They not only evidence receipt of cargo but also contract of carriage as well.
Additionally some transport documents title to cargo such as negotiable bills of lading.
What does negotiable transport document mean in foreign trade?
Only traditional bill of lading could be issued in negotiable form along with couple of its close variants such as charter party bill of lading and multimodal bill of lading etc. All other transport documents in circulation, as much as in my information, cannot be issued in negotiable form.
For example US transport legislation defines the negotiable bill of lading as follows:
A bill of lading is negotiable if the bill— (A) states that the goods are to be delivered to the order of a consignee; and (B) does not contain on its face an agreement with the shipper that the bill is not negotiable.Is air waybill a negotiable document?
Air waybill is not a negotiable document. It is a straight transport document.
As a result, just like other non-negotiable transport documents, an air waybill must be issued straight to the name of the consignee, not to his order.
On below picture you can see an air waybill sample, which is issued under a letter of credit, consigned to the issuing bank's name. If you look at the below figure you will realize that the importer company is stated on the air waybill as a notify party under field "Handling Information."
If you need further information in regards to consignee and notify fields on air waybills', please read my article "How to complete consignee and notify fields on an air waybill?"
What happens if letter of credit calls for a negotiable air waybill?
According to latest version of International Standard Banking Practices (ISBP 745), an air waybill can be issued in non-negotiable form even if the letter of credit calls for a negotiable form of an air waybill.
Below you can find the respected articles from ISBP 745.
- When a credit requires an air transport document to evidence that goods are consigned “to order of (named entity)”, it may indicate that the goods are consigned to that entity, without mentioning “to order of”.
- When a credit requires an air transport document to evidence that goods are consigned “to order” without naming the entity to whose order the goods are to be consigned, it is to indicate that the goods are consigned to either the issuing bank or the applicant, without the need to mention the words “to order”.