The Bill of Lading has long played an important role in International Trade.

Initially developed during medieval times when trade between countries and regions began expand, merchants needed a system in order to note the condition of goods at the time of loading, and to certify when and where the goods were loaded.

With the growth of trade and mercantilism, these receipts began to be used as the title of goods, and evolved into the modern Bill of Lading used in trade today.

What Is A Bill Of Lading And What Is Its Purpose?

Today's Bill Of Lading

  • A receipt issued by the carrier that the goods have been loaded on the conveyance.
  • A title of goods to the consignee noted on the Bill of Lading.
  • Because it is considered a title of goods, the Bill of Lading can be used as a negotiable instrument and can be traded much in the same way goods may be.

In quoting Adam Smith, Scottish philosopher and Father of Modern Economics, he said "Every Man lives by exchanging."

The Bill of Lading is how past and modern traders document their exchanges, and it is one of the most important documents in our modern day supply chain.

So Why Is A Bill Of Lading So Important?

The Bill of Lading is the contract of carriage, in other words it embodies the agreement between the carrier and the shipper on movement and delivery of goods.

It is used as a receipt signed by the carrier confirming that the goods match the description listed, and have been received by the carrier in good order.

It can indicate the terms of sale by listing the Incoterms:

  • For instance if the shipping agreement between the consignor and consignee is door to door delivery (Door Move of DDP may be listed).
  • Or if the goods have only been contracted to the carrier to deliver to the port (CIF may be listed).
  • Also, in being a title of goods it represents ownership of the goods.
  • A shipper can hold on to the original Bill of Lading as collateral to ensure the goods are paid for in full and the terms of sale have been met.
  • In these cases the original Bill of Lading is often required in order for the carrier or forwarder to issue a freight release allowing the consignee to physically take possession.
  • When completed in full, the Bill of Lading aids the customs broker in matching up the commercial clearance documents in order to ensure they are able to make an accurate declaration for all goods to Customs on the importer's behalf.
Why Is A Bill Of Lading Important?

What Information Must Be Listed On The Bill Of Lading?

For Customs purposes, some of the important details include:

  • Piece count - meaning the total skids, boxes, and/or cartons
  • The total weight of the goods
  • The description of goods
  • Any marks and numbers
  • The parties involved in the transaction resulting in the move
  • The Bill of Lading identifies the place of pickup. If the carrier is picking up in more than one place a Bill of Lading will need to be issued and signed by the carrier for each pick up.
  • And the Bill of Lading lists the date of loading or export.
  • This is an important piece of information because Customs uses the date of export to determine the exchange rate if the goods are sold in foreign currency.

It is important to accurately represent the goods and the condition of the goods loaded on-board.

What Happens If The Bill Of Lading Is Inaccurate?

If the goods and condition are inaccurately listed it could leave the carrier exposed to claims.

For instance:

If the Bill of Lading indicates that the goods were loaded in good order and condition, but the consignee receives the goods at the point of discharge and the shipment is incomplete or in damaged condition, the consignee is then entitled to make a claim for the missing and/or damaged goods against the carrier.

This is not a good spot for the carrier to be in, which is why it is important that the load and the information listed on the Bill of Lading match.

The Bill of Lading is one of the most vital documents associated with trade, yet due to its abiding presence it is often the document that is the most over looked.

As a contributing member in the supply chain, whether you are a carrier or the consignee, protect yourself and make sure that the Bill of Lading issued is accurately completed.

As the carrier this important step will help to safeguard you against unjust claims, and as the importer or consignee it will help to ensure your get what you paid for.

If you have any questions, or any other cross-border transportation matters, please do not hesitate to contact our Carrier Relations Liaison at 855.542.6644 or via email at carrierhelpdesk@pcb.ca.

Freight Management
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Breanna Leininger
CCS, LCB

While we strive for accuracy in all our communications, as the Importer of Record it is incumbent upon your company to ensure that you are aware of the requirements under the new regulations so that you maintain compliance as always.