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Trade Advice

Sea Waybill

05/05/2022 9 Min Read

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International trade has exponentially increased over the years. This rise in trade brings to light the importance of precise documentation associated with cross-border trade and logistics.

A sea waybill is one of the essential documents that transporter and procurer need to be well-versed with. This document works as a receipt for a shipment and helps minimize the legal complexities. Also, it ensures that goods reach their destination without any hassles or delays.

What is a Sea Waybill in shipping?

A sea waybill is primarily used in maritime shipment and acts as a receipt for the transported goods. It is a non-negotiable transport carriage contract similar to a bill of lading document but has many distinguishing features.

Also known as a straight bill of lading or express release bill of lading, the sea waybill is evidence that an exporter uses when they decide to release the cargo’s ownership. This allows exporters to deliver the cargo only to the intended receiver mentioned in the document.

Once received, the recipient can conveniently verify their identity and accept the cargo. Overall, the document has an evidential function; it helps expedite the transportation process and reduce formalities.

What is a sea waybill used for?

A shipper or exporter uses the sea waybill when they need to speed up the transportation process and quickly release ownership of shipment(s). The document is only essential for cargo receipt and not the delivery in the case where the shipper knows the recipient. So, trust between the recipient and shipper is crucial.

Partner companies that conduct business regularly can use sea waybills for cargo transportation. However, since the document is not negotiable, companies cannot assign it to any third-party firm.

After loading the cargo, the shipper receives a sea waybill as a reference. Here, the shipper and the receiver (importer) don't have to submit additional documents to the carrier. Whenever the goods reach the port, the carrier releases the cargo almost immediately.

Here are the ideal circumstances when you can use the sea waybill:-

  • When both the consignee and the shipper know and trust each other.
  • The cargo payment is made using an approved line of credit (LOC).
  • When there is no selling or trading of the cargo during its transportation.
  • When the transaction is between companies under the same business group.

Contents of sea waybill

A sea waybill is used when there is no involvement of banks. This document comes in handy, especially when the shipper doesn’t have the time to print and send the original bills.

Here are some crucial details that a sea waybill must include:-

  • Information about the shipper/sender
  • Information about the receiver/importer
  • Destination port and port of boarding
  • Contact details of the receiver
  • Contact details of the shipper
  • Name of the vessel/ship
  • Port of discharge
  • Place of delivery
  • Description of the cargo
  • Number of packages

Sample sea waybill

Here is what a sea waybill looks like:

sea-waybill-example-sample

Although many important details are included here, a sea waybill is not considered as formal as an original bill of lading (BOL). So, the parties involved cannot use the sea waybill as a title deed.

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What is the difference between a sea waybill and a bill of lading?

A sea waybill and a BOL are important for transporting goods by sea. Whether it's domestic or international transportation, traders should understand the details and differences of the two documents.

Bill of lading (BOL)

The BOL is used as evidence for shipping goods from point A to B. In general, the shipping company, transport agent, vessel operator, carrier, or captain can issue it to serve three primary purposes:-

  • To indicate that the goods have been loaded for departure on the vessel.
  • To act as the cargo's receipt that indicates some of its details like the destination.
  • Since a BOL is a title document for the cargo, it allows the transfer of ownership.

The party with the BOL is considered the owner of the shipment. So, a shipper can send this document to a buyer with the shipment to transfer goods' ownership.

Differences

The primary difference between the two documents is that the BOL can work as contract evidence, cargo receipt, and ownership transfer. On the other hand, the sea waybill doesn’t work as a title ownership document but still functions as the carriage contract evidence and receipt.

Besides, the BOL is a negotiable financial instrument that all banks accept. It is applicable when a third party is involved and if the shipper doesn’t know the recipient.

On the contrary, the sea waybill is non-negotiable and doesn’t involve banks. Whenever companies have a good mutual understanding, they use a sea waybill. No original BOL is issued here, and the cargo is sent to the receiver specified in the sea waybill.

What are the main differences between a negotiable bill of lading and non-negotiable transport documents?

A negotiable bill of lading is a specific type of BOL that works as the title document that can transfer ownership of the cargo to another party. It is used when the buyer signs the documents for the new buyer or consignee to receive the goods. Thereafter, the carrier transports the goods to their destination.

Additionally, for considering the document to be negotiable, it has to be a clean BOL. The carrier issues a clean BOL when the recipient accepts the goods to be in satisfactory condition.

Also, the negotiable bill names the consignee in the format of 'to order [consignee name]'. Adding the words 'to order' with the consignee’s name means that the consignee will endorse the bill.

The carrier holds the negotiable BOL and takes it to the new consignee or recipient. This is done to ensure the contract’s validity.

Non-negotiable transport documents

Non-negotiable documents like a non-negotiable BOL are applicable when the document cannot transfer ownership. The terms 'not negotiable' or 'non-negotiable' must appear on these types of documents.

The document can specify any particular consignee, seller, or buyer who will receive the goods. The receiver might also need additional documents here as it doesn't transfer ownership.

On the other hand, a negotiable BOL notifies the carrier to deliver the cargo to any receiver who has the original negotiable BOL.

Is sea waybill the same as the telex release?

No, a telex release is not the same as a sea waybill. The former is a message that the shipping line sends to the cargo’s destination port.

The agent at the loading port will release this electronic message when the shipper surrenders the original BOL.

The telex release, therefore, becomes important if the BOL can’t be sent to the destination for cargo release. It helps the agent at the load port send instructions to the agent at the destination or discharge port, saving mailing expenses.

On the other hand, a sea waybill is issued when both parties know each other and aim to quicken the transportation process. Lastly, unlike the telex release, parties involved don’t issue, surrender and print the original BOL. On the other hand, the sea waybill is issued when both parties know each other and aim to quicken the transportation process. Lastly, unlike the telex release, parties involved don’t issue, surrender and print the original bill of lading here.

How to use the sea waybill in letters of credit transactions?

If you want to use a sea waybill for a letter of credit (LC) transaction, the document has to contain specific details and satisfy certain formalities. These are as follows:-

  • The document must contain the carrier's name and signature. Alternatively, it can contain the signature of another professional or agent who is signing on the carrier's behalf.
  • The document must indicate that the cargo has been transported along with the name of the vessel at the specified destination.
  • It must be the original sea waybill, and if more than one is issued, details must be specified.
  • It must specify the cargo's shipment from the origin to the destination port as mentioned in the LC.
  • It should also have all the terms and conditions of the carriage or references to any other sources containing the terms.
  • The document must not have any indication that the process involves a charter party.

If one would want to use the sea waybill for this type of transaction, it's better to consult a customs official or legal professional to understand the formalities.

Advantages & disadvantages of sea waybill

A sea waybill is a non-negotiable document, so you don't have to submit it at the destination port for completing the cargo delivery.

It allows importers to complete the customs process and receive the shipment. They won't require the original BOL for concluding the transportation process.

Advantages

A sea waybill offers both the shipper and the recipient the following benefits-

  • As the BOL is not an important document that has to be submitted at the destination port, the shipment process is more convenient and faster.
  • Even if the shipping lines cause delays in the delivery, the recipient can obtain their goods using the sea waybill.
  • The document reduces the time taken during the process of detention expenses and limits demurrage charges.

With the increase in the number of vessels involved in international trade, all BOLs may not be dispatched on time. This is when the sea waybill helps importers reduce inefficiencies and inconveniences in receiving the goods.

Disadvantages

Despite providing a host of benefits to all parties involved, the document decreases the shipper's control over the cargo. Here are some disadvantages of using a seaway bill:-

  • Being a non-negotiable document, the sea waybill can enable the importer to receive the cargo without the original BOL.
  • The document is not useful for any LC processes and cash against documents payments.
  • It might sometimes lead to complications and fraud as the importers can obtain the shipment without original documents.

So, it's important to analyze the circumstances and use the sea waybill to keep both the parties as well as the cargo safe.

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Avani Ghangurde

Senior Associate Communications at Drip Capital

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