Bill Of Lading

What Does Bill Of Lading Mean?

A legal document between the shipper of a particular good and the carrier detailing the type, quantity and destination
of the good being carried. The bill of lading also serves as a receipt of shipment when the good is delivered to the
predetermined destination. This document must accompany the shipped goods, no matter the form of transportation,
and must be signed by an authorized representative from the carrier, shipper and receiver. 
 

Investopedia explains Bill Of Lading

For example, suppose that a logistics company must transport gasoline from a plant in Texas to a gas station in
Arizona via heavy truck. A plant representative and the driver would sign the bill of lading after the gas is loaded onto
the truck. Once the gasoline is delivered to the gas station in Arizona, the truck driver must have the clerk at the
station sign the document as well.

A bill of lading is a type of document that is used to acknowledge the receipt of a shipment of goods. A transportation
company or carrier issues this document to a shipper. In addition to acknowledging the receipt of goods, a bill of lading
indicates the particular vessel on which the goods have been placed, their intended destination, and the terms for
transporting the shipment to its final destination.

Inland, ocean, through, and air waybill are the names given to bills of lading. An inland bill of lading is a document that
establishes an agreement between a shipper and a transportation company for the transportation of goods. It is used to lay
out the terms for transporting items overland to the exporter's international transportation company. An ocean bill of
lading is a document that provides terms between an exporter and international carrier for the shipment of goods to a
foreign location overseas.

A through bill of lading is a contract that covers the specific terms agreed to by a shipper and carrier. This document
covers the domestic and international transportation of export merchandise. It provides the details of the agreed upon
transportation between specific locations for a set monetary amount. An air waybill is a bill of lading that establishes terms
of flights for the transportation of goods both domestically and internationally. This document also serves as a receipt for
the shipper, proving the carrier's acceptance of the shipper's goods and agreement to carry those goods to a specific airport.

Performa Invoice

A price quotation prepared in the form of an invoice, a Performa invoice, is different from commercial invoices. It is used to create a
sale and is sent in advance of the commercial invoice. The content of a Performa invoice is almost identical to a commercial invoice
and is usually considered a binding agreement although the price might change in advance of the final sale.

For establishment of LC or for advance payment by the importer through his bank, usually banks prefer Performa invoice to a
quotation.

In some countries, the US for example, Customs may accept a Performa invoice (generated by the US importer and not the
exporter) if the required commercial invoice is not available at the time when filing entry documents (entry - the process of filing
documents with US Customs at the port of entry to get goods released from Customs). U.S. Customs may use a pro forma invoice
to assess duty and examine goods. The importer on record however, is required to post a bond and produce a commercial invoice
within 120 days from the date of entry. If the required commercial invoice is needed for statistical purposes the importer has to
produce the commercial invoice within 50 days from the date Customs releases the goods to the importer.
Here are some reasons why pro forma invoices are widely used in international transactions