When you’re shipping ocean freight, you’ll need various documents. Two of the most common shipping documents are the sea waybill and the bill of lading. But how do you know which one to use when? In this article, we explain the meaning of both, how they differ, and when to use either of the two. 

What is a bill of lading in ocean shipping? 

The bill of lading (B/L or BoL) is a crucial shipping document issued by a carrier to the shipper (owner of the goods). It serves three main functions:

• Contract of carriage between shipper and carrier, establishing the terms of transportation.
• Receipt of goods, acting as proof that the carrier has received the freight in the agreed-upon condition.
• Document of title, representing the ownership of the cargo and that the party holding the original B/L has the legal right to claim the goods upon arrival.

Because it acts as a title document, the original bill of lading must be physically presented to release cargo if it is ‘negotiable’ (explained further below). B/Ls are especially important when engaging in international trade where trust isn’t yet established or when the goods might be resold while still in transit. 

There are two primary types of B/Ls:

1. Negotiable bill of lading: This document allows the transfer of ownership to a third party. Ownership of cargo can be transferred to a third party through endorsement – a documented chain of custody signed by the original shipper and subsequent buyer(s). The consignee is a third party who will sell goods on behalf of the producer, usually by collecting a commission. In this case, the consignee takes financial responsibility and legal ownership of the goods. 
2. Non-negotiable bill of lading: In this case, the consignee (recipient) is explicitly named on bill issuance and cannot be changed afterwards. It is therefore not possible for the shipper or the consignee to transfer legal title and ownership of the cargo to a third party through endorsement. 

Also, do note:

• Negotiable B/L requires the submission of the original document at the port of discharge.
• Non-negotiable B/L doesn't require endorsements, simplifying cargo release.
• Deliveries are only made to the recipient designated in the consignee field unless the latter issues a letter of subrogation to the carrier for another recipient. A letter of subrogation is a legal document that allows the consignee to transfer their rights to the goods to another party.
• For the cargo to be released to the consignee, at least one original B/L must be submitted at the port of discharge.
• A Telex release (electronic or digital cargo release) can replace the physical submission of original B/Ls, reducing risk and environmental impact.

What is a sea waybill?

A sea waybill is a simpler alternative to the bill of lading, serving two key purposes:

• Evidence of a contract of carriage
• Receipt of transportation of goods

Unlike a bill of lading, a sea waybill is not a document of title. It cannot be used to transfer ownership of cargo; nor does it require physical presentation, endorsements, or original copies. The carrier can directly release cargo to the named consignee without further documentation.

In terms of effort, the sea waybill is much easier for everyone involved and is suitable for routine, regular transactions between trusted parties. Using a letter of subrogation, shippers can also have the goods accepted by a recipient other than those named in the sea waybill.

Bill of lading vs sea Waybill: Key differences

Sea waybill or bill of lading: When should you use each?

Choosing between a B/L and a sea waybill depends on the nature of your shipment and the level of control required:

Use a bill of lading when:

• You need a legally binding contract for shipping terms.
• You want to retain ownership of the goods until payment is received.
• You need to transfer ownership of the goods during transit.
• You’re processing payments through documentary letters of credit. 
• You’re establishing new business relationships with limited trust. 
• You need negotiability to resell goods during transit. 

Use a sea waybill when:

• Your shipment is straightforward, and ownership transfer is unnecessary. 
• You have regular transactions and established trust with the other party.
• Your financial transactions don’t require any documentation of title transfer.
• You want to speed up cargo release without waiting for physical documents.
• You don’t need a title document for financial transactions related to shipments.
• You prefer simplicity, speed, and reduced paperwork. 

The following checklist provides a quick overview of the key differences between the bill of lading and sea waybill. Note that it should only be used as a guideline. It is entirely up to you which shipping document type you choose.

Need help with your shipping documentation?

Every shipment presents unique documentation challenges and compliance risks. Selecting between a bill of lading and a sea waybill is just the start. Proper and accurate documentation (e.g., commercial invoice and certificate of origin) is essential for smooth customs clearance and avoiding delays or penalties. At Maersk, our experts can help you design tailored strategies to ensure your cargo moves efficiently, securely, and cost-effectively. With our Global Trade and Customs Consulting services, we help you navigate cross-border regulations while ensuring full compliance. Speak to your Maersk representative to get started.

Note: This article is for information only and is relied upon at your own risk. Maersk is not a party to sales contracts between buyer and seller, and this article does not affect or alter the carrier's rights in any way. If you are uncertain whether to choose a bill of lading or a sea waybill, we recommend you seek legal advice.