Understanding the Importance of a Bill of Lading (BOL)

Whether you’re shipping a full truckload (FTL) or less-than-truckload (LTL) freight shipment, it is vitally important that the shipment is accompanied by a Bill of Lading. Also known in the industry as a BOL, this is a legal document outlining the details of a shipment and it serves as a legal contract between the carrier and the shipper.

A BOL is required for all freight shipments, regardless of transportation method or piece count, and must contain specific information to be considered legally binding. BOLs can be generated electronically, or created by hand, and either format must be signed by both the shipper and carrier to be considered legitimate.


What must be listed on a Bill of Lading?

Specific information must be noted on a BOL to ensure a shipment meets legal requirements. Below is an outline of the important information to include when creating a BOL.

  • Shipper and consignee name, complete addresses, and contact information.
  • Type of location being picked up from or delivered to, whether it be a business, residence, trade show, conference center, farm etc.
  • Any specific pickup or delivery instructions or routing guidelines, including the need for pickup/delivery appointment, call ahead notification, residential pickup/delivery, liftgate pickup/delivery, etc.
  • The date the shipment is picking up.
  • Number of shipping units.
  • A description of the commodity being shipped, typically including the common name of the item or material of manufacture.
  • Type of packaging, such as pallets, boxes, cartons, cases, skids, drums, rolls, etc. A piece count can be included as well, for example “3 boxes on 1 pallet.” Being as specific as possible helps ensure all pieces get delivered to the consignee, or informs the consignee if pieces are missing and a claim needs to be filed.
  • The exact weight and dimensions of the package type being shipped.
  • PO number, or special account numbers to for business or tracking purposes.
  • NMFC freight classification and code, or, if shipping internationally, the HTS code of the commodity. If multiple commodities are being shipped, the NMFC classification must be listed separately per commodity.
  • A note if the commodity being shipped is considered HAZMAT by the Department of Transportation, and if so, the HAZMAT classification and packing group.
  • The declared value of the goods if additional insurance is requested for the shipment.
  • Any other information you wish to communicate to the carrier or consignee, such as preferred delivery dates or alternate points of contact.

Many of the details notated on a BOL directly impact charges that can be billed by the carrier, such as liftgate or an appointment needed at delivery. Therefore, it’s vitally important to be as accurate as possible when creating a lading bill to ensure the bill-to party is not met with any surprise fees or penalty charges. A BOL must always be signed by the shipper and the carrier to be legally binding.

Do you know why Bill of Lading is important for shipping? - SAFETY4SEA

Additional types of BOLs exist, too, when dealing with ocean or air transportation. These are identified by the following acronyms:

  • AWB: Airway Bill of Lading
  • OBL: Ocean Bill of Lading

It is important to keep in mind that while these are common terms for shipping in North America, they may differ in other places. For example, some countries may identify OBL to mean “Original Bill of Lading” instead of “Ocean Bill of Lading.” If these confusions occur, the party that created the BOL should be contacted to clarify the correct identification.

Who is responsible for creating a BOL?

A BOL can created by the carrier or the shipper, but the document should be initiated out by the party that is booking the freight shipment if possible. For example, if a third party is requesting a pickup from a specific shipper, the third-party representative is responsible for creating the bill. This is important because while the shipper may have some of the details of the shipment, such as the piece count, weights, and dimensions of the freight, the third party booking the pickup will know specifics such as who the carrier is, any delivery requirements, additional insurance needs, routing guidelines, or the correct bill-to party.

Importance of a BOL

As stated above, a Bill of Lading is a legally binding contract between the carrier and the shipper, meaning that if a dispute occurs, the document can and likely will be used in litigation. Therefore, it must be understood by all parties that the accuracy of the information provided in generating the BOL is of the utmost importance.

Generally, these agreements serves three main purposes. First, it is a contract of carriage. This means there is evidence that a contract between the shipper and carrier exists in order for the carrier to execute the transportation of freight, as per the contract between the buyer and the seller.

Second, it serves as a receipt of goods. A BOL is issued by the booking party to the shipper in exchange for the receipt of freight by the carrier. The issuance and signing of the document prove that the shipper has released the freight to the carrier in apparent good order and condition.

Lastly, it is a document of title, which is layman’s terms means that the holder of the BOL has the right to the goods. This is important because if a driver were to get pulled over for a DOT inspection, he or she must show proof that the goods they are hauling are intended to be in their possession and are not stolen.

Which is the most important function of a bill of lading and why..??

Avoiding Common Mistakes

With so many important details required during the creation a BOL, it is no surprise that they are often sent out with missing information. Errors of omission or incorrect information can delay the transit time of the shipment, and/or cause issues when carriers attempt to invoice the bill-to party. Follow this advice to avoid these common errors:

  • Be Specific: It’s important to identify the specifics of all items being shipped, including the packaging type, weight, dimensions, piece count, and freight class. The more information that can be provided, the more accurately the carrier can identify what they are hauling. Discrepancies in the details can result in costly accessorial charges or cause the carrier to deliver the shipment short.
  • Double Check Your Work: Be sure to review all details listed on the BOL prior to releasing it to the shipper. Even a quick glance over the BOL can save on costly errors in the long run. Ask the shipper to look over the BOL before releasing the freight, just to be sure nothing is missed.
  • Use a Consistent Template: With so many different downloadable BOL formats out there, it can be easy to miss adding important details when using a new template. Streamline the process by using the same template each time so you’re familiar with where the information needs to be inputted.
  • Ask a Professional: At 5 Logistics, we understand that getting BOLs right can be tricky. Our dedicated transportation team is here to answer any questions you may have about what information to include. And remember, when in doubt, more information is always better.

These contracts are very important shipping documents that must be included with all freight shipment. Essentially, a BOL works as an undisputed proof of shipment. It is a legally binding contract between the carrier and the shipper that is used to identify details of a shipment and acts of proof of possession of freight. BOLs are a critical component because, not only do they protect the assets of the shipper, they also provide details to ensure the safe transit of the freight to the consignee. Act now to protect your freight by using this guide as a checklist to create thorough and accurate BOLs for all of your shipments.