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Understanding the Freight Bill and Bill of Lading

January 31, 2018
5 min read
Less Than Truckload
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Do you keep the bill of lading or the freight bill on file? If there’s a legal dispute, which document do you need? These questions are seemingly complicated. But the matter can be cleared up in just a few minutes.

Keep reading if you’re having trouble understanding the freight bill and bill of lading differences, then contact the team at Amware to get a free shipping quote.

What is a Bill of Lading?

A Bill of Lading is a legal document that names and tallies the items transported in a full or LTL freight shipment. This document, which is issued by the shipping company, is given to the shipping provider who provides a customer’s logistics support.

A Bill of Lading has an abundance of information, which includes the following:

  • Exact weight of shipment
  • Value of shipment
  • Detailed description of all items included in the shipment

This document is a physical representation of the agreement made between a shipping provider and shipping company, which gives an exact account of when, how, and where items will be transferred. In addition, the Bill of Lading is an explicit service level agreement and can be used legally as a title for loan collateral. For this reason, it is imperative that all information on a Bill of Lading be absolutely accurate. A small error in a Bill of Lading document could easily escalate to a legal battle.

What is a Freight Bill?

A freight bill or invoice, on the other hand, is not a legal document or service level agreement. While it is important for a freight bill or invoice to be accurate for financing and accounting purposes, this file isn’t a legal document and isn’t usually used as “evidence” in the event of a dispute between the shipping company and the shipping provider.

This is a document used to clarify points on the Bill of Lading. For example, if a Bill of Lading specifies when and where a shipment will be transferred, the freight bill could identify ancillary charges incurred along that specific route. The bill or invoice can also include stipulations and information, which are not offered in the Bill of Lading, but that which may clarify the official document.

The freight bill is what will likely be examined by accountants, financial advisors, or those looking for a detailed account of ancillary charges incurred by a particular shipment, carrier, or shipping company. While not necessarily an integral part of the shipping process itself, bills and invoices are important for financial documentation.

Why Both Documents are Important

The Bill of Lading and Freight Bill or Invoice work together to provide a big picture of the agreement between a shipping provider and individual shipping company. While the lading document outlines the relationship between the two companies, the bill or invoice gives a detailed account of the financial aspect of the arrangement. Together, the two documents can show the total cost of a shipment with a particular company and the circumstances by which those charges were incurred.

If bills of lading and freight invoicing aren’t a part of your day-to-day, consider engaging the assistance of a third party logistics provider. Amware has been taking care of companies’ shipping and logistics needs for over 60 years. Contact our team today to get a free estimate, or download a free 30-day trial of Amrate, one of the best LTL software platforms in the industry!

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