Article-21-UCP-600 Non-Negotiable Sea Waybill

A Non Negotiable Sea Waybill is not a negotiable document. Therefore it is not necessary to surrender it at the destination to obtain cargo delivery. The current bill of lading system used by shipping lines sometimes results in delays in cargo delivery due to various reasons and other problems when the original bill of lading is lost or arrives late.

Article-21-UCP-600 Non-Negotiable Sea Waybill

a. A non-negotiable sea waybill, however named, must appear to:
i. indicate the name of the carrier and be signed by:
- the carrier or a named agent for or on behalf of the carrier, or
- the master or a named agent for or on behalf of the master.

Any signature by the carrier, master or agent must be identified as that of the carrier, master or agent.
Any signature by an agent must indicate whether the agent has signed for or on behalf of the carrier or for or on behalf of the master.

Explanations: a non-negotiable bill of lading may or may not be titled (however named), must need to indicate the name of the carrier and can be signed as one of the below:

1.    Signed by the carrier itself.
2.    By a named agent for or on behalf of the carrier, must indicate whether agent has signed for on behalf of the carrier or on behalf of the master. If the named agent signs behalf of the carrier it must need to indicate the name of the carrier, in case a named agents signs on behalf of the master, name of the master need not to indicate.
3.    By the Master of the Ship, when a Master signs a non-negotiable bill of lading it need not to indicate the name; as only authority "as master" and a signature will suffice the need. Point to note here is in all the above cases carrier name must be identified anywhere on the non-negotiable bill of lading.

ii. indicate that the goods have been shipped on board a named vessel at the port of loading stated in the credit by:
- pre-printed wording, or
- an on board notation indicating the date on which the goods have been shipped on board.
The date of issuance of the non-negotiable sea waybill will be deemed to be the date of shipment unless the non-negotiable sea waybill contains an on board notation indicating the date of shipment, in which case the date stated in the on board notation will be deemed to be the date of shipment.

If the non-negotiable sea waybill contains the indication "intended vessel" or similar qualification in relation to the name of the vessel, an on board notation indicating the date of shipment and the name of the actual vessel is required.

Explanations: A non-negotiable bill of lading must indicate the status of the goods once it is issued whether the goods have been dispatched, taken in charge or shipped on board at the place as per credit as per one of the below method:

1-Pre-printed wording.
2-A stamp or notation indicating the actual date of the action taken for the goods by shipping company.

It not necessary in case of bill of lading to have the date of the issuance until stipulated in credit, however, if date of dispatch or shipped on board have not been indicated then the issuance date will be deemed to be the date of shipment and becomes necessary. If the non-negotiable bill of lading contains the indication "intended vessel" or similar qualification in relation to the name of the vessel, an on board notation indicating the date of shipment and the name of the actual vessel is required. The requirement to name the vessel applies even if the goods have been loaded on the vessel named in the non-negotiable bill of lading.

iii. Indicate shipment from the port of loading to the port of discharge stated in the credit. If the non-negotiable sea waybill does not indicate the port of loading stated in the credit as the port of loading, or if it contains the indication "intended" or similar qualification in relation to the port of loading, an on board notation indicating the port of loading as stated in the credit, the date of shipment and the name of the vessel is required. This provision applies even when loading on board or shipment on a named vessel is indicated by pre-printed wording on the non-negotiable sea waybill.

Explanations: A non-negotiable bill of lading must evidence a port of lading and port of discharge as per credit. However, if the bill of lading does not indicate the port of lading given in the credit or provides as "intended" on the place of port of loading then a bill of lading must need to indicate with an on board notation-1.Port of loading stated in the credit 2.Date of shipment 3. Name of the vessel.

This provision applies even when loading on board or shipment on a named vessel is indicated by pre-printed wording on the non-negotiable bill of lading.

iv. be the sole original non-negotiable sea waybill or, if issued in more than one original, be the full set as indicated on the non-negotiable sea waybill.

Explanations: There is no requirement to submit the original non-negotiable bill of lading to Shipping Company to take the delivery of the goods, however, all the original issued non-negotiable bill of lading need to be presented as per credit to avoid any risk of fraud or conversion.

v. contain terms and conditions of carriage or make reference to another source containing the terms and conditions of carriage (short form or blank back non-negotiable sea waybill). Contents of terms and conditions of carriage will not be examined.

Explanations: A non-negotiable bill of lading must needs to contain terms and conditions of carriage which is usually given on the back side of the non-negotiable bill of lading, however, it can also be verified by other sources such as website or URL, this kind of bill of lading is called short form or blank back non-negotiable bill of lading. A banker needs to check only the terms and conditions given or not, and should not go and check the contents of the terms and conditions.

vi. Contain no indication that it is subject to a charter party.

Explanations: A non-negotiable bill of lading must not indicate in any way that it is subject to a charter party bill of lading.

b. For the purpose of this article, transshipment means unloading from one vessel and reloading to another vessel during the carriage from the port of loading to the port of discharge stated in the credit.

Explanations-Generally transshipment means unloading and reloading of the goods from one means to other means whether in same mode or different mode of transport, however, UCP restricts the meaning of transhipment as  unloading from one vessel (or aircraft, or means of conveyance) and reloading to another vessel (or aircraft, or means of conveyance within the same mode of transport) during the carriage from the port of loading (or airport of departure, or place of shipment / dispatch/ carriage) to the port of discharge (or airport of destination, or place of destination) stated in the documentary credit.

c.i. A non-negotiable sea waybill may indicate that the goods will or may be transhipped provided that the entire carriage is covered by one and the same non-negotiable sea waybill.

Explanations: A non-negotiable bill of lading may indicate that the goods will or may be transhipped if the entire carriage is covered by one and only shipping company, usually a transport operator does have offices or connections across the world, a cargo can be shipped early and in cheaper cost if the whole responsibility is being taken by a multimodal transport operator.

ii. A non-negotiable sea waybill indicating that transhipment will or may take place is acceptable, even if the credit prohibits transhipment, if the goods have been shipped in a container, trailer or LASH barge as evidenced by the non-negotiable sea waybill.

Explanations: Even if credit prohibits transhipment a non-negotiable bill of lading may indicate that the transhipment will or may take place is acceptable, logic is an MTO (multimodal transport operator) operate with different branch across the globe and use the containerize shipment where the risk of loss is lesser then a normal shipment.

d. Clauses in a non-negotiable sea waybill stating that the carrier reserves the right to tranship will be
disregarded.

Difference between a bill of lading and a non-negotiable bill of lading:

-    A bill of lading is title to the document and original is required to take the delivery of the goods.

-    A non-negotiable bill of lading is not a title to the goods and original is not required to take the delivery of the goods and may be directly consigned to applicant.

Why a Non-Negotiable bill of lading? 

sometimes for shorter journey goods may reach the port destination before presentations of document, for an example goods are being shipped from India to Srilanka whereas it may be a overnight journey however, a beneficiary may take time to acquire the required document as per credit terms; in that case it may incur the demurrage charges or eatable goods may rot at detination port.

In such a case a non-negotiable sea Waybill is a perfect instrument to be issued and directly consigned to applicant so applicant can take the delivery of the goods showing its identity to shipping company.  


Points to Remember:

1.    A non negotiable bill of lading is contract for carriage, Receipt of Goods, but not a title to the goods
2.    Field 44e and 44f are used for port to port shipment, however, if any of these are being used with the combinations of 44a and 44b or only 44a and 44b will make a bill of lading to a multimodal bill of lading.
3.    A non-negotiable bill of lading need not to be title as non-negotiable bill of lading or any similar word.
4.    Terms and conditions are to be check whether given or not (apart from content), to validate the originality of the bill of lading.

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Chandan Kumar Yadav
My name is Chandan Kumar Yadav CDCS, CSDG, CITF, PGDIBO,AML-KYC, CCFE, MLIBF, CSF, 6SIGMA a trade finance professional with an experience of 11 years whereas worked with several stages of letter of credit, bank guarantee and on other payments methods of trade transactions such as documentary collection, open accounts, SBLC etc., I have a fair understanding of Trade Based Money Laundering as well, Blogging related to Trade Finance is my passion and I want to share which I know and learn from others, I have worked with Wells Fargo, Yes Bank Limited and Bank of America, India which helped me to gain knowledge, view of Trade Finance and importance of International Trade in world's economy. Trade Finance is thumping product, everyday we are learning something new so in order to keep learning I started this as one of the platform. . Let's Learn Together

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