Definition
An Air Waybill (AWB) is a legal contract used in the international shipping industry. It serves as a receipt issued by an international airline for goods and as proof of the contract of carriage. It also includes important information, such as the shipper’s name and address, description of the goods, destination and other details relevant to the shipment.
Key Takeaways
- Air Waybill (AWB) is a legal contract used in the international shipping of goods. It serves as a receipt issued by an international airline for the goods and an evidence of the contract of carriage.
- AWB includes essential information such as the nature of goods, quantity, value for customs, details of consignee and shipper, etc. This ensures seamless air cargo shipments.
- AWB serves as a document of proof ensuring that the carrier has received the goods described and agreed to carry them to the destination airport per the agreed terms. Therefore, it is crucial for air freight shipping.
Importance
The finance term Air Waybill (AWB) is important as it acts as a legal agreement between the shipper and the carrier and ensures transparency in the freight transportation process.
It contains vital information such as the type and quantity of goods, the destination, and the name of the consignee, which allows all parties involved in the transportation to stay informed and track the shipment.
Moreover, AWB ensures the shipper’s proof of consignment as it guarantees the carrier’s commitment to transport the shipment to the specified destination through the agreed route.
Therefore, AWB is an essential document in managing and securing cargo transportation, contributing to global trade’s smooth operation.
Explanation
The Air Waybill (AWB) is a critical document in the air cargo transportation system, which achieves several important functions. Primarily, it serves as a contract of carriage between the shipper (sender) and the carrier (airline). This comprehensive document contains details such as the nature, quantity, value and other specific details of the cargo, which is essential for the carrier to effectively process and handle the shipment.
It also includes the details pertaining to charges, regulations, liabilities and any pre-agreed special instructions. Moreover, the AWB is used as an evidence of receipt of goods for shipment for the transporter.
It verifies that the carrier has received the cargo as listed and is obligated to deliver it to the intended destination in the same condition. Notably, despite documenting the transaction and transfer of ownership, the AWB is a non-negotiable instrument, meaning it doesn’t confer ownership or title of the goods to the holder of the document.
Thus, it cannot be used as collateral or for claiming ownership against a third party.
Examples of Air Waybill (AWB)
International Shipping: An international shoe manufacturing company ships its products from its factory in China to retail stores across Europe. The company would use an Air Waybill for this type of shipping transaction. This document will cover the details of the shipment such as the carrier’s name, name and address of the consignee, description of goods, handling instructions, and will work as proof of the contract of carriage.
E-commerce Fulfillment: A successful e-commerce company selling electronics is shipping an order containing laptops to a customer in another country. An AWB will be issued by the airline handling the order, ensuring the timely and efficient delivery of the package. It includes crucial information like shipper’s and receiver’s details, description of goods, and tracking number.
Import/Export of Perishable Goods: A US-based farm exporting organic products to European countries would use an AWB. The document would have complete information about the shipment, including the weight, security checks, instructions for handling, and delivery details. This is important as the goods are perishable and need to be dealt with in a specific manner.
FAQs About Air Waybill (AWB)
What is an Air Waybill (AWB)?
An Air Waybill (AWB) is a legal contract between the shipper and the carrier. It serves as a receipt for the goods, an evidence of the contract of carriage, and a document of title.
Why is an AWB important?
An AWB is critical because it acts as a contract between the shipper and respective airlines. The contract is binding, and outlines the responsibilities of both parties and serves as a goods receipt as well.
What information is contained in an AWB?
An AWB usually contains information such as the shipper’s name and address, the receiver’s name and address, three-letter airport code, description of goods, handling instructions, and other relevant details.
Can AWB be used for sea freight or land freight?
No, AWB is specific to air freight. For sea freight, a Bill of Lading is used, and for land freight, a Bill of Lading or a Freight Bill could be used.
Is AWB a document of title?
Yes, in addition to serving as an evidence of the contract of carriage, AWB also serves as a document of title.
Related Entrepreneurship Terms
- Freight Forwarder
- Bill of Lading
- Consignment
- Cargo Receipt
- Shipment Tracking
Sources for More Information
- Investopedia: This is a leading source of financial content on the web, with comprehensive information about Air Waybill (AWB).
- International Air Transport Association (IATA): IATA represents, leads, and serves the airline industry, which includes defining AWB standards and practices.
- Export.gov: This U.S. government site offers help with many aspects of trade, including shipping documents such as Air Waybill (AWB).
- FedEx: As a major shipping company, FedEx provides detailed information on their site about shipping processes, including how to complete an Air Waybill.
