Definition: A bill of lading is a written document where detailed characteristics of a shipment and its destination are described. It is mainly related to maritime transportation and used as a legal receipt of the shipment and even a kind of contract for the transportation service.
What Does Bill of Lading Mean?
The term is widely known in the international trade field. Typically, a carrier delivers a cargo to a shipper and both agree and sign a bill of lading, also known as B/L or BoL. This document tends to follow a standard format that contains departure and destination ports, carriers and shipper’s name and specific quantities, nature and description of the shipped goods.
It also includes the service contract terms and rates applied in the transportation as well as a unique number or code that facilitates all involved parties to follow the shipment until the owner finally receives it. The bill of lading accompanies the items from departure to destination, no matter the form of transportation.
Example
Toys and Games is a large store brand operating in Costa Rica. It bought five thousand toys from China and plans to sell them at its own stores for Christmas time. The company hired an agent to deal with all the international trade procedures. The agent chose Global Sea Inc, a shipping company that is well recognized within the international trade world.
The entire cargo was transported by road from the Chinese manufacturer to the Tianjin port in September and when the cargo was loaded into the ship, Global Sea Inc issued a bill of lading. The shipping company signed three copies of the document. One copy was attached to the cargo and traveled with it, the road transportation company kept another copy and the last one was delivered to the agent, who later claimed the goods in Costa Rica.
The bill of lading described quantity of each toy model, freight rates and details of the origin and destination ports.
