What is a Bill of Lading (BOL)?

What is a Bill of Lading (BOL)?

Bills of Lading are cited frequently in shipping and trade documents; especially when there are cross border transactions or the movement of goods overseas.

A Bill of Lading is often abbreviated to BoL or B/L. It is a list of the cargo which a ship is carrying as a receipt; provided by the master of the ship to the person who is consigning the goods. BOLs are issued by a carrier of goods to acknowledge that they are in receipt of cargo for shipment.

What Does a Bill of Lading Look like?

Here is a sample of a BOL.

When is a Bill Of Lading Issued?

A Bill Of Lading is issued at the time it is loaded onto a vessel for international transit. In the case of seaway transit, the Bill Of Lading is issued at the time it is loaded onto the ocean vessel. However, there is an exception in the case of multimodal transport. Freight Forwarders and NVOCC's are able to issue a multimodal Bill Of Lading at the time the goods are loaded at a rail port.

For example, if a company in Minneapolis is shipping 200lbs of coffee to China by sea, a Bill Of Lading could be issued at one of two points. If the goods are trucked to a seaport, the Bill Of Lading would be issued at the time the goods are loaded onto the ship for sailing. However, the Minneapolis company could also work with an NVOCC to arrange for intermodal transport of the goods via rail to the port. In this instance, a dock receipt would be issued at the time the goods are picked up from the company's door by a truck, and the multimodal Bill Of Lading would be issued at the time they are loaded onto a cargo train at the Minneapolis rail port.

Types of Bill of Lading

There are several types of BLs for ocean transportation, although some are becoming less common: Straight Bill of Lading, Inland Bill of Lading, Multimodal Bill of Lading, and others. To keep things simple, carriers and freight forwarders only use a few terms:

• Sea Way Bill: It's mainly called BL, but some carriers use the term “Sea Way Bill,” which is used for ocean transportation.
• Air Way Bill: This is what it sounds like – a BL for air freight.
• Bill of Lading: This is used for both air and ocean transport, and for any other combination: sea transport and trucking, air transport and trucking, etc.

House BL vs. Master BL

A House BL is always a BL issued by “the house” that provides the service to you, AKA your freight forwarder (FF).

The Master BL is issued by the party who is actually in charge (the master) of physically moving your goods – the airline or shipping line.

Since a FF has a service contract with a shipping line in order to occupy space in a ship, the forwarder requires the Master BL as evidence that they have delivered the goods to the line. Then they provide you – the client – a House BL as evidence that your shipment is in their hands. The Master BL states the name of the FF at the origin as the Shipper, and the name of the FF  at the destination as the Consignee. As the FF’s client, you usually work with the FF at the destination; but it is typical for a freight forwarding company to have a branch or a partner at the destination. For example, Kuehne + Nagel in Los Angeles (destination) works with Kuehne + Nagel in Shanghai (origin) to import your goods from China to the US. Same procedures apply for airfreight involving an airline and a cargo jet.

Original BL vs. Express Release BL

Original BL is the BL issued by the forwarder to the factory as a proof that the forwarder has picked up the goods from the factory. Most commonly, the original BL states the factory as the shipper.

For the consignee – typically the client – to retrieve the goods at the final destination, the BL must be sent by the shipper to the consignee either as an Original BL or an Express Release. Express Release is much more common nowadays. The Original BL differs from the Express Release in an important way: it requires the consignee or importer to physically have it in hand in order to receive the goods. Therefore, the document has to be sent physically from one location to another, with additional shipping costs involved for the document delivery. The Original BL is mostly used when the shipper is waiting for payment confirmation from the consignee while advancing a shipment. If the shipper does not receive payment, the goods will not be released to the consignee even if they have arrived at their final destination.

In contrast, an Express Release (or Telex Release), is an easy document that allows an electronic or printed copy of BL to be enough for the importer to claim the goods. Express Release is the most popular among current traders.

The factory will issue a Telex Release to the FF to confirm payment. With the Telex Release, the FF can retrieve the goods at the port.