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What is an airway bill: Role, types and importance in shipping

Airway bill (AWB) is a document that accompanies goods shipped by an international air courier to provide information about the shipment & allow it's tracking.

Air and ocean are two popular and recommended international shipping modes. Among the two, air shipment is not just faster but also offers better tracking information. One of the most important documents that accompany goods shipped by air is an Air Waybill (AWB).

What is an airway bill (AWB)?

An Air Waybill is a consignment letter or dispatch note that contains information about the contract signed between the shipper and the carrier (airline). The International Air Transport Association (IATA) is the global authority in charge of maintaining the format of the Air Waybill¹.

What is an electronic airway bill?

The international regulating body that establishes the standard format for aviation waybills is the International Air Transport Association (IATA). The electronic airway bill (e-AWB), which was first introduced in 2010, has been the standard document since 2019, digitizing and streamlining the air freight process. But paper AWBs are still provided if and when they are "needed owing to applicable international treaties, national law, or as bilaterally agreed between the parties.”²

What is the origin and importance of an airway bill (AWB)?

The airway bill was introduced by the Warsaw Convention for the Unification of International Air Transportation rules in 1929². They declared AWB as a document that will be prepared by the shipper, as the legal contract signed between the shipper and the airline. It contains shipper’s name and address, consignee’s name and address, origin airport code, destination airport code, shipment value and details about number of goods and their description. It also contains terms and conditions, claims and standard procedures of the deal.

How to issue an airway bill?

An AWB has the following steps involved in applying and issuing:
• The carrier of the air shipment issues an Air Waybill upon receiving goods that have cleared the customs formalities.
• The shipper receives it and sends it through their bank to the consignee, if the transaction is under a Letter of Credit.
• When goods reach their destination, the consignee (agent) receives the shipment and collects a copy of the Air Waybill.

Issuing an AWB was paper-intensive and required manual efforts, which made way for an e-Air Waybill (e-AWB) in 2010 by IATA. From January 1^st 2019, the electronic airway bill (e-AWB) has become the default contract of carriage for air cargo shipments.

What is the use of an airway bill?

Uses:

This single-page legal document holds a lot of important information that helps in both domestic as well as international shipping. The following are the functions it serves:
• An AWB acts as a contract of carriage between the shipper and the airlines
• It is proof of shipment
• It acts as an air freight bill
• It acts as a legal document that contains information about both the parties involved
• It guides the carrier in dispatching the shipment correctly
• It also works as a customs declaration document

Functions

The following are the functions of an airway bill:⁴
● Proof of the shipper and carrier (airline's) carriage agreement
● Evidence of the carrier's receipt of the items for shipping
● Information about the associated freight and incidental costs
● Source of contact details for each party concerned
● Instructions for managing, sending, and delivering the items
● Document for customs declaration

Contents of an airway bill

The IATA (International Air Transport Association) standardizes two key formats in which an Air Waybill can be issued³:

Airline-specific AWB

This format contains information about name of the airline, logo, address of the headquarters and airway bill number.

Neutral AWB

This format has the same format as mentioned above, without the details about airlines.

There are 8 different color codes in which airway bills can be issued. Each of the colors has specific significance:
• Green: This is the original copy that remains with the carrier (issuing authority).
• Pink: This is also considered the original copy and it remains with the consignee of the shipment.
• Blue: Also considered original, this copy or an Air Waybill is given to the shipper.
• Brown: This is a duplicate of the Air Waybill that is used as a receipt or proof of delivery in the process of commute.
• White: This copy is also kept by the shipper and gets used for various purposes.

There is a unique 11-digit number assigned to each Air Waybill. This code is unique and indicates the information in the following sections:
• The first three digits give information about the carrier
• The next seven digits are the serial number of the bill issued
• The last digit is the checksum digit which is calculated by dividing the serial-number digits by 7.

What are the types of airway bill?

There are two major types of airway bill:

House Air Waybill (HAWB):

When the freight forwarder receives export goods from the exporter, this bill is issued by them to the exporter. In this document, the shipper is the exporter and the consignee is the importer.

Master Air Waybill (MAWB):

The air cargo goes through custom checks and once all the customs formalities are completed and the cargo is transferred to the main carrier, Master airway bill is issued to the freight forwarder. In this document, the freight forwarder is the shipper and the person who receives the shipment before the consignee at the destination port is called the consignee. This person then makes the final delivery.

How to get an airway bill number?

An AWB has the following steps involved in applying and issuing:⁶

Step 1:

The carrier of the air shipment issues an airway bill upon receiving goods that have cleared the customs formalities.

Step 2:

The shipper receives it and sends it through their bank to the consignee if the transaction is under a letter of credit.

Step 3:

When goods reach their destination, the consignee (agent) receives the shipment and collects a copy of the airway bill.

Issuing an AWB was paper-intensive and required manual efforts, which made way for an e-airway bill (e-AWB) in 2010 by IATA. From January 1st 2019, the electronic airway bill (e-AWB) has become the default contract of carriage for air cargo shipments.

Difference between airway bill and bill of lading

A bill of lading is a legal document that contains details about the type of goods, quantity, and destination. It is issued by the carrier to the shipper in case of ocean freight. It is similar to an airway bill that acts as proof of shipping the export goods from the shipper to the carrier in the case of air freight. The only difference between the two is that an airway bill is not a document of title for the goods, meaning it does not transfer the ownership of the shipment in transit; it only acts as a legal contract of transportation of the goods.

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More blogs on way bills

1. What is Seaway Bill: Why do exporters need it?

2. Master Airway Bill in shipping: All you need to know about its meaning and format

Frequently Asked Questions

Why is the Air Waybill a non-negotiable document?

Air Waybill is a non-negotiable document because this bill does not transfer ownership of the shipment to anyone, this is just a proof of receipt.

Where can I find my Air Waybill number?

Air Waybill number is mentioned on all copies of the bill. You also receive your AWB number in messages on your registered mobile number and emails.

How can I track my shipment through the Air Waybill number?

To track your cargo using your Air Waybill, visit your shipping company’s website and enter your unique Air Waybill number. All your cargo details and the tracking-related information will be displayed.

What is required in an airway bill?

The name, address of the carrier's head office, logo, and airway bill number must all be included on every airline AWB. The format and layout of neutral airway bills are identical to those of airline AWBs; they are simply not pre-populated. Some airlines only permit access to electronic airway bills; they no longer print paper versions.⁷

Who provides an airway bill?

The airway bill is created and distributed by the International Air Transport Association (IATA).⁸

Published on August 29, 2022.

Sources:
1. https://www.investopedia.com/terms/a/airway-bill.asp
2. https://www.iata.org/contentassets/6c6b8373246b4b2db532ff9c89bee5a7/eawb-default.pdf
3. https://loginextsolutions.com/blog/eawb-electronic-air-waybill/
4. https://www.cogoport.com/blogs/air-waybill-awb-what-is-its-role-in-air-cargo-transport
5. https://www.dripcapital.com/en-in/resources/blog/what-is-an-airway-bill-awb
6. https://www.iata.org/contentassets/783ac75f30d74e32a8eaef26af5696b6/csc-672-en-28dec2019.pdf

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