A bill of lading (B/L) is a legal document used in shipments. It serves as evidence for goods received by a carrier, a contract of carriage outlining transportation terms, and a document of title proving ownership of the cargo. In supply chain finance, the B/L acts as collateral for loans, allowing lenders to hold it until repayment terms are met, which reduces risk and enables funding for exporters before buyers pay. It verifies shipments in letters of credit transactions, ensuring banks release payments only when shipment details match requirements, thus securing B2B trade between the buyer and the seller.
