It is never negotiable, and that changes everything
The Air Waybill is a receipt and a contract of air carriage, but it is not a document of title. It is not endorsed and it grants no right to collect the goods: the airline delivers to the consignee named on the document, on proof of identity and without requiring any original.
The consequence is direct: if you send goods by air with the AWB in your customer’s name and you have not been paid, the goods are theirs the moment they land. By sea you can hold cargo with a B/L “to order”; by air, you cannot.
When that security is needed, the usual solution is to consign the AWB to the buyer’s bank, which then releases the goods against payment. It has to be agreed with the bank before shipping, and not all of them accept it.
AWB versus sea B/L
| Air Waybill | Sea B/L | |
|---|---|---|
| Document of title? | No, never | Yes, when issued “to order” |
| Can it be endorsed? | No | Yes |
| Delivery against | Consignee’s identification | Presentation of an original |
| Works as payment security | Only by consigning it to a bank | Yes, naturally |
| Originals | Three, all non-negotiable | Normally three negotiable |
| Governing convention | Montreal or Warsaw | Hague-Visby, Hamburg or Rotterdam Rules |
Master and house: two documents for one shipment
When the shipment is consolidated, there are two AWBs. The Master (MAWB) is issued by the airline in the name of the consolidating forwarder. The House (HAWB) is issued by the forwarder in your name and your customer’s, and it is the one that governs your relationship.
If you collect against documents or have a letter of credit, check which one the credit calls for: asking for a MAWB when your shipment travels consolidated is asking for something you will never be able to produce.
How to read it
- AWB number
- Eleven digits: a three-digit airline prefix, seven of serial and one check digit. It tracks the shipment in any system.075-12345675
- Shipper and consignee
- Who sends and who receives. The consignee is who will be able to collect: this is where you decide whether you keep control.Consignee: HANDELSBANKEN, Stockholm
- Airport of departure / destination
- Three-letter IATA codes of the departure and arrival airports.MAD → ARN
- Pieces, gross weight, chargeable weight
- Packages, actual weight and chargeable weight. In air freight the volumetric divisor is 6,000 and the higher of the two governs.8 / 3,912.0 kg / 4,180.0 kg
- Nature and quantity of goods
- Description of the goods. The same as on the invoice, in customs terms.OLIVE OIL, EXTRA VIRGIN, BOTTLED
- Declared value for carriage
- The value declared for liability purposes. If you write “NVD” (no value declared), compensation is capped per kilo.NVD
- Handling informationOptional
- Special instructions, letter of credit references, temperature or dangerous goods notices.L/C 0123456 — notify on arrival
The mistakes specific to air freight
- Sending by air unpaid, with the AWB in the customer’s nameThere is no way to hold the goods at destination. If you want security, it has to be consigned to a bank and agreed beforehand.
- Calculating freight on actual weightIn air freight the volumetric divisor is 6,000 cm³/kg. Bulky cargo is billed on volume and the difference is large.
- Calling for a MAWB in the letter of creditIf your shipment travels consolidated, you can only produce the house. The credit has to be drafted knowing how the cargo will travel.
- Forgetting the dangerous goods declarationIn air freight the regime is stricter than at sea. Without a correct IATA declaration, the cargo is refused at the airport warehouse.