What is a Bill of Lading?

A freight bill, also known as a bill of lading (BOL), is a legal contract between the shipper and a carrier. Freight bills include the important details of the transaction and generally are signed by both the shipper and the carrier.

Freight bills are used by accounting departments for support documentation to validate billing either by the shipper or the receiver for a successful delivery of goods.

History and Overview of Freight Billing Originally called ‘Bills of “Loading”’, BOLs have been around for many centuries. Early transportation contracts made their debut as early as the 13th century. At that time, they only served as a receipt for goods received by a master or ship owners.

Over time, they have developed into a receipt that also contains the contract of carriage between shipper and carrier. As commercial activity began to increase, these transportation documents became essential in order to generate and/or prevent disputes, as well as to serve as a proof of shipment to protect both shipper and consignee.

Centuries later, many protocols and rules have shaped the characteristics seen in today’s modern bill of lading which include the limitation of parties, practices of bill of lading exchanges, shipper’s, consignee’s and carrier’s legal rights.

• Bill of Lading (BOL)

  The Bill of Lading (BOL) is the contract between the shipper and the carrier. This transportation contract identifies the freight, consignee, shipper, and the terms of the agreement.

• Payment Facility

  A payment facility audits and pays freight bills for other companies. A company whose purpose is to audit and pay freight bills for other companies.

• Claim

  A claim is filed to request payment from a carrier due to loss or damage alleged to have occurred while they possessed the shipment. A claim is filed to request a carrier for refund of an overcharge. See Overcharge.

• Less Than Truckload

  Less than truckload (LTL) is an amount of freight that is less than what is required for the application of truckload rates. LTL freight shipping is the easiest and most economical way to move large and bulky items.

• Manifest

  The manifest is a document that describes the shipment or the contents for a vehicle, container, or ship.

• Carrier

  A carrier can be an individual, partnership, or corporation that is in the business of transporting goods.

• Proof of Delivery (POD)

  Proof of Delivery (POD) is a document that is used when a shipment is delivered. The consignee signs this document to confirm delivery. See also Delivery Receipt.

• Shipping Orderate

  The shipping order consists of instructions to a carrier regarding the transportation of a shipment. The shipping order is typically a copy of the bill of lading.

• Imaging

  Imaging is a system that is used to store digital images of documents.

• Contract

  A contract is a legal document between parties. In regard to freight, a contract states specifics of the freight shipment process.

• Maximum Rate

  The maximum rate is the highest contracted rate that might be charged.

• Minimum Rate

  The minimum rate is the lowest contracted rate that might be charged.

• Prepaid Terms

  Prepaid terms mean that the shipper or a Third Party is responsible for the freight charges.

• Third Party Billing

  Third party billing is a scenario where neither the shipper nor the consignee is responsible for paying the freight charges – instead there is a third party who is responsible for the charges.

• Statement

  A statement is a list of one or more bills.

• Rate

  The rate is the cost of transporting freight.

• Terms

  Terms state who is responsible for paying the freight charges.

The primary use of the BOL is to be a receipt distributed by the carrier once the goods have been loaded onto the container. This receipt can be used as proof of shipment for the carrier, as well as used for customs and insurance needs.

Having a clean BOL becomes especially important when it comes to looking for ways to improve accuracy rates and turnaround times.

Accurate BOLs are very important. They must be signed and dated correctly so to record the actual date that the cargo was loaded. If a BOL is post-dated there can be serious consequences: the company can be exposed to claims from cargo interests, which in-turn, may mean that P&I cover is no longer available.

BOLs are legal contracts which can be used in litigation. When a BOL is inaccurate a freight claim may be put into action, which opens up a whole can of worms that would be best if avoided in the first place.

Two words – competitive advantage. If you want the be on top, your turnaround times have to be faster, better, smarter and more accurate than the other guys.

Shipping goods in an efficient manner is crucial for the success of a business. Be that as it may, many companies do not have the capacity to process bill of lading documents. This hinders their supply chain and can decrease the speed of shipment. In these cases, it is recommended to outsource this part of the back office process to experts such as DDC FPO, who have the capacity and expertise to consolidate BOL data entry and improve the efficiency of your logistics procedures. Read more about our solutions here.

A satisfied customer is a loyal customer. And these days customers have changing expectations. They want full transparency into where their delivery is at all times. Now, the location of a package is as interconnected as your social network. In fact, as customer expectations have increased, their willingness to pay for fast shipping has decreased -with just about 64 percent of consumers unwilling to pay anything extra for less than two-day shipping (Schiller, Maier, and Büchle, Global Truck Study 2016).

There is a lot of great advice out there on how to make improvement when it comes to cost-containment and savings. In particular, when examining BOLs, a significant path to success comes with automation.

By automating and optimizing manual BOL processes, a company can reduce dependencies on staff, and production operations can be centralized to lower-cost areas that will create a more proactive approach to maintaining customer satisfaction. Employing an automated, cost-effective transportation / logistics system also allows a company to implement vital strategic changes that provide visibility, reduce costs and increase customer service levels.