What is a Bill of lading?

The Bill of Lading serves three specific purposes:
1. To act as a receipt to the shipper acknowledging that specific goods have been received for shipment;
2. A memorandum of the terms and conditions of the contract between the shipper and the carrier; and
3. May provide evidence of title to the goods.

As a receipt, the bill of lading is generally not very explicit and as a contract it is not in itself complete, in that all of the terms of the agreement between shipper and carrier are not detailed in the document. Even though the shipping contract is always between the shipper and the carrier; the Canadian Bill of Lading Act as given the consignee the same rights and liabilities as the shipper.

Each and every movement of goods from a shipper to a consignee should be covered by a bill of lading. Whatever transport mode or combination of transport modes is used, the bill of lading will confirm the existence of a contract for carriage between the shipper and the carrier.

Ocean Bills of Lading

The ocean bill of lading is primarily a receipt, given by the carrier; it signifies acceptance of the merchandises (cargo); it confirms that the carrier will exercise care, custody and control at all times while that named cargo remains with the carrier.
Simultaneously, the bill of lading serves as evidence of the contract of freight between shipper and carrier, with the terms and conditions applicable to the transport, as shown on the face and back of this document. The shipper is no party to the preparation of the bill of lading nor does he sign it; the bill of lading is issued and signed by the carrier or is agent and handed by him to the shipper usually after the goods have been put on board.
The ocean bill of lading is usually prepared in 2 or more originals and a number of non negotiable copies. An original bill of lading properly endorsed is a negotiable instrument carrying the right to demand and have possession of the goods described in it. Provided they have no notice of any other claim to the goods, or knowledge of any other circumstances which could raise a reasonable suspicion that the clamant is not entitles to the goods, the agents of the vessel are justified in delivering the goods to the first person who presents to them a bill of lading, though that bill of lading is only one of a set.
There are four sections on the face of the bill of lading which are:
1. Identification of the parties, the vessel and the ports of loading and discharge
2. Description of goods – Quantity, marks and numbers and also measurements
3. Freight Charges
4. Signatures
The conditions of the bill of lading are printed on the back side of the form. The Canada Marine Liability Act, 2001 gives the Hague-Visby Rules the force of law for water carriage of goods in, and from Canada. The Hague-Visby Rules dictate the responsibilities, liabilities, and entitlement to certain rights and immunities of carriers and shippers with respect to shipments moving under the jurisdiction of the Act.

Rail Bills of Lading

In Canada, a “clean” railway bill of lading, signed by the carrier without exceptions, is considered by the Courts of Law as a prima facie proof of the delivery of goods as described on the bill of lading, in the condition stated, usually “in apparent good order”.
Besides being a receipt for goods, a rail bill of lading is a contract for carriage of goods that also can carry the title of property to the goods if it is issued as an “Order bill of lading”. In that instance, the surrender of the order bill of lading, properly endorsed, is required before the delivery of goods can be performed.
According to the Canadian Transport Commission, the rail bill of lading should be issued by the carrier; in practice, the shipper normally completes the form. It is interesting to note that a railway bill of lading is signed by the shipper and the carrier while an ocean bill of lading does not require the signature of the shipper.
The face of rail bill of lading shows four sections:
1. Identification of parties, routing and equipment
2. Description of goods – Quantity, marks and numbers and also measurements
3. Freight Charges
4. Signatures

Road Transport Bills of Lading

At present there is only one form of contract of carriage by road. This is the bill of lading. The highway bill of lading is usually issued by the shipper and signed by the carrier.
The Motor Vehicle Transportation Act, 1985 delegates the responsibility for extra provincial truck transportation to the province in such a manner that legislation and regulation applied by the provinces to intra-provincial motor transport applies equally to extra-provincial transport. Every province has an Act which outlines the clauses that must be incorporated in bills of lading issued by public commercial vehicle owners within the jurisdiction of that province.
One must be aware of provincial legislation applicable to its shipments.

Air Transport Bills of Lading

As regards, individual shipments, in international service, an air waybill is required, and must be completed by the shipper. Although there is no statutory requirement, airlines in Canada use an air waybill domestically in the same fashion as for international shipments. Air waybills have the conditions of carriage on their reverse, either explicitly, or by cross reference to other documents, or the legislation itself.
The Carriage by Air Act, 1985 has a requirement for an “Air Waybill” that must be used internationally. However, there are no regulations requiring or describing bills of lading or other documentation such as air waybill for domestic use.

Bills of Lading for Intermodal Transportation

Bills of lading for intermodal shipments have existed for some time. The Canadian railways have issued combination rail and water bills of lading, with language that makes the rail movement subject to rail regulation, and the ocean movement subject to ocean rules and regulation. One should always remember the Canada Transportation Act, 1996, contains no provisions in the area of contracting or bill of lading specific to intermodalism.

Bills of Lading for Intermediate Transportation Agencies

Freight forwarders tend to issue their own bills of lading, reflecting the mode of carriage involved. Some Brokers do not even issue their own bills of lading, leaving it to the shipper to execute a bill of lading with the carrier who actually carries the goods.
There is no Canadian federal legislation which dictates, describes or limits contracts of carriage, bills of lading, or limits of liability to Intermediate Transportation Agencies, which includes transportation brokers and freight forwarders.

Bills of Lading for Smalls Transportation Agencies – Courier, Canada Post

In the “smalls” transportation sector each individual shipment is generally covered by a document, often called a waybill, which has is own terms and conditions, including liability limitations.

In general the “smalls” transportation sector is not categorized separately for regulatory purposes. Canada Post is, however, covered directly by the Canada Post Corporation Act, which defines the manner in which Canada Post may operate.
To the extent Canada Post or courier shipments move via common or private carriers, they are governed by the Canada Transportation Act, 1996, the Motor Vehicle Transportation Act, 1987, and applicable provincial legislation.

One must always remember the bill of lading serves three very important purposes whish are:
1. To act as a receipt to the shipper acknowledging that specific goods have been received for shipment;
2. A memorandum of the terms and conditions of the contract between the shipper and the carrier; and
3. May provide evidence of title to the goods.
And as such, the bill of lading must be very carefully completed and verified before being accomplished and or transmitted to the other party.

For more information on this subject or any other matter related to logistics, customs or transportation please do not hesitate to contact the Institute.

Sources
CITT,  Transportation, Distribution & Logistics : A Canadian Perspective, 2010 Edition
Volume 1 – Transportation Systems 
Volume 2 – Logistics Processes
Transport Canada
http://www.tc.gc.ca/eng/menu.htm