Approximately 80% of global goods are transported by sea, with over 600 million containers in use at any given moment. In this massive flow of trade, the bill of lading serves as part receipt, part contract, and part proof of ownership.
Because it ties shipments from the shipper to the final consignee, bill of lading tracking gives every stakeholder visibility into the location of their goods and who is responsible for them at every step. But what exactly is a bill of lading, and why does it matter in the modern supply chain?
What is a Bill of Lading?
A bill of lading (B/L) is a legal document issued by a carrier to acknowledge receipt of goods for shipment. It serves as:
- A receipt for the cargo, verifying that the shipping company has received the specific good in the stated condition
- A contract between the shipper and the carrier, stipulating the terms of transportation
- Proof of ownership, allowing the final consignee to claim the cargo at delivery
In maritime law, the bill of lading is legally binding and is usually required to settle disputes and facilitate payments in international trade.
How Does Bill of Lading Tracking Work?
Every B/L issued by a carrier has a reference code that every stakeholder can use to monitor shipment progress and details. Tracking usually works through the carrier’s online system or integrated logistics platform.
Every stakeholder can enter the B/L reference code on the carrier’s platform and view the cargo’s location and status, such as whether it has cleared customs. Such transportation visibility reduces the risk of disputes and helps coordinate downstream logistics, such as trucking or warehousing.
Yet, despite the digital revolution, only 5% of the 50 million bills of lading are electronic. McKinsey reports that electronic bill of lading tracking could save $6.5 billion in direct costs and enable $40 billion in global trade.
Why is Bill of Lading Tracking Important in Modern Supply Chains?
Businesses track vessels by bill of lading to get real-time visibility into where goods are and who’s responsible for them. In supply chains where delays and bottlenecks can be costly, asset tracking provides visibility that helps reduce disputes and improve planning.
But to serve its purpose as a receipt, contract, and proof of ownership, a bill of lading must indicate:
- Cargo description
- The parties involved (shipper, consignee, notify party)
- Cargo weight, package count, quantity
- Terms of payment
- Port of loading
- Port of discharge
- Bill type
The carrier will issue this document to the shipper to provide a reference point for everyone involved.
What Are the Functions of a Bill of Lading?
While a bill of lading functions as evidence of contract, receipt for goods, and title of goods, you shouldn’t confuse it with a shipping bill. A shipping bill is a mandatory customs document that exporters fill out to secure clearance for goods leaving the country. It’s typically a declaration used for compliance and taxation.
Making a Bill of Lading
To create a bill of lading, include key shipment details that identify the parties involved and the cargo being moved:
- Name and address of the shipper
- Name and address of the consignee
- Details of the carrier
- Description of goods (type, weight, dimensions, quantity)
- Packaging details (e.g., cartons, pallets, crates)
- Port of loading and port of discharge
- Vessel or transport details
- B/L number (unique identifier)
- Date of issue and signatures
Types of Bill of Lading
You may encounter different types of bills of lading, depending on how you want ownership and delivery of your goods to be handled.
Straight Bill of Lading
Carriers issue the Straight Bill of Lading when you’re shipping to a specific consignee. This document is non-negotiable, and cargo ownership cannot be transferred to someone else. It’s suitable when you’re shipping to a buyer who has already paid for the goods or for transactions that don’t require payment, such as returns.
Order Bill of Lading
An order bill of lading is a negotiable document that allows ownership to be transferred by endorsement. It’s ideal if the buyer hasn’t paid in full or if a bank or other financial institution is financing the shipment, since the seller can retain control until payment or other conditions are met.
Bearer Bill of Lading
A bearer bill of lading is a shipping document that transfers cargo ownership simply by handing it over. Whoever holds the document can claim the goods, providing speed and convenience. However, it carries a significant risk if lost or stolen.
How are Bills of Lading Managed?
Managing bills of lading requires a mix of accuracy and compliance.
- Verify details on every bill of lading to ensure accuracy
- Use electronic bills of lading when possible to reduce paperwork and increase convenience
- Establish a clear audit trail through an electronic system that logs updates and changes
- Conduct regular audits to catch errors or irregularities early
- Implement dual authorization for high-value or sensitive transactions to reduce fraud risk
- Train employees on the importance of bills of lading and how to detect fraud
- Retain bills of lading and related documents for at least five years to meet compliance requirements and support potential audits
Challenges with Bill of Lading Tracking
While tracking the bill of lading is critical in the modern supply chain, it comes with several challenges:
| Challenge | Impact |
| Data Errors | Mistakes in shipment details or documentation can lead to delays and disputes. |
| Limited Visibility | Traditional paper-based bills of lading often make it hard to get real-time updates on shipments. |
| Fraud Risk | Forged or tampered documents remain a concern, especially when goods change hands frequently. |
| Lack of Standardization | Different carriers and regions may follow different practices, complicating global trade. |
Advances in digital tools are addressing many of these issues. For example, electronic bills of lading integrated with a transportation management system (TMS) provide real-time visibility and create a digital audit trail to reduce fraud risks. Features like automated verification and multilingual support help overcome localization challenges.
Get Full Transportation Visibility with Surgere
Leading organizations are already taking advantage of technology to improve visibility into their shipments and reduce costly inefficiencies. At Surgere, we combine deep industry expertise with cutting-edge IoT tech to deliver precise, real-time updates of your container movements.
We can help you integrate electronic bills of lading with your transportation management system to create a more secure and transparent flow of information from origin to destination. You can then always know where your goods are and who has control of them. Contact us today and discover how Surgere can give you complete transportation visibility.
