When it comes to international trade, the most critical third party is a 'Shipping Company', which ensures the safe delivery of goods. The document involved in this agreement is known as the 'Bill of Lading'. It is a receipt of the traded goods which have been received on board (ship). It is a document that establishes an agreement between you (the shipper) and a shipping company for the transportation of goods. Bills of lading are one of three necessary materials used in international trade to ensure that exporters receive payment and importers receive the merchandise. The other two documents are a policy of insurance and an invoice.
What information bill of lading contains?
The complete name and official address of the receiver and the shipper.
The Purchase orders or unique reference/ invoice numbers which helps the shipper and the consignee to release the goods for pickup or accepted at delivery.
The date of the pickup which acts as a reference to track the freight.
The details of the item including the number of units being shipper, weight and dimension of the product, along with the nature of the cargo being carried, i.e. dangerous goods, etc.
If the goods are hazardous, the Department of Transportation hazardous material designation is tagged, and it is cited on the bill to follow special rules and requirements when shipping.
The details of the packaging used, such as crates, palates, cartons, pills, drums, etc.
Any special notes or instruction for the carrier
What is the importance/purpose of the bill of lading?
It should act as a piece of evidence for the carriage contract containing the terms and conditions under which the goods transportation is carried out.
It should represent a receipt that endorses that the carrier has received the cargo as per the contract and the goods received are in good condition.
It is a document of title, permitting the sale of goods in transit and the raising of financial credit.
At the end of the process, you should submit the bill of lading along with other documents to the bank to receive the payment. Explore more about the documents involved in the process of international trade through Ximpex. We help enterprises in overcoming challenges related to international trade. Ask your query to our experts now!
Author: Sachin Yadav