In a previous post I talked about the various freight optimization techniques available in logistics to optimize freight costs. We received some good feedback and want to expand the conversation to discuss bill of lading documents and the leading practice for the use/creation of bill of ladings in most scenarios you will encounter in domestic transportation. A quick note, these are the typical uses but your specific carrier or carrier agreement will dictate whether these scenarios for example the master bill of ladings will be honored for freight rating and billing purposes.
For now I’ll avoid touching on bill of ladings related to ocean / air / multi modal scenarios to simplify the discussion I but may cover those in a future post.
Straight order shipment
The simplest and most common scenario is the straight shipment, even this scenario can be handled in several ways but I’ll address the two most common.
- A customer order(s) is shipped under 1 bill of lading generated from a single delivery document.
- A customer order(s) is shipped under 1 bill of lading generated from a single delivery under a single shipment document. This approach makes sense if your normal process uses the shipment document as the key shipping document and you want to avoid two separate process paths (decision points).
- Individual Bill of lading is created
Consolidation shipments
Consolidated Individual Bill of Lading
In straight shipment consolidation we have multiple deliveries shipping to one location, we combine these on a shipment document internally to manage transportation. In this example I have multiple deliveries being combined into 1 shipment document which is used to generate the individual bill of lading.
- Individual Bill of lading is created
Purchase order driven master bill of lading
From a process standpoint this is no different then handling a consolidated individual bill of lading as above but is necessary to support customer systems that require a separate bill of lading and invoice for each customer purchase order.
- Master billing of lading is created for freight rating and billing purposes.
- Individual child bill of ladings are created for each delivery
Pool distribution master bill of lading
The master bill of lading is used when shipping through a pool point or consolidator. In this scenario we combine multiple customer deliveries into one shipment with multiple legs. We create a master bill of lading and tie individual child bill of ladings to it. The master bill of lading is used for freight rating and billing purposes the pool point or consolidator uses the individual bill of ladings to deliver the shipments to each consignee.
- Master billing of lading is created for freight rating and billing purposes.
- Individual Child bill of ladings are created for each delivery
Multi-stop consolidation
Our multi-stop scenario entails a truckload shipment consolidation with multiple stops.
- Master billing of lading is created for freight rating and billing purposes.
- Individual child bill of ladings are created for each stage (1 or multiple deliveries)
Well that wraps up our discussion, I would like to hear from you, do you have any unique scenarios you want to share?
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Phillip Avelar is a Managing partner at Advanced Solutions, based in Chicago. He works with SAP enterprises to optimize their supply chains, increase productivity and challenges the status quo. He shares his passion for solving customers problems in his blog posts, industry articles and conference talks.