Packing Slip vs. Bill of Lading: Learn How to Use Both

While both a packing slip and a bill of lading travel with your shipment, mixing them up can lead to costly consequences, disputes, and customs delays. Documents during delivery can cost a lot: research shows that simply digitizing a bill of lading alone could save $6.5 billion globally, and this is just a minor readjustment. Businesses frequently use a bill of lading and a packing slip. In addition to knowing what each of these is, entrepreneurs can minimize delivery risks by learning how to use these documents. This article dives into the packing list vs. the bill of lading divide and provides a few tips to ensure your delivery goes smoothly.

A bill of lading is a document issued by a carrier to a shipper that details the type, quantity, and destination of the cargo being carried. Often used for already onboarded vendors who are in agreement with a company, it is also used to deliver a specific sold item to a buyer. It usually accompanies the freight from the moment it leaves the dock until it’s signed for at its final destination. Under the Uniform Commercial Code (UCC), the bill of lading has three key purposes:

Having a bill of lading and making sure it fits all the right criteria provides you with a set of advantages:

A packing slip is a document that verifies the contents of a shipment and is attached to the outside of a shipping container. It contains a detailed itemization of everything included in the specific package and is signed only by the recipient. It doesn’t have a legal value, but it is important for inventory management and practical purposes. A packing list also supports international shipment documentation by giving customs inspectors a clear, box-by-box breakdown of the entire cargo. 

Using this document:

A packing slip can be a useful addition for goods returns. It proves what items were actually provided, making it possible to issue a return if necessary. 

Learn when and how to use both documents to ensure your cargo safety.

Use a packing list when you need individual item tracking or customs verification. Although it does not have legal weight, you essentially need it every time you have a physical shipment. 

A bill of lading is often critical in any commercial freight network, where you place your goods in the custody of third parties. Use it as a legal guarantee that you’ll have your items delivered as you have packed them. 

These documents aren’t mutually exclusive. Just as there are cases when you need one more than the other, some scenarios call for both of them in your delivery.

Inappropriate documentation causes severe financial losses for businesses during the delivery. For example, mid-market shippers lose between 3% and 7% annually due to freight billing errors. Your bill of lading is an instrument that can safeguard you against many mistakes, but it needs to be filled out correctly.

These are the standards and institutions affecting your documents and delivery.

Although your paperwork can help ensure the safe delivery of your goods, much also depends on your self-management and organization.

A lot of things get mixed up during storage and preparation for the delivery. For example, warehouses can accidentally place the newest items near those already ready for shipping. Create a physical distinction for each delivery stage: pre-check, staged for loading, and inbound receiving. If possible, make a barrier between the sections to prevent your workers from picking up the wrong package. 

Slip-ups happen. If a picker encounters an out-of-stock item and quietly substitutes another without updating the system, the weight calculation on a bill of lading can differ. To prevent this and similar examples, use both a packing slip and a bill of lading. Establish a strict operational rule: don’t give the driver the bill of lading until you’ve actually verified the physical cargo matches the packing slip.

Your team may struggle with determining how to handle different documents. Provide them with proper training so they understand the legal and operational standards that govern their decision-making and actions. To simplify learning, incorporate an AI document summary tool to help your employees understand complex legal language.

Inventory control accounts for the biggest warehouse challenge, with more than 62% of respondents considering it a severe problem. Modernizing that inventory control begins by upgrading to a digital recording system. Ideally, each record for a high-value delivery should include a packing slip, a bill of lading, and the original customer purchase order. While it can be simplified or re-adjusted based on what you’re actually delivering, turn the tide toward modernization.