Bills of Lading and Sea Waybills: what you need to know about basic ocean cargo documentation
Bills of Lading and Sea Waybills are the two main documents used in the transport of goods by sea, both domestic and abroad. It can be confusing to apply and use these documents correctly; however, each one performs very specific functions.
A Sea Waybill is evidence of a contract of carriage and receipt of the goods being transported; whereas a Bill of Lading acts as the contract of carriage and receipt of the goods, while also serving as a document of title affording ownership.
Below we will discuss some of the key differences between these two documents:
Bill of Lading (B/L)
The international transport of goods by sea is regulated by the Hamburg Rules of 1978, created by UNCITRAL (U.N. Commission on International Trade Law). In order to transport goods by sea, the Hamburg Rules dictate the need to provide information about the transaction in a document called the “Bill of Lading (B/L).”
A B/L can be issued by the carrier, transport agent, shipping company, vessel operator, and even the captain of the ship.
Important functions of the B/L
- Receipt of the goods sent on a vessel and their apparent condition
- Evidence of the contract of carriage
- Document of title to the goods, transferring ownership to the holder, who may collect the goods from the carrier at the destination port.
- It is a negotiable instrument accepted by banking institutions
Names that appear in a B/L
For a B/L to be valid, it must include the following information:
- Name and address of shipper.
- Name and address of carrier.
- Name and nationality of vessel.
- Loading and unloading port/final destination (“orders”).
- Name and address of the person or entity to be notified upon the goods’ arrival
- Nature and condition of the goods (number of packages or pieces, quantity or weight, and identifying marks)
- Apparent condition of the cargo
- INCOTERMS as per agreement and place of payment (If already paid, it will state “pre-paid” and if not, it will read “collect”)
- Number of original copies submitted
- Place, date, and signature of either the carrier, shipping company, vessel operator or captain of the ship
However, in some cases it is not necessary to have a document of title supporting the ownership of goods; in these cases, the Bill of Lading may be replaced by another type of document, such as the Sea Waybill.
Sea Waybill (SWB)
Also known as “Express Release Bill of Lading” or “Straight Bill of Lading,” a Sea Waybill is used when the shipper decides to release ownership of the cargo immediately. This means that the goods can be delivered to the person identified in the document, and they will simply have to verify their identity instead of presenting a document to claim the freight.
It is important to mention that a Sea Waybill only plays an evidential function and does not give title to the goods (nonnegotiable).
When the shipment is loaded, the shipper receives a SWB simply as a reference. In this case, neither the shipper nor the importer are obligated to submit any additional documents to the carrier, and therefore the cargo is released as soon as it is available at the port.
When is it better to use a Sea Waybill?
- When there is a high degree of trust between the shipper and the consignee.
- When the goods will not be traded or sold during transport.
- When the goods are paid for with an approved line of credit.
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