It is essential to understand the differences between a bill of lading and a waybill in order to handle shipping properly.
Freight transport, or shipping, plays an important role in global commerce, facilitating the physical transportation of a vast array of goods and cargo. This process encompasses a multitude of transportation modes, including land, sea, air, and multimodal approaches, which combine different modes to optimize efficiency. Regardless of the method, freight transport necessitates using key documents to ensure seamless operations, among which are the bill of lading and the waybill.
It is essential to understand the differences between a bill of lading and a waybill in order to handle shipping properly. Below, we‘ll take a closer look at these two documents.
What is a Bill of Lading (BL or BoL)?
A bill of lading can be described as a legally binding document between the shipper of goods and the carrier that specifies the type, quantity, and destination of the goods being carried. It serves as:
- A receipt of goods
- A contract between a freight carrier and a shipper
- A document of title
The bill of lading is used to ensure the proper and timely delivery of goods to their destination.
Who Issues a Bill of Lading?
If you are wondering where you can obtain a bill of lading, it is generally provided by the carrier or the carrier’s agent. It is typically filled out by the shipper or the freight forwarder on behalf of the shipper. In some cases, a third-party logistics provider (3PL) may also be involved in the process.
Releasing the Original Bill of Lading at Destination Port
The original bill of lading needs to be released by the consignee (or the consignee’s agent) at the destination port before the cargo can be released. The document is usually handed over in exchange for the goods, at which point it serves as a receipt. It can also be sent electronically, in the case of a telex release or an express release.
What Information Is Included In a Bill of Lading?
The information found on a bill of lading includes:
- Shipper’s Information: This includes the name and address of the person or company shipping the goods.
- Consignee’s Information: This is the name and address of the person or company to whom the goods are being shipped.
- Purchase Orders or Special Reference Numbers: These numbers are used by the shipper or consignee to track specific shipments. This is particularly important when there are multiple shipments or when the shipment is part of a larger transaction.
- Special Instructions: This might include special handling instructions, information about dangerous goods, or other important information that the carrier needs to know to handle the shipment properly.
- Date of Shipment: This is the date the goods are handed over to the carrier for transport.
- Number of Shipping Units: This could be the number of boxes, pallets, or other units being shipped.
- Type of Packaging: This might include boxes, pallets, drums, crates, or other types of packaging.
- Description of Goods: This includes a detailed description of the items being shipped, including what they are, their material composition, and potentially their Harmonized System (HS) codes for customs purposes.
- Volume, Weight, and Freight Dimensions: This includes the dimensions, weight, and sometimes volume of the shipment.
- Declared Value of Goods: This is the value of the goods being shipped as declared by the shipper. This information can be important for insurance purposes and for customs if the shipment crosses international borders.
What Types of Bill of Lading Are There?
There are several types of bill of lading shippers should know about. Furthermore, it’s important to know which bill of lading is needed based on how the goods being shipped will be handled.
- Original bill of lading: This is the highest form of the bill of lading. It is a valuable document and gives title and control of the goods, and the customer usually needs an original as proof of ownership to take possession of the goods.
- Straight Bill of Lading: This is a non-negotiable bill of lading. It is used where the goods have been paid for or do not require payment, such as donations or gifts.
- Order Bill of Lading: This is a negotiable bill of lading. It can be bought, sold, or traded while the goods are in transit. The customer usually needs an original as proof of ownership to take possession of the goods.
- Bearer Bill of Lading: This type of bill of lading does not name a specific recipient. Instead, it is marked to the “bearer” or “holder” of the document, making it highly negotiable and risky as anyone who has the original document has the right to claim the goods.
- Switch Bill of Lading: This is a second set of bill of lading issued by the carrier or the carrier’s agent, in substitution for the original bills of lading, for the purpose of transferring the title of good from one party to the other.
- Express Bill of Lading: This is a non-negotiable bill of lading, where no physical paper “bill of lading” is issued or required. It is typically sent electronically and is advantageous in situations in which time is a critical factor.
- Master Bill of Lading: Issued by the main carrier of goods, this document covers the entire transportation process, including all the different legs of the journey.
Each type of bill of lading has its own particular uses, advantages, and risks. The type of bill of lading chosen for a particular shipment will depend on the details of the shipment, the requirements of the shipper and receiver, and the laws and regulations of the countries of origin and destination. The choice of the right type of bill of lading is critical in ensuring the smooth and timely delivery of goods, as well as the legal protection of the parties involved.
What is a Waybill in Shipping?
A waybill refers to a document issued by a carrier detailing a shipment of merchandise that gives details of the shipment, the route, and the sender and receiver.
It serves multiple purposes:
- The waybill serves as a receipt for the person sending the goods, evidence of the contract of carriage, and a guide to the transport of the shipment to its final destination.
- Waybills can typically be obtained from the carrier or shipping company.
- When a business or individual decides to ship goods, they would contact a carrier who would provide them with a waybill. It is also possible for them to hire an expert to assist them with this process.
- The sender is generally responsible for filling out the waybill, as they have all the necessary information about the shipment.
- After the waybill is filled out, it is typically given to the carrier when the goods are handed over for shipping. This can be done physically, with a printed document, or digitally, depending on the practices of the carrier.
- The carrier then uses this document as a guide for transporting the goods and gives it to the recipient upon delivery as proof of delivery.
What Information Is Included In a Waybill?
While specific details may vary somewhat depending on the type of waybill, the following key elements are typically included:
- Shipper’s Name and Address: This is the information of the party who is sending the goods.
- Consignee’s Name and Address: This is the information of the party who is supposed to receive the goods.
- Billing Information: This includes information about who is responsible for the payment of the shipping charges.
- Carrier’s Information: The name and address of the transportation company that is moving the goods.
- Description of Goods: Detailed information about the goods being transported, including type of goods, quantity, weight, and any other special handling instructions.
- Packaging Type: Information on how the goods are packed (for example, in boxes, crates, pallets, etc.).
- Number of Packages: The total number of packages or units in the shipment.
- Gross Weight: The total weight of the shipment, including packaging and pallets.
- Dimensions: The size of the shipment or individual packages, usually length, width, and height.
- Date of Shipment: The date when the goods were handed over to the carrier.
- Place of Receipt: The location where the goods were received by the carrier.
- Place of Delivery: The destination where the carrier is to deliver the goods.
- Freight and Other Charges: Details of the shipping cost, including any additional charges for special handling or services.
- Declared Value for Customs: The value of the goods as declared by the shipper, for customs purposes.
- Instructions to the Carrier: Any specific instructions from the shipper to the carrier.
- Route of the Shipment: The planned route of the shipment, including any transshipment points.
- Terms and Conditions: The standard terms and conditions of carriage, which form part of the contract between the shipper and the carrier.
- Signatures: The signatures of the shipper and the carrier or their representatives, as confirmation of the contract of carriage.
The specific layout and format of a waybill may vary depending on the carrier and the mode of transport, but these are the common elements you would typically find on a waybill. The waybill serves as a crucial document for the shipper, the carrier, and the consignee, as it provides key information about the shipment and the terms of its transportation.
What Are The Different Types of Waybills?
There are different types of waybills shippers should be aware of, including the following:
Air Waybill: This is used for air freight. It serves as a proof of receipt of the goods for shipment, provides details about the goods and the agreed upon conditions of transport, and is a proof of the contract of carriage.
Railway Waybill: This is used for rail freight. It’s similar to a bill of lading, but specific to rail transport.
Truck Waybill: This is used for road freight. It’s a document provided by a carrier to a shipper, signed by the carrier entity or the driver who has taken the shipment.
Bill of Lading: As discussed above, this is used for sea freight. A bill of lading is similar to a waybill and serves as a contract between the shipper and the freight carrier, a receipt for shipped goods, and evidence of title of the goods.
Sea Waybill: A sea waybill is a transport contract (document of carriage) used in international trade. It serves as a receipt of goods by a carrier (such as a shipping line) for transportation from the consignor (the shipper) to the consignee.
Sea Waybill vs. Bill of Lading
A bill of lading is a legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried. It serves as a shipment receipt when the carrier delivers the goods, a contract between the shipper and the carrier, and a document of title that proves ownership of the goods.
In contrast, a sea waybill is a non-negotiable transport document. It provides evidence of a contract for carriage and receipt of the goods, but unlike a bill of lading, it does not convey ownership, meaning the goods can be delivered to the named consignee without the presentation of the original document. Therefore, sea waybills are often used for trusted relationships or when goods are paid for in advance, as they allow for faster and more efficient deliveries.
Can I Use Both?
When shipping internationally, whether you need a bill of lading, a waybill, or both, largely depends on the specifics of the shipment and the mode of transport used.
A bill of lading is often regarded as one of the most important documents in the freight industry, particularly for land-based and sea freight because of the three functions it serves, mentioned at the beginning of this overview (a receipt of goods, evidence of a contract, and a document of title).
The need for both a bill of lading and a waybill depends on the specific requirements of the shipment and the parties involved in the transportation process. For example, a bill of lading may be required for the legal and financial aspects of the shipment, while a waybill may be necessary for tracking and coordination purposes.
For any specific shipment, it would be best to consult with your shipping company or a logistics professional to ensure all necessary documentation is correctly prepared.
Air Waybill vs. Bill of Lading
An air waybill is a contract between the shipper and the airline that states the terms and conditions of the carriage of goods by air. It serves as a receipt issued by an international airline for goods and an evidence of the contract of carriage, but it is not a document of title to the goods. Hence, the AWB is non-negotiable.
On the other hand, a bill of lading is a document that is provided by a carrier (or its agent) to acknowledge receipt of cargo for shipment. Unlike AWBs, BOLs are typically negotiable documents and represent ownership of the goods, meaning they can be bought, sold, or traded while the goods are in transit.
Can I Use Both?
Typically, you wouldn’t use both an air waybill and a bill of lading for the same shipment because they refer to different modes of transportation. Which document to use depends on whether the goods are transported by air or sea (if only by sea, either a Sea Waybill or a bill of lading should be used).
To demonstrate its usefulness, a bill of lading is widely used in sea freight because of its unique features which are particularly useful for this mode of transport. Sea transport often involves long distances and lengthy transit times, during which ownership of the goods may need to be transferred.
The negotiability and title document function of the BOL facilitates these transfers of ownership, making it a preferred document for sea freight. This contrasts with the air waybill which is non-negotiable, making it more streamlined but less flexible for changes in ownership during transit. The non-negotiability of the air waybill reflects the typically shorter transit times and less complex routing involved in air transport, reducing the need for transfer of ownership during transit.
Bill of Lading and Waybill When Shipping Internationally, Including the U.S. and Canada
When it comes to shipping goods internationally, most countries require documentation such as a bill of lading or a waybill. For instance, the United States requires the presentation of an ocean bill of lading, inland bill of lading, through bill of lading, or an air waybill for air cargo as part of the import documentation process. Similarly, a bill of lading or waybill is required when shipping from or to Canada, similar to shipping procedures in other countries.
However, the requirements may vary based on the country shipping from or shipping to, and the specific contents of these documents can be subject to regulations in the destination country. As such, it’s important to always verify the requirements of the destination country.
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