Freight shipping involves the movement of shipments on a national or international level. The procedure to make shipments ready for transport is complex and requires transportation documentation and completion of other related procedures. Most importantly, shipments require a bill of lading and Airway Bill (AWB) to facilitate the transportation process. 

Read on to learn more about shipping contracts and how AWB eases the process.

The International Air Transport Association (IATA) distributes a legal document that contains shipping details known as an airway bill (AWB). The AWB is an essential component of consignment shipping since it contains details of the shipment, supplier and recipient, etc. 

Although AWBs are legally bound, interested parties cannot negotiate the terms of an AWB, thus providing lesser protection than bills of lading. However, AWBs are enforceable contracts signed by shippers and contracts. The consignee, airline and receiver are the three main parties involved in the process. 

As per the Airway Bill definition, the principal cargo document establishes contracts between the carrier and the consignee. As a global regulatory authority, IATA has devised a specific format for producing an AWB depending on the contract type.   

The airway bill serves the following functions:

• Receipt proof: Cargo carriers issue these bills as legal tenders to acknowledge receipt of goods. In case of disputes, either party can refer to AWB as legal scrutiny.
• Legal contract: Like bills of lading, Airway Bill contains detailed information like physical address, online contact details, mail id and contact information of the interested parties. Thus, it represents a contract of carriage between consignees and shippers. As a legal contract, AWB holds the terms and conditions of the contract. 
• Freight Bill: When Airway Bills are paired with all supporting documents, they can serve as freight bills. It contains detailed information on the ancillary charges, thus assisting the accounting process. 
• Customs declaration: Freights must pass a basic customs clearance before shipping. AWB is an important customs clearance document containing all export/import-related information. Additionally, it highlights other shipment details, carrier agent’s contact, insurance amount, etc. 
• Guidelines and insurance certificates: AWBs include the precise details of the goods and shipment. Shipments that require special maintenance guidelines are also provided. This reduces the probability of hazardous situations and protects the shipment. AWBs also contain insurance details of the shipment as legal proof of their receipt. In case of unfavourable circumstances, AWBs serve as the basis for insurance payments.
• Shipment tracking: Bills have their own unique airway bill number that helps consignees or receivers track the shipment. Shipments that require a lot of time can be tracked in real-time using the AWB number.

An Airway Bill keeps an account of shipment-related information that helps shippers and receivers alike. This one-page document is available in eight colours depending on the level at which different individuals hold it. The features of different types of AWBs are as follows:

• The original AWB held by the carrier is green, while the second one, also known as the consignee’s copy, is pink. The shipper's copy is blue, while the receipt and delivery proof copy are brown. All other copies are white and represent the individual stages of shipping. 
• Airline-specific shipments contain the airliner's logo, while neutral AWBs have no logos. 
• The most crucial feature of an AWB is the address and contact numbers of senders and receivers. 
• A 12-digit AWB number helps track shipment location and status. 
• A typical Airway Bill documents the relevant information in a specific format. The top right corner notes the AWB number and name of the airline carrying the shipment. The top left corner contains shippers' and consignees' addresses and personal contact details. It may also contain their account number, nature, quantity, type of goods, etc.

As a contract between the shipper and the carrier, AWBs contain crucial shipping information. To ensure that a carrier faces no issues while shipping, there are certain rules that consignees should follow while filling an AWB. These include:

• Entering personal details: Consignees must pay special attention while filling in their personal information. This information includes shipping dates, account numbers, company names, contact details, GST information, etc. 
• Entering receiver’s details: This section includes the receiver's personal information, including their names, addresses, contact details and tax IDs, etc. Some countries also allow postal addresses in this section.  
• Shipment details: Consignees must enter the shipment details, including package numbers, type, weight and dimensions. International shipments include information like shipment value, Harmonised System code and customs information. Shipments containing perishable or hazardous substances must carry the necessary tags and markings. 
• Billing and Shipping service selection: AWBs must clearly mention the name of the party paying for the shipping. Consignees or receivers must add their account information depending on who is making the payment. The option to select a shipping service depends on various factors like delivery dates, time taken, etc. 

The AWB can only go forward with the consignee’s signature and a packaging list.