Bill of Lading: Definition, Components, and Types

If your business often gets involved in importing or exporting, you may have come across the term ‘Bill of Lading (BOL/BL). 

In short, it’s an important document when it comes to logistics. If you currently own a business or are entering the world of business, it’s essential to learn about the bill of landing. 

In this blog, we explain what a Bill of Lading is and other important aspects of it. 

Let’s get started.  

What is a Bill of Lading?

A Bill of Lading is a legally-binding document that includes A to Z details like the name of the consignor, details of the consignee, the destination address, details of the goods, and more. 

It’s issued by the carrier to the shipper to legalize the contract between both. BOL also acts as a shipment receipt when the goods are delivered to the destination. Moreover, it needs to be signed by the shipper, receiver, and carrier.

With BOL, the involved parties could also check whether any goods are missing or not. 

Components of Bill of Lading

A Bill of Lading is typically comprised of the following information:

1. The Number of the Bill of Lading

2. Name and Address of the Shipper

3. Name and Address of the Receiver

4. Carrier Name & Trailer Number

5. Place of Receipt

6. Port of Loading

7. Place of Delivery

8. Information About the Freight Forwarder

9. Date of Pick-up

10. Name of the Vessel

11. Description and Nature of Goods

12. The Material of the Package 

13. Instructions for the Carrier

Common Types of Bill of Lading

  • House Bill of Lading

This BOL comes with all the details normally a BOL has. However, the issuer changes. 

A House Bill of Lading is issued by the Non-Vessel Operating Common Carrier (NVOCC) or the freight forwarding company to confirm they have picked the goods, which need to be shipped. 

In this BOL, the Consignor should be the seller, sender, or exporter, and the Consignee should be the buyer, receiver or importer.  The House Bill of Lading is also comprised of the details like the description of the cargo, the name of the carrier, the destination, and more. 

  • Master Bill of Lading

The Master Bill of Lading is otherwise known under the name ‘Ocean or Carrier Bill of Lading .It’s issued when the carrier has to transport multiple shipments, of the freight forwarder, to the same country. 

In this BOL, the consignor should be the seller’s or shipper’s agent, freight forwarder, or NVOCC. Whereas the consignee should be the buyer’s agent, freight forwarder, or the NVOCC. 

Here is an example to let you understand more clearly. 

A Company needs to ship some goods to a country and they entrust a Freight Forwarding company, who picks up the goods and issue a House of Lading. 

Now the freight forwarder finds a carrier to move the goods.

At the same time, the freight forwarding company also entrusts the shipping of other goods meant to be sent to the same country with the same carrier. 

In other words, they choose one carrier for multiple goods for the same country. 

Since all goods are meant to be shipped to the same country, the carrier consolidates the goods.

Here, instead of issuing separate BOLs, they issue a Master Bill of Lading, which confirms that the carrier has collected the goods from the freight forwarding company.

  • Straight Bill of Lading

This Bill of Lading is issued when the buyer/consignee has made full payment for the goods. Here, the shipment must be delivered directly to the consignee, and he or she has no right to assign the receiving power to another person. Hence, it’s a non-negotiable bill. 

The Straight Bill of Lading is also known as the Ocean Bill of Lading. Moreover, this BOL is issued by the carrier to the shipper after the latter and the consignee agree on the decision to use Straight BOL. 

  • Order Bill of Lading

The order Bill of Lading is pretty much the opposite of the Straight Bill of Lading. Moreover, it’s one of the widely used Bills of Lading.

The order BOL is a negotiable instrument, which means that the consignee can assign another person to receive the shipment. Also, this BOL is issued for credit purchases.

To avoid fraudulence, the Consignee is required to produce a copy of Order BOL at the port of discharge. The delivery will be fulfilled once the agent verified the BOL. 

  • Clean Bill of Lading

The Clean Bill of Lading certifies or confirms that the carrier has received the goods in their vessel without any defects, damage, or loss.

Prior to creating this bill, the carrier must carry out a detailed inspection of all the goods to identify the damages if any. 

Sufficed it to say, if the goods incur any damage after the Clean Bill of Lading is issued, the responsibility will be on the carrier. 

  • Claused Bill of Lading

A Claused Bill of Lading is also referred to as a Dirty Bill of Lading or Foul Bill of Lading.

While a Clean Bill of Lading confirms the goods have no damage, the Claused Bill of Lading mentions clauses when the goods have damage or are short when the carrier receives them.  

Final Words

We now hope that it’s clear to you what a Bill of Lading is and why it’s used. In a nutshell, a BOL not only binds the carrier or freight forwarder and the shipper but also lets the receiver know whether they are receiving the right products in the right quantity. It also acts as a shipment receipt when the goods are delivered to the destination. The next time you come across a Bill of Lading, we hope that it will not confuse you. 

If you are looking for a logistics company in Dubai that can expertly and seamlessly ship your goods, feel free to approach us. Freighbrid is eyeing to be the best logistics company in Dubai with whom you’ll not feel complications with the technicalities like the Bill of Lading. Furthermore, we have an expert workforce, innovative equipment, professional warehouse management, and automated processes. To learn more about us, feel free to contact us.