Many companies nowadays make use of freight forwarding services to export and import their merchandise goods and commodities all over the world. But before you jump to the first freight forwarding company you find online, it’s essential that you are familiar with the bill of lading that shippers, carriers, and receivers sign before goods are delivered to its predetermined destination. By doing this, you will be able to protect your goods from theft and ensure that it will be transported to the right place in a timely manner.
What Is the Bill of Lading?
The bill of lading is a legal document that serves as the receipt of your company’s shipment. It requires the signatories of authorized representatives from the shipper, carrier, and receiver. This document contains the details about the goods that are being carried by the freight forwarder—specifically, the type, quantity, and predetermined destination of the shipment. Apart from that, this document is also intended to accompany the shipped items during transportation.
Roles of a Bill of Lading
Before going to the points that you have to consider before signing a bill of lading, it’s important that you are aware of the roles that this document plays during a transaction. With much deeper understanding of its purpose, you won’t think of it as another sheet of paper ever again. To delve into detail, here are the 3 basic roles of a bill of lading:
Evidence of Contract of Carriage
It’s a common misconception among businessmen that the Bill of Lading is a contract between the carrier and shipper. Often times, they are unaware that the contract between the shipper and carrier has been established when the shipper made a booking with the carrier. In reality, the Bill of Lading is the evidence of the contract of carriage made in order to transport the cargo.
Receipt of Goods
As mentioned, the Bill of Lading can also serve as the receipt of the shipper’s shipment. With this document, shippers can get proof that the carrier has received their goods in good condition. That said, the issuance of a Bill of Lading is necessary for both shippers and carriers if they want to ensure a smooth transaction.
Document of Title to the goods
With a Bill of Lading on hand, you will have the right to claim the transported goods and transfer it further to someone else. But in order to do this, it’s important to make sure that the document is issued as a negotiable bill of lading or a straight bill of lading. After that, it’s also necessary to issue this with one or many original bills of lading that have an original signature.
What You Need to Consider Before Signing the Bill of Lading
Now that you’re aware of the bill of lading’s purpose, it’s time for you to learn about the different points you should look into before you sign this document. It’s essential that you’re keen with the details you find in this document to avoid any anomaly upon transaction.
To help you in this matter, here are the points that you have to consider before you sign the bill of lading:
Check If the Correct Stationery Is Used
This may seem like a small detail, but it’s important to be mindful of the type of stationery used for the document. That way you’ll be able to ensure that the details in the stationery are authentic and the transaction will be done smoothly. With that said, it’s essential that you check if the stationery shows the logo of the carrier, the correct details of the shipment, and the terms and conditions of the transaction. Furthermore, it’s also crucial to make sure that the document is not issued using a short form or a blank back bill of lading. By doing this, you will be able to avoid confusions and complications that can affect the transportation of your goods.
Verify The Address Details
As much as customers need to submit the right details for the Bill of Lading, it’s also necessary for carriers to verify the information shown on the document. By doing that, you will be able to get the assurance that freight forwarders will deliver your shipment at the right destination. Although it’s not the responsibility of the carrier to figure out if the address given by the shipper is correct, they should at least check the consignee in the Bill of Lading. This procedure is extremely necessary to avoid delays and complications during the transportation of the shipment.
Cross-Check The Goods and The Details Found on The Document
Before you sign the Bill of Lading for your shipment, it’s important to cross-check the cargo that you ship and the details on the document. See to it that you’re sending out the right goods to your recipients. Moreover, this action is also beneficial for the freight forwarders you hire. Apart from helping them apprehend cunning customers that ship banned goods, this can also help them verify whether goods are special cargo or not. Carriers can set the carrying temperature, the dimensions of its container, etc. to avoid problems during the shipping of items.
Make Sure Cargo Is Received for Shipment
Other than the ones mentioned above, it’s also important for shippers to check whether their carriers received the containers they want to be delivered or not. They will be able to get the peace of mind that their cargo will be transported without problems. Furthermore, it’s also ideal that freight forwarders show their customers proof that their cargo is received. The evidence they show can take the form of a port printout or an online view.
Examine The Protective Clauses
In most cases, protective clauses like “Shipper’s load, stow, and count” or “Said to contain” are pre-printed in the stationery used for the bill of lading. These clauses exist to protect the carrier’s interest when misdeclaration of goods is made. Before you sign the bill of lading, see to it that clauses or notations like “Clean on board” is not given away freely. That way you’ll be able to protect yourself from the legal consequences and complications that misrepresented details on the Bill of Lading can cause.
Non-Inclusion of Commercial Terms
When it comes to the issuance of a Bill of Lading, it’s fundamental to remember that commercial terms such as the cargo value, incoterms, etc. are not included on the document. If the document states the value of the cargo, this becomes an Ad Valorem Bill of Lading. With this, customers can deprive carriers of the right to limit the liability of every package or unit in the event they get damaged. In order for customers to avail of this document, they have to pay an extra cost to the insurers.
Ensure That It Is Issued in The Right Numbers
It’s crucial to keep in mind that negotiable Bills of Lading are normally issued with 3 originals and 6 copies. If it goes beyond that, then something may be off. It’s only necessary that the number of Bills of Lading released is reflected correctly in relevant fields. Furthermore, you should also see to it that these documents are all identical and printed at the same time. That way you’ll enable yourself to ensure that these documents won’t fall into the wrong hands. Aside from that, it’s also important that the bill of lading is stamped with the words “Original” and “Non-negotiable” if there are no pre-printed markings on it.
Confirm If the Payment has been Received
One more thing that you should consider before signing a Bill of Lading is the confirmation whether the payment has been collected or not. This way you’ll be able to ensure that the money due for the services rendered is paid and avoid the long legal battle that this can cause. There have been many cases that carrier agents missed to collect these payments and this has obliged them to pay for it. Furthermore, this action has also led some agents to give customers unauthorized credits which have stopped the release of some cargo.
It is undeniable that by checking these factors, you will be able to save yourself from a lot of trouble that may come your way because of negligence. For this reason, it’s a must to read and verify the details found on your bill of lading before signing it.
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