Bill of Lading – Its purposes and Importance
The definition of Bill of Lading or commonly referred to as B/L or BoL is, so-to-speak, a receipt of cargo that has been loaded on a ship and it is also proof of ownership of the cargo and an evidence of a contract or agreement to transport goods by sea. Because the B/L is needed by the consignee to receive the goods it has a feature of an exchange ticket of the goods.
When transporting cargo internationally by ocean, Bill of Lading (B / L) is one of the most important shipping documents because it has a guarantee or security characteristic. Original B / L shows the rights of the ownership over the goods and in fact, without the B / L it is not possible for a person or other designated party at the destination to receive the cargo mentioned in the B / L after the arrival of the cargo at the destination. Original B/L is needed to receive the goods, however, if the shipper makes an arrangement of issuing a surrender bill of lading or a sea waybill, only a copy is needed at the destination. The consignee only needs to show a copy of the surrender bill of lading or a waybill. This makes the process easier so you may wish to learn more about the surrender bill of lading.
B / L is also used as a customs document in the import process of goods
particularly at the time of import customs clearance. The consignee normally submits the commercial invoice and B/L to the customs office at the time of customs clearance.
On the Bill of Lading (B / L) various parties including the following are indicated:
- Shipper or the party who is acting as the beneficiary.
- Consignee or the party who is notified of the arrival of the goods and receives the goods.
- Notify party or the party specified in the Letter of Credit (L / C), which is a payment method in international trade.
- Carrier, consolidator or shipping company
The process of shipping goods often involves a third party as an intermediary. Examples of such third parties are international movers, customs brokers or freight forwarders. Third parties are quite helpful in the process of transporting goods internationally even though in fact third parties such as freight forwarders or custom brokers are not involved in the actual contract of transportation.
The details of the forwarder are indicated in two documents – one is the House Bill of Lading and the other is the Master Bill of Lading.
The shipper delivers the goods to the forwarder and the shipper will receive a document called the House Bill of Lading in exchange. It is issued when the goods are loaded into container and the ship leaves the port of the origin.
Then the forwarder will contact the shipping company that has a shipping fleet and schedule transportation to the destination port in accordance with the shipper’s instructions.
The shipping company will then inform the forwarder of the location and schedule for receiving the goods. In the process of handing over the goods, the shipping company will issue a Master Bill of Lading to the forwarder as proof that the goods have been received.
A document that has a similar function and purpose as the Bill of Lading (B / L) is Air Waybill which is used for the transportation of goods by air.