Air waybill
Encyclopedia
Air Waybill or air consignment note refers to a receipt issued by an international airline for goods and an evidence of the contract
of carriage, but it is not a document of title
to the goods. Hence, the AWB is non-negotiable
.
AWBs have eleven digit numbers which can be used to make bookings, check the status of delivery, and current position of the shipment. The number consists of:
The seven digit running numbers are divided by 7, by using a long division calculation. The remainder becomes the check digit. That is why no AWB number ends with a figure greater than 6.
Air waybills are issued in sets of different colours. The first three copies are classified as originals. The first original, blue in colour, is the shipper’s copy. The second, coloured blue, is retained by the issuing carrier. The third, coloured orange, is the consignee’s copy. A yellow copy acts as the delivery receipt, or proof of delivery*. The other copies are all white.
There are several purposes that an air waybill serves, but its main functions are:
When the shipper delivers goods to be forwarded, he will get a receipt. The receipt is proof that the shipment was handed over in good order and condition and also that the shipping instructions, as contained in the Shipper's Letter of Instructions, are acceptable. After completion, an original copy of the air waybill is given to the shipper as evidence of the acceptance of goods and as proof of contract of carriage
The air waybill may be used as a bill or invoice together with supporting documents since it may indicate charges to be paid by the consignee, charges due to the agent or the carrier. An original copy of the air waybill is used for the carrier's accounting
The air waybill may also serve as an evidence if the carrier is in a position to insure the shipment and is requested to do so by the shipper
Although customs authorities require various documents like a commercial invoice, packing list, etc. the air waybill too is proof of the freight amount billed for the goods carried and may be needed to be presented for customs clearance
The format of the air waybill has been designed by IATA and these can be used for both domestic as well as international transportation. These are available in two forms, viz. the airline logo equipped air waybill and the neutral air waybill.
Usually, airline air waybills are distributed to IATA cargo agents by IATA airlines.
The air waybills show:
It is also possible to complete an air waybill through a computerised system. Agents all over the world are now using their own in-house computer systems to issue airlines' and freight forwarders' own air waybills. IATA cargo agents usually hold air waybills of several carriers. However, it gradually became difficult to accommodate these pre-numbered air waybills with the printed identification in the computer system. Therefore a neutral air waybill was created.
Both types of air waybills have the same format and layout. However, the neutral air waybill does not bear any pre-printed individual name, head office address, logo and serial number.
As long as the air waybill is neither dated nor signed twice, the goods do not fall within the terms of the conditions of contract and therefore the carrier will not accept any responsibility for the goods. The validity of the air waybill and thus the contract of carriage expires upon delivery of the shipment to the consignee (or his authorised agent).
When the shipper signs the AWB or issues the letter of instructions he simultaneously confirms his agreement to the conditions of contract.
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Although the AWB is a non-negotiable document, it can be used as a means of payment. This can be done only through the intermediary of a bank and only when the carriage is subject to a letter of credit. The air waybill executed according to the terms of a letter of credit allows the shipper to present the original of the air waybill to the bank and collect the billed value of the shipped goods from the bank. The amount paid by the bank to the shipper will be debited to the consignee who ordered the goods. At the destination the carrier will only hand over the goods to the consignee on receipt of a bank release order from the consignee's bankers.
The goods in the air consignment
are consigned directly to the party (the consignee
) named in the letter of credit
(L/C). Unless the goods are consigned to a third party like the issuing bank, the importer can obtain the goods from the carrier at destination without paying the issuing bank or the consignor. Therefore, unless a cash payment has been received by the exporter or the buyer's integrity is unquestionable, consigning goods directly to the importer is risky.
For air consignment to certain destinations, it is possible to arrange payment on a COD (cash on delivery
) basis and consign the goods directly to the importer. The goods are released to the importer only after the importer makes the payment and complies with the instructions in the AWB.
In air freight, the exporter (the consignor) often engages a freight forwarder or consolidator to handle the forwarding of goods. The consignor provides a Shipper's Letter of Instructions which authorizes the forwarding agent to sign certain documents (e.g. the AWB) on behalf of the consignor.
The AWB must indicate that the goods have been accepted for carriage, and it must be signed or authenticated by the carrier or the named agent for or on behalf of the carrier. The signature or authentication of the carrier must be identified as carrier, and in the case of agent signing or authenticating, the name and the capacity of the carrier on whose behalf the agent signs or authenticates must be indicated.
International AWBs that contain consolidated cargo are called master air waybills (MAWB). MAWBs have additional papers called house air waybills (HAWB). Each HAWB contains information of each individual shipment (consignee, contents, etc.) within the consolidation. International AWBs that are not consolidated (only one shipment in one bill) are called simple AWBs. A house air waybill can also be created by a freight forwarder
. When the shipment is booked, the airline issues a MAWB to the forwarder, who in turn issues their own house air waybill to the customer.
by Wings
.
Contract
A contract is an agreement entered into by two parties or more with the intention of creating a legal obligation, which may have elements in writing. Contracts can be made orally. The remedy for breach of contract can be "damages" or compensation of money. In equity, the remedy can be specific...
of carriage, but it is not a document of title
Title (property)
Title is a legal term for a bundle of rights in a piece of property in which a party may own either a legal interest or an equitable interest. The rights in the bundle may be separated and held by different parties. It may also refer to a formal document that serves as evidence of ownership...
to the goods. Hence, the AWB is non-negotiable
Negotiable instrument
A negotiable instrument is a document guaranteeing the payment of a specific amount of money, either on demand, or at a set time. According to the Section 13 of the Negotiable Instruments Act, 1881 in India, a negotiable instrument means a promissory note, bill of exchange or cheque payable either...
.
Description
The Air Waybill (AWB) is the most important document issued by a carrier either directly or through its authorised agent. It is a non-negotiable transport document. It covers transport of cargo from airport to airport. By accepting a shipment an IATA cargo agent is acting on behalf of the carrier whose air waybill is issued.AWBs have eleven digit numbers which can be used to make bookings, check the status of delivery, and current position of the shipment. The number consists of:
- 1. The first three digits are the airline prefix. Each airline has been assigned a 3-digit number by IATA, so from the prefix we know which airline has issued the document.
- 2. The next seven digits are the running number/s - one number for each consignment
- 3. The last digit is what is called the check digit. It is arrived at in the following manner:
The seven digit running numbers are divided by 7, by using a long division calculation. The remainder becomes the check digit. That is why no AWB number ends with a figure greater than 6.
Air waybills are issued in sets of different colours. The first three copies are classified as originals. The first original, blue in colour, is the shipper’s copy. The second, coloured blue, is retained by the issuing carrier. The third, coloured orange, is the consignee’s copy. A yellow copy acts as the delivery receipt, or proof of delivery*. The other copies are all white.
There are several purposes that an air waybill serves, but its main functions are:
- Contract of Carriage. Behind every original of the AWB are conditions of contract for carriage
- Evidence of Receipt of Goods
When the shipper delivers goods to be forwarded, he will get a receipt. The receipt is proof that the shipment was handed over in good order and condition and also that the shipping instructions, as contained in the Shipper's Letter of Instructions, are acceptable. After completion, an original copy of the air waybill is given to the shipper as evidence of the acceptance of goods and as proof of contract of carriage
- Freight Bill
The air waybill may be used as a bill or invoice together with supporting documents since it may indicate charges to be paid by the consignee, charges due to the agent or the carrier. An original copy of the air waybill is used for the carrier's accounting
- Certificate of Insurance
The air waybill may also serve as an evidence if the carrier is in a position to insure the shipment and is requested to do so by the shipper
- Customs Declaration
Although customs authorities require various documents like a commercial invoice, packing list, etc. the air waybill too is proof of the freight amount billed for the goods carried and may be needed to be presented for customs clearance
The format of the air waybill has been designed by IATA and these can be used for both domestic as well as international transportation. These are available in two forms, viz. the airline logo equipped air waybill and the neutral air waybill.
Usually, airline air waybills are distributed to IATA cargo agents by IATA airlines.
The air waybills show:
- the carrier's name
- its head office address
- its logo
- the pre printed eleven digit air waybill number
It is also possible to complete an air waybill through a computerised system. Agents all over the world are now using their own in-house computer systems to issue airlines' and freight forwarders' own air waybills. IATA cargo agents usually hold air waybills of several carriers. However, it gradually became difficult to accommodate these pre-numbered air waybills with the printed identification in the computer system. Therefore a neutral air waybill was created.
Both types of air waybills have the same format and layout. However, the neutral air waybill does not bear any pre-printed individual name, head office address, logo and serial number.
The validity of the Air Waybill
We have seen earlier that the air waybill is a contract i.e. an agreement enforceable by law. To become a valid contract it has to be signed by the shipper or his agent and by the carrier or its authorised agent. Although the same individual or organisation may act on behalf of both the carrier and the shipper, the air waybill must be signed twice one each in the respective carrier and shipper boxes. Both signatures may be of the same person. This also implies that the air waybill should be issued immediately upon receipt of the goods and letter in instructions from the shipper.As long as the air waybill is neither dated nor signed twice, the goods do not fall within the terms of the conditions of contract and therefore the carrier will not accept any responsibility for the goods. The validity of the air waybill and thus the contract of carriage expires upon delivery of the shipment to the consignee (or his authorised agent).
Responsibility for Completion
The AWB as we have seen is a contract - an agreement between the shipper and the carrier. The agent only acts as an intermediary between the shipper and carrier. The air waybill is also a contract of good faith. This means that the shipper will be responsible for the hall also be liable for all the damage suffered by the airline or any person due to irregularity, incorrectness or incompleteness of insertions on the air waybill, even if the air waybill has been completed by an agent or the carrier on his behalf.When the shipper signs the AWB or issues the letter of instructions he simultaneously confirms his agreement to the conditions of contract.
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Definition of the term Not Negotiable
Waybills are non-negotiable documents unlike bills of lading which are negotiable. The words non-negotiable are printed clearly at the top of the air waybill. This means that the air waybill is a contract for transportation only and does not represent (the value of) merchandise mentioned in the box nature and quantity of goods. The ocean bill of lading, if negotiated may represent (the value of) the goods and must be endorsed by the party ultimately accepting the goods.Although the AWB is a non-negotiable document, it can be used as a means of payment. This can be done only through the intermediary of a bank and only when the carriage is subject to a letter of credit. The air waybill executed according to the terms of a letter of credit allows the shipper to present the original of the air waybill to the bank and collect the billed value of the shipped goods from the bank. The amount paid by the bank to the shipper will be debited to the consignee who ordered the goods. At the destination the carrier will only hand over the goods to the consignee on receipt of a bank release order from the consignee's bankers.
The goods in the air consignment
Consignment
Consignment the act of consigning, which is placing any material in the hand of another, but retaining ownership until the goods are sold or person is transferred. This may be done for shipping, transfer of prisoners, to auction, or for sale in a store Consignment the act of consigning, which is...
are consigned directly to the party (the consignee
Consignee
In a contract of carriage, the consignee is the person to whom the shipment is to be delivered to whether by land, sea or air.-A brief statement of law:...
) named in the letter of credit
Letter of credit
A standard, commercial letter of credit is a document issued mostly by a financial institution, used primarily in trade finance, which usually provides an irrevocable payment undertaking....
(L/C). Unless the goods are consigned to a third party like the issuing bank, the importer can obtain the goods from the carrier at destination without paying the issuing bank or the consignor. Therefore, unless a cash payment has been received by the exporter or the buyer's integrity is unquestionable, consigning goods directly to the importer is risky.
For air consignment to certain destinations, it is possible to arrange payment on a COD (cash on delivery
Cash on delivery
Collect on delivery is a financial transaction where the payment of products and/or services received is done at the time of actual delivery rather than paid-for in advance...
) basis and consign the goods directly to the importer. The goods are released to the importer only after the importer makes the payment and complies with the instructions in the AWB.
In air freight, the exporter (the consignor) often engages a freight forwarder or consolidator to handle the forwarding of goods. The consignor provides a Shipper's Letter of Instructions which authorizes the forwarding agent to sign certain documents (e.g. the AWB) on behalf of the consignor.
The AWB must indicate that the goods have been accepted for carriage, and it must be signed or authenticated by the carrier or the named agent for or on behalf of the carrier. The signature or authentication of the carrier must be identified as carrier, and in the case of agent signing or authenticating, the name and the capacity of the carrier on whose behalf the agent signs or authenticates must be indicated.
International AWBs that contain consolidated cargo are called master air waybills (MAWB). MAWBs have additional papers called house air waybills (HAWB). Each HAWB contains information of each individual shipment (consignee, contents, etc.) within the consolidation. International AWBs that are not consolidated (only one shipment in one bill) are called simple AWBs. A house air waybill can also be created by a freight forwarder
Freight forwarder
A freight forwarder, forwarder, or forwarding agent is a person or company that organizes shipments for individuals or other companies and may also act as a carrier...
. When the shipment is booked, the airline issues a MAWB to the forwarder, who in turn issues their own house air waybill to the customer.
House and Master AWBs and BLs
A freight forwarder offering a consolidation service, will issue its own air waybill or bill of lading. From now on AWB will be used to refer to both. This is called a Forwarder's or House AWB with its equivalent House BL. These act as contracts of carriage between the shipper and the forwarder, who in this case becomes a Deemed Carrier. The forwarder in turn enters into contracts with one or more carriers, often using more than one mode of transportation. The contract of carriage between the forwarder and carrier is called a Master Air Way Bill ( MAWB or MBL). A House Air Waybill (HAWB) or Bill of Lading (HBL) could act as a multimodal transport document.Air Waybill Number
The AWB number has 11 digits and 3 parts.- The first 3 digits are the Airline Prefix
- The next 7 digits is the Serial Number of the AWB
- The last digit is the Check digitCheck digitA check digit is a form of redundancy check used for error detection, the decimal equivalent of a binary checksum. It consists of a single digit computed from the other digits in the message....
- The check digit is derived by dividing the 7 digit Serial Number by 7. The remainder determines the Check Digit. Example: Serial Number 8114074 divided by 7 is 1159153 remainder 3. Therefore the Serial Number + Check Digit is 81140743.
Trivia
Part of a copy of a British Caledonian Airways air waybill can be seen on the back of the cover of the album Band On The RunBand on the Run
Band on the Run is an album by Paul McCartney & Wings, released in 1973. It was Wings' third album. It became Wings' most successful album and remains the most celebrated of McCartney's post-Beatles albums...
by Wings
Wings (band)
Wings were a British-American rock group formed in 1971 by Paul McCartney, Denny Laine and Linda McCartney that remained active until 1981....
.