Mr Old Man Payment Q&A Why Is an Air Waybill Non-Negotiable While a Bill of Lading Can Be Negotiable? By Mr Old Man Posted on September 3, 2025 3 min read 0 0 187 Share on Facebook Share on Twitter Share on Google+ Share on Reddit Share on Pinterest Share on Linkedin Share on Tumblr In trade finance, one of the most common questions is why an Air Waybill (AWB) is always non-negotiable, while a Bill of Lading (BL) can be either negotiable or non-negotiable. The answer lies in the legal nature of the documents and the rights they confer. QUESTION Thanks for your valuable trade related write up. I’m from Pakistan I need your answer to the following question: Why does AWB is non-negotiable, and BL is negotiable? = Mohammad = _________ ANSWER Dear Mohammad, An Air Waybill (AWB) is non-negotiable because it is not a document of title. It functions only as a receipt for the goods, a contract of carriage, and proof of shipment. The consignee named on the AWB is the party entitled to take delivery, and that right cannot be transferred to another party by endorsement. Because of its non-negotiable nature, an AWB should always be consigned to a named party, not “to order” or “to the order of” any party. In LC transactions, issuing banks often require the AWB to be consigned to their name so they can control release of the goods. The bank then authorizes the applicant in writing to take delivery once the applicant has met his obligations under the LC contract (e.g., providing full cash cover or promissory notes if financed). Sometimes AWBs are mistakenly requested “to the order of the issuing bank,” but in practice banks do not endorse AWBs—they issue letters of authorization instead. A Bill of Lading (BL), on the other hand, can be either negotiable or non-negotiable depending on how it is made out: If consigned to a named party, it is a straight BL (non-negotiable). Delivery can only be made to that consignee, and endorsement does not transfer rights. If issued “to order” and blank-endorsed, it is a negotiable BL. The bona fide holder is the owner of the goods and can transfer rights by endorsement and delivery. If issued “to the order of [a named consignee],” the consignee may transfer title by endorsement to another party. Best regards, Mr. Old Man