FREIGHT BILL OR BILL OF LADING: KNOWING THE DIFFERENCE IS KEY TO EFFECTIVE LOGISTICS

1. FREIGHT BILL OR BILL OF
LADING: KNOWING THE
DIFFERENCE IS KEY TO
EFFECTIVE LOGISTICS
LOGICAL MARITIME SERVICES LIMITED
www.logicalmaritimegh.com

2. Freight Bill or Bills of Lading? What's the
Difference?
One of the most common questions that arise when we first bring
on a customer has to do with the freight bill and bill of lading.
While these documents are similar in most contexts, there are key
differences between the bill of lading and the freight bill. Failing
to know these can lead to misunderstandings that might
undermine an otherwise mutually beneficial business relationship
not only between your third party logistics provider, but also with
carriers, suppliers, and ultimately customers.

3. What are Bills of Lading?
Bills of lading are official documents, which may be admissible in
a court of law, that precisely, name and enumerate the items to
be transported during a freight shipment. They are issued by the
shipping company (the carrier hauling your freight) or by your 3PL
that provides overall logistical support to meet the customer’s
needs.

4. What are Bills of Lading?
When composing these bills of lading, it is important to provide
weight, value, and description of every item to be shipped. These
bills (remember NOT the freight bill by bills of lading) represent
the agreement between the shipper and the logistics provider or
carrier that spells out where the freight will be collected, where it
will be transported, and when the freight will arrive. Traditionally,
this bill also serves as title to the goods thus described; in other
words, it can serve as an official description of loan collateral.

5. What are Bills of Lading?
In effect, this bill makes explicit the “service level agreement” that
exists between a freight company and its customer. When
determining whether a company has met its obligations, this bill
is often the paramount source. For that reason, both customers
and freight companies have a vested interest in ensuring these
bills are accurate. Disputes can be avoided when all parties
involved take steps to ensure these documents have been
thoroughly checked over.

6. What is a Freight Bill?
Freight bills or freight invoices are different from bills of lading in
that they do not serve as a key piece of “evidence” in any dispute.
While freight bills should match up closely to their bills of lading
counterparts, they can also include additional charges (such as
accessorial), information, or stipulations that serve to clarify the
information on the bill of lading document. When you are looking
for an “invoice” to examine as part of a focused logistics
improvement effort, you will generally use this bill rather than the
original lading documents).

7. What is a Freight Bill?
Examples of using the freight bill for improvement is during
the freight audit process. If you are using a third party logistics
provider, included in the agreement should be a freight audit and
freight payment service (also known as freight accounting

8. What is a Freight Bill?
In effect, these freight bills are similar to other invoices for
professional services your business might collect. Although they
may seem less important during the freight shipping process, they
should be retained long term. If you are using a transportation
management system provided by the 3PL or some other
company, have a requirement that these freight bills and bills of
lading are stored and available electronically.