Understanding the Bill of Lading in Shipping


A shipping invoice is a legal document required to accompany products shipped to customers. They’re sometimes called freight invoices or trucking invoices because they serve as receipts for freight shipments. They’re also considered important accounting documents to businesses because they record and provide detailed descriptions of the products in every shipment.

A shipping invoice is also referred to as a bill of lading (sometimes abbreviated BOL). A bill of lading lists the types of products shipped, the corresponding prices for the items, and the shipping cost. It also serves as a receipt, a document of ownership, and a contract between the seller and the shipping company.


What is a Bill of Lading?

This is one of the documents that list all the shipment information, with the inclusion of the type of goods being transported by trucking companies, product name, their quantity, purchase price, and business term. The destination of the goods is also included in the bill of lading. It also serves as an agreement in a contract between the freight carrier and the shipper.

A bill of lading can be served in the place of a shipping receipt when the goods get to their final destination. The shipping invoice template is also shipped along with the goods bought by the buyer, and it has to be signed by the carrier of the goods and the purchaser or receiver of the shipment. Bill of lading is a frequent term used in international trade. Lading is the process of loading a ship with cargo.

A bill of lading serves three purposes, namely:

  • Receipt of shipped goods: From the point of origin, the bill of lading serves as evidence that the products are transferred from the shipper to the carrier in good condition.
  • Document of title: The bill of lading follows the title of ownership. Originally, the seller owned the goods. The responsibility for the care of the products is transferred to the carrier while in transit. And when the buyer receives the products and signs the bill of lading, the ownership of the shipment is fully transferred. The bill of lading will also serve as proof of delivery.
  • A contract between the shipper and the freight carrier: The bill of lading serves as a legally binding contract that lays out the terms and conditions that the shipper and the carrier agreed on regarding the transport of the goods.

What Should You Include in a Bill of Lading?

Every bill of lading must carry the necessary information to avoid delay and prevent confusion with the buyer. These shipping documents must contain details of the items being shipped at their right quantity and unit price. It must also include the value of the items and where the goods will be landed. This is the breakdown of every piece of information to be included in a bill of lading:

Contact Information of the Shipper

The first thing to appear in the bill of lading is the shipper’s information; it includes the invoice number, full company name, logo, business address, and phone number or fax number.

Receiver’s Contact Information

After including the shipper’s information in the invoice, also add that of the receiver. It must include every detail of the receiver with the entire company name or contact person information, logo, business address, and phone number or fax number.

Reference Number Or Purchase Order Number

The purchase order number and other useful figures for referencing the bill of lading must be added to validate the document and to keep a record. The freight shipment may also require these numbers before releasing the items.


A section on the bill of lading allows the inclusion of special notes to the carrier about the shipment taking place.

Pick-Up Date

The date of pick up should be noted on the bill of lading to affirm when the carrier received the shipment. This data is used for tracking a shipment and is needed during invoice reconciliation.

Description of Goods

The goods in the shipment have to be described as they are on the bill of lading or as discussed during product requirements. The billing description includes the items’ quantity, weight, value, and measurement, if applicable.

Type of Packaging

A bill of lading must list the type of materials used in packaging the shipment, maybe cartons, pallets,  crates, or drums.

Freight Class

It is important to tick what class of freight your shipment is; freight classes are up to 18. For proper identification based on factors like value and dimension, state the freight class on the lading bill.

Special Designations

Sometimes, the goods being shipped may need extra care or be handled with ease. Whatever the case is, you must state any special designation. For example, the shipment may be hazardous if brought near some substance—state what has to be done to avoid danger.

Example of Shipping Invoice

A shipping invoice template entails the complete description or details of the shipment, including payment options. It is often more detailed than the commonly generated invoices for the customers. Shipping invoices have full details on the goods and services that the business owner is supposed to know during the shipping.

What is the Difference Between Shipping invoices and Commercial Invoices?

A shipping invoice template basically describes the items shipped from a company to the purchaser, the service charges, and the list of items being shipped. Shipping invoices are sometimes also known as trucking invoices or freight invoices. But, a business owner or a company prefers to call it a shipping invoice to avoid any confusion among the customers.

The commercial invoice is a legal record between a supplier and a company or third-party buyers. To invoice a commercial document, you need to clearly describe the products sold and the amount due to the customers. The commercial invoice is one of the core documents that customs officials use in determining customs duties.

For more useful information, browse the resources guide today!

Related Articles: