What is a Bill of Lading (B/L)?
A definition of Bill of Lading is according to Investopedia “a legal document issued by a carrier to a shipper that carries all the necessary details of the shipment such as type, quantity, and destination of the goods.”
The Bill of Lading acts as a shipment receipt. And it must be signed by an authorized representative from the carrier, shipper, and receiver. But the Bill of Lading will always be issued by the carrier or their agent.
Other names for “Bill of Lading”:
- Waybill (used in the US and Canada)
- Bill of Landing (common misspelling)
Why is the Bill of Lading important?
This legal document serves three main purposes:
- It provides the carrier and shipper all the necessary details of the goods (type, quantity, perishable, etc.). This helps in comparing the purchase order with the delivered order.
- It is a receipt and invoice for the products being shipped.
- It contains all the terms and conditions for the transportation process.
Types of Bill of Lading
Depending on the way of transporting the goods, there are majorly 4 types of Bill of Lading, also called Waybills. They are:
Air Waybill (AWB)
- Documents accompanying the goods shipped through international air couriers.
- It is also called an air consignment note.
- AWB is a standard form distributed by the International Air Transport Association (IATA).
- It is just a contract of transportation and is non-negotiable.
- Rail Wazbill is a document issued when the freight is transported with the railway.
- It is prepared by the shipping agent or the railway line, that transports the shipment, after receiving the instructions from the shipper.
- The Road Wazbill is issued by a road carrier for the transportation of goods. The document is called CMR.
- This international consignment note is used by drivers and forwarders. It informs about the carriage of goods by road internationally.
Now that we have settled the main elements, let’s move on to the different types of Bills of Lading under the three main waybills.
We use many other criteria to differentiate the Bills of Lading. Now, let’s dive into the different types of BOL that you can find under the three main waybills listed above!
Bill of Lading based on the carrier
Master Bill of Lading
- It is issued by the actual shipping carrier (like MSC, Maersk, etc.)
House Bill of Lading
- B/L issued and signed by the freight forwarders is called the House Bill of Lading (HBL) – with the terms and conditions specified by them.
- The shipping company (carrier’s) B/L can show the forwarder as the consignor.
- HBL has a legal standing similar to a normal B/L.
Switch Bill of Lading
- It is another set of Bill of Lading issued by the carrier or their agent – that may be used in exchange for the first set of B/L.
- Switch B/L cannot be issued when the first set of B/L is active.
Based on the payment and consignee
Straight Bill of Lading
- This B/L is issued when shipping directly to the customer who has already paid for the complete shipment in advance.
- The goods have to be received by the specified consignee, and cannot reassign or transfer the B/L to another party’s name.
- It is non-negotiable.
(To) Order Bill of Lading
- It is the most common B/L issued when the payment for the shipment is pending.
- The consignee can order the shipment to be delivered to another party by endorsing the B/L on their name.
- It is negotiable.
Bearer Bill of Lading
- This is issued when the bearer of the bill of lading is the owner of the cargo.
- There is no consignee on the B/L.
- The ownership of the bill can be transferred, thus, it is negotiable.
Based on the condition of shipment
Clean Bill of Lading
- This B/L declares that the goods or cargo wasn’t damaged or lost during the shipment.
- It is issued after inspecting the cargo for any discrepancies and acts as a guarantee that the shipped goods are in good condition.
- A clean B/L is a must to complete the requirements asked in the letter of credit.
Claused or Foul Bill of Lading
- If the goods are damaged, quality/quality compromised or do not meet the required specifications, a claused or foul bill of lading is issued by the carrier.
- The damage, defects and other discrepancies are outlined in the document.
- The consignee can reject a shipment if it arrives with a foul B/L.
Based on transportation
Inland Bill of Lading
- It is often the first transportation document issued for a shipment, that allows the carrier to carry the goods, by road or rail or air, across domestic land.
- It is usually consigned to a third-party responsible for carrying the shipment before being forwarded to international carriers.
Ocean Bill of Lading
- If the goods are to be shipped overseas (nationally or internationally), an ocean bill of lading is required.
Through Bill of Lading
- This B/L allows the carrier to move the shipment across different distribution centers – through one or several different modes of transport.
- Depending on the mode of shipping, it needs an Inland and/or Ocean B/L.
Multimodal Bill of Lading
- It is issued when the shipment must move through two or more modes of transport (like ocean and rail, or ocean and road).