Waybills. For ocean transport these can be called “Seawaybills” to distinguish them from commonly-used “Air waybills”.
A waybill is essentially a non-negotiable receipt for the goods. Its non-negotiability prevents it from possessing the general characteristic of the “bill of lading” which is a document of title. One of the major reasons for the use of waybills is where the need for a document of title is reduced, thus reducing the opportunity for fraud.
Just as in the United States’ “straight bill of lading” (which see above), or the “named bill of lading”, the waybill is also essentially a document providing for the delivery of the goods to a named consignee who can prove his identity, and to no other. Traditionally, the presentation of the bill pf lading as a “document of title” was necessary to prove ownership before the cargo was delivered or released. The waybill cannot require the goods-to be consigned “to order” as in an “order bill of lading”.
Although the waybill is primarily a receipt, it is also the evidence of the contract of carriage between the carrier and the shipper.
The layout of a waybill is similar to that of a bill of lading except that the words “Non-Negotiable Waybill” are prominent. Organisations that publish waybills, for example, BIMCO, and also some major carriers who carry goods under waybills, try to distinguish waybills from bills of lading by using a different colour for the former. Common colours are light blue (for example, for the WORLDFOODWAYBILL approved by BIMCO in 1989) or yellow (for example, for the BIMCO CHEMTANKWAYBILL). Perhaps different colours are used to prevent rapid forgery in addition to distinguishing the two types of documents to avoid confusion. The waybill is also similar to a “short form of bill of lading” (which see), with possibly a blank back and an incorporation clause at the foot of the waybill which explains that the shipment is subject to the conditions as contained in a document obtainable from the Head Office of the carrier or from his agents.
Another use of the waybill is where the transit time may be very short compared with the time that it would take for documents to travel between shipper, banks and consignees. If transit time is so short, the consignee would have little opportunity to dispose of the goods while they were in transit. In particular, containerisation transit times have improved vastly and international trade in goods which are transported by container vessels and even fast intermodalism requires an improved documentation system. In any event, the “Air waybill” has been used by air cargo carriers for many years to solve this problem.
Seawaybills were common in short trades such as across the English Channel, the Atlantic and the Tasman Sea (between Australia and New Zealand). In 1990, it could be estimated that about 85 per cent of the cargo on the North Atlantic trades was not sold in transit and a bill of lading as a “document of title” was unnecessary.
In contrast, however, in 1990 there were some countries, such as India and Taiwan that did not permit the use of this extremely useful document. This applied even to aid programmes under the “WORLDFOODWAYBILL”.
The waybill has benefits for both the shipper and the consignee and also the carrier who has simply to deliver the goods to the person who proves his identity. The waybill may be carried on board and the consignee presents his identity, the agent or master matches this with the name in the waybill and the goods can be delivered. In this situation the waybill returns to the original use of the “bill of lading”, as a receipt for goods. There is no need to issue sets of waybills or certified copies. There is also no need for the consignee to produce the waybill for delivery.
For the shipper, the advantages include the ability to send the commercial documents (invoice, certificate of origin ...) to the consignees immediately they are ready, by post or by courier service. The waybill does not have to be sent. The procedures of the documentary credit system may be shortened because there would be no need to check all the details that would be necessary for a vulnerable bill of lading/document of title, Of course, banks may be reluctant to finance a transaction based only on a nonnegotiable waybill and may require alternative security arrangements.
For the consignee, delays of cargo clearance or delivery owing to non-receipt of bills of lading would be avoided and costly demurrage or warehouse rental would be unnecessary. Bank guarantees would be unnecessary. All he has to do is to produce evidence of identity, pay any freight and other charges that may be necessary and take delivery of the goods.
Examples of uses of waybills:
Shipment by multinational companies which ship from a plant in one country to a plant in another country.
Other non-commercial shipments, such as artifacts for a museum or exhibition, household and/or personal effects, etc.
Sale of goods, which does not require the documentary credit system, for example, on open account sales to long-standing, trusted buyers.
Goods, which will arrive before the documents, could arrive under the usual documentary credit system.
The use of the waybill is becoming more widespread, especially on short trades such as across the Atlantic. Much cargo shipped in containers, usually in less than container loads (“LCL”) where the cargo has been stuffed into the containers by consolidators and freight forwarders, has already been sold and paid for or will be paid for. The increasing delivery of goods from door-to-door does not require a person to present himself at a wharf or warehouse with original bill of lading in hand to claim delivery of the goods consigned to him.
The non-negotiable waybill is not usually subject to the Hague-Visby Rules or Hague Rules. Under Art. II of the Rules the carrier has obligations and rights under a “contract of carriage of goods by sea”. This contract requires a formal bill of lading or other document of title to be issued. In the United Kingdom, the Carriage of Goods by Sea Act 1971 provides in section 1 (6)(b) that waybills in the U.K. would be subject to the Hague-Visby Rules if they contained a “paramount clause”.
It could be argued that Art. VI of the Hague-Visby Rules permits a carrier and shipper to enter into any agreement (which may include the terms under a waybill) if (a) no bill of lading is issued; (b) the terms of the agreement are in a nonnegotiable, appropriately marked receipt for goods; and (c) the contract of carriage of goods is for non-commercial shipments. In this situation, the Rules would not bind the carrier. However, if the shipment is a commercial one, the third condition would not be met and the Rules may apply although a formal “bill of lading” has not been issued. This would go against the certainty of Art. X which indicates that the application of the Rules occurs when a bill of lading has been issued. Accordingly, the argument may not be sufficiently strong and may be seen as being only a lawyer’s or academic argument.
In any event, express clauses may be incorporated in the document of the waybill causing it to be subject to the Rules. There would be no need to introduce artificial, semantic reasoning to apply the Rules to waybills. This incorporation and consequent application is permitted by Art. X(c) of the- Hague-Visby Rules.
Under the Hamburg Rules, there will be little problem regarding application because under Art. 1, r. 6 the contract of carriage of goods by sea can include a receipt for goods which is also evidence of the contract of carriage; this is precisely what a waybill is. In addition, Art. 2, r. 1 applies the Hamburg Rules to all “contracts of carriage by sea”.
In the United States, the Pomerene Bills of Lading Act 1916 deals with the straight bill of lading which is, essentially, a waybill.
In 1983 the “CMI”, an international organisation of maritime law experts which has formulated many international agreements, some of which are part of international shipping law and business, discussed the issues related to sea waybills at a Conference in Venice. It was realised that uniform rules were necessary in line with the uniform code provided by the Hague Rules or Hague-Visby Rules or Hamburg Rules relating to carriage of goods by sea.
The problems that were arising from the issue of bills of lading by carriers also suggested that the practice of using bills of lading as documents of title, when a negotiable document was not required, should be discouraged. Some of the problems have been discussed above but, to summarise, the insistence on the presentation of an original bill of lading before cargo delivery can lead to delay and the bill of lading in its original form contributes to documentary fraud.
The CMI drafted a set of “Uniform Rules for Seawaybills” at another Conference in Paris in 1990. When the Rules enter into force through being adopted by countries and enacted into law, they will apply “when adopted by a contract of carriage”. This can be done by incorporation into the appropriate contract, which may be in writing or not. There is no requirement in the draft that if a written document is used for a contract of carriage, it should be described on its face as being “non-negotiable”. The “contract of carriage” is one which will be performed wholly or partly by sea.
Rule 3 was drafted to overcome the problem encountered because of section 1 of the United Kingdom’s Bills of Lading Act 1855 which applies only to bills of lading and not to sea waybills or other documents used in carriage of goods by sea. (See Bills of Lading Act 1855 above.) The Act prevents a consignee under a waybill from being treated as if he made the contract of carriage with the carrier. The problems under the English law do not occur in other European countries where the “Civil law” principles apply. In the United Sates, the Pomerene Act makes a carrier liable to the owner of the goods under a “straight” bill of lading, which is another name for a seawaybill. (1990—1991 debate continued on the possible amendment of the United Kingdom’s Bills of Lading Act in the line with the modern practice.)
This important Rule (r. 3) provides that:
“The shipper on entering into the contract of carriage does so not only on his own behalf but also as agent for and on behalf of the consignee, and warrants to the carrier that he has authority to do so. This rule shall apply if, and only if, it be necessary by the law applicable to the contract of carriage so as to enable the consignee to sue and be sued thereon. The consignee shall be under no greater liability than he would have been had the contract of carriage been covered by a bill of lading or similar document of title.”
The liability regime under the draft Rules is the same as under the regime that would apply if bills of lading were issued. This means that if a national law implements the Hague-Visby Rules for bills of lading, these will also apply to seawaybills. Rule 4 of the draft also states that the contract of carriage will be subject to standard terms and conditions of the carrier and any other terms and conditions agreed by the parties. In the case of any inconsistency, the draft Rules will prevail.
Rule 6 of the draft seawaybill Rules identifies the points in time at which the shipper or the consignee has the right of control over the goods. Initially the shipper alone has the right of control and gives the carrier instructions in relation to the contract of carriage. He can change the name of the consignee at any time until the consignee claims the goods at the destination. The shipper must give the carrier reasonable notice in writing or by some other means to do this. He will indemnify the carrier against any additional expense caused by any changes. The shipper has the option to transfer the right of control to the consignee. The option must be noted on the document, if any, evidencing the seawaybill. When the shipper exercises the option, he loses any right of control.
The carrier is required to deliver the goods to the consignee who produces proper identification (r. 7). This Rule also exempts the carrier from liability if the goods were wrongly delivered but the carrier had exercised reasonable care to ascertain that the party claiming to be the consignee is in fact that party. This probably means that the named consignee alone can claim delivery. It seems to leave Out the possibility of agents and servants of the consignee or nominees of the consignee claiming the goods.
It remains to be seen if the seawaybill Rules are adopted internationally and applied to carriage of goods by sea under waybills. If they are adopted they may be of assistance in reducing some problems under bills of lading and also link in with electronic data interchange.
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