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Bill of Lading Basics for International Shippers

Posted by Ascent Global Logistics on Jun 8, 2017 9:16:09 AM

The Bill of Lading (BOL), along with the commercial invoice and packing list, play a crucial role in the international shipping process. Its importance is not always understood when INCOterms and terms of sale are being discussed between the buyer and the seller. However, the BOL can impact the timely release of cargo upon arrival to the destination country. 

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Essentially, the Bill of Lading serves as a contract between the owner of the goods and the carrier handling the transportation of the goods. 

Specific BOL's are used depending on the mode of transportation. Within the world of international freight forwarding, an Ocean Bill of Lading (BOL) is used for ocean cargo while Air Waybills (AWB) are used for air cargo. 

What is the importance of the BOL?

  • It is used as a receipt for the goods shipped.
  • It is evidence of a contract for carriage.
  • It serves as a document of title. 

How are international BOL's completed?

The exporter or freight forwarder will send the carrier (ocean or air) a Shipper's Letter of Instruction (SLI). The SLI details the parties involved, ship dates, vessel and voyage information or flight information, descriptions of the commodities and the respective classifications, weights, piece and pallet counts, shipment value, delivery instructions, tax IDs and other important shipment information.  

BOL's are also completed according to the consignee's specific country requirements. For example, in Latin America, charges must appear on the BOL for customs purposes. Additionally, in Argentina, the consignee's tax ID (CUIT) must be present on the BOL. Failure to comply with specific country requirements will likely result in shipment delays and additional charges may be assessed. 

How is the BOL surrendered to the consignee? 

Sometimes original BOL's are required for the shipment release in the destination country. In this case, the exporter will overnight the original BOL to the consignee after the vessel sails. Originals are usually sent with the commercial documents to the consignee via courier. This allows the consignee to prepare the necessary documentation for the customs clearance. Furthermore, the shipper might consign the BOL to a bank, instead of the importer, depending on the terms of sale. In this case the originals must be endorsed by the bank prior to being endorsed by the importer. When proper endorsements have been secured, the original BOL will be surrendered to the steamship line or the freight forwarder for cargo release.  

The option for a telex release BOL can speed this process up. In this case, the shipper advises the carrier's origin office when to surrender the BOL. The origin carrier office then relays this message to the destination carrier office. When this occurs, the freight is released to the consignee without an original BOL being required at destination. 

The most common way a BOL is surrendered to a consignee is through an express release BOL, which is also known as the Seaway Bill. This is the quickest way to surrender the shipment to the consignee. Originals are not required in this case and the BOL will be released upon arrival at destination (assuming all carrier charges are paid or the shipper has credit terms with the carrier). 

These three variations provide the importer or exporter with the degree of protection they choose, based on the business relationship between the two parties. As an exporter, cargo is more secure when electing for originals to be required for cargo release. As the importer, the express release BOL is preferred as the freight is released as soon as it is available at the destination port. 

The international transportation and trade experts at Ascent Global Logistics assist clients in managing complex global logistics needs.  Contact us today to learn more about our International Freight Forwarding solutions

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Topics: International Freight Forwarding, Bill of Lading Best Practices