A bill of lading (also seen as B/L and BoL) is a document given to a shipper by the carrier that details the shipment and serves as a means of transferring the title of goods.
The purpose of a bill of lading is to ensure that exporters receive payment and importers receive the merchandise they ordered. The bill of lading must always accompany the goods and must be signed by authorized representatives of the carrier, shipper and receiver. Details listed in a bill of lading might include a shipment’s itemized contents, number of packages, weight, volume, consignor and consignee names, names of ports of departure and destination, dates of departure and arrival as well as shipping rates and amounts.
There are two types of bills of lading:
Straight bills of lading involve payment in advance for an order that is shipped directly to the party named in the letter of credit, typically the importer. A straight bill of lading is also known as a non-negotiable bill of lading because title to the shipment cannot be transferred to another party.
Order bills of lading involve merchandise ordered and shipped prior to payment. An order bill of lading is sometimes referred to as a negotiable bill of lading. Title to the shipment is conferred to order of the shipper or a party named in the letter of credit and may be transferred to another party by signature of the title-holder, usually by endorsing the back of the BoL. An endorsed order bill of lading can serve as title to goods and can therefore be traded as a security or used as collateral.
Bills of lading are legal documents required under the Hague-Visby rules. However, they may be superseded by transport documents under the Rotterdam rules.