Non-negotiable Sea Waybills vs traditional Bills of Lading
2008-12-11 19:40 (19494 Views)
Cross-border trading implies geographical distances, differences in culture and language, legal matters and commercial custom.
Matching delivery and payment in international trade is a crucial issue which could be bridged by a link, namely the transport document. In which shape could this intermediary link appear? It usually appears as a transport document established by a third party, having been contracted for the purpose, a carrier, whose services are essential for the performance of the delivery of the goods.
Let's for a moment compare the traditional Bill of Lading with the non-negotiable Sea Waybill.
The latter has been used for a period of time due to the following reasons:
A Bill of Lading, the traditional type which is a document of title, requries surrender of the physical document to the carrier before he delivers the goods to a consignee. For short sea journeys this type might not be ideal, as the goods sometimes arrive at the port of discharge before the documents arrive. These are processed by banks, a procedure that could delay customs clearance and cause demurrage charges. For documentary credits the revision of UCP, ICC's rules for Documentary Credits, has implied a speeding up of the examining procedure a.o. in order to go in tandem with modern technique and transport. The number of days available for examining have been curtailed into a maximum of 5 working days - but banks´processing is still time-consuming and the goods might very well be in the port of discharge before the buyer can obtain possession of it.
Traditional Bills of Lading are important tools in international trade, particularly with respect to commodity tradings where goods could be sold while they are in transit, but many categories of goods, particularly containerised goods, are not at all sold in transit. When buyers and sellers are asked why a negotiable transport document is needed, they give as a reason that the goods are to be sold while at sea. But upon further interviewing them, it turns out that it hardly ever happens. If this is the case and if an exporter is wishing to ship the goods without the consignee needing to show evidence of title to the goods, a non-negotiable sea waybill might be an option. It facilitates constructive delivery by transfer of control instead of via paper or document of title. It also avoids the costs of having to send a document to destination to secure delivery.
If a bank out of security reasons would like to exercise control without becoming a party to the contract of carriage, a bank can be shown as a consignee.
A non-negotiable waybill can be claused to protect interests of both the seller and the buyer in a documentary credit.
Next time I'll give some views of the often used - or misused concept "negotiation". You might wonder if there is more to say about it?
Sure, it is a inexhaustible subject.