In the trucking industry, a bill of lading (BOL) is a document used to list the items in a shipment, including the goods in the shipment, the weight and other factors important to the carrier, shipper and recipient. This is a legal document, and when signed properly can protect the carrier from claims of loss or damage during the journey. It is essential to understand the purpose and importance of this document – failing to get the required signatures could be a costly error. There is no specified bill of lading required by federal regulation. Carriers, not shippers or brokers, are required to issue the receipt or bill of lading.
A bill of lading is directly tied to the payment process, so delays can be costly. Learning more about what a bill of lading is, how it works and how a factoring company can ensure you are paid in a timely manner can help keep your own business flowing smoothly and prevent disruption to your revenue.
Why is a Bill of Lading Important?
A bill of lading is important for every party involved in the shipment – the shipper, the carrier and the recipient.
For the seller or shipping party, the bill of lading acts as a receipt, confirming the carrier has picked up the items and verifying that the included pieces physically match the shipment. This document is an integral part of the shipping process and is required by all parties to ensure proper payment.
This document also states who is responsible to pay for the freight. It may be:
- Prepaid (Shipper is responsible)
- Collect (Consignee is responsible)
- Bill to a Third Party (as listed is responsible)
For international shipments, a correct and complete bill of lading can mean the difference between a smooth and easy declarations and entry process and a timely, costly delay at customs.
A BOL is also a requirement for interstate carriers according to the FMCSA. According to Title 49 USC 14706) Motor carriers and freight forwarders: A carrier providing transportation or service subject to jurisdiction under subchapter I or III of chapter 135 shall issue a receipt or bill of lading for property it receives for transportation under this part.
FMCSA Regulation 373-101 on Motor Carrier Bills of Lading also states that each BOL must include:
- Names of consignor and consignee, with addresses
- Origin and destination points
- Number of packages
- Description of freight
- Weight, volume, or measurement of freight
The Bill of Lading Benefits the Carrier, the Shipper and the Recipient
For the carrier, this is a required document for each load hauled, the bill of lading also confirms the goods are as described and that they have been accepted and transported as agreed. If the shipment needs to clear customs, the bill of lading ensures that any declarations are accurate and that they can be processed efficiently. Every carrier should have their own bill of lading, even if there is already one for the shipper.
For the recipient, the bill of lading acts to outline the shipping agreement, how and where the items will be listed (door to door or other terms) and verifies that the desired items are actually included in the shipment.
What Details are Included on a Bill of Lading?
- A list of the items included (how many pieces, skids or boxes)
- The weight of the cargo
- Written description of the goods
- Marks, numbers and other identifying details
- All parties responsible for each stage of the shipment process
- Shipment details, including the place and time of pickup, the export or loading date and other information needed to verify the included items.
- Party responsible for Freight Charges
What if the Bill of Lading is Not Signed?
If the bill of lading is not signed, it could prevent the shipper or carrier from being paid. If the shipment is incomplete or damaged, and there is not a signed bill of lading, then the carrier could be held liable for the items involved.
If this important document goes unsigned by any party, it becomes much more difficult to determine what has happened with a shipment or where things went wrong. A factoring company can help prevent fraud and losses due to unsigned documents by ensuring that this vital legal piece is always completed as it should be before purchasing the invoice for the haul.
This important document is not only designed to accompany the shipment throughout the process, regardless of mode or carrier, it also verifies that the goods have been received in the correct condition and that the parties should be paid as agreed.
An unsigned bill of lading could prevent payment or make it difficult to collect what is owed -- it also means that the correct party may not be held liable for missing, damaged or otherwise corrupted cargo. Using a factoring company can eliminate the headache and risk associated with bills of lading and shipping and prevent disruption of revenue.
Factoring and Bills of Lading
If you are constantly waiting to be paid, chasing down bills of lading or otherwise frustrated with the process, partnering with a factoring company can help.
Bill of lading errors can be costly; recognizing the importance of this essential legal document and working with a trusted factoring company can help ensure you get paid on time and for the work performed.
By working with your factoring company, you will be able to streamline the process and ensure you are not waiting around for payment because of an unsigned or missing bill of lading. Your factor should be there to ensure the process runs smoothly and you get paid on time, every time.
Having a signed bill of lading is essential to not only receive payment from freight hauls, but also to protect yourself as a carrier. We always recommend having your own bill of lading for every shipment you haul, even if you already received a BOL from the shipper. All Motor Carriers are required by Federal Regulations to have their own BOL for each haul.
By taking the time to ensure you create a BOL and get it signed for every shipment, you will be able to receive payment in a timely fashion as well as have protection from risks in case any issues arise from the haul.
Make sure you have a factoring company who is knowledgable about the trucking industry's rules and regulations! Learn how to choose the best factor for your business here: