What Is a Bill of Lading?

Worker with tablet computer in warehouse

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In simple terms, a bill of lading (BOL) is a document used as evidence that your company (or the carrier) received goods from a shipper. This contract indicates the shipping method and terms for getting the merchandise to its final destination. It outlines the method, dates, and expected transit times. 

Defining the BOL

Think of it as a ticket for your products or goods coming from the manufacturer's warehouse to your retail store. Just like you need a ticket to fly on an airplane, your products need a ticket or in this case, a BOL to get from its original destination to you. It serves as a receipt of the merchandise by you, and it also ensures that what you get is what was shipped to you. 

An Important Document

A BOL often gets ignored or downplayed by retail employees, but it serves as an important document. An employee signing for a delivery but not checking the BOL or paperwork could result in a shipment ending up one case short on the order.

Because the employee signed the form, the company would have no recourse except to eat the loss of the box and its contents. That means inventory shrinkage and loss of profit. 

Carrier Tracking

The BOL also serves as a tracking mechanism for the carrier. A carrier such as UPS or FedEx or other hauler is responsible for the safe delivery of the merchandise listed on the BOL. When signs by the carrier, it means they agree with the contents. When signed by the retailer in the store, it means the employee (your employee) agrees with the contents.

This is an important fact because, in most cases, the store owner is not the one who signs for the shipments. The common practice in retail is for the first person the carrier's driver finds to sign for the goods. Also, use caution with a carrier. They are in a hurry and sometimes even know there is damage or a problem, but if they can get a signature, they are absolved, and it's your problem now. 

This document serves to detail the carrier instructions, package handling, quantities and more. For example, the boxes may need to stay upright or not be stacked more than two high. If the BOL details these things and you notice these instructions were not followed when you receive the merchandise, you have the right to refuse delivery.

For this reason, make sure you always inspect the truck as they unload and not wait until everything gets in the store. Boxes may look okay or intact, but the merchandise inside may have been damaged due to improper handling. You may even want to crack open every box and do a site inspection before signing.

This is not checking in the goods, but making sure the boxes are full, have the right merchandise and the goods show no obvious damage. Most boxes have no helpful information on the outside, especially when receiving private label merchandise

Not to be confused with the invoice or "pick ticket" from the manufacturer, this document is meant to detail the movement. It will not contain information like payment terms or dating. You can find details on the invoice. This document is meant for the tracking of the movement, not the repayment of the debt. 

Reviewing the BOL

It is the retailer's responsibility to read and agree with the bill of lading before signing it. A good practice is to attach this document to the packing slip, invoice copy and/or purchase order as proof of receipt of merchandise.

This creates a paper trail for your records. Too often, the BOL ends up as a piece of trash for the retailer. The carrier takes good care of it because it's his evidence of doing his job correctly so he can get paid, but it offers plenty of useful information to the retailer as well.