The bill of lading—also referred to as BOL or B/L—is a vital piece of the freight puzzle. However, even though it's so vital, there are multiple small details that may cause confusion. One of the major points of confusion is who issues a bill of lading? And a related question is who are the responsible parties?
In this post, I'll answer those two questions, hopefully clearing up any confusion. I'll start by giving a quick recap of what a bill of lading is. Then we'll jump into who issues it and the responsible parties. I'll describe each of these in reasonable detail so you know the why as well as the who.
If, however, you're just here for a quick answer to the main question, I won't hold you up any longer. The carrier issues the bill of lading when they take control of the goods.
For everyone else who wants to understand that sentence in more detail—as well as the why and the responsible parties—read on!
What Is Bill of Lading?
A bill of lading is a legal document that serves three core purposes during the freight of a product. The bill of lading serves as a
- Receipt for the contents of the shipment that tracks when and where they have been loaded.
- Title of goods, stating that the holder of the original bill of lading has ownership of the goods.
- Contract of carriage that lists the amount, condition, type, and destination of the freight contents.
The document accompanies the goods throughout the freight process. It provides all the details required to process a shipment.
Read more about bills of lading here.
Who Are the Responsible Parties?
Before we get into more details about bills of lading, there are a couple terms you need to know to identify the responsible parties.
Multiple responsible parties are involved in the bill of lading. The bill must list these parties to be legally binding.
- Shipper: This is the party that is sending the goods.
- Consignee: The consignee is the other end of the freight. It is the person or company that is receiving the goods.
- Carrier: This is the shipping company. The carrier takes the goods from the shipper and carries them to the consignee.
- Notify Party: The notify party is the person that should be informed when the goods reach their destination port.
In addition, a bill of lading is only binding if the responsible parties have signed the document at the correct time.
Who Issues a Bill of Lading?
So, now that you know the names of the different parties, we can talk about who issues a bill of lading. As I stated earlier, the carrier issues a bill of lading.
In this section, I'll explain this in more detail, talking through what it means to issue a bill of lading and then discussing when the document is issued. I'll also talk about a subtle difference between land freight and sea freight. Finally, I'll discuss the requirements around issuing a bill of lading.
What Does It Mean to Issue a Bill of Lading?
So, first up, what does it mean to issue a bill of lading?
Legally, issuing a bill of lading means that the freight or shipping company have taken control of the goods. That is, the goods have been handed from the shipper to the carrier—loaded onto the initial truck, van, ship, or warehouse floor of the freighting process.
At this point, the three purposes of a bill of lading come into effect. The receipt aspect indicates this first transfer of goods. The title aspect states the legal owner of the goods. And the contract aspect states all the relevant details about the goods.
When Is a Bill of Lading Issued?
It's probably pretty clear by now when a bill of lading is issued. But to put it succinctly, the bill of lading is issued at the time the goods are loaded onto a freighting vessel owned or used by the carrier.
To illustrate this, it's best to give an example. Imagine the situation where a company in Toronto (the shipper) is sending 300kg of wheat to Santiago in Chile (the consignee) with a company called SendIt (the carrier). A SendIt representative issues the bill of lading when they take control of the goods. Once the goods reach the other end, the port in Santiago, SendIt tells a customs representative from the receiving company (the notify party). They check the goods and sign that they have been received.
There are some caveats to the above example, such as when an NVOCC issues a house bill of lading for intermodal transport. However, by and large, the above process holds.
What's the Difference for Land and Sea Freight?
In the above example, land or sea freight could be used to transport the goods. It's important to note two slight differences between the bill of lading in these instances.
Sea freight occurs when the carrier uses waterways as the primary mode of transport. Rail or trucks may also be used during freight. But the main portion of the transport occurs on water.
Difference 1: The term ocean carrier instead of carrier.
Difference 2: In sea freight, it's much more likely that an intermodal transport company will be used. In this case, two bills of lading are used: the original master bill of lading and a house bill of lading. The house bill of lading serves the three listed purposes, rather than the master bill. However, the master bill of lading must be used to release the cargo.
What Are the Issuing Requirements?
There are no worldwide rules or regulations for who can issue a bill of lading. Certain countries, such as the US, have their own regulations stating that issuers must be registered with the relevant authorities.
Similarly, international freighting groups and consortiums provide their own templates for valid bills of lading. If you're shipping with one of these groups, you will have to use their templates and processes. To check that a bill of lading is valid, check the documentation provided by the carrier. Wikipedia also has a list of the largest carriers and how they label their documents.
In terms of what needs to be on a bill of lading, there are a few requirements. A bill of lading must list the responsible parties, origin, destination, number of packages, contents of the packages, and package details such as weight and volume.
This post explains a few key bill of lading concepts. Specifically, who issues it, and the responsible parties.
In summary, a bill of lading is a legal document that serves three vital purposes in the shipping process: as a receipt for shipping, as a title of goods, and as a contract of carriage.
The carrier serves the bill of lading when they take control of the goods. This may change slightly in the case of an ocean carrier, which may use intermodal transport with a house bill of lading.
There are no universal regulations that limit who issues a bill of lading or set out specific requirements. However, shipping groups and certain countries set standards.
The bill of lading is only legally binding once signed. It must list the responsible parties, origin and destination, number of packages, contents of the packages, and package details to be binding.
The responsible parties in a standard bill of lading are the shipper, the consignee, the carrier, and the notify party.
This post was written by Michael de Ridder. Michael has worked in software development, data visualization, data science, research, consulting, and business analysis across healthcare, telecommunications, radio and finance. He enjoys the challenge of combining and utilizing the relationships between different domains and technology. A big fan of travel, Michael is a proponent for the benefits of work-life balance, believing that time away from a subject allows creativity to flourish.