QUESTION
Dear Mr. Old Man,
I hope you can help me answer this question:
The L/C requires the beneficiary (exporter) to present 3/3 original air waybill issued “to order and blank endorsed”.
Is this requirement correct? Why?
Thank you
TT
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ANSWER
Hi,
An air waybill is usually issued in 8 copies. The first 3 copies are the original, the rest are copies. Each copy has its own color and purpose:
Original 1 is blue for the carrier, Original 2 is pink for the consignee and Original 3 is blue for the Consignor/Shipper.
Copy 4 (yellow) is for Receipt/Proof of delivery, copies 5, 6, 7 and 8 (white or brown) are for insurance, customs clearance, book-keeping…
Unlike a bill of lading which is a negotiable document (a document of title) that can be issued “to order” or “to the order of the issuing bank” and allows transfer by endorsement, an air waybill is a non-negotiable document, therefore, it is usually issued specifically to a named consignee.
In view of the above, the fact that the LC requires presentation of 3/3 original air waybill issued to order blank endorsed is not in accordance with the practice of the air transport industry. The LC should require presentation of air waybill (Original 3 for Shipper) consigned to the applicant.
However, in reality, there are still LCs that require air waybills to be issued “to the order of the issuing bank. If this is the case, the issuing bank will issue a letter of authorization for the applicant (importer) to receive the goods under the air waybill, instead of endorsing the air way similar to endorsing a bill of lading.
Best regards,
Mr. Old Man
