A bill of lading (also referred to as a B/L or BoL) is a legal document that details goods being transported from a shipper or seller to the recipient via freight carrier. The B/L will include various information including the type of goods included in the shipment, the number of shipping units, the destination address for the transaction, and the carrier name. This document should always be included in a transaction involving shipped products because it acts as a transport document.
The B/L should be frequently signed at various points throughout the delivery process. First, it will be signed by the seller, or the people who is shipping the goods. It will also be signed by a representative of the shipping company. Then, when the package is delivered, the B/L will be signed by the recipient.
This important document protects the seller, the shipper, and the recipient. It helps ensure that all the products are successfully delivered. If there is a problem, the B/L can help you figure out where the problem occurred. In fact, if a claim is filed for compensation related to the goods, a B/L must be provided.
The document may be negotiable or non-negotiable. When a B/L is negotiable, it is often used for credit transactions; it could be used as a letter of credit. It can be bought, sold, or traded. It can even be used as collateral on which to borrow money.
When it comes to shipping and trade, a B/L is one of three official documents used to guarantee proper accounting of shipments. A template helps ensure that people or businesses receive the merchandise they pay for. It also ensures that the seller receives proper payment for their goods. The template provides clarification and accountability for both parties, particularly in international trade.
When shipping or receiving goods, it is critical that a B/L be part of the process. In fact, free forms are available online to make the process easier. A template has three major roles. First, it acts as proof that the shipping line promised to carry the goods. Second, it acts as a “receipt” – proof that the merchandise listed was received and is in good order. Third, it is proof of ownership of the goods, an original bill.
There are two different types of templates. The first is known as a straight bill of lading. It is used when payment was made before the freight ships. The second type, an order bill of lading, is used when payment will be made after shipment. Essentially, it withholds transferring legal ownership of the freight until payment is made.
Adjustments can be made to explain different things on a B/L. For instance, it might be noted “received for shipment." This would indicate that merchandise was received, but may not yet be in transit. A “shipped on board” note indicates that the merchandise was physically loaded and is in transit. Merchandise that is transported by sea often requires a “port to port” notation on the B/L. This limits the carrier’s responsibility for the merchandise to only that time that it is physically on the vessel. Thus, origin and ultimate delivery should not be mentioned.
An adjustment to the bill of lading can also indicate the condition of the merchandise at the time of receipt. A “clean” B/L lets people know that the merchandise was in good condition when it was received. A “foul” B/L means that some or all of the merchandise was damaged upon receipt. This type of B/L may also be called a “claused” B/L. These types of notations can be highly important to both parties later on.
A bill of lading documents a purchase of merchandise. The parties are primarily the seller and a buyer. It may document the items shipped (including the quantity), the condition of the items, the item number, list the freight forwarder, mention special rules for handling the goods, and is signed by those who handle the items while they’re being shipped.
A charterparty is a document that outlines the relationship between a shipowner and the charterer. So, it is the agreement between the seller and the shipowner who will transport the goods. The owner of the boat may or may not act as an agent on behalf of the seller. It usually lists the freight charges.
The most common use of a B/L is a cargo receipt. Usually, someone (often a business) is importing items that must be shipped in via ocean. It is often used for customs or insurance during the shipping process. However, it ultimately acts as a contract between the seller and the buyer.
The components of a B/L include:
The B/L will be completed by the seller. They may receive a template from the cargo company they plan to use. Below, you’ll learn how to fill out a B/L, but keep in mind that it may slightly vary depending on the shipper and their template.
A B/L is one of several documents managed by a purchasing system. Because a B/L is part of a purchasing system, it’s important that you understand how one works. When a business needs specific items, they know that they must order them. The manager may complete a PO that is reviewed by a manager or supervisor for approval. Once approved, the order is sent to the vendor. The vendor gathers the items to match the quantity listed by the business and prepares them for shipment. A bill of lading is created. The vendor and a representative of the shipping company will review and sign the B/L. If it is accurate, they will send the purchase order and the bill of lading back to the business. The business then issues payment for the items.
Segregation of duties helps prevent theft in the workplace of the items that are ordered and received. The concept helps ensure that one employee doesn’t have too much control within the business. Looking back at the purchase system section, you’ll remember that one person may create the list of items the business needs and another person approves it before the order is placed. That is an example of segregation of duties. Of course, in the concept of buying items for a business, the process continues: the purchase order and the B/L are compared by two different people. When the bill is paid, the accountant who did not purchase or approve the order would reconcile the statement.
With the rise of automation in the US creating uncertainty around job security in various industries, our team was interested in seeing how automation might specifically affect truck drivers in each state. We created a ranking of the states that could be hit the hardest by weighting various factors: Heavy and Tractor Trailer Truck driver employment totals by state, annual median wage of truck drivers, total loss in income that could be incurred by these individuals should they be replaced, and total welfare spending of the state. We then calculated the ratio of loss of income to welfare unemployment spending by state, to determine states where employees would be hit the hardest.
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