The Bill of Lading (BOL) is a straightforward yet, at times, complex shipping document. It is more than just a contract of carriage with carriers that holds the shipper or consignee liable to pay compensation in the event of a lost or damaged shipment. By having a greater knowledge of the BOL, shippers can streamline freight claims processes and make sure their claims are settled as efficiently as possible. This blog will help shippers understand the bill of lading better by defining it, breaking down its details, and explaining why it is important in freight claims.

What is a Bill of Lading?

The bill of lading is a legal document included with every shipment. Usually issued by a shipper to a carrier, the BOL details the type, quantity, and final destination of the goods being transported. Its secondary purpose is to serve as a shipment receipt when the carrier delivers the goods to the destination. In most forms of transportation (though typically not the case in LTL shipping), the BOL is required to accompany the shipment and has to be signed by representatives of the carrier, shipper, and receiver. Here is a detailed list of what should be included on the bill of lading:

• Number of units to be shipped (pieces, pallets, etc.)
• Weight of the shipment (if there are multiple units, each item’s weight should be listed)
• Names and addresses of the shipper, carrier, and receiver/consignee
• Date of shipment, pickup/delivery dates and times
• Unique shipping/handling instructions and added services 
• The BOL and Carrier Pro Numbers
• Type of packaging (i.e., pallets, cartons, skids, drums)
• Value of the cargo being shipped
• A full description of the item, with a common name if applicable, and the material used to manufacture it
• Freight classification and NMFC code
• Account number or purchase order used for tracking between companies
• Contact information for all relevant parties
• If the freight has a Department of Transportation hazardous material, an explanatory note is needed because there are specific regulations about shipping those types of materials.

BOLs also include terms and conditions that intend to define various parties’ responsibilities and liability limitations for a shipment. These terms and conditions may include things like: 

• No carrier shall be liable for any loss or damage or for any delay caused by an act of God, the public enemy, the authority of law, the act or default of the shipper, riots or strikes, or any related causes. Except in the case of negligence of the carrier, the carrier shall not be liable for loss, damage, or delay that results from faulty or impassible highway roads or by lack of capacity of a highway, bridge, or ferry. The burden to prove carrier negligence is on the shipper.

• Unless arranged or agreed to in writing or electronically, the carrier is not bound to deliver a shipment by a particular schedule or in time for a particular market.

• Claims for visible damage must be filed with the carrier not more than nine months from the date of delivery. Claims for loss must be filed with the carrier not more than nine months from the date of the bill of lading. These are part of the Carmack Amendment regulations.

These few sample conditions illustrate how difficult it can be to keep track of BOL nuances, but it is critical to understand the details because the document serves multiple purposes. 

BOL 101: What’s the Purpose of a BOL?

A bill of lading (BOL) is a vital document in the shipping and logistics industry, playing a key role in ensuring the smooth and efficient movement of goods from one place to another. Often likened to a receipt from a retail store, a BOL serves as a binding contract between the shipper and carrier, a shipping receipt, and a guide to delivery expectations. As this document carries legal weight, shippers need to have a thorough understanding of its nuances and implications.

A BOL is Evidence of the Contract of Carriage

The BOL serves as a binding agreement between the shipper and the carrier, detailing the specifics of the cargo being transported. This contract of carriage outlines the responsibilities of both parties involved, as well as the terms and conditions under which the shipment will be moved. The BOL contains crucial information, such as the type and quantity of goods being shipped, the consignor and consignee, the origin and destination of the shipment, and any special instructions or requirements. By signing the BOL, both the shipper and carrier acknowledge their agreement to the terms of the contract, making it a legally enforceable document. In case of any disputes or legal issues, the BOL serves as the primary reference point.

A BOL Acts as a Shipping Receipt 

In many cases, the BOL can also serve as a shipping receipt—the exceptions being LTL shipping (where a POD is used) and parcel shipping (where the receiver must electronically sign a tablet or handheld device). This provides evidence that the carrier has received the goods in question and is responsible for their safe transportation to the specified destination. This shipping receipt acknowledges the transfer of responsibility from the shipper to the carrier; this is essential documentation for both parties to confirm the accuracy of the shipment details. Upon delivery, the consignee or their authorized representative is usually required to sign the BOL, indicating that they have received the shipment in the expected condition. This signed document then becomes proof of delivery, which is a critical document for any claims or disputes related to the shipment.

A BOL Defines Delivery Expectations

A BOL also plays a crucial role in setting the delivery expectations for the shipment. It provides essential information on the delivery timeframes, any special handling requirements, and the agreed-upon terms for the transportation process. This information is crucial for both the shipper and the carrier, as it helps them to plan and coordinate their operations effectively. By outlining the delivery expectations, the BOL helps ensure that both parties are on the same page and that the shipment proceeds smoothly from pickup to delivery. It is important to note that deviations from the agreed-upon terms in the BOL can lead to potential disputes, additional costs, or liability issues for the parties involved. As such, it is crucial for shippers to review the BOL carefully and ensure that it accurately reflects their requirements and expectations.

BOL and Freight Claims

If all goes correctly with the shipment, the bill of lading will be an exact record of the process. If there is a concern over damage or shortage or loss to the shipment, then the BOL should be part of the evidence needed to file or dispute a freight claim. The side that is filing the claim should also make every effort to obtain photo evidence as part of their case. With it thoroughly filled out, the BOL should help answer any questions about where the damage or loss occurred along the way and who is responsible for it.

Claims for concealed damage or shortage should be filed with the carrier within five days of the delivery date. Claims for visibly damaged freight can be filed for at least up to nine months following the freight’s delivery date. The Carmack Amendment, which covers interstate transportation, states that a carrier must allow at least nine months for all claims for loss or damage by a shipper to be made in writing. These claims require a recorded chain of custody stating the shape of a shipment at each checkpoint in its journey.

Each party involved in the shipment should have a copy of the bill of lading and all three copies should show a similar picture of when the damage occurred. Any time there is damage, the responsible party is expected to note the damage and acknowledge their liability.

It’s extremely important to immediately take a count when the shipment arrives and record all evidence if any product is missing right away. This discrepancy should be noted on the delivery receipt or proof of delivery (POD). Also, before transporting a shipment, the driver or carrier should be noting any discrepancies as well. If the shipment is not properly recorded at that time, the driver could be held responsible.

There are times when the shipment is loaded without the driver present and it can severely limit the ability of the driver to verify that all the product is accounted for. When a shipper has loaded and counted the shipment by themselves, “shipper’s load and count” should be noted on the bill of lading. This means the burden is no longer on the trucker’s shoulders if the shipment comes up short when it is delivered.

These situations further illustrate the BOL’s importance and why it is critical to confirm that all details are accurate. All parties need to keep on top of these details to make sure any responsibility for damage or loss is clear and that when a freight claim is filed it will be as easy as it can be to quickly reach a resolution.

For High-Stakes Freight Claims, Shippers Turn to Freight Claims Management Software

On multiple levels, the bill of lading is imperative to the shipping of a product. It is a list of all the details of a shipment and a contract of carriage. The bill of lading is also vital to any freight claims that you might need to file.    

One way to make freight claims easier is to work with a partner that has freight claims management software. This software can help companies streamline claims to reach faster conclusions and save both time and money. The software can help you gain better visibility over the claims process, organize documents easier, and make communications over claims more fluid.

If you are looking for an extraordinary partner with an exceptional, user-friendly platform that lets you do all those things and more, FreightClaims.com is your ideal choice. In addition to having software that can help you quickly organize pictures and shipping documents to be rapidly communicated to other parties and make sure you meet deadlines, FreightClaims.com can also provide a user-friendly dashboard that incorporates actionable analytics to help you determine how to alter your shipments to avoid future freight claims. With FreightClaims.com’s software, you can take that next step into the high-stakes freight claims world with confidence. So, check out our website and request a demo today.