What is a Bill of Lading?

A Bill of Lading, often abbreviated as BL or B/L, is the most important document traders have to deal with in any international transaction. Regardless of whether you’re importing, exporting, dealing with ocean freight or air freight, the Bill of Lading acts as a contract of carriage.

There are many different definitions of the Bill of Lading. But they all address the same main points.

Bill of Lading definition
In general, a Bill of Lading definition is as follows:

The Bill of Lading acts as evidence of a contract of carriage between the shipper and the shipping line to carry out the transportation of cargo under the terms and conditions agreed upon between the seller and buyer. It proves the existence of a goods transportation contract.

In many ways, a Bill of Lading is similar to a boarding pass for passenger air travel, except it applies to the merchandise being shipped. In an international maritime transport, it answers the who, why, what, how, and when of the process.

As an evidence of shipment, the Bill of Lading lists the important parties involved in the transportation process. More specifically, it clearly states the essential information such as:

Type of cargo being shipped
Seller/Exporter
Vessel the cargo is being transported on
Shipping line
Bill of Lading number
Freight forwarder
Buyer/Importer
Consignee
Notify party
Etc.

Besides a contract of carriage, a Bill of Lading definition also covers its role as a receipt of goods and title to goods.

Receipt of goods: At origin, the Bill of Lading represents a receipt of goods. It confirms the goods that are being transported and is proof that the shipper has transferred the cargo to the shipping line in good condition.

Title to goods: Once the goods have arrived at destination, the Bill of Lading acts as a title to the goods. The consignee* listed will need to present the Bill of Lading in order to secure the release of the shipment by the carrier and claim ownership. In this sense, it is evidence of confirmation of delivery.

*Only the consignee listed on the Bill of Lading has contractual rights to request for the release of the cargo.