Bill of lading

What is a bill of lading?

A bill of lading (BOL) is a legal document issued by a carrier that serves as:

• A receipt for shipped goods

• A contract of carriage, legally binding between the consignor or shipper and the carrier or logistics services provider (LSP)

• A document of title, which proves ownership of the goods

It is signed by the carrier upon delivery to confirm receipt of the goods. The BOL also records special instructions, tracking information and the agreed terms and conditions for moving the shipment.

Originally used for goods shipped by sea, bills of lading are now used for all international trade and shipping—land, ocean and air. While paper bills of lading were traditionally used, businesses are now moving to electronic bills of lading (eBOL) to save costs, reduce processing time and enhance security.

BOLs are sometimes referred to as shipping bills of lading or freight bills of lading.

Who issues a bill of lading, and when is one required?

The BOL is issued by the carrier or LSP to the shipper, detailing the type, quantity and destination of the goods being transported. It travels with the shipped products and is signed by an authorized representative of the carrier, the consignor or shipper and the receiver.

For domestic motor freight in the US, providing a BOL is a regulatory requirement rather than a commercial choice. Under Federal Motor Carrier Safety Administration (FMCSA) rules, carriers transporting property are required to issue one, and the shipper should receive it before the vehicle leaves the origin. Livestock and wild animals are treated differently. Check current FMCSA guidance for the specifics that apply to your operation.

Key components of a BOL document

There are several types of BOL documents, so the key components may vary.

Standard BOL documents contain the following information:

• Shipper and consignee details: With complete addresses and contact information

• Shipment details: Including a reference number, description of goods, quantities and any hazmat designations

• Transportation details: Including date of loading, place of loading, the transport method and where the goods will be delivered

• Financial and legal details: Including freight charges, payment terms and liability limits

• Any special instructions: For example, temperature control or appointment scheduling

• Purchase orders and reference numbers: used to track freight as it is released for pickup and accepted at delivery

• Packaging type: whether the freight is in cartons, crates, pallets, drums, a shipping container or another format

• NMFC freight class: freight class affects shipping cost and is assigned from 18 classes ranging from class 50 to class 500, based on stowability, density, handling and liability

Bill of lading numbers and PRO numbers

Every bill of lading carries a unique number issued by the transportation provider. That number is the primary reference for tracking a shipment's status.

A PRO number is different. Short for progressive rotating order number, it is used in over-the-road transportation—less-than-truckload (LTL) and truckload (TL)—as an order identifier in the tracking and chain-of-custody process from shipper to consignee. Affixed to shipments as a scannable barcode, this 7–10-digit number identifies and tracks specific orders tendered to a particular carrier.

Types of bills of lading

Which BOL applies depends on whether the document can change hands, what stage the shipment is at, what condition the cargo is in, how far the document's coverage extends and who issued it.

By negotiability:

• Straight BOL: also called a non-negotiable BOL. The shipment is consigned to a specific person and can't be handed to another party

• Open BOL: also called a negotiable BOL. The shipment can be transferred from one consignee to another with the consignees' signature, and can be transferred multiple times

• Order BOL: a negotiable BOL made out to, or to the order of, a particular person, transferred by endorsement and delivery of the bill. Widely used in international trade

• Bearer BOL: delivery is made to whoever holds the bill. Used for bulk cargo delivered in small quantities

By stage of shipment:

• Received for shipment BOL: issued by the transportation provider before the vehicle is loaded, as evidence that goods were received for shipment

• Shipped BOL: issued once cargo is loaded on board, binding the shipowner and the shipper directly

• Stale BOL: presented to the consignee more than 21 days after the shipment's scheduled arrival date

By cargo condition:

• Clean BOL: issued with no declarations of damage to the goods or the packaging

• Dirty or claused BOL: the provider has recorded concerns about the cargo's condition at pickup—torn packaging, broken cargo or a quantity shortage

By transport scope:

• Through BOL: used for international shipments, permitting the carrier to pass cargo through several transportation modes or distribution centers. It contains an inland BOL and an ocean BOL depending on destination

• Multimodal or combined transport BOL: a type of through BOL covering at least two transportation modes, often ocean or air plus rail, truck and final mile

• Container BOL: covers goods delivered in one or more containers moving from port to port

• Charter party BOL: issued by the charterer of a vessel, outlining the types of goods, quantity and the conditions under which they are transported

By issuing party:

• House or forwarders BOL: created by an Ocean Transport Intermediary (OTI) such as a freight forwarder or non-vessel operating common carrier (NVOCC), issued to suppliers when the cargo is received

• Master BOL: created for shipping companies by their carriers as a receipt of transfer. It summarizes a shipment's contents, the BOL numbers assigned within it, a freight description under each BOL, the transport terms and the names and addresses of the consignor, shipper and consignee

• Surrender BOL: issued by exporters, allowing importers to legally own the items shipped

• Short-form or blank BOL: issued when the detailed terms and conditions of the carriage contract aren't printed on the body or back of the BOL

Do I need specialist bill of lading software?

There are specialist platforms you can use to generate BOL documents.

However, if you have a warehouse management system (WMS), you can use this to create BOL documents.