5 Most Common Mistakes to Avoid on Your Export Bill of Lading
An ocean Bill of Lading (BOL) is a standard document required for exporting goods overseas. You may think it's as simple as filling out a form, but neglecting to pay attention to the details could result in costly consequences. Below, you'll find the top five things that can go wrong when filling out your export Bill of Lading and how to avoid mistakes. International trade finance companies can help you simplify the paperwork necessary to release your cargo when dealing with multiple suppliers.
1. Choosing the Right Form
A Straight BOL is a non-negotiable receipt of goods that acts as evidence of a transaction. If you haven't received your payment in full and you're shipping to a first-time buyer, you should avoid using a Straight BOL.
Instead, use an Order (or Negotiable) BOL, which will require the original document, obtained through full payment, to release the cargo.
Tip: Use a “To Order of Shipper” consignment to specify who should pick up the goods when they arrive at the port of discharge. This option will give you an added layer of protection.
Check your paperwork to make sure documentation is consistent throughout. Any inconsistencies could result in the bank denying your letter of credit.
2. The Description
You'll need to be very specific when describing the packaging and goods you plan to ship abroad. List a description of each package in its smallest measurable unit.
Example: Contents include 5000 cartons of paper cups loaded onto five pallets in 50 boxes with 100 cups per package.
Specify the quantity per package, as well as the type of packaging used, and be as thorough as possible. You can also include any handling instructions such as “fragile” or “this side up.”
3. Listing Hazardous Materials
If you plan to ship hazardous materials, you'll need to label this on a BOL and provide specific details. Additionally, you may be required to show licenses and permits, along with your hazmat contact information. Hazardous materials can include explosives, compressed gasses (aerosol sprays), flammable liquids or solids, oxidizing substances, corrosives, and chemicals. Include the following in your description of these items.
- List the number of containers and the number of individual units within each vessel.
- Provide the weight, size, value, manufacturer's materials, and any other significant characteristics. Include the weight of the entire shipment as well as the weight of each unit.
- List the number of pallets and the type of shipment.
- Include precise handling and safety instructions.
If you include a Letter of Credit, you may have to sign and stamp the BOLs. Sending your BOLs by courier service is always recommended to avoid the legal and financial complications that can arise if your documents are lost.
4. Forgetting the Service Contract Number
Forgetting to add the service contract number is an easy mistake to make, but it could cause your shipment to be re-rated at a higher price. It's critical to have the same number on each copy of your Bill of Lading.
If there are discrepancies in the service contract numbers, the terms of your contract may not apply when it comes to credit conditions and damage claims.
5. Misreading the Terms and Conditions
Before completing your Bill of Lading, it's essential to read the terms and conditions carefully. If you have a contract, these terms will come before those of the BOL. You'll be responsible for the repercussions of your agreements, even if you fail to understand them.
Tip: Bills of Lading will often contain strict provisions regarding the recovery of a shipment and your ability to file a lawsuit.
Note that the carrier's terms and conditions can vary from those of the Bill of Lading, and may or may not be present in the physical contract.
Errors on your Bill of Lading can cause delays in your delivery and payment, result in the denial of claims, and produce costs or penalties that threaten your company's bottom line. Always remember to double-check the accuracy of your information and provide as many details as possible.
An international trade finance company like Tradewind Finance that provides supply chain finance services can give you peace of mind by managing your bookkeeping and shipping records for you. Trade finance experts also provide credit protection that covers the risks of non-payment. Even if you don't qualify for a traditional bank loan, you can still leverage the credit of your client's supply chain, enabling you to compete for larger buyers.