The bill of lading is arguably the most important document in the shipping industry. It’s a legally binding document that provides the carrier with all the details needed to process the freight shipment correctly.
The bill of lading is important for several reasons.
Evidence of Contract of Carriage
A common misconception about the bill of lading is that it is a contract between the buyer and seller or the contract between the carrier and shipper. Technically speaking, the document is not a contract, however it is evidence of the contract of carriage entered into between the carrier and the shipper in order to carry out the transportation of the freight as per the contract between the buyer and the seller.
Receipt of Goods
A bill of lading is issued by the carrier or their third party logistics provider to the shipper or 3PL in exchange for the receipt of the freight. The issuance of the bill of lading is proof that the carrier has received the goods from the shipper or their 3PL in good condition, as handed over by the shipper.
Title of the Goods in Shipment
Whoever holds the bill of lading at any time throughout the shipping process, holds the title to the goods. This title does, however, vary according to the way in which the bill of lading has been consigned.
For these reasons, it is very important that you make sure you get your bill of lading right.