Why is a Bill of Lading Important?

a bill of lading

In today’s digital age, it might seem redundant to spend time on filling out a bill of lading (BOL).

And while most shippers understand the importance of having a bill of lading to accompany their shipments, there are many who are new to shipping who have never even seen one of these things!

When just getting started building a supply chain, understanding all of the invoicing and paperwork involved is the first step. Having accurate information about the who, what, where, and why’s of shipping will help reduce common invoicing mistakes.

So, let’s take some time to break down the importance of a bill of lading and how to fill one out correctly.


What is the Purpose of a Bill of Lading?

Regardless of the type of mode used, most shippers will fill out some sort of bill of lading.

In some cases, like express parcel deliveries, the bill of lading can be filled out online. Several LTL and FTL carriers are now offering this flexible form submission but not all have caught up.

However, whether you type in your information, click boxes, or hand write the information, the purpose of any bill of lading is always the same. The purpose is to provide a paper trail of documentation as the primary source of evidence for freight disputes.

Beyond the legal reasons, there are several other tasks that the bill of lading serves.

Here are 3 of the most common...

Provides Evidence of Freight Movement

The bill of lading is filled out by a shipper and received and documented by the shipping agent. This creates the needed evidence that the previously agreed to ‘contract’ to move the freight (during the order and rating process) has been enacted.

Verifies Transfer of Goods or Products

The bill of lading also serves as evidence that products are transferred to the carrier to await movement. Once a carrier has picked up the shipment, they take responsibility for its condition.

The BOL is the legal document that indicates when and where the shipment is received by the carrier or agent. Furthermore, it documents every time the commodity is transferred to others (like the recipient or customer).

Documents the Full Delivery

A BOL also includes common sense information. Some of this includes things like where the shipment is heading (the recipient information).

While most of today’s freight movement is stored digitally, a printed BOL is just as easy for a carrier to review. Additionally, this ensures that freight deliveries are not solely dependent on computers in the event of a network failure.

The bill of lading creates a full paper trail of documentation designed to protect the shipper, carrier, and recipient alike. For a shipper, making sure all information filled out on the bill of lading reduces shipping errors – which is something that growing companies simply cannot afford.


Bill of Lading Best Practices

Now that you have a clear understanding of why a bill of lading is important, it’s time to learn a few best practices for filling one out correctly!

While each BOL is based on the mode of transportation and the carrier used for the movement, there are a few general guidelines that should be followed all the same.

Names and Addresses

A bill of lading will require two identifiers – the names and address of the shipper and the recipient.

The technical name for this data entry is the consignee information. It is important to accurately note everything in this section.

Contact your recipient before filling out the BOL. This verifies their address, point of contact, location of the delivery facility, and time window for delivery.

Purchase or Invoice Control Number

When you want to check on the status of any shipment, you need a special number to access the file.

This is the Invoice Control or Purchase Number. If you’re using a carriers BOL, make sure you retain a copy of this number for each individual shipment. This may come in useful later so you can forward it to all parties involved for the sake of transparency.

Date of Freight Movement

There are usually two dates on a BOL. One of them notes the time of completion of the bill. The other, for the shipment pickup and expected delivery.

This serves as evidence of the pick-up, and the service type. It’s important to verify that the dates are accurately entered and noted correctly on each copy of the BOL.

Special Handling or Instructions

This section needs to be filled out correctly as it determines how the freight is handled throughout transportation.

Examples of areas that require this info for legal purposes include multi-stop shipments, secure cargo, hazardous materials, or cold storage shipments.

Dimensions and Cargo Specifics

No matter what type of shipment you are shipping, you will likely need to know the dimensions of your goods.

A lot of carriers require this information on a BOL to ensure that they are able to accommodate your freight.


Final Thoughts

You’ll quickly discover that there are different types of bill of ladings depending on the mode of transportation. Airway freight has their own, as does ocean movement and ground transportation.

To make the process easier, it makes sense to work with an experienced shipping expert like a third-party logistics company. This is especially true when you’re a new company and need to avoid shipping errors.

A 3PL like Redwood Logistics has the experience to help you through the entire shipping process. From filling out a bill of lading to handling the entire movement of cargo, we've got you covered!

If you’re new to shipping or would like to speak with an experienced 3PL, contact the shipping experts at Redwood Logistics today.