What is a Negotiable Bill of Lading?
The Wallenius Wilhelmsen Ocean Bill of Lading serves 3 purposes:
* it is a transport contract (contract of carriage)
* a receipt of cargo
* a document of title (right to take delivery)
This feature is recognised by the Bill of Lading being consigned "to order of" which means that it is a negotiable document that transfers the title to the goods. This feature is commonly used when transactions are financed through letters of credit and/or goods are traded during the transit.
The title to the goods can be transferred by a simple endorsement on the document by the holder of the Bill of Lading and by handing over the Bill of Lading to the new owner, in much the same way as a personal check is endorsed.
A Sea Waybill is a transport contract (contract of carriage) - the same as a Bill of Lading. A Sea Waybill, however, is not needed for cargo delivery and is only issued as a cargo receipt. It can either be issued in hard copy format or soft copy format. A Sea Waybill is not negotiable and cannot be assigned to a third party. Wallenius Wilhelmsen Ocean will deliver the cargo at destination to the person or company described as Consignee in the Sea Waybill.
A Sea Waybill is not a negotiable document. Therefore it is not necessary to surrender it at the destination to obtain cargo delivery. The current bill of lading system used by shipping lines sometimes results in delays in cargo delivery and other problems when the original bill of lading is lost or arrives late. The Sea Waybill system not only expedites cargo delivery but also simplifies the documentation procedure between shipper and consignee.
A sea waybill is used in lieu of a bill of lading for straight consignments whenever a letter of credit or similar banking arrangement is not involved in the sale of goods. The sea waybill is suitable for regular shipments between related companies which do not require settlements through banks or third parties.
You can use a sea waybill when:
The recipient of the cargo is known, for example with shipments between related companies.
Cargo will not be traded/sold during transport.
Payment of goods is made under an open account or there is a high degree of trust between the importer and exporter and where a negotiable transport document is not required under a letter of credit.
You are required to use the bill of lading when:
The goods are being traded/sold in transit.
The letter of credit terms require that a negotiable document to be used.
The laws and regulations of a country demand the production of a paper bill of lading.