Bill of Lading vs Waybill


BIll of Lading

Bills of Lading and Waybills are often mistakenly considered synonymous. From a transport point of view, both documents prove the existence of a valid contract of carriage and involve carriers’s liability for cargo delivery, quantity and quality. These common functions are probably the reasons why some users place the wrong sign of equality between a Bill of Lading and a Waybill. Also, sometimes shippers rely on carriers to provide "appropriate" or "commonly used" shipping documents. As the difference between these two documents is in their commercial functions, the choice of the type of shipping document should be made not by the carrier, but by the merchants under the sales contract. For that purpose a number of factors should be taken into account and carefully analysed: e.g. the commercial relationship between the shipper and the consignee (permanent or casual), the payment method (advance, deferred or through L/C), the possible need to resell the goods in transit, the transit time, the possible need to detain cargo release to the consignee, etc.

If the transport has already started, serious issues could arise when one of the parties is not aware of the differences between these two types of shipping documents. Two of the possible and most striking examplesare: First, a carrier having signed a Bill of Lading, but treating it as a Waybill, and second, the mirror scenario - a shipper holding a Waybill, but treating it as a Bill of Lading. In fact sea carriers practically do not make the first mistake, but such situations sometimes happen by carriage of goods on the Danube under a Bill of Lading. Cases involving the second mistake done by shippers are more common.

If a carrier has signed and surrendered an original straight Bill of Lading to the shipper, but treats that Bill of Lading as a Waybill (probably because it is straight), there is a risk for that carrier to release the cargo to the consignee without production of a duly endorsed original Bill of Lading or a Letter of Indemnity. In this case, ifthe cargo has not been paid to the shipper and a claim is set up against the carrier, the latter will not be able to benefit from the limited liability under the applicable convention.

Conversely, if a shipper has obtained a Waybill and treats it as a Bill of Lading, that shipper may mistakenly believe to have control over the cargo release to the consignee until payment is received. In reality, the consignee under a Waybill, especially if he or she pays the freight, can easily receive the unpaid cargo from the carrier. Claims by the shipper against the carrier could not be set up, and those by the shipper against the consignee would not involve lien on cargo on board as security.

There are other possible mistakes and potential risks with an incorrectly chosen shipping document, as well as with the entries in it. Therefore, it is of great importance that merchants discuss such issues with their freight forwarders before signing sales contracts, especially in the case of payments through L/C.

More articles

Cargo insurance


To be available soon......

Learn more arrow
Incoterms group C


Disadvantages of Incoterms group C for the Buyer...

Learn more arrow

By using the site you accept that we use "cookies" to improve the experience, personalize content and ads, and analyze traffic. See our <a href="/en/page/privacy-policy#cookies"> Cookie Policy</a> and <a href="/en/page/privacy-policy"> Privacy Policy</a>.