What is a Bill of Lading?

bill of lading
Getty Images

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. 

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. 

A BOL often gets ignored or "downplayed" by retail employees, but it really is an important document. I remember an employee signing for a delivery once wan not checking the BOL or paperwork and we ended up one case short on the order. Because the employee had signed the form, there was nothing I could do - except eat the loss of the box and its contents. And that is inventory shrinkage and loss of profit. 

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.

And then 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 get a signature, they are absolved; 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. In our stores, we often cracked ever box and did a sight inspection before signing. We were not checking in the goods, but we were making sure the boxes were full, had the right merchandise and there was no obvious damage. I heard of a retailer once that got a box full of packing paper. Most boxes are generic on the outside as well. Especially when we are 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. Those details are found on the invoice. This document is meant for the tracking of the movement, not the repayment of the debt. 

It is the retailers 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 its his evidence of doing the job correctly so he can get paid. But the retailer needs to take it serious as well.