The bill of lading (BOL) is a legal document that shippers must complete before a freight shipping process begins. A bill of lading protects both the carrier and the shipper. The document contains complete information on the type, quantity, and destination of the goods.
The carrier issues the BOL to the shipper of goods. You should provide the document to the carrier at pick-up or arrival. Later, the carrier passes the BOL to the receiver or consignee at delivery. It provides the driver and carrier with all the necessary information to process the freight shipment and invoice it accurately. The BOL must specify any and all details of the shipment.
The bill of lading and freight bill are similar documents. However, they are not the same. Unlike a BOL, a freight bill cannot serve as evidence in a claims dispute or shipping mistake. The information on a freight bill should be similar (if not the same) to the BOL, but it also includes extra information on accessorial charges, fees, and notes to clarify any data on the BOL. Freight bills are an invoice that can be assessed by 3PLs or an internal logistics team; they showroom for improvement in costs, solutions and time.
There are 2 primary types of bills of lading, a straight BOL, and an order BOL. However, there are a few other types. Understanding the difference between these BOLs is important because it determines whether the document is negotiable the terms for delivery.
Straight bill of lading is a non-negotiable bill of lading used where the goods have been paid for or do not require payment. The shipping company will deliver the shipment to its consignee upon confirmation of identification. This is also a consignment bill of lading.
a document that is issued to the order of a shipper or consignee for the delivery of goods. This bill of lading can be transferred by endorsement to third parties.
A negotiable BOL can be transferred by its consignee to a third party through signing (endorsement) and delivering it to another consignee. The new consignee can transfer the document again, and so on. In order to issue a negotiable BOL, it must be written “to order” of the consignee and must be clean.
This type of BOL shows there has been damage to the delivered goods. If something is missing or goods are damaged, the carrier may have difficulty receiving payment.
A paperless version of the bill of lading.
In the fall of 2013, the Federal Motor Carrier Safety Administration (FMCSA) issued rules over freight brokers’ operations and how they fill out the bill of lading. Under these guidelines, FMCSA requires brokers to post a $75,000 surety bond that guarantees payment to motor carriers if the broker fails to make payment.
The rule also eliminates “double-brokering.” Double-brokering is when a driver takes ownership of freight from another driver or broker. Truckers cannot broker freight without a brokerage license, and the freight brokerage must be a completely separate entity from the carrier.
When a driver gets to the destination to pick-up freight, the freight broker must ensure that the driver is with the same trucking company as arranged on the BOL. A broker can never appear on the BOL as the carrier. If there is a discrepancy, the shipper or broker must create a new BOL and identify the driver and carrier.
The FMCSA’s rules detail what is acceptable and unacceptable in the relationship between carriers and brokers. The rules provide shippers peace-of-mind that the carrier on the bill of lading will be the same one that hauls their freight.
Given the importance of this shipping document, the information must be filled out accurately every time. Use the same bill of lading form consistently, then you will become familiar with the information you need. It’s helpful to refer to a transportation management system (TMS). Eliminate risks by quickly and easily filling out your BOL online. Using a TMS, you need to fill in all fields which decreases the chance of error. And of course, always double-check the information before sending the BOL.