Letter of Credit Forum

Hello Sameer
Others here will help you regarding the credit itself: I can assist in part with the difference between a bill of lading (proper) and a ‘waybill’.

Note that it depends on where the bill of lading is issued and by whom – but as a general proposition;
All transport documents do at least two things – they act as evidence of the contract between the parties (usually the shipper and the carrier) and they act as a receipt for the package (s) said to contain the stated goods.
Where the bill of lading differs from the waybill is that the bill of lading seeks a third ‘power’, that of a document of title. Again, this is not necessarily supported by law and where it is, it is not necessarily supported in the same manner in every country – but certainly this feature is supported by customary usage.

Under this concept, possession of the underlying goods or the right to dispose of the same falls to the holder of the bill of lading – the best way to envisage this is to think of a dry cleaning slip. I give my jacket to the cleaner; the cleaner gives me a slip of paper. You can collect my jacket next week for me, provided you have the slip of paper – so possession of the jacket falls to whoever possesses the slip. We could buy and sell possession of the jacket by buying and selling the slip of paper.

A waybill lacks this property. The underlying goods detailed on a waybill get released to the named consignee on evidence that they are the named consignee – i.e. they do not need the waybill to obtain release just sufficient evidence (sufficient as determined by the carrier) that they are the party named on the manifest or copy waybill.

One of the features of the bill of lading is that – again, by virtue of custom rather than law – if worded in a particular manner (“order” , “to order” etc) then possession can pass to any holder rather than one specifically named holder – a transferrable instrument (although people will call it ‘negotiable’): by buying and selling the slip of paper, we buy and sell possession of the goods. Again, the waybill lacks this characteristic – hence the use of the ‘release letter’ when air waybills are consigned to banks, as opposed to the reverse endorsement of bills of lading consigned to order of the bank and so on.

So, as a general rule, all waybills are non-negotiable – copies or otherwise. Conversely, all bills of lading can be made transferable if correctly worded and subsequently endorsed in the given manner or they can function ‘simply’ as title documents consigned to a specific party, where that party must produce the bill to evidence that they have the right to possess the goods (just like you produce the dry cleaning slip)

But, the devil is in the detail and while waybills are fairly stable, bills of lading are not and you will come across variations in most corners of the world...

Just some thoughts in passing – I hope they assist...
cheers

phill doran

 ...thus: another step on the road to mercantile enlightenment...