What’s a bill of lading in trucking? Learn all about it here.
Trucking is an act of commerce between two different entities. In many cases, it is an economic interaction between two businesses. One business buys goods from another company and the second ships the ordered products to the first via in-house or outsourced trucks. Just like when individuals make a purchase from a vendor, there needs to be an account of the transaction. That’s where the bill of lading in trucking comes in.
What Is a Bill of Lading?
The bill of lading is a receipt of goods ordered, shipped, and received. It is evidence that the three parties of buyer, shipper, and seller have endorsed the purchase and that the shipment has arrived safely. It is like a lock with three keys held by three different people, with those keys being their signatures. Once all three entities have signed the receipt, the shipment and the order is complete. These three signatures confirm that the product, its quantity, and its destination are accurate.
Bill of Lading Types
There are three types of bills of lading.
- Straight bill of lading: A straight bill of lading is a receipt that confirms that the carrier received payment in advance.
- Order bill of lading: An order bill of lading is for instances when the carrier receives payment after delivering the goods.
- Endorsed bill of lading: The endorsed bill of lading is a document confirming a title transfer of goods.
Bill of Lading Example
An example of a bill of lading in action is if a restaurant orders a bulk delivery of oranges from an orange orchard. The orchard company outsources a trucking company to deliver the ordered amount to the restaurant’s location. The company manager and the trucker sign the bill of lading, and the trucker takes the load to the restaurant. Once the restaurant manager reviews the order, he signs the bill of lading, confirming the order is accurate and complete.
Why Is the Bill of Lading Important?
If there is any question about whether the order was confirmed, one only has to refer back to the bill of lading to know the who, what, when, and how. It details what is being transported, the terms and conditions of its transportation, when it was shipped, and who was involved. Ultimately, it confirms the facts and who endorsed the transaction and helps prevent theft.
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