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AR Finance - the complete guide
Invoice payment terms: How it works (with examples)

What is a Bill of Lading: Definition and purpose

AR Finance – the complete guide

Invoice payment terms: How it works (with examples)

A Bill of Lading (abbreviated as BoL) is a document which serves as proof that goods have been delivered. It also specifies the terms and conditions under which those goods were shipped. The BoL may be required for Customs clearance, or it might simply be used for domestic transport purposes.

Courts rely heavily on the information contained within a Bill of Lading when making judgments about damage claims, lost shipments or illegal activities such as smuggling. So if you have a dispute about your shipment or you want to prove that the contents of a package were not as described, this document will be essential evidence in your case.

The content on this page will provide an overview of what constitutes a Bill of Lading, with additional information about its uses in the shipping process.

Bill of Lading – definition and purpose

A Bill of Lading is a document that details the goods being packaged and transported as well as how they are packaged. The BoL also lists the contents, weight, dimensions and identifying marks on each package.

This document is a legally binding contract that has to be presented to customs officials in order to clear international shipments crossing over past national borders. Once these packages have been cleared by all importing/exporting parties, the shipping company will receive an original BoL as well as several copies of all accompanying documents.

When does a Bill of Lading need to be used?

A Bill of Lading must be produced when:

1) Goods are being exported;

2) When there’s uncertainty over who owns the goods (e.g., if they’re trade-ins);

3) When there’s concern that someone other than the shipper might claim ownership of the goods; 4) When a dispute occurs over damage done to the items or if they’re not delivered.

The BoL may also be required for import clearance and must be presented when:

1) The exporter doesn’t want to handle the process;

2) Goods are being imported by someone other than the shipper;

3) The importer is required to use a BoL when importing.

The document must be present at all times during transport.

Where do you get a Bill of Lading?

BoLs can be obtained from your chosen shipping provider, or you may purchase them directly from a transport agent.

What are the requirements for a Bill of Lading?

A BoL must have the following information:

1) The names of the consignor and consignee;

2) A description of the goods being delivered;

3) The terms and conditions under which they’re shipped (e.g., who will pay for transportation);

4) Signature lines for both parties. Additional information might be required, depending on the type of service chosen.

If you’re shipping internationally, the BoL will probably require an International Convention number (also known as a ‘cargo reference number’). This consists of six letters and four numbers — e.g., CP0009123456789.

The first three letters denote which convention was used to draft the document (e.g., C = CMR). The final four numbers are used for documentation and tracking purposes, allowing companies to easily find the corresponding BoLs in their files.

What does a Bill of Lading typically contain?

The BoL lists the contents, weight, dimensions and identifying marks on each package. The bill of lading also contains information about who is shipping the cargo, where it’s going and who will be receiving it as well as instructions for handling or moving these packages through customs.

This is also the easiest way to track your shipments because it contains an official seal and signature. You can have multiple copies made so that you can access them from any location without having to worry about misplacing them. This is especially useful if you are traveling in an area where there is a high risk of theft.

What’s the difference between a Bill of Lading and a Bill of Exchange?

The Bill of Lading or BoL is a contract between the shipper, carrier and consignee. The Bill of Exchange is an open sovereign instrument and can be used as a means of payment for goods not yet delivered. It is drawn on banker and it only becomes payable when the goods are received.

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