The Ultimate Guide for Creating and Automating a Bill of Lading

Picture this: Your logistics team is drowning in a sea of Bills of Lading (BOL), manually processing hundreds of these critical shipping documents each week. You're all too familiar with the tedious data entry, the occasional errors that slip through, and the constant pressure to move shipments faster. 

However, what if you could transform this time-consuming process into a streamlined operation that takes minutes instead of hours?

Whether you're a freight forwarder, shipping company, or logistics provider, you know that BOLs are the lifeblood of your supply chain operations. However, in a digital-first world, you can’t rely on manual BOL processing. It is not just inefficient—it's holding your business back from scaling effectively. 

In this comprehensive guide, you'll discover how automation is revolutionizing BOL management and, more importantly, how you can implement it in your operations to achieve up to 90% reduction in processing time.

So, let's jump right into it:-

What is a Bill of Lading?

As such, it is the document of title for all the goods described in the BOL. It also doubles as a shipment receipt and indicates its place of origin and destination. Furthermore, it also contains all the terms and conditions of the transportation of the goods.

Since it is required to move the freight shipment, the Bill of Lading must accompany the shipment at all times, irrespective of the mode of transport. 

Understanding the fundamentals of a Bill of Lading is essential, but knowing how to create one correctly is where the rubber meets the road. Let's walk through the practical steps of generating a BOL that meets all shipping and legal requirements.

How to Make a Bill of Lading?

You can follow a standard template or create a custom BoL. If you were to opt for the latter, make sure that your Bill of Lading contains:

• Contact details of the parties involved - Full name, physical address, telephone number, email ID of the individual or business shipping the goods and the intended consignee designated to receive the goods.
• Order tracking number or purchase order number to track or refer to the shipment.
• Order/Shipment pickup date (for record creation and maintenance purposes).
• A brief description of the goods, number of units, state of the goods, shipment weight, and any other identifying information. 
• Type of packaging used, such as cartons, pallets, drums, etc.
• Special instructions (if any) regarding the shipping and handling of goods by the freight carrier.
• DOT or NMFC freight class.
• In case the shipment contains any dangerous or hazardous material, the BL must clearly state this fact explicitly.

Having mastered the creation process of a Bill of Lading, you might wonder who's actually responsible for issuing this crucial document. Let's clarify the roles and responsibilities involved in BOL issuance.

Who Issues a Bill of Lading?

There are no well-defined global policies on who can issue a bill of lading. The prescribed issuing authority varies from country to country and, in some cases, region to region! 

Typically, the carrier or the shipping company issues the bill of lading. In some cases, the local regulations may dictate that the issuer be registered with relevant organizations or bodies.

BOL issuance signifies that the freight company is in possession of the goods, and the item is now in the shipment process.

While knowing who issues your Bills of Lading is crucial, understanding how to fill them out correctly is equally important. Let's break down the step-by-step process of completing a BOL accurately.

How to Fill Out a Bill of Lading?

The cargo company may issue a BoL to the seller and request them to fill it out before scheduling the pickup. Alternatively, they may fill it out in your presence.

Here are the steps detailing the process of filling out a BL:

• Begin by indicating the date (and time - optional) when you are creating the document.
• Next, input your BOL number and apply a barcode.
• Enter the ID, PO (purchase order), or reference number.
• Print the complete physical address of the shipper along with their contact details. Do the same for the receiver as well.
• Include the names of any third-party players who are paying for the shipment.
• Add the special shipping, handling, or delivery instructions.
• Indicate the guaranteed date and time of delivery, wherever applicable.
• Incorporate whether the shipment is COD (Cash on Delivery) or Prepaid. In the case of COD, indicate the amount to be collected at the time of delivery.
• Create a list of the goods present in the shipment and their respective quantities. 
• Describe the items, the packaging type, unit measurement, NMFC and DOT categorization, class specification, etc.
• Document the dimensions (length, width, height) and weight of the shipment.
• Declare hazardous materials, if any. In case of transporting dangerous goods, indicate an emergency contact number.
• List the value of the goods for tax and customs purposes.
• Get an authorized agent to sign the BoL.

Now that you know how to properly fill out a Bill of Lading, let's flip the script and explore how to read and interpret one effectively. Understanding each element of a BOL will help you catch errors and verify shipment details with confidence.

How to read a Bill of Lading?

Reading a Bill of Lading is simply interpreting and understanding the elements listed by the shipper. While the positioning may vary from one BL to another, here is an overview of the main sections:

1. Shipment ID or Reference Numbers

In most cases, the shipment ID/purchase order or any reference number will be available at the top of the BoL.

2. Shipper Section

This section contains the shipper-specific information, such as the company’s name, physical address, contact details. It may also include additional information such as the scheduled pickup date and time, shipping and handling instructions, packaging details, etc.

3. Consignee Section

The consignee section contains details of the final delivery destination. It also includes the receiver’s details such as their name, address, contact details, delivery schedule, etc.

4. Carrier Details

Wherever 3PL logistics partners are involved, the B/L may also contain carrier information such as the carrier name, intermediate shipment reference number, and any such crucial details.

5. Freight Information

The freight details section adds value to the BOL by covering a wealth of information including (but not limited to):

• Total number of items
• Item details
• Total weight of the shipment
• Height, length, and width of the goods
• Freight class
• Shipping and handling instructions
• Packaging instructions
• Special handling specifications

6. Declared Value

It is the deemed value of the freight. This information is extremely vital for insurance purposes in case the shipment is lost, damaged, or stolen. The settlement or compensation will be in accordance with the declared value.

7. Pricing and Payment

The pricing and payment section primarily deals with the cost of transportation of the shipment from source to destination.

8. Signatures and Dates

All the parties involved in the shipping process must sign and acknowledge their role in collecting, handling, transporting, and delivering the goods. Such a consideration introduces transparency and accountability.

You've learned to read BOLs like a pro—now let's explore how OCR technology is revolutionizing this process, making document handling smarter and faster.

The role of OCR in bills of lading

Processing of the BL has been a manual task in the logistics industry for decades. OCR now plays a major role in improving the process by: 

Digitizing and organizing bills of lading

OCR allows carriers to go paperless by making the BL digital. OCR converts physical or scanned bills into digital text by scanning and reading the documents. This information can be integrated into CRMs, ERPs, or other logistics applications. Having digitized copies and the data entered into the system makes it possible to access information instantly. 

Extract relevant information

The OCR bills of lading API can extract all the necessary information. Personnel on the ground can digitally access shipment details, dates, addresses, and other crucial data. The OCR software identifies and captures this information accurately so every detail is correctly recorded. 

Automate repetitive tasks 

An OCR system does an outstanding job of automating repetitive tasks such as data entry and document sorting. Instead of manually entering data from each BL, the software can automatically process hundreds of documents in a fraction of the time. With automation, businesses can save significant time and costs and allow employees to focus on other crucial tasks. 

Ensuring regulatory compliance

Accurate processing and storing of bills of lading is important for meeting industry regulations and standards. OCR software can minimize the risk of human error and take the bulk of the load. It can then ensure that all necessary information is captured and stored correctly. 

Given this crucial role, let's examine the significant benefits of implementing OCR technology in bill-of-lading processing in the next section of the blog.

Benefits of OCR in bills of lading 

OCR in bills of lading has numerous benefits, such as:

1. Enhanced efficiency

OCR can significantly boost efficiency across different logistics processes. By automating reading and organizing documents, employees can focus their efforts on more value-added tasks. More importantly, the software can process documents much faster than people can. Businesses using OCR in bills of lading will also see fewer entry errors. Overall, this translates into an efficient process. 

2. Cost savings

Manual data entry and document handling incur significant costs as more people are needed. Automating the bill of lading reduces the workforce necessary for the task and saves labor costs. The efficiency of automated systems also means there is less need for rework and time savings. Digital storage of BL also adds to cost savings regarding materials and space. 

3. Improved compliance

Meeting compliance and regulatory requirements is crucial for businesses to avoid penalties and maintain standards. OCR ensures that bills of lading are processed and stored accurately and enables businesses to meet regulatory requirements. The easily accessible records also help companies to stick to industry standards and legal obligations. 

4. Accelerated decision-making

Immediate access to information is crucial in making critical business decisions. With OCR, important information from bills of lading is quickly digitized and made accessible to all stakeholders. This enables teams to make faster decisions regarding shipments, routes, and negotiations with vendors and regulators. Businesses can also swiftly address problems and avoid delays and losses. 

5. Streamlined claims processing

Accuracy of information and data is at the heart of claims processing. OCR software simplifies the process by ensuring that all relevant data from BL is accurately captured and readily available. Without any confusion regarding the accuracy of the information, claim resolution becomes streamlined and faster. The net effect is higher customer satisfaction and a good business reputation. 

While OCR offers substantial advantages, it's crucial to acknowledge and address the challenges that may arise during implementation. Let’s evaluate them in the next section.

Challenges of using OCR in bills of lading

Bill of Lading (BoL) OCR, while offering significant benefits, faces several challenges that can impact its accuracy and effectiveness. Here's a breakdown of the key hurdles:

1. Document quality issues

Poor document quality is a major challenge to bills of lading OCR automation. Bills of lading may be scanned from crumpled, faded, or damaged paper documents. This can result in poor-quality and unclear images that OCR systems struggle to read accurately. Smudges, stains, and handwritten notes can further complicate the extraction process. The challenge can be mitigated with advanced pre-processing and algorithms. 

2. Diverse document formats

Bills of lading come in various formats and layouts depending on the type of industry and even carriers. The variation can pose a challenge for OCR systems trained only on structured documents. Each document may have different structures, fonts, and data placement, which requires the OCR software to adapt to multiple templates. Advanced machine capabilities, which enable OCR software to read unstructured documents, are necessary to solve this challenge. 

3. Security concerns

Handling bills of lading containing sensitive information raises security concerns. Data extracted often contains confidential details about shipments, clients, and financial transactions. Therefore, this information must be protected from unauthorized access and data breaches. OCR software that offers robust safety features and strict access control can mitigate this challenge. Additionally, strong security protocols and compliance certifications are necessary to boost the confidence of vendors and carriers. 

4. Integration challenges

Businesses often use multiple software applications, such as CRMs, ERPs, and inventory management systems. Since there are diverse service providers, it can be challenging to interact seamlessly with the OCR solution. Custom bills of lading OCR API can enable integration with different solutions and ensure smooth data flow without adding complexity. 

5. OCR accuracy

Although OCR software does an outstanding job of extracting data accurately, it can still have difficulty with certain fonts, languages, and document structures. Errors in data extraction can cost businesses a lot of money. Mitigating the challenge requires better training of models, deployment of custom models for challenging applications, and human oversight. A user's involvement in overseeing problem areas can ensure high accuracy. 

How to automate Bill of Lading processing?

Once you have nailed the basics, creating a foolproof bill of lading becomes a piece of cake. And since the subsequent actions are primarily routine and recurring in nature, automating this process could be a smart move. 

Enter: DocSumo.

DocSumo makes tracking, tracing, and archiving your bills of lading simpler. 

With its AI-powered engine, you can create, store, or access BL documents in a span of a few minutes. DocSumo’s ability to unify and standardize the process addresses any issues or discrepancies caused by the involvement of multiple players. It also mitigates any expensive dispatch and invoicing errors.

Schedule your demo and see why Docsumo is the industry leader .