Shipping Bill vs Bill of Lading: Key Differences Explained

When it comes to international shipping, several documents must be considered. These documents are of great significance, as they contain information about shipments. Some of the documents that stand out for their importance include shipping bills and bills of lading. To a common man, both documents seem similar; however, they are quite distinct in terms of their importance in the logistics chain. Businesses involved in the shipping industry must understand the key differences between Shipping Bill vs Bill of Lading.
Additionally, considering that in June 2022, approximately 2.1% of the 45 million bills were made digitally, it highlights how the shipping industry is transitioning to digital documents, replacing traditional paperwork such as the shipping bill and bills of lading; it thus becomes necessary to be aware of various documents and their usage. In this article, we will understand what is a shipping bill, what is a bill of lading and what are the differences between Shipping Bill and Bill of Lading.
What is a Shipping Bill?
One of the primary documents required by the customs authority during the clearance of goods is the shipping bill. The shipping bill contains detailed information about the goods that are being exported or imported.
Details on a shipping bill include the following aspects:
- The complete description of the good, such as the type, value and the quantity.
- It also contains detailed information about the exporter and importer, including their names, numbers, and addresses.
- It also contains the HS code, which is the Harmonised System code for classifying the goods.
- The shipping bill also has details about the port for loading, as well as the destination. It specifies the exact location from which the goods are being shipped and to which location they are being shipped.
- Shipping bills also include export taxes, which apply to the goods.
What is a Bill of Lading?
The bill of lading is a document that is legalised, and it is a necessary requirement for every shipper. It is issued by the carrier to the shipper, thereby acknowledging the receipt of goods for shipment. A bill of lading serves several purposes.
Purposes served by a bill of lading include:
- It confirms that the carrier had successfully received the shipment of goods.
- A bill of lading also outlines the terms and conditions in detail under which the goods are shipped.
- A bill of lading necessarily contains a document of title. It represents the ownership of the goods. The document title can be used to transfer ownership by endorsement.
Shipping Bill Vs Bill of Lading: Key Differences
When the international shipping industry is considered, the shipping bill is quite different from the bill of lading. The differences between a shipping bill and a bill of lading are explained below in detail:
Aspect | Shipping Bill | Bill of Lading |
Type of document | A shipping bill is a legal document that is required for customs clearance. | On the contrary, a bill of lading is a legal document that is used by shippers or carriers. |
Main Purpose | The primary purpose of a shipping bill is to obtain customs clearance and permission for export. | The primary reason why a bill of lading is issued is for the acknowledgement of goods and terms and conditions of a shipment. |
Ownership | A shipping bill does not represent ownership. | A bill of lading does represent ownership and can also be transferred. |
Authorities involved | Authorities involved in verification or issuance are customs authorities. | The bill of lading is governed by maritime laws and does not involve customs authorities. |
Mode of generation | A shipping bill is generated by authorities such as ICEGATE in India and is generated electronically. | A bill of lading can be generated electronically or manually. It is usually generated by the shipping line. |
Requirement of signatures | A shipping bill may require signatures from customs, CHA, or even the exporter. | A bill of lading mandatorily requires a signature from the carrier. |
Customs requirement | A shipping bill is an essential document needed for customs clearance. | A bill of lading is not needed for customs clearance; however, it is needed for cargo delivery. |
Retention period | The retention period of a shipping bill as per legal or compliance norms is for 5 to 7 years. | A bill of lading must be preserved for dispute handling and record keeping, as it is required for cargo release. |
Amendments | Amendments to a shipping bill can be made before the departure of cargo or before customs clearance. | Amendments to a bill of lading are difficult if the cargo is already shipped out. |
Jurisdiction | A shipping bill falls under export regulations or customs clearance in a country. | A bill of lading falls under maritime or contractual laws. |
Related documents | Documents which are related to a shipping bill include certificate of origin, LUT (for exports), packing list and invoice. | Documents related to a bill of lading include a delivery order, letter of credit or freight invoice. |
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Suggested read- How to check Bill of Entry Status
Conclusion
A bill of lading and a shipping bill are two essential documents in international trade. Hence, it is necessary to understand both the documents and their differences as well. A shipping bill ensures smooth customs clearance, as it serves as a formal permission document, which is essential. On the other hand, a bill of lading is like a contractual pass that is issued by the carrier.
Understanding the nuances of Shipping Bill vs Bill of Lading is necessary not only for compliance but also for seamless and efficient logistics management. It is also required to protect the cargo being shipped, maintain healthy cash flows, and obtain timely clearances. Being unaware of the significance and differences between these documents can lead to monetary penalties, delays, and even the seizure of shipments.
Related read – How to Check Your Shipping Bill Status Online in India?
FAQs About Shipping Bill vs Bill of Lading
Who issues the shipping bill?
A shipping bill is a document generated electronically by either the exporter or their authorised agent. It is usually generated through the ICEGATE portal in India.
Is it necessary to have a shipping bill generated for every export?
Yes, a shipping bill is a necessary document required for customs clearance on all shipments exported from India.
Is a bill of lading similar to a sea waybill?
No, a bill of lading is different from a sea waybill. A bill of lading is a document that essentially represents ownership of goods. On the other hand, a sea waybill is a non-negotiable document and does not serve as a document of title.
Will there be any complications if there is a discrepancy found in a shipping bill?
If there are discrepancies in a shipping bill, it can cause various problems, such as delayed customs clearance processes and potential penalties and fines.