Outlining a BOL’s Purpose and Importance, Risk Involved if Misused and Proactive Solutions to Consider for Risk Prevention
While many shippers understand how critical it is to have a properly completed Bill of Lading (BOL), there are many who may have misinformed information or could be new to the transportation and logistics industry, and therefore, not fully understand its true purpose.
Not using your broker’s BOL can result in some challenging issues. Let’s cover the basics and breakdown the purpose of using a BOL, as well as the consequences for not having one or inaccurately completing a BOL, in addition to some takeaways that can be applied in future shipments and use of a BOL.
WHAT IS A BOL AND WHAT PURPOSE DOES IT SERVE?
A BOL (Bill of Lading) is one of the most critical documents in the shipping process. Without it, the driver cannot move forward with transporting the freight.
The bill of lading is a legal contract and can be used in litigation. This is one of the primary reasons that the bill of lading accuracy and use of it is most critical. A BOL:
provides the driver and the carrier all of the crucial details (such as addresses, billing information, freight description, etc..)
shows and proves (through signatures) what exactly was picked up and delivered (with special delivery instructions outlined)
and the details to invoice accordingly.
A BOL must be completed thoroughly and provided to the carrier, at the time of pick up.
A bill of lading is issued to the carrier in exchange for the receipt of the freight. The issuance of the bill of lading is proof that the carrier has received the goods from the shipper in apparent good order and condition, as handed over by the shipper.
It is important to ensure that, when signing the bill of lading, the description of the goods in the bill of lading is accurate as well as all of the information described in the bullet points outlined above. If the bill of lading is inaccurate, there are repercussions that could occur, such as the most common, which is the product may not arrive to the desired recipient and the freight owner could incur financial loss.
WHAT ARE THE RISKS INVOLVED WHEN MISUSED?
It’s clear that several other consequences can occur when a BOL is not used, or used with missing or inaccurate information.
Exposure to Claims:
if special handling instructions are left out or not clearly outlined, it leaves out a clear direction for how the freight should be handled at pick up, delivery, or even during transit. This could lead to reporting a claim.
For more information about Freight Claims, see our previous blog post: 7 Ways to Prevent + Reduce Freight Claims
Extra charges, such as:
Attempted deliveries for not complying with appointments
“Corrected BOL” charge because the wrong party is being billed or the delivery address needs to be corrected
Missing quote numbers
Wrong service level selected
The driver could have made the delivery successfully to the address listed on the BOL, but if the address was not confirmed, the driver could actually arrive to the wrong address, causing confusion not only for the driver, but for the dock workers accepting the freight
In turn, if the address is incorrect, perhaps the contact number for the driver to call could also be. And if so, and the driver finds himself in this situation, he may not know where to reroute the shipment, causing many other issues, delay, time and money.
Missing or incorrect PO numbers
3 COMMON SOLUTIONS TO ENSURE PROPER USE OF A BOL
Clearly, as you can see from the points above that incorrectly using a bill of lading can mean severe consequences. So how can you ensure you are compliant and protected?
#1 Implement the use of your 3PL’s TMS (transportation management system)
With so many variables, details and risk in moving freight, it is crucial to go digital in order to properly manage, track, maintain visibility and have accurate data and analytics tied to each shipment. Using a TMS takes all the data entry points you must have in a bill of lading and has them as easily filled out guided fills to decrease the chance of error. The TMS also stores the documents, allows you to email them, and print them for ease of use!
#2 Use a Consistent and Standard Bill of Lading
There are many online bills of lading forms you can download from the internet, but once you choose one, make sure you use the same one so you are familiar and so are your consignees. However, if you choose to use your broker’s BOL template, you will not have to worry about choosing a form.
#3 Double Check Before Signing
BEFORE you sign,ensure all information that needs to be in the BOL (as outlined in the first section of this post) is 100% accurate. It’s YOUR signature on a LEGAL document, so it’s VITAL to check!
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