Who Issues a Bill of Lading? Guide for Responsible Parties

The bill of lading is a crucial document in the freight process, but a common point of confusion is who issues it and which parties are involved. In this guide, we’ll provide a quick overview of the bill of lading and explain the role of each responsible party in issuing it.

If, however, you’re just here for a quick answer to the main question, I won’t hold you up any longer. The carrier issues the bill of lading when they take control of the goods.

For everyone else who wants to understand that sentence in more detail—as well as the why and the responsible parties—read on!

What Is Bill of Lading?

A bill of lading is a legal document that serves three primary purposes during the shipment of goods:

1. Receipt: Confirms the contents of the shipment.
2. Title of Goods: Establishes ownership of the goods.
3. Contract of Carriage: Outlines the shipment details, such as type, quantity, and destination.

Businesses can create a bill of lading online using digital tools, streamlining the process and reducing paperwork.

The document accompanies the goods throughout the freight process. It provides all the details required to process a shipment.

Read more about bills of lading here.

Who Are the Responsible Parties?

Before we get into more details about bills of lading, there are a couple terms you need to know to identify the responsible parties.

Multiple responsible parties are involved in the bill of lading. The bill must list these parties to be legally binding.

• Shipper: This is the party that is sending the goods.
• Consignee: The consignee is the other end of the freight. It is the person or company that is receiving the goods.
• Carrier: This is the shipping company. The carrier takes the goods from the shipper and carries them to the consignee.
• Notify Party: The notify party is the person that should be informed when the goods reach their destination port.

In addition, a bill of lading is only binding if the responsible parties have signed the document at the correct time.

Who Issues a Bill of Lading?

So, now that you know the names of the different parties, we can talk about who issues a bill of lading. As I stated earlier, the carrier issues a bill of lading.

In this section, I’ll explain this in more detail, talking through what it means to issue a bill of lading and then discussing when the document is issued. I’ll also talk about a subtle difference between land freight and sea freight. Finally, I’ll discuss the requirements around issuing a bill of lading.

What Does It Mean to Issue a Bill of Lading?

So, first up, what does it mean to issue a bill of lading?

Legally, issuing a bill of lading means that the freight or shipping company have taken control of the goods. That is, the goods have been handed from the shipper to the carrier—loaded onto the initial truck, van, ship, or warehouse floor of the freighting process.

At this point, the three purposes of a bill of lading come into effect. The receipt aspect indicates this first transfer of goods. The title aspect states the legal owner of the goods. And the contract aspect states all the relevant details about the goods.

When Is a Bill of Lading Issued?

It’s probably pretty clear by now when a bill of lading is issued. But to put it succinctly, the bill of lading is issued at the time the goods are loaded onto a freighting vessel owned or used by the carrier.

To illustrate this, it’s best to give an example. Imagine the situation where a company in Toronto (the shipper) is sending 300kg of wheat to Santiago in Chile (the consignee) with a company called SendIt (the carrier). A SendIt representative issues the bill of lading when they take control of the goods. Once the goods reach the other end, the port in Santiago, SendIt tells a customs representative from the receiving company (the notify party). They check the goods and sign that they have been received.

There are some caveats to the above example, such as when an NVOCC issues a house bill of lading for intermodal transport. However, by and large, the above process holds.

What’s the Difference for Land and Sea Freight?

In the above example, land or sea freight could be used to transport the goods. It’s important to note two slight differences between the bill of lading in these instances.

There are slight differences in issuing a bill of lading for land versus sea freight:

• Land Freight: Typically involves a single carrier and uses a straightforward bill of lading, making it simpler for domestic and cross-border shipments.

Sea Freight: Often involves an ocean carrier and may require two documents—a master bill of lading and a house bill of lading, especially when intermodal transport is used for cross-border transactions.

Sea freight occurs when the carrier uses waterways as the primary mode of transport. Rail or trucks may also be used during freight. But the main portion of the transport occurs on water.

Bill of Lading Issuing Requirements

There are no worldwide rules or regulations for who can issue a bill of lading. Certain countries, such as the US, have their own regulations stating that issuers must be registered with the relevant authorities.

You can also create a bill of lading online using templates from recognized shipping groups. These templates ensure that your document meets industry standards and includes necessary details such as:

• Responsible parties
• Origin and destination
• Number of packages
• Package contents, weight, and volume

Similarly, international freighting groups and consortiums provide their own templates for valid bills of lading. If you’re shipping with one of these groups, you will have to use their templates and processes. To check that a bill of lading is valid, check the documentation provided by the carrier. Wikipedia also has a list of the largest carriers and how they label their documents.

In terms of what needs to be on a bill of lading, there are a few requirements. A bill of lading must list the responsible parties, origin, destination, number of packages, contents of the packages, and package details such as weight and volume.

Summary

This post explains a few key bill of lading concepts. Specifically, who issues it, and the responsible parties.

A bill of lading is a vital document that acts as a receipt, a title of goods, and a contract of carriage. It is usually prepared and issued by the carrier once they take control of the shipment. To be legally binding, the document must include all key parties: the shipper, consignee, carrier, and notify party.

Although there are no universal regulations for issuing a bill of lading, following industry best practices and using online tools can help ensure your documents are accurate and compliant.

Need help managing your bills of lading? Our yard management solutions can streamline the process and ensure compliance. Contact us today to learn more!

This post was written by Michael de Ridder. Michael has worked in software development, data visualization, data science, research, consulting, and business analysis across healthcare, telecommunications, radio and finance. He enjoys the challenge of combining and utilizing the relationships between different domains and technology. A big fan of travel, Michael is a proponent for the benefits of work-life balance, believing that time away from a subject allows creativity to flourish.