OCEANTRANSPORTATION

DOCUMENTSORIGINAL BILL OF LADING OR SEA WAYBILL?

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There are two primary types of documents that move all ocean cargo:

ORIGINAL BILLS OF LADING AND SEA WAYBILLS

The term bill of lading itself is actually quite old. It is believed that the bill of lading as we know it today came into use with the growth of international trade in the medieval world. The word “lading” refers to the act of loading cargo aboard a ship.

An original bill of lading (BOL) and a sea waybill are types of contracts of carriage between the ocean carrier, including non-vessel operating common carriers (NVOCCs), and the parties in the transaction: the shipper and consignee or receiver. Also, as discussed more later, an original BOL confers the right to possession of the goods detailed on it. For these reasons, original bills of lading and sea waybills are very important and common documents used in export and import trade globally. The current regulations on bills of lading were codified by the Hague Rules in 1924 and the Carriage of Goods by Sea Act (COGSA) in 1936.

The wrong type of ocean transportation

document can cause serious consequences

in a company’s supply chain and can

inadvertently increase financial exposure.

Choosing the correct type of document,

conversely, can go a long way toward ensuring

a streamlined and secure supply chain.

OCEAN TRANSPORTATION DOCUMENTS

Your ObligationEven if you are not selecting the freight forwarder as is the case in a “routed” transaction, as the entity benefiting commercially from the sale of goods overseas, you have a regulatory obligation to the government agencies.

ORIGINAL BILL OF LADING OR SEA WAYBILL?

These materials are for informational purposes only and not for the purpose of providing legal advice or recommendations

www.expeditors.com | © 2015-2017 Expeditors International of Washington, Inc. All rights reserved.

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Essentially, whoever is in possession of the original bill of lading is entitled to demand possession of the goods from the carrier at destination so long as the original bill of lading is properly endorsed. The endorsement is important because it passes the right to possession of the goods from holder to holder. Similar to the endorsement of a check.

Advantage of Using an Original BOLThe primary advantage to using an original bill of lading is that it gives control over the movement and delivery of the goods. Since goods cannot be delivered without a properly endorsed original bill of lading, the shipper can maintain control of the shipment and can transfer its right to possession at the time of its choosing. This is particularly useful in shipments under a letter of credit as it controls the transfer of goods and funds.

Disadvantages of Using an Original BOLThe primary disadvantage of an original bill of lading is the necessary transfer of documentation. Because of the timing and the need to wait for the properly endorsed original to arrive, this can sometimes delay the receiver in gaining possession of the freight.

ORIGINAL BILL OF LADINGAn Original BOL has three main functions:

1. Receipt of the Goods

• Acts as receipt of goods shipped

• Identifies the goods, pieces, & weight

2. Contract of Carriage

• Serves as contract between the shipper & carrier

3. Document of Title

• Possession of the goods determined bypossession of the document

• If the original BOL is made out “to the order of” anamed party (a “negotiable” BOL), it also conferstitle or ownership to the goods specified

These materials are for informational purposes only and not for the purpose of providing legal advice or recommendations

www.expeditors.com | © 2015-2017 Expeditors International of Washington, Inc. All rights reserved.

OCEAN TRANSPORTATION DOCUMENTSORIGINAL BILL OF LADING OR SEA WAYBILL?

OCEAN TRANSPORTATION DOCUMENTSORIGINAL BILL OF LADING OR SEA WAYBILL?

These materials are for informational purposes only and not for the purpose of providing legal advice or recommendations

www.expeditors.com | © 2015-2017 Expeditors International of Washington, Inc. All rights reserved. p a g e 4 /4

About Us

Expeditors is a global logistics company headquartered in Seattle, Washington. As a Fortune 500 company, we employ over 16,500

trained professionals in a worldwide network of over 320 locations across six continents.

Expeditors satisfies the increasingly sophisticated needs of international trade through customized solutions and seamless, integrated information systems. Our services include the consolidation and forwarding of air or ocean freight, customs brokerage, vendor consolidation, cargo insurance, time-definite transportation, order management, warehousing, distribution and customized logistics solutions.

SEA WAYBILLA Sea Waybill has two main functions:

1. Receipt of the Goods

• Acts as receipt of goods shipped

• Identifies the goods, pieces, & weight

2. Contract of Carriage

• Serves as contract between the shipper & carrier

No original bills of lading are issued when a sea waybill is used. The carrier’s responsibility is to deliver the cargo to the named receiver and only to the named receiver. Sea waybills are sometimes referred to as consignment notes and do not act as a title document. There is no need to physically forward them overseas, since the document does not need to be surrendered at destination. Sea waybills can only be issued with the shipper’s written consent.

Advantages of Using a Sea WaybillFor a sea waybill, the receiver does not need to wait for the original bill of lading from the shipper to secure release of the freight. This avoids delays when the goods arrive before the documents.

However, a sea waybill does not control title to the goods or the right to possession. The receiver can pick up the freight once it arrives, clears customs, and freight payment has been made to the carrier.

Disadvantages of Using a Sea Waybill Banks do not accept sea waybills as part of the payment procedure. Unlike an original bill of lading, the shipper cannot stop the release of freight once the freight payment has been made to the carrier. Once a sea waybill is issued it cannot be changed.

Understanding the advantages and disadvantages of the different types of ocean transportation documents can help to ensure a secure and uninterrupted supply chain.