Electronic Bill of Lading: Everything You Need to Know
“We are what we repeatedly do. Excellence, then, is not an act, but a habit.” —Aristotle
In logistics every delivery of freight involves paperwork. So if logistics makes the world go ’round, then paperwork is the logistics of logistics. Paperwork runs the world of logistics. And of all the paperwork, the most important piece is the bill of lading (BOL). Today, we’ll look at everything you need to know about electronic bills of lading.
First of all, there’s no getting around all the paperwork. Every load legally requires delivery paperwork and bills of lading. BOLs serve an important purpose, day in and day out.
But what if there’s a better way to streamline workflow and manage paperwork? That’s the trillion-dollar question.
In reality, tech has changed a lot about the logistics world. New apps are changing how we manage paperwork. New software platforms are already here with the potential to make life easier for everyone working on a delivery.
Electronic BOLs are a hot area of logistics tech. They are creating streamlined workflows for drivers, back-office personnel, and fleet managers alike. In logistics, time is money. So, it follows that by saving more of the former, you yield more of the latter. Let’s find out more about how it’s done!
Bill of Lading Basics
The first thing to remember is that the bill of lading is a fancy way of saying receipt. The term “lading” is derived from the Old English word for “loading.”
As a refresher the BOL serves three functions:
A receipt of goods
Evidence of a contract of carriage
A document of title of ownership
To clarify, a BOL is a legal document used between a shipper and a carrier. A BOL specifies the type, quantity, and destination of the freight a driver is carrying.
The BOL is issued by the carrier to the shipper once their truck or vessel is loaded with freight. This is when the contractual nature of the BOL comes into play. The carrier then delivers the BOL (along with the freight) to the consignee. The consignee (or cons) is the the party to whom the goods are shipped and delivered.
You’ll typically find the following information on a BOL. Depending on the type of BOL, it may include other information as well.
A bill of lading is actually two pieces of paper. That’s why they’re often called bills of lading.
Both copies of the bill of lading contain the same information. Upon delivery, both parties sign both copies. The driver signs on the carrier’s behalf. Correspondingly, an authorized individual at the cons will sign off on the freight bills.
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Legality of BOLs
Each BOL is assigned a number. That same number appears on both copies of the BOL. Going forward, all parties use the bill of lading number when
- Confirming delivery of a load
- Billing/invoicing for a load
- Discussing issues and disputes
In addition to that, there are several types of BOLs such as an order bill of lading, bearer bill of lading, switch bill of lading and through bill of lading. Ocean freight alone has several different types of BOLs. Indeed, much of BOL legal history is based on maritime laws that stretch back hundreds of years.
A Clean Bill of Lading Is Like a Clean Bill of Health
Put simply, you want a clean BOL. What is a clean BOL? It’s exactly what it sounds like: You get a clean BOL when a freight delivery doesn’t declare any inconsistencies, defects, or issues with regards to the delivery of goods or packages. In other words, on a clean BOL, the freight matches the description.
On the other hand, a dirty, or claused, BOL is issued when freight does not match the description. You also use a dirty BOL if a payment discrepancy occurs.
Contracts and Titles
It’s important to understand that a BOL is also considered evidence of a contract between a carrier and a shipper. The BOL legally protects the carrier, who is performing the service of hauling freight and expects rightful payment.
Also, in the case of the buyer, a BOL legally constitutes a title of ownership. Two types of BOLs specifically are considered titles:
There are many types of BOLs used depending on the arrangement between the parties. Read more about those here.
In general, as you can see, a bill of lading is a complex document. The bill of lading has with a rich history that stretches back to maritime law. One thing is clear: Over the course of history, a lot of freight has exchanged hands via BOLs. In reality, it makes sense that BOLs should evolve. Everything else has over the years.
What do you think Aristotle would say about all that BOL paperwork? Something like this perhaps?
“We are the BOLs we repeatedly use. Excellence, then, is not an act (or a single BOL) but our habits (and system for managing BOLs.)”
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Electronic Bill of Lading Forms
Tech is transforming society. Tech is transforming logistics. Electronic BOLs are one major area of optimization.
An electronic bill of lading (eBOL or eB/L) “is the legal and functional equivalent of a paper bill of lading.” Electronic data interchange (EDI) has become widely accepted throughout the greater business community.
We have always associated technology with the benefit of saving time. As such, the upside of using an eBOL is velocity. Less paperwork, in general, means a more streamlined workflow for everyone.
Ways of the Past
In the past, an OTR driver’s only option was to obtain a paper copy of a BOL. (Two copies, to be exact.) Next, the cons would sign the paperwork signed and the driver would be on their merry way. After that, the driver might be able to fax the paperwork in. But more often than not, that driver would just shove that paperwork into a packet, and forget about it for the rest of the driving week.
A driver might be gone for a week or two or more! But eventually they’d that packet of BOLs would get back to the office. Once the driver’s packet made back to HQ, the back office could then process the customer invoices. The billing process took weeks. That’s a long time to wait to for payment. Or how about the fact that BOLs delivered by courier might take longer than the driver to arrive if it’s a short route. In today’s market, no one can afford to wait for the paperwork to arrive!
Oh sure, you can keep all the plates spinning—as long your trucks keep moving. But it isn’t very efficient. In addition, paper BOLs are an easy target for fraud. Keep that in mind if you’re considering digitization software and eBOLs, but concerned about data security. How secure is the data on that paper BOL?
And worst of all, paper BOLs limit the control of a companies cash flow.
A Better Way Forward
Nowadays, tech companies have apps with software that eliminate many workflow bottlenecks surrounding BOLs. For example, Vector’s app allows a driver to scan a paper BOL and upload the paper to the cloud immediately.
Vector’s app will auto-enhance the image, scan any bar codes, translate handwriting, and load that information into any integrated TMS platform. It accomplishes that with the ease of clicking a button.
If a driver is in an area without cell phone coverage, this digital package will simply hold in queue until cell coverage returns. At that point, the app will automatically send the paperwork to your office.
Electronic BOLs can streamline invoicing in the same way. Provided that you have imaging software like Vector’s integrated with your TMS, a customer can get set up for automated billing.
That’s next level. Whereas the billing process previously took weeks, eBOL software like Vector’s can reduce the billing process to minutes.
That’s as easy as 1, 2, 3:
But there are still greater levels of efficiency. The next evolution for BOLs follows the trend of the paperless office.
Electronic Signature for Bills of Lading
Imagine zero paperwork. No more packets. No filing cabinet for the back office to dig through.
Beyond automated billing, integrated imaging software also allows for the digitizing of custom forms and workflows.
Electronic signatures are the key to 100% digital forms. In essence, the electronic signature eliminates the need for paper back-ups entirely. You can still add scans and pictures of any supplemental documents as needed. But the BOLs themselves are entirely digital and stored in the cloud.
Vector’s customized digital forms allow for faster workflows, more accurate information, easier access to information, and immediate billing.
Don’t Settle For Good
In summary, BOLs have been around forever. BOLs serve an important legal purpose. But there are new and better ways to manage all that paperwork. To put a twist on what Aristotle said, remember, you are the BOLs you repeatedly use.
Don’t settle. These days, “it’s all Greek to me” and business-as-usual doesn’t cut it anymore. Instead, consider the time, money, and effort you can save by updating your BOL workflow. Take a look at Vector’s offerings for eBOLs and start your company’s transformation to a streamlined digital workflow.
The future is paperless. It’s time for better habits
This post was written by Brian Deines. Brian believes that every day is a referendum on a brand’s relevance, and he’s excited to bring that kind of thinking to the world of modern manufacturing and logistics. He deploys a full-stack of business development, sales, and marketing tools built through years of work in the logistics, packaging, and tier-1 part supply industries serving a customer base comprised of Fortune 1000 OEMs.
