Sea Waybill

How to Determine Date of Shipment on a Sea Waybill?

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How to determine date of shipment on a Non-Negotiable Sea Waybill?

Date of shipment is one of the key definitions in a letter of credit transaction. It is used to determine

  • whether shipment made on time or not (in other words a late shipment has been effected or not)
  • whether documents presented within the presentation period or not (in other words a late presentation has been effected or not)
  • maturity date of the time draft
  • maturity date of a deferred payment letter of credit.

Date of shipment can be determined in two ways on a Non-Negotiable Sea Waybill.

  • In the first scenario we will face a situation where Non-Negotiable Sea Waybill does not contain any date of shipped on board notation.
  • In the second scenario we will be having a Non-Negotiable Sea Waybill which contains a dated shipped on board notation.

Option 1 => No shipped on board notation exists on the Non-Negotiable Sea Waybill:

  • The date of issuance of the Non-Negotiable Sea Waybill will be deemed to be the date of shipment.

Option 2=> Non-Negotiable Sea Waybill indicates, by stamp or notation, a date of shipped on board:

  • Date of shipped on board notation/stamp => this date will be deemed to be the date of shipment

Example: On the below figure you can see a shipped on board notation which is located on the bottom of a Non-Negotiable Sea Waybill.

As there is a dated on board notation exists on the Non-Negotiable Sea Waybill, date of shipment will be deemed to be this shipped on board notation date which is 30.December.2012.

date of shipment on sea waybill

What Does Full Set of Bills of Lading Mean?

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What does full set of bill of lading mean?

Under an ordinary letter of credit, the issuing bank demands a full set of clean shipped on board ocean bills of lading from the beneficiary.

But what is a full set of bill of lading according to the letter of credit rules? How does a beneficiary make sure that he presents a full set of bills of lading?

Most of the transport documents, that is subject to international transportation, issued in more than one originals.

For example, a CMR road consignment note is issued in 3 original copies. The first copy for the exporter, the second to accompany the goods; and the third for retention by the carrier. (1)

Understanding the Reasons Behind the Issuance of Multiple Original Transport Documents:

International transport documents can be classified under two main groups: Negotiable transport documents and non-negotiable transport documents.

 

Multiple Original Transport Documents

Negotiable transport document is a title of goods, such as an original bill of lading, which can be transferred to another party by endorsement.

At least one original negotiable transport document must be surrendered to the carrier by the consignee at the place of destination to collect the goods.

Negotiable transport documents are issued in more than one originals in order to prevent lost of documents.

Non-negotiable transport document is a not a title of property and the consignment is placed at the disposal of the stipulated consignee against a proof of identity without further need to surrendering any original transport document.(2)

Non-negotiable transport documents are issued in more than one originals mainly for operational purposes as some of the original copies of these documents are traveling with the goods.

Full Set of Ocean Bills of Lading Under a Letter of Credit

According to the letter of credit rules, a bill of lading is to indicate the number of originals that have been issued and all of the originals stated on the bill of lading have to be presented by the beneficiary to the issuing bank, unless otherwise indicated in the credit.

For example, container carriers issue bills of lading in a set of 3 original and 3 copies as an established tradition for decades.

The letter of credit rules taking into account only the original bills of lading as a transport document by disregarding the non-negotiable copies.

Example:

  • A letter of credit issued asking for a full set of clean ”shipped on board” negotiable bill of lading showing freight prepaid made out/endorsed to the issuing bank, notifying the issuing bank and the applicant with full address.
  • The bill of lading indicated that it has issued in 3 originals.
  • The beneficiary has presented all of the 3 originals as a full set of bills of lading.

Important Note: The beneficiary could have presented 3 originals and 3 copies of the bills of lading without any problem.

Letter of Credit Rules:

UCP 600 – Article 20 – Bill of Lading
iv- Be the sole original bill of lading or, if issued in more than one original, be the full set as indicated on the bill of lading.

ISBP 2007 – Full set of originals Paragraph 93
As per UCP 600 article 20 transport document must indicate the number of originals that have been issued. Transport documents marked “First Original”, “Second Original”, “Third Original”, “Original”, “Duplicate”, “Triplicate”, etc., or similar expressions are all originals. Bills of lading need not be marked “original” to be acceptable as an original bill of lading. In addition to UCP 600 article 17, the ICC Banking Commission Policy Statement, document 470/871(Rev), titled “The determination of an ‘Original’ document in the context of UCP 500 sub-Article 20(b)” is recommended for further guidance on originals and copies and remains valid under UCP 600. The content of the Policy Statement appears in the Appendix of this publication, for reference purposes. (Please keep in mind that ISBP 2007 has been updated and is not the effective version as of July 2013.)

References:

  1. The CMR Convention, The British International Freight Association (BIFA) Website, Retrieved: 21.06.2018
  2. Shipping and Incoterms, Practice Guide, UNDP Practice Series, Page:50

Fiata FWB (Non-Negotiable Fiata Multimodal Transport Waybill)

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fiata waybill

On this post, I will explain Non-Negotiable Fiata Multimodal Transport Waybill, a transport document, only issued by freight forwarders, whom are the members of the FIATA (International Federation of Freight Forwarders Associations).

The FWB is an acronym which stands for “Forwarder’s Waybill”, “Fiata Waybill” or “Non-Negotiable FIATA Multimodal Transport Waybill”.

FWB is a standard format transport document, which is created by FIATA (International Federation of Freight Forwarders Associations) for general use of the freight forwarders in international freight transportation.

FWB has been restricted to use only by FIATA members.

Structure of a Fiata Waybill

FWB is printed on a white color paper with light blue borders. Fiata logo is positioned in the middle of the FWB transport document. The ICC logo, which signifies the ICC approval, can be seen on the right up side of the document.

FWB is a non-negotiable transport document which was created by Fiata and acknowledged by ICC. This acknowledgement has been secured by the attachment of ICC logo on the right-up side of the document.

Terms and conditions of the carriage have been printed on the reverse side of the FWB transport document under the title of “Standard Conditions (1997) governing the FIATA Multimodal Transport Waybill”.

As a result FWB is not a short form or blank back non-negotiable sea waybill.

FWB is a valid transport document when it is issued as a non-negotiable sea waybill according to letter of credit rules.

This view supported by the Fiata with the following declaration: “The non-negotiable FIATA Multimodal Transport Waybill (FWB) conforms to the requirements of the “Guide for the Uniform Customs and Practice for Documentary Credits (UCP 600)” of ICC (ICC publication No. 600) in line with article 21 when issued as a sea waybill, as an acceptable transport document.”

Why Exporters and Importers Use a FWB transport document?

The main reason to use a FWB would be working with a freight forwarder instead of a carrier.

FBL issued by the freight forwarders in the capacity of contractual carriers. They usually sign FBL transport document “as carrier”.

Additionally, importers could clear the consignment at the port of discharge without surrendering an original bill of lading, as carriers could deliver the cargo to the importers with a proof of identity.

What are the Main Characteristics of a Fiata Waybill?

  1. FWB includes a contract of carriage and it is a valid sea waybill according to current letter of credit rules.
  2. FWB is a non-negotiable transport document. If a FWB is issued, carriers could deliver the cargo to the importers by the proof of identity only without requiring the original copy of the FWB.
  3. FWB transport documents can be used not only in multimodal transportation, but also single mode port-to-port sea shipments.
  4. The copyrights of FBL documents are owned by FIATA. Only Fiata member freight forwarders could use FWB standard format multimodal non-negotiable waybill.
  5. FWB is in conformity with the UNCTAD/ICC Rules for Multimodal Transport Documents only when it is used as non-negotiable sea waybill in port-to-port sea shipments.

What are the Differences Between a FWB (Non-Negotiable FIATA Multimodal Transport Waybill) and a Shipping Line Sea Waybill (SLSWB)?

  1. A Shipping Line Sea Waybill (SLSWB) or carrier’s sea waybill is issued by the carrier or its agent on behalf of the carrier. SLSWB generally printed on the letterhead of the shipping line. On the reverse side of the SLSWB the terms and conditions of carriage of the shipping line are incorporated.
  2. A Non-Negotiable FIATA Multimodal Transport Waybill (FWB) is issued by a freight forwarder. FWB should be printed on the standard form Fiata FWB format incorporating Fiata and ICC logos. “Standard Conditions (1997) governing the FIATA Multimodal Transport Waybill” has been printed on the reverse side of the FWB. FWB signed by the freight forwarder, as carrier.

Sample Form of a Non-Negotiable FIATA Multimodal Transport Waybill

fiata waybill fwb

Sea Waybill (Non-Negotiable Bill of Lading)

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sea waybill

Transport documents can be classified under two main groups: Negotiable transport documents and non-negotiable transport documents.

Bill of lading has always been a negotiable transport document for centuries.

Road transport document, air transport document and rail transport document are relatively new transport document types and all of them are non-negotiable by their nature.

Non-negotiable transport documents generally called as waybills; such as air waybill, road waybill and rail waybill etc.

Non-negotiable transport documents share two out of three basic functions of a negotiable bill of lading:

  • Non-negotiable transport documents are receipts for the goods as negotiable bills of lading;
  • Non-negotiable transport documents evidence the terms of the contract of carriage (by way of clauses usually printed on one side of the document) as negotiable bills of lading;
  • But non-negotiable transport documents are not said to be “negotiable documents of title” unlike negotiable bills of lading.

What Are The Main Differences Between a Negotiable Bill of Lading and Non-Negotiable Transport Documents?

The main difference between a negotiable bill of lading and non-negotiable transport documents is how the goods are delivered to the consignee.

Under negotiable bill of lading, the goods can only be handed over to the consignee, if and only if, at least one negotiable bill of lading copy is surrendered to the carrier’s agent at the port of discharge.

Under non-negotiable transport documents, however, the carrier delivers the goods to the consignee without demanding any original copies of the transport documents, by having authentication of the consignee’s company information.

negotiable bill of lading and non-negotiable transport documents

Sea waybill is a non-negotiable bill of lading, invented by the transportation industry very recently, to respond the market, that demands a more flexible marine transport document than a conventional bill of lading.

What Are The Advantages and Disadvantages of a Sea Waybill?

The main advantages of a sea waybill over a traditional negotiable bill of lading is its flexibility and ease of use.

Advantages of a Sea Waybill

Importers can clear the goods from the customs without needing to present at least one original copy of the bill of lading, when sea waybill is selected as a transport document.

This will reduce procedures and increase efficiency, and may help to eliminate or at least limit demurrage and detention charges at the port of discharge.

advantages and disadvantages of a sea waybill

International trade has been increased in volume for the last couple of decades significantly; furthermore vessels are becoming faster and ports are getting quicker.

For example, one container vessel can travel around all major European Ports within a week.

It would not be possible for exporters to dispatch export documents, especially the bills of lading, within a such short period of time.

Consequently, importers may face to pay high amounts of demurrage and detention charges.

Actually, sea waybill has been invented to prevent such inefficient processes.

Disadvantages of a Sea Waybill

Main disadvantage of a sea waybill against a negotiable bill of lading is that it reduces exporter’s control over the goods, because of the fact that importer can clear the goods from customs without surrendering an original bill of lading.

This makes sea waybill not suitable for cash against documents and letter of credit payments and increases fraud risk.

How to Use Sea Waybill in Letters of Credit Transactions:

Non-negotiable Sea Waybill is covered under article 21 of UCP 600.

A non-negotiable sea waybill, however named, must appear to:

  1. indicate the name of the carrier and be signed by:
    • the carrier or a named agent for or on behalf of the carrier, or
    • the master or a named agent for or on behalf of the master.
  2. indicate that the goods have been shipped on board a named vessel at the port of loading stated in the credit.
  3. indicate shipment from the port of loading to the port of discharge stated in the credit.
  4. be the sole original non-negotiable sea waybill or, if issued in more than one original, be the full set as indicated on the non-negotiable sea waybill.
  5. contain terms and conditions of carriage or make reference to another source containing the terms and conditions of carriage (short form or blank back non-negotiable sea waybill).
  6. contain no indication that it is subject to a charter party. (source : UCP 600)

Special Hints Regarding the Sea Waybill From ISBP (International Standard Banking Practice):

  1. To comply with UCP 600 article 21, a non-negotiable sea waybill must appear to cover a port-to-port shipment but need not be titled “Non-negotiable Sea Waybill” or similar.
  2. If a credit requires presentation of a non-negotiable sea waybill (“Sea Waybill”, Non-negotiable Port-to-Port transport Document” or similar) covering sea shipment only, UCP 600 article 21 is applicable.

Sea Waybill Example:

You can find a sample sea waybill below in blank format.

Please keep in mind that this sea waybill format is not suitable for letter of credit, because it does not contain any reference to contract of carriage.sea waybill example

Letter of Credit Documents

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letter of credit documents

After reading this post, you should understand why documentation is very important under letters of credit.

Additionally, most frequently used document links have been supplied on later parts of this article.

There are many important points in a typical letter of credit transaction that need to be taken care of professionally.

However, documentation is much more important than any other aspects of the letters of credit transactions, because the documentation forms the backbone of the letters of credit structure.

In order to understand the importance of the documentation, please assume that you are an exporter, whom has just shipped an order.

How can you prove to the issuing bank that you have make the shipment according to the letter of credit terms?

Which means that;

  • you have shipped the goods on time, not late
  • you have shipped the right goods, not wrong ones
  • you have shipped the goods in good condition, no apparent defect on the packing
  • you have delivered the goods to the carrier for transportation from port of loading to the port of discharge indicated in the credit etc.

In order to prove above points to the issuing bank, you have to supply a relevant transport document.

Furthermore, let us also consider that the delivery term was CIF Incoterms 2010, which obligates the exporter, which is you, to arrange and pay the insurance for the shipment.

Once again, you have to supply an insurance policy to fulfill your insurance responsibility.

The examples can be extended, but perhaps the main idea is very clear. Letters of credit transactions are related to the documents only, not actions.

importance of letter of credit documentation

The importance of the documentation is stated in UCP 600 article 5 as follows:

Banks deal with documents and not with goods, services or performance to which the documents may relate.

In addition, every condition stated in the letter of credit must be connected to a document. This point is also clearly indicated in UCP 600 article 14 as below.

If a credit contains a condition without stipulating the document to indicate compliance with the condition, banks will deem such condition as not stated and will disregard it.

Documents Most Frequently Used Under Letters of Credit Transactions:

Transport Documents:

Insurance Documents:

Financial Documents:

Commercial Documents:

Official Documents: