The bill of lading is perhaps the most crucial shipping document in international trade.
Across borders or continents, it serves as a receipt, title, and proof of contract. Without it, the transfer of goods between a shipper and a carrier would be pretty complicated.
Not every bill of lading is the same. Different ones serve different purposes depending on the shipment’s nature, transport mode, and specific trade agreement.
In this blog post, we will show some of the most common types of bills of lading and understand how they each play a distinct role in the shipping process.
What Is a Bill of Lading?
More than just a document for the shipment of goods, a bill of lading, or BoL, can be issued by a carrier as a legal instrument to acknowledge and show cargo receipt for shipment. It simply does two things: it acts as a contract between the shipper and the carrier and as a document of title that can be transferred or assigned.
This makes it a vital tool in global business, ensuring that goods are delivered to the proper party and assisting in changing ownership.
This bill of lading will ensure that whether importing machinery or exporting consumer goods, both parties involved- the shipper and consignee- are bound to agreed terms.
Klearstack’s Bill of Lading data extraction involves carefully extracting information from the Bill of Lading (BoL) and recording it in the system for further processing. Because this document holds legal significance, it is crucial to enter all details accurately, ensuring there are no errors.
Types of Bills of Lading
1. Straight Bill of Lading
A straight bill of lading is usually issued when the goods are shipped to a consignee. That is, the person or firm receiving the shipment at the time of its issuance cannot be subsequently changed.
A straight or single bill of lading typically is not negotiable; it cannot be transferred to another party. It is used in many situations where the payment was made before or when parties are related and shipping to each other.
All such cases look pretty obvious in transferring ownership, and there’s no necessity for flexibility in whoever can claim goods.
2. Order Bill of Lading
Unlike the straight bill of lading, an order bill of lading is negotiable. This is because ownership of the goods can be transferred from one party to another through endorsement.
This order bill however is flexible mainly when it is used in arrangements of trade which may imply shipping of goods on terms that require payment before delivery. For example, a letter of credit transaction. The recipient is allowed to pass the goods on to another party even before the cargo’s reception; hence, this gives some room for flexibility, making global trade easier.
3. Bearer Bill of Lading
A bearer bill of lading is even more lenient than other bills of lading. It does not mention any named consignee and can be delivered over physically.
Though this is convenient in some instances, it puts the risk as possession of the document effectively equates to ownership of the goods.
Businesses have to weigh the risks, particularly for high-value or sensitive shipments.
4. Clean Bill of Lading
A clean bill of lading is one issued when the goods are delivered to the carrier in apparent good order and condition and without damage or shortage. A clean bill of lading is vital for the hassle-free performance of the transaction-especially when payments are made under letters of credit.
A clean bill of lading is usually demanded by banks to generate funds, thereby establishing that the goods have shipped in conformity with the agreement.
The consignee warrants the cargo arriving in a safe and clean condition. The paper dramatically decreases the possibility of any form of dispute or claim. Thus, it should not be overlooked in international trade transactions.
5. Claused/Dirty Bill of Lading
This is opposite to the Clean Bill of Lading. A clause or dirty bill of lading is issued if goods are damaged or discrepancies are noticed at the time of loading.
The document is crucial as it points out the shortages, damages, or improper packaging, which alerts both the shipper and consignee to any possible defects in the cargo. It is a bill that complicates the transaction and makes it hard to deal with.
Especially in cases where payments depend on letters of credit, banks can freeze the funds until the bill is settled.
The consignee would send off signals requiring extensive examination immediately after reception. This may lead to insurance claims, adjustments in the contract terms and therefore a series of hazards.
6. Through Bill of Lading
A thorough bill of lading is one of the most critical documents in international logistics. Businesses use it where more than one carrier or mode of transport is used to move goods. Regardless of shipping via sea, rail, or road, this bill covers the entire movement of the consignment from the port of origin to the final destination.
Manually extracting information from shipping labels is a tedious, error-prone task that significantly impedes logistics operations. Efficient data extraction from shipping labels is not just a convenience—it’s a necessity for modern logistics operations.
Its most significant advantage is simplicity. It combines all transportation formalities into a single document, thus avoiding an assortment of papers and providing easy transitions between different carriers or modes of transport.
This kind of bill is necessary for international shipping, for cargo usually passes through several hands before it reaches its destination. Without a thorough bill, the shipper would have to issue separate bills of lading to each carrier, making it more complicated and prone to error.
Tracing shipments would be more efficient; thus, tracing goods from origin to destination would provide more visibility and control for the consignee and the shipper on cargo.
7. Multimodal/Combined Transport Bill of Lading
This is similar to the Through Bill of Lading. A multimodal or joint transport bill of lading is an essential document in the business world where shipments are made in more than one mode, say sea, rail, air, or road.
This bill of lading simplifies logistics processes by capturing all the transport modes in one paperless document. It facilitates coordination with other carriers so that goods are transferred and handed over efficiently at every stage of the journey.
It is thus very important for complex businesses to manage long and complex supply chains since it helps reduce the administrative costs associated with handling a vast number of documents. It also makes shipping more accessible and faster by providing better visibility in the shipment from origin to destination.
This document is also of legal benefit since it guards all parties involved in the transportation process, thus allowing for smoother and more reliable international trade and logistics management.
KlearStack: Streamline Your Document Management
KlearStack offers an efficient solution for businesses that manage high volumes of bills of lading and other shipping documents. It is one of the premium Data Extraction & Management software worldwide.
KlearStack software has numerous modern technologies such as Artificial Intelligence, Machine Learning and APIs. The best thing about KlearStack’s AI features is that it is a self-learning tool. Due to this, the software’s accuracy keeps increasing every time you use it.
Due to all these features, many business organizations worldwide, such as IT Cube, BAJAJ Auto Credit, Network and HighRadius, have installed Klearsta in their systems.
If you also want to experience all the latest features for FREE, visit KlearStack.com and Schedule your FREE DEMO right now.
Conclusion
Selection of the bill of lading is critical to easy shipping and legal protection in international trade.
There are several types of bills: while there is a straight or order bill, there is also a bearer and a multimodal option.
Businesses that ship at scale require digitization solutions like KlearStack to streamline document management, run such processes well, and comply with industry regulations.
