What is the Difference Between a Freight Bill and Bill of Lading?

What is the Difference Between a Freight Bill and Bill of Lading?

To capture the most value from custom logistics, it is important you know some terminology from the industry. No matter what kind of enterprise you represent, it is part of a unified network of standards developed by logistics providers to help you get your product from your own facilities to the end user. As a result, you can start to understand more about most fundamental logistics processes simply by knowing certain key terms.

When you are discussing logistical services with experts from a firm like Lojistic, you want to have a strong idea what bottom line value such services can capture. After all, no outside expertise can be justified if the ultimate value is not made clear to all parties. That being the case, a brief glimpse into the logistical lexicon will help the communication process.

One of the most common questions that might arise 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.

About 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 – which controls the actual tanker, cargo ship or container ship that will be used for transport of the physical items – to the customer’s shipping provider; that is, the business that provides overall logistical support to meet the customer's needs.

When composing these bills, it is important to provide weight, value, and description of every item to be shipped. These bills represent the agreement between the shipper and the logistics provider that spells out where items will be collected, where they will be transported, and when they 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.

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.

About Freight Bills

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 lading counterparts, they can also include additional charges, information, or stipulations that serve to clarify the information on the 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.

In effect, these bills are similar to other invoices for professional services your business might collect. Although they may seem less important during the shipping process, they should be retained on the long term. Occasional examination of shipping bills by logistics professionals, such as those at Lojistic, is key to saving millions in cases where human error leads to erroneous charges on your shipping account.