Hamburg rules have increased the liability of the carrier to unbearable levels. The majority of the world maritime
      powers have thus, continued to use the previous rules with some adopting a hybrid of the previous and the existing one. Therefore there’s no concrete answer to your question due to the interpretation that each maritime powers adopts regarding the rules.

  21. Zay

    Hi my name is Zay from Nigeria am new in the shipping business and I would like to know so much about it.. Thanks cause I already know what a bill of lading is and I appreciate that.. But I want to know the basics and the end game of it..

  22. Fernando

    Hi! I just shipped a vehicle from Europe to south America using a freight company and after the vehicle was shipped and after I paid them they are saying that there was some extra expenses and as a result I have to pay 100 euros more. I argue they had all the information so they should have calculated their expenses properly. They are now saying that if I don’t pay they won’t release the vehicle. Is this legal? Can they do that? What can I do?

    Thanks in advance!

    1. LILLY + Associates
      LILLY + Associates

      Hello Fernando, We would suggest you as a first step to clarify why you are being charged with those extra expenses and if they were on the proposal you accepted for this freight, if they where not included on the proposal ask your forwarded to clarify why, for your peace of mind, we can tell you that sometimes carriers charge extra fees for many different reasons that even the forwarders can’t foresee. We hope you can find this answer helpful and thank you for reading us.

  23. devon mcmaster

    This has been super helpful. I have been struggling a bit on our terms and conditions. We currently have a very tight T&C for our live event production portion of our company. However we are moving multimillion dollar media equipment for clients so I went ahead and opened a trucking logistics side. The main issue we encounter is our clients are leaning on us to handle, crate, and event set up their items which show up undamaged physically and we do the work but I am not sure how to define the end of our work and their liability due the fact that not all drivers are qualified to do the extra tasks. Are there companies that have labor models added onto this form? Any advice or other companies to look into? Also we have been sending a polaroid camera along side digital to take photos of items and condition is this common or useless?

    1. LILLY + Associates
      LILLY + Associates

      Hi Devon – Most trucking companies that offer any type of offloading, setting up or inside delivery – use the term white glove service and charge an additional premium for this. This service is address more in the quoting process than on the actual bill of lading. We Suggest you searching white glove trucking services to find a model to follow. Definitely agree that photos are needed to document the condition of goods and work done.

  24. Daniel

    Hi I have just read your blog and find it interesting. Thanks.
    I have a question to ask regarding unclaimed imported goods. I have shipped some goods from X to Z and the agency I have listed as the consignee has ignored my request to collect the shipment. The shipment remains uncleared through customs and has been sitting in the warehouse for a month. I have requested they arrange collection of the goods but due to the storage costs, it will be expensive to retrieve. If the goods remain uncollected and become abandoned, who is responsible for any costs associated with this uncollected/abandoned import?

    1. LILLY + Associates
      LILLY + Associates

      Hi Daniel – Shipments are normally considered abandoned freight/cargo after 30 days. At which time whomever is in possession of the shipment becomes owner and can determine at their discretion if they will destroy or sell the goods. If the goods are sold and the owner feels they have not been financially reimbursed for their losses in the storage of these goods, they may at this time sue the seller and/or shipper on the Master Bill.

  25. kieren

    hi,

    What is the maximum number of containers 1 bill of lading will cover? Also will that one bill of lading ensure all the containers are sent on the same ship?

    1. LILLY + Associates
      LILLY + Associates

      Hello Kieren – You can place as many as you need although it is not recommended. Placing multiple containers that have sailed under one Master Bill of Lading means that if 1 of the containers on the Master is placed on hold by US Customs, then all of the containers that are under that B/L will be placed on hold and incur additional charges individually. For the most part, having multiple containers on one B/L should mean they are all loaded on the same vessel but if the carrier decides that some containers cannot be shipped together, they will separate the B/Ls at their discretion. We hope you find this answer helpful!

  26. Julieta

    Hi! First of all, thank you for the article, it has been really clarifying.
    Now one question. As a bank, if you are financing an import, and as guarantee you hold the bill of lading, how is the procedure if the Co. does not pay to you (the bank) (let’s say, interests, or amortization of the facility)? What should the bank do next with that bill of lading? And what are exactly its options?
    Thank you

    1. LILLY + Associates
      LILLY + Associates

      Hi Julieta – If this is moving with a letter of credit then the banks has the authority not to release the B/L until they’ve been paid in full. Once they’ve received their monies, then they may ask the carrier to release the B/L to consignee. Otherwise, until bank has received their payment, the container will sit at the port incurring demurrage charges daily until the bank releases the B/L.

  27. Terr

    Good morning – if a consignee requests the shipper to amend the BOL once the vessel has left the port of loading, who would be the responsible party for any charges such as detention and storage that may occur due to any delays? For example, the consignee wanted the BOL amended to change the Mode of Transportation once it is delivered to the port to Rail from Truck. The terms are FOB Shanghai port to door. The BOL is Prepaid by the shipper and then the consignee reimburses the shipper once the material is received.

    1. LILLY + Associates
      LILLY + Associates

      Hello! – If the shipper is prepaying all the way through to the consignee’s door on their own contract with the carrier, then they would be responsible for the fees due. Thank you for reading us!

  28. patrick Kb

    Hi;

    The article is very interesting;

    I have a question which to me seems complicated but I need a relatively quick turn around in needing an answer.

    I do a lot of shipping from China. The BOL is proof of ownership right.
    When does ownership from buyer to seller occur. I believe it is something written in commercial invoice and contract supported by the BOL.
    Can contract terms be changed whilst goods are in transit ?

    1. LILLY + Associates
      LILLY + Associates

      Hello – Ownership of order/product is transferred at the time the product is paid to the supplier. Now, what transfers from supplier to buyer is liability/responsibility for certain parts of the shipping process. This is determined by the INCOTERMS of the order. Otherwise known as your shipping terms. These terms are what dictate whom is responsible for which portion of the logistics/forwarding process. Below please find a copy of INCOTERMS chart for your review.
      Incoterms Chart

  29. marion

    glad read this helpful examples, i will be starting my new career in logistics and cannot wait to get started.

    1. LILLY + Associates
      LILLY + Associates

      Hi Marion – Thank you for reading us – Best of luck in your new career, don’t forget to subscribe to our monthly newsletter!

  30. Genny

    Hello Amanda,

    Your article and answers are very helpful in clearing up several of my questions regarding BOLs. I am curious about when a shipment is processed thru customs clearance, where are the container(s) physically ? If there should be a hold on one container, will there be demurrage and/or storage charges for all containers in the shipment ?

    1. LILLY + Associates
      LILLY + Associates

      Hello Genny, If one of the containers is on hold by customs authorities, all of the containers in the same BL would remain at the port until it is released and demurrage charges will apply for all of the containers – That’s why we always recommend having no more than 3 containers per BL. Hope this helps and thank you for reading us!

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