When you're shipping freight with a carrier, you’ll need a bill of lading. But what type should you use — an original bill of lading or a sea waybill? In this article, we explain the meaning of both, and how they differ.

What's the meaning of the bill of lading?

The so-called "original bill of lading" (also known as a bill of lading, B/L, or BoL) is a document that acts as the:

• Evidence of a contract of carriage
• Transport goods receipt
• Document of title affording ownership

The BoL is a physical document that is usually issued at the origin by the carrier to the shipper (owner of the goods).

It’s a good option to use the BoL when you are entering new business partnerships – as you might not have established trust concerning delivery or payment with your new business partner.

There are two types of bills of lading:

1. Negotiable bill of lading: The legal title of the cargo can pass from the original bill of lading holder to a third party. It is done through a consignment — an arrangement in which the title of goods is transferred from a consignor to a consignee (the buyer). The consignee is a third party who will sell goods on behalf of the producer, usually by collecting a commission. In this case, the consignee takes financial responsibility and legal ownership of the goods.
2. Non-negotiable bill of lading: The consignee is named when the bill is issued and cannot be changed later. It is, therefore, not possible for the shipper or the consignee to transfer legal title and ownership of the cargo to a third party by means of endorsing the bill.

Also, do note:

• If you are using a negotiable bill of lading, the originals must be endorsed. That means a traceable chain of ownership must be documented by stamp and signature on the front of the document (where you can find the Terms) – starting with the shipper, followed by the respective buyers.
• Deliveries are only made to the recipient designated in the consignee field unless the latter issues a letter of subrogation to the carrier for another recipient.
• For the cargo release to the consignee, at least one original B/L must be submitted to the responsible Maersk office in the port of discharge.
• No endorsements are required for non-negotiable bills of lading.

A Telex release (or digital cargo release) is an alternative for customers using the original BoL to avoid the hassle of sending the document back and forth and the risk of losing it. It is also more environmentally friendly.

What is the sea waybill?

The sea waybill is a simple, non-negotiable transport document that can be used as an alternative to the bill of lading. Unlike the bill of lading, the sea waybill is not a document of title. But it does act as the:

• Evidence of a contract of carriage
• Transport goods receipt

With the sea waybill, no original document is needed for cargo delivery. It does not have to be printed and is sufficient in electronic form to fulfil its functions. Also, there is no need to endorse a sea waybill, nor do you need to mail them physically.

Carriers can release the containers directly at the port of discharge to the stipulated receiver since no proof of ownership is required here.

In terms of effort, the sea waybill is much easier for everyone involved and is particularly suitable for regular transactions with a high level of trust. Using a letter of subrogation, shippers can also have the goods accepted by a recipient other than those named in the sea waybill.

Checklist: Bill of Lading vs. Sea Waybill

The following checklist provides a quick overview of the differences between the bill of lading and the sea waybill. Note that it should only be used as a guideline. It is entirely up to you which document type you choose.