Which statement best describes the function of the bill of lading?

• A. It is a payment instrument.
• B. It is a document evidencing carriage and title to goods.
• C. It is a supplier's invoice.
• D. It is a packing list.

Answer: (B)

The bill of lading is a document that formalizes the shipment process by capturing the carrier’s agreement to transport the goods and the terms of that transport, while also serving as a receipt for the goods when they are loaded. It is also a document of title, meaning whoever holds or is endorsed on the bill can claim the goods or transfer ownership, which is essential in trade finance and when goods move through different parties. This dual role—evidence of carriage and proof of ownership—is why the bill of lading is so central in international shipping. It’s not a payment instrument, nor is it simply a supplier’s invoice or a packing list; those documents have different purposes (payment request and contents listing, respectively).