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The bill of lading is a legal contract for transportation services that binds both parties to all provisions contained in it and to the terms and conditions on the back of it.
The Department of Transportation (DOT) regulations for bill of lading requirements are found in 373.101 and apply to for-hire common carriers who do not otherwise have a contract with shippers. This regulation requires that certain information be shown on the bill of lading, including:
There are three distinct functions of a bill of lading:
As a contract, the bill of lading serves the same purpose as any other contract between two parties. The face of the bill of lading provides for the entry of information required for the transportation of the freight. The reverse side usually contains the terms and conditions of carriage.
However, the bill of lading does differ from the ordinary contract in one respect: The terms and conditions, primarily dealing with claims and liability issues, are prescribed by statute. These terms and conditions are part of the bill of lading contract, whether they are printed on the form or not. Participants in the bill of lading contract are assumed to be familiar with these terms and conditions.
Bill of lading retention period
To satisfy the Federal Motor Carrier Safety Administration (FMCSA) requirements, a non-hazardous material bill of lading must be retained by a motor carrier, broker, household goods freight forwarder, or water carrier for a period of one year from the date of the document, or until any claim or dispute involving the transportation of freight based upon the document is resolved (Part 379).
Bill of lading formats
The straight bill of lading has long been the industry standard. However, there are other acceptable formats in use today. The carrier, who is responsible under the regulations for issuing the bill of lading, may choose the format that the company will use. In the case of a shipper issued bill of lading, the driver should be able to recognize the specific provisions their employer requires. Otherwise, the signature on the bill of lading may bind the carrier to unwanted contract provisions.