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Bill of Lading: Do’s and Don’ts

Shipping freight is a complex process, and sometimes the paperwork can be a headache. When you are ready to ship, the last thing you want to do is have issues and overpay due to incorrect paperwork.

Essentially, the cargo transportation process involves many documents. One piece of documentation is more important than the others, and that is the Bill of Lading (BOL).

Providing accurate and correct information while completing a BOL may seem too evident, yet penalties for wrong data in the document are very common. There are many things that can happen if you don’t fill out a BOL correctly, and today we want to help highlight some of the major do’s and don’ts of the Bill of Lading form.

Do’s:

  • Make sure all of the dimensions, numbers, and weight are exact and correct
  • Make sure the address of the shipper and consignee are accurate
  • Mark whether your bill is prepaid, collect, or a third party bill to ensure the invoice is going to the right place and payment won’t be delayed
  • Make sure to put down all the details you want the carrier to know
  • Provide an accurate freight class code according to NMFC rules

While the above recommendations may seem familiar or obvious to you, take the time to read what you should NOT write in your BOL:

Don’ts:

  • Describe weight or dimensions as “approximate” or an “estimate.” Before stating/writing down any numbers, you have to check the accuracy and put only concrete information that you know is correct
  • State general or uncertain freight descriptions. For instance, “details” or “parts” does not give a full image of what you’re shipping. Use “steel details for drilling equipment” or “auto parts” instead of uncertain examples
  • Not being specific on a freight count. Make sure you accurately defined how many items are actually listed.
  • Not specifying the carrier or party. If you don’t include that in a form, the general contractor will choose the carrier instead of you.
  • Not listing any contacts. It is highly recommended to leave at least one cell number to be in touch with a carrier in case of emergency or for proper updates
  • Not calling your carrier. It’s better to call 1-2 days prior and remind them about the pickup, shipment details and booth number.
  • Missing some fields of BOL. Make sure that every single section of the bill of lading is completed.

Ultimately, everything goes down to triple-checking all the information in your BOL. Before you sign the document, make sure you won’t regret signing it later. With these steps and precautions, you are ready to ship freight successfully!

3 Most Common Questions About a Bill of Lading

A Bill of Lading is one of the most important documents in the world of freight shipping. However, it’s still confusing for many companies and shippers to understand what a BOL is and what role it plays in the transportation process.

To clear it up, here are the 3 most important things you need to know about a Bill of Lading:

What is Bill of Lading?

Bill of Lading (BOL) is a legal document that involves a shipper of certain freight and a carrier, who is responsible for transporting goods. The document is issued by the carrier (or transportation company) to the shipper and states the type, quantity, and destination of the goods being carried.

Read What Is a Bill of Lading

Why do you need it? 

Imagine boarding a plane without a ticket. It’s not happening either way, and a BOL plays the same role in freight transportation. It serves multiple purposes, and here are the most important of them:

  • A receipt for the shipment
  • A contract between a freight carrier and shipper
  • A document of title

If your freight is lost or damaged, having accurate information in your BOL will boost claim processing and raise the chances to find the cargo. Providing correct information is essential to complete a Bill of Lading. Neglecting to do so puts you at risk for experiencing delays and unwanted headache.

What information does it contain?

As the most important record in the shipping process, the Bill of Lading essentially includes a lot of important information. Basically, it answers every what, where, and who of the freight.

BOL data includes:

  • Shipper’s name and address
  • Receiver’s/consignee’s name and address
  • Purchase order number or special account numbers used for order tracking
  • Special instructions
  • Date of the shipment
  • Number of units being shipped
  • Type of packaging (including cartons, pallets, skids, and drums)
  • Note if the shipment contains Department of Transportation hazardous material
  • Description of items being shipped (including the material of manufacture and common name)
  • The NMFC freight classification
  • The exact weight of the shipment
  • The declared value of the goods being shipped

Final thoughts

No matter if you are a large corporation, a small business or an individual shipper, if you have to ship cargo, chances are you’ll deal with the Bill of Lading. Completing it is not as scary and complex as it seems, just make sure you provide correct information.

Read A Comprehensive Guide to Completing a Bill of Lading

 

How Important is Accuracy on the BOL?

A bill of lading (BOL) acts as evidence: a receipt and a document of freight services. It’s proof of a contract between a carrier and shipper. It’s a Analysis.jpglegally binding document, containing relevant information about the shipment. A BOL includes pickup and delivery addresses, a place to note any freight damage, shipping/purchase order numbers, special shipping instructions and other details so the freight is delivered and invoiced properly.

2 Most Common BOLs

  • Straight: Non-negotiable. Where goods have been paid for and the shipment will be delivered to a consignee upon confirmation of ID.
  • Order: Where the goods and BOL can be transferred by endorsement to third parties.

“The BOL is a standardized short form or long form, but how you fill it out is not very standardized – as long as the carrier has the basic information, he can work with it.” says Elie Hiller of Transwide.

It’s important that the BOL is signed and dated accurately to record the actual date on which the cargo was loaded. If the BOL is post-dated there are serious consequences: the company is exposed to claims from cargo interests and the P&I cover might not be available. The BOL is a legal contract and can be used in litigation. If the bill of lading is inaccurate, there are definite consequences.

Freight claims occur when BOL information does not match the actual service provided or product received. If the BOL indicates that the goods were loaded in good condition, but the consignee receives them damaged, the consignee will be entitled to make a claim for the damage against the carrier. Or, if the BOL states there are 100 boxes, but only 75 arrive, the consignee can make a claim for the shortage.

Types of Freight Claims

  • Limit Liability. The company may lose its right to limit liability for a claim for freight damage or shortage.
  • Lose P&I Cover. P&I cover may not be available for claims in situations where the description of goods isn’t correct.
  • No Indemnity from Charterer. No obligation to sign a bill of lading that wrongly describes the cargo.

Before signing off on the BOL, the receiver should inspect the cargo to ensure that the product is not compromised. Double check the BOL is accurate compared to the delivery of goods, and verify the accuracy of the cargo description before signing. Any damage or defect should be recorded in detail.

Tips on Generating an Accurate BOL

  • Information should be clearly written or typed in the space provided.
  • Use the same BOL form so you are familiar with the information that needs to be provided.
  • Refer to a TMS to decrease chance of error.
  • Eliminate risks by saving data online and prepopulating the fields.
  • Double check information before submitting the BOL.

Recommended s:

A Comprehensive Guide to Completing a Bill of Lading

What is a Bill of Lading?

The bill of lading (BOL) is a legally required document that must be completed before a freight shipment is hauled. A bill of lading protects both the carrier and the shipper. The document contains detailed information on the type, quantity, and destination of the goods being carried. It is issued by a carrier and given to the shipper of goods.

The BOL serves three essential purposes:

  1. It is a receipt for the goods shipped
  2. It evidences the contract between the carrier and shipper
  3. It serves as a document of title.

There are 2 basic types of bills of lading, a straight BOL, and an order BOL. Understanding the difference between these BOLs is important because it determines whether the document is negotiable and what terms are defined for delivery.

The bill of lading should be provided to the carrier at pick-up or arrival and will be delivered to the receiver or consignee at delivery.

It provides the driver and carrier with all necessary information to process the freight shipment and invoice it accurately. The BOL must specify any and all details of the shipment.

What information must be included on the Bill of Lading?

  • Shipper and receiver (or consignee) names and complete address.
  • The date of the shipment.
  • The number of shipping units.
  • The freight classification.
  • The exact weight of the shipment. If there are multiple freight units, then each item’s weight must be listed.
  • Type of packaging, including cartons, pallets, skids, and drums.
  • A description of the item being shipped, include the material of manufacture and common name.
  • PO or special account numbers used between businesses for order tracking.
  • Special instructions for the carrier.
  • Note if the freight is a Department of Transportation hazardous material. (Special rules and requirements apply when shipping hazardous material.)
  • The declared value of the freight being shipped.

3 major roles of a Bill of Lading form:

  • As a receipt of the goods. The BOL is issued by the carrier to the shipper in exchange for the receipt of the cargo. This is proof that the carrier has received the goods from the shipper in apparently good condition.
  • As evidence of the contract between carrier and shipper. As evidence of a contract, a BOL is the contract of carriage entered into between the carrier and shipper in order to transport the freight as agreed upon by the buyer and seller.
  • As a document of title to the goods. A document of title means the freight can be transferred to the holder of the BOL. Now, the holder of the BOL has the right to claim the goods to be transferred to another.

What is the Difference between a BOL and Freight Bill?

The bill of lading and freight bill are similar documents; however, they should not be confused. 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.

Types of Bills of Lading

  • Straight Bill of Lading: 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 known as a consignment bill of lading.
  • Order 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.
  • Negotiable Bill of Lading: 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.
  • Claused Bill of Lading: a BOL that shows there has been damage to the delivered goods. If something is missing or goods are damaged, the carrier may have difficulty receiving payment.
  • Electronic Bill of Lading: a paperless version of the bill of lading.

Regulations on BOL

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, brokers are required to post a $75,000 surety bond that guarantees payment to motor carriers receiving loads 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 of 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.

Consequences of an inaccurate Bill of Lading

  • The product doesn’t make it to the destination.
  • Claims.
  • Loss of the right to limit liability.
  • Loss of P&I cover.
  • Loss of the right to indemnity from the charterer.

Mistakes Shippers Can Avoid on BOL

  • Not describing the freight correctly.
    Be thorough in your description of the freight.
  • Not being specific enough on freight and product count.
    You must specify the number of containers, and sometimes you have to specify the number of goods in each container. Be sure to clarify items versus pallets, and so on.
  • Not identifying hazardous materials.
    If you deal with hazardous materials, be sure to take responsibility for shipping the product safely. Do research to learn if you have hazardous materials, and properly label the BOL.
  • Not communicating the carrier requirements for the shipment.
    Make sure you are providing the information required. Ask, if you have to, and plan ahead so that you can avoid expensive errors.
  • Not referencing the correct contact numbers or service numbers.
    Include the service contract number in the paperwork. BOLs are evidence of carriage, so if terms differ, it can cost you money. Make sure your contact information is correct in case questions arise during the transport.
  • Not completing the BOL.
    Double check that all required fields have been filled out properly.
     
  • Not understanding the terms on the BOL.
    Read through the document and make sure you understand what you are responsible for.

How to keep a consistent and accurate Bill of Lading

The information within the BOL must be clearly written or typed in the space provided. 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 are required to fill in all fields which decreases the chance of error. And of course, always double check the information before sending the BOL.

Generating the BOL with Technology

Today, most leading technology platforms or transportation management systems allow you to electronically complete the bill of lading.  This not only requires less time, but it also increases accuracy as many of the fields are pre-populated based on historical data within the system.  In addition, shippers, carriers, and 3PLs are notified automatically if any critical data fields are missing or incomplete.

Technology makes filling out the BOL easy, convenient and quick. Through TMS technology, there’s less risk that the BOL will be filled out incorrectly, leaving you free of extra charges and headaches.

6 Steps to Take When Your Freight is Damaged or Lost

Lost_Stolen

Whether someone orders shoes online or ships tons of industrial equipment, one common problem can happen: the freight can become lost or damaged. The process for finding out who is responsible for damaged freight could take months, and discovering whether freight had been stolen or lost on route can be difficult. Shippers will never be able prevent all instances of lost or stolen cargo, but they can at least ensure that they are compensated for their loss and informed on the details to try and prevent future instances.

What is the most important rule of receiving freight? Do not sign the Bill of Lading before checking your load for damage, concealed damage or missing parts.

Let’s walk through this step-by-step to determine the proper course of action  when something goes wrong with your freight.

1) Take a close look at delivered freight and inspect all details. Pay attention to every part or item; open crates if needed – there could be concealed damages. Determine what exactly is stolen, missing or damaged. Don’t be intimidated by the driver, who can claim he or she is in a hurry for the next route – you have a right to record all details necessary.

2) Write everything down and take photos, if possible. The more documentation, the better. Make notes of damages and shortages on the Bill of Lading and make sure the carrier is aware of the situation as soon as possible. Don’t underestimate the importance of communication and cooperation; carriers can try to salvage, re-deliver or return the freight if damage or shortage statement was passed on quickly enough.

3) Do not refuse a shipment and never discard damaged freight. If shippers get rid of the freight, they may not be paid the full freight claim amount. So keep all freight and packages intact if possible.

4) Fill out the proper freight claim, shipping claim, cargo claim or transportation claim paperwork. It is a legal request to a carrier for financial reimbursement on damaged or lost freight. The freight claim is created to recover costs for the shipper, but not the profit, only the difference between the original value and the damaged value. So, the shipper must determine a reasonable dollar amount for the claim – it is the shipper’s legal obligation to minimize the cost of claim.

The carrier must acknowledge a claim within 30 days of initial filling. Concealed damages and shortages should be reported to the carrier within 10-15 days of receipt of the load.

5) Pay the freight bill as soon as possible. The shipper is still responsible for payment of goods’ transportation, even if there are damaged, lost or stolen freight. The claim will be processed by an insurance company.

6) Keep all necessary documents:

  • A copy of the bill of lading
  • A copy of the freight bill (paid)
  • A copy of the invoice showing the amount paid for the goods
  • A copy of the packing slip
  • A standard claim form or a letter identifying the shipment and the claim amount
  • Photos of the damage

While it seems quite fair to get compensation for damaged or lost freight, it is more important to gather as much information and evidence as possible to avoid further improper load handling. Having an expert who can manage all of a shipper’s claims and paperwork is a great option to save money, time and peace-of-mind. Partnering with a 3PL, like PLS Logistics Services, eliminates the hassle of dealing with lost or stolen goods.  We make sure your shipment is delivered on time, every time.

Suggested Reading:

What is a Bill of Lading?

Bill-of-LadingWhat is Bill of Lading?

A bill of lading (BOL) is a legal document between a shipper of a particular commodity and the carrier detailing the type, quantity, and destination of the goods being carried. It is issued by a carrier to a shipper of the goods. It is essential that the information contained on the BOL is accurate.

BOL serves three purposes:

1) it is a receipt for the goods shipped;

2) it evidences the contract between the carrier and shipper;

3) it serves as a document of title.

There are two basic types of bills of lading – straight BOL and order BOL. A straight BOL is one where the goods are consigned to a designated party and is not negotiable. An order BOL is one that is consigned to the order of a named party.

It’s an important designation in determining whether the BOL is negotiable. An order BOL is capable of transferring title to the goods covered under it by its delivery or endorsement.

A BOL is the most important document in the shipping industry. It provides all the information that the driver and carrier need to process the freight shipment and invoice it correctly.

What information is on a BOL?

  • Shipper’s name and address
  • Receiver’s/Consignee’s name and address
  • Purchase Order number or special account numbers used for order tracking
  • Special instructions
  • Date of the shipment
  • Number of units being shipped
  • Type of packaging (including cartons, pallets, skids, and drums)
  • Note if the shipment contains Department of Transportation hazardous material
  • Description of items being shipped (including the material of manufacture and common name)
  • The NMFC freight classification
  • The exact weight of the shipment
  • The declared value of the goods being shipped

When a customer books a shipment with PLS PRO, our web-based transportation management system, the system automatically generates the BOL based on the shipment details entered during the quoting and booking process. It is available online immediately and can be downloaded and emailed. Contact PLS Logistics for a free transportation quote.