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What is a Bill of Lading used for?

Often a question that passes us by, because most people know it's there, and know it's needed, but do they actually know why?

A Bill of Lading is the paperwork that controls a shipment. It is created by the Freight Forwarder at the origin of the shipment, on behalf (and instruction) by the shipper - or factory in other words.

The Bill of Lading is an official and original document that acts as a receipt for payment. So once it's issued, the consignee (the buyer/importer) cannot have the goods until they give this Bill of Lading to freight forwarders office at destination.

How does the importer get their hands on the Bill of Lading?

Easy. Pay the supplier for the goods! The supplier then sends the bill of lading by courier (3x original copies) so they can stamp and lodge them with the freight forwarder or shipping line.

Have you heard of a Telex Released Bill? If not, and you're just starting out - this will be a common phrase but somewhat confusing. For those too young to barely remember the fax machine, then you definitely won't remember a Telex Machine. (Pictured in the Article) but it was an electronic message way before email and faxes that basically transmitted an urgent message. In this case, it would be something along the lines of :-

"Re: Bill of Lading Number xxxxxxxx relating to shipment on board the Westbound Bridge v.102, please accept this Telex Release Message as authorisation to release goods without presentation of an original Bill of lading".

Todays 'Telex Release' has in fact moved on from a Fax Release and again to an email release. It's still known as a 'Telex Release' - I guess the industry liked the name and stuck with it! After all, people hate change! :)

If the supplier and the buyer already have a credit agreement, or know the full payment will be received before the shipment even leaves, then it's common to bypass raising an original bill of lading and simply creating an 'Express Bill of Lading". It's the same document, but with the terms 'Express' stamped on it, informing the freight agents at both sides that goods can also be released without presentation of an original.

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