11 July 2025

Shipping Guarantee in Singapore: Importers' Guide in 2025

In order for an importer to safely and reliably obtain their goods, a Shipping Guarantee is a vital piece of documentation. Without this document, goods may be held up at port, creating costly delays and disrupting the supply chain. In order for importers to take control of delivery, obtain their goods, and improve cash flow, it is integral to have banks issue these guarantees. Importers and shipping companies rely on this process to keep goods moving and to support Singapore’s busy trading environment.

What Is a Shipping Guarantee?

A shipping guarantee is a financial document issued by a bank on behalf of an importer. It serves as an indemnity to the shipping company, that approves the releasing of cargo prior to the original bill of lading arriving

This document is particularly useful in international trade when goods reach the port faster than the shipping documents. The shipping company receives the written guarantee as assurance of payment, enabling them to release cargo promptly and avoid demurrage charges.

This type of bank guarantee is commonly used under letters of credit (L/C) arrangements. After accepting liability, the banking institution and importer both bear joint liability for the release of goods, ensuring that both the importer and shipping company are protected during the process.

Use Cases and Benefits for Singapore Importers

Shipping guarantees are often used by Singapore importers when the arrival of goods precedes the arrival of original shipping documents. This situation can happen due to delays in document transmission or unexpected changes in logistics.

Key use cases include:

• Urgent Cargo Release: The Shipping Guarantee becomes urgent when goods are perishable or needed for time-sensitive projects, and the importer cannot afford for them to be held up at the port indefinitely.
• Avoiding Demurrage Fees: It prevents extra costs for storage, when cargo is stuck at port for longer than the allowable free period.
• Loss Prevention: Under MPA (Maritime and Port Authority of Singapore) laws, unclaimed and abandoned cargo may be removed at the port operator's discretion after a specific timeframe. It is possible for a shipment to be entirely lost if the goods are auctioned off or removed, due to an inability to claim it.

To avoid such circumstances, Shipping Guarantees are a highly useful safety measure. By presenting these guarantees, the importing business can prevent their cargo from being stalled in the harbour, maintaining supply chain continuity and leading to stable operations.
 

Shipping Guarantee & Air Waybill Endorsement: What’s the Difference?

A Shipping Guarantee (SG) and a Air Waybill Endorsement (AWBE) are both used to claim goods before the arrival of the full set of shipping documents. However, they have slightly different purposes, and have distinct procedures to follow.

A Shipping Guarantee is used when only a non-negotiable copy of the Bill of lading/Air Waybill is available. The importer submits the Shipping Guarantee acquired from their bank, and presents it at the port to claim the goods. Once the original shipping documents arrive, the Guarantee is returned and cancelled by the bank. This is non-transferrable, and can only be delivered to the named buyer.

Air Waybill Endorsements, on the other hand, are used to handle a negotiable Bill of lading/Air Waybill. The buyer requests for the bank to endorse this document, and the negotiable transport document is used to take delivery of goods. AWBEs are often considered a subset of Shipping Guarantees and are sometimes required as an additional safeguard. This is transferable, and goods can be delivered to anyone in possession of the endorsed bill.

How do I Apply for a Shipping Guarantee?

To apply for a Shipping Guarantee with RHB, applicants are required to submit several supporting documents. The Shipping Guarantee process requires the applicant to provide:

• Application form
• Shipping Company’s Letter of Guarantee
• A copy of the original Bill of Lading (BL)
• Copies of relevant invoices
• Signed Bill of Exchange
• Air Consignment Indemnity Form
• Indemnity for Counter-Signing of Shipping Guarantee Form

The completed application and supporting documents are then submitted to RHB for processing. As the issuing bank, RHB is able to evaluate these documents and issue a shipping guarantee according to the specifics outlined in the application.

Safeguard Your Imports With RHB

In international trade, delays do not just cost valuable time. The disruption of a shipping schedule can have a major impact on cash flow and time-reliant projects, making it important to avoid these situations. An original Shipping Guarantee gives Singaporean importers a practical way to bridge the gap between arrival and clearance, thus keeping everything running on schedule and logistics flowing smoothly.

RHB offers tailored trade finance products for various enterprises, including Shipping Guarantees, Import Letters of Credit, Inward Bill Collection, and other Import and Export products. To find out more about how we can help your organisation, contact RHB today and learn about how we can serve your business.

The information presented in this article is accurate as of date of publication.

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