Any import and export business can only flourish if one has a proper understanding of the documentation involved. Understanding the various types of documentation and which one is best for which situation is important for e-commerce exporters that are planning to tap international consumers for their products. Bill of Lading is one such critical document that needs to be properly understood so that business can grow sustainably.
What is a Bill of Lading?
A Bill of Lading is a legal document that is proof of shipment when an exporter sends the cargo overseas. It acts as an ‘evidence of contract’ between the carrier and the shipper. In other words, a Bill of Lading is proof that there is an agreement between the two parties.
A Bill of Lading also works well as a receipt for the carrier to be handed over to the receiver of the goods. It is proof that the goods have been loaded for shipment.
A Bill of Lading is also used for verifying the list of goods that was sent by the exporter. An importer can use the Bill of Lading to verify the goods received at the end of the shipment.
Contents of Bill of Lading
The contents of a Bill of Lading can vary as per the type of contract between the buyer and the seller. It is also affected by the terms of the buyer and seller. A few details that remain consistent in a Bill of Lading are as follows:
- Carrier details
- Date and shipping bill number
- Necessary certifications for hazardous products, if any
- Details of the exporter
- Details of the importer
- Purchase order number to check terms and conditions
- Consignment details
- Freight classification
- Signature of the concerned official
The signatory must ensure that all details in a Bill of Lading are clear and nothing is left to interpretation. At the same time, terms and conditions must be checked thoroughly before signing the document.
Various types of Bills of Lading
There are various types of Bill of Lading which is applicable as per the party involved. The types of Bill of Lading can be explained as follows:
Based on carrier
House Bill of Lading
This is a simple form of a Bill of Lading where the seller and buyer of goods are the end party. For instance, a buyer from the UK buys glasses from a seller in India. The rest of the details in the Bill of Lading will remain the same.
Master Bill of Lading
This Bill of Lading is issued by the carrier of goods where the consignor is acting as the agent of the seller while the consignee is the agent of the buyer.
Based on payment and consignee
Straight Bill of Lading
This is a type of Bill of Lading where the buyer has already paid for the shipment in advance. In such a scenario, the buyer will receive the consignment directly.
Order Bill of Lading
Under this type of BOL, a buyer can nominate a third party to receive goods on his behalf.
Bearer Bill of Lading
This BOL allows for the delivery of goods only to the party who holds the BOL at the time of delivery. In other words, the consignee is the bearer.
Clean Bill of Lading
The carrier is expected to inspect the condition of the goods and certify that the goods were received without any damage by issuing a Clean Bill of Lading.
Based on transportation
Inland Bill of Lading
It is a BOL used for domestic shipments
Ocean Bill of Lading
It is a BOL that is used for international shipments
Through Bill of Lading
It is a BOL that is used in cases where goods travel through several types of transportation.
Multimodal Bill of Lading
It is a type of BOL that is used when goods move using over 2 types of transport.
What happens if the Bill of Lading has incorrect information?
If the Bill of Lading does not have the correct information as per the shipment, the shipment of goods will likely be impacted. At the same time, the receiver can also claim the shipment to be incomplete or faulty. In such a scenario, an exporter may have to compensate the importer. An exporter can also lose indemnity insurance and protection of goods. There is a possibility of criminal prosecution against the exporter.
Therefore, it is better to seek expert guidance at the time of filling out the Bill of Lading. It can be an expert or a freight forwarder that can help a business deal with the Bill of Lading with ease.
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