Although the bill of lading (BOL) plays a crucial role in the international shipping process alongside the commercial invoice and packing list, its importance is not always understood. Beyond reviewing Incoterms and terms of sale, the bill of lading is essential to include in discussions between the buyer and the seller. A bill of lading plays a vital role in the shipping process, as it can impact the timely release of cargo upon arrival to the destination country.
Bills of lading serve as a contract between the goods’ owner and the carrier handling the goods’ transportation, with specific bills of lading to be used dependent upon the mode of transportation. Within the world of international freight forwarding, an ocean bill of lading is used for ocean cargo, while air waybills (AWB) are used for air cargo.
The exporter or freight forwarder will send the ocean or air carrier a Shipper’s Letter of Instruction (SLI). The SLI details the parties involved, ship dates, vessel and voyage information or flight information, descriptions of the commodities and the respective classifications, weights, piece and pallet counts, shipment value, delivery instructions, tax IDs and other important shipment information.
Bills of lading are also completed according to the consignee’s specific country requirements. For example, in Latin America, charges must appear on the bill of lading for customs purposes. Additionally, in Argentina, the consignee’s tax ID (CUIT) must be present on the bill of lading. Failure to comply with specific country requirements is likely to result in shipment delays with the potential for additional charges to be assessed.
These three variations provide the importer or exporter with the degree of protection they choose based on the business relationship between the two parties. As an exporter, cargo is more secure when electing for originals to be required for cargo release. As an importer, the express release BOL is preferred as the freight is released as soon as it is available at the destination port.