Sea Waybill (SWB)

Introduction to Sea Waybill

A Sea Waybill is used in cases where no sale of goods is expected during transit (no change of consignee) and where the shipper and consignee trust that payment will take place and legal ownership of the goods can change without the use of an original B/L document.

This trust may be built based on a long-term relationship between the seller and buyer, the fact that a Letter of Credit covers the shipment and ensures payment (provided the shipper fulfils the obligations set out in the L/C) or because it is an inter-company type carriage.

The advantage of the Sea Waybill is that it allows less administration and fast release of the goods at destination because an exchange of original documents between the shipper and the consignee and between the consignee and the carrier does not have to take place.

The first thing to note about a Sea Waybill is that it is a document issued by the carrier, also known as a VOCC (vessel-operating common carrier) or shipping line. The carrier will issue either a Bill of Lading or a Sea Waybill.

The Sea Waybill looks almost identical to the Bill of Lading and works much in the same way, but there are a few fundamentally different points that we must be aware of, in particular that the Sea Waybill is not a document of title.

Functions of Sea Waybill

Basically, a Sea Waybill has 2 following functions: 

Receipt for cargo

A Sea Waybill is a document issued to a shipper in exchange for his cargo. It is a confirmation by the carrier that they have taken the customer’s goods into their custody and take on the responsibility to care for the goods.

The shipper will nominate the consignee and the carrier will only release the cargo to the named consignee at destination.

The shipper can amend his release instructions up until such time as the cargo has been physically released to the consignee. 

Evidence of contract of carriage

Just as the Bill Lading, the Sea Waybill is evidence of a contract of carriage, but the actual contract of carriage is always the underlying agreement between the carrier and the customer to carry his goods. The Sea Waybill is merely evidence of this. The Sea Waybill evidences a contract of carriage between the ocean carrier and the shipper/consignee in the Sea Waybill.

Note:

The Sea Waybill is not a document of title. It cannot be consigned ‘to order’ and it cannot be endorsed and transferred to another consignee.

The carrier will only release the goods to the party named as consignee on the Sea Waybill. The consignee does not have to present an original Sea Waybill at destination to obtain release of the goods. He just needs to be able to identify himself as a representative of the consignee in the Waybill.

The shipper can amend his release instructions up until such time as the cargo has been physically released to the consignee.

 

Originals and Copies of Sea Waybill

Because the Sea Waybill is not a document of title and is not required to effect release of the goods at destination, Sea Waybills are not issued in ‘originals’ and ‘copies’.

Whether the Sea Waybill form says ‘copy’ or ‘non-negotiable’ or does not have a notation at all, does not matter. It is always a copy document which is not transferable.

The shipper or consignee may ask to obtain printed copies of the Sea Waybill and the carrier will issue a reasonable number of copies. Copies of the Sea Waybill may be used for purposes such as proof of shipment, customs, payment, bank or letter of credit requirement and so on.

 

Carrier’s Responsibilities under Sea Waybill

The 3 main areas of responsibility of the carrier under a Sea Waybill are more or less the same as for the Bill of Lading:

Responsibility for correct description of the goods

Any third party buyer may purchase goods by relying on the description of the goods in the Sea Waybill (quantity, condition, etc.). The description of the goods on the Sea Waybill is usually supplied by the shipper or his agent. The carrier will not know what is inside a container or carton packed by the shipper. It is however essential that if the carrier knows that the description of the goods supplied by the shipper is not correct (for example that cartons are damaged), the carrier clearly notes the discrepancy on the Sea Waybill or refuses to accept the cargo and issue the Sea Waybill.

If the carrier does not note the discrepancy on the Sea Waybill, the carrier ‘steps into the shoes’ of the shipper and assumes responsibility, on behalf of the shipper, to the buyer of the goods. This means that if there was a dispute between the carrier and the buyer of the goods, the buyer could file a claim against the carrier. The carrier would need to file claim against the shipper but may not be able to prove that the goods were not received as stated in the Sea Waybill.

 

Responsibility to care for the cargo while in the carrier’s custody

The duty of care of the goods is both regulated in law and is based on common sense. If the goods arrive damaged at destination and no note has been made on the Sea Waybill regarding the condition of the cargo, it is the carrier’s responsibility.

If the carrier wants to claim against the shipper, it is the carrier’s responsibility to prove that the goods were not damaged while in his custody.

 

Responsibility to ensure that the party to whom goods are released is in fact a representative of the consignee

Although a Sea Waybill document is not needed to effect release of the goods, the carrier is nonetheless obliged to assure himself of the identity of the party to whom cargo is released. If he is in doubt, he should contact the shipper.

 

Sea Waybill – Amendment

A shipper can amend his release instructions (consignee name) until such time as the cargo has been physically released to the consignee. Amendments should be made in writing and are always subject to acceptance by the carrier.

The carrier must ensure that no changes to the description of the goods are made that can affect his position towards the consignee.

There is no need for the carrier to have the Sea Waybills returned in order to make an amendment (as they are not issued as originals but only copies). But to ensure that no unnecessary disputes arise because of the amendment, the carrier may confirm the amendment with both the shipper and the consignee.