8 important International Shipment Documents
Exporting is a daunting task, even for the most experienced. It's all nice and easy to say "just get it shipped from China", but there is a lot of extra work that must go in to ensure to goods are able to be transported.
Here are the 8 most important documents required to ensure your goods make it across the waters.
1. PROFORMA INVOICE
Almost all international transactions start with a proforma invoice. Rather than a 'quotation document', a proforma invoice allows a prospect to arrange for such things as financing, letters of credit, and applications for import licenses.
Details of the proforma invoice include;
The buyer and seller in this transaction.
A detailed description of the goods.
The Harmonized System (HS) classification of those goods.
The payment term of the sale. (Incoterms)
The delivery details including how and where the goods will be delivered and how much that will cost.
The currency used in the quote.
The proforma invoice should include an expiration date to minimise risk of market volatility.
2.Commercial Invoice Once a proforma invoice is approved and an order is received, the goods need to be prepared for shipping. This includes the paperwork that must accompany the goods. One of the most important documents is a commercial invoice. The commercial invoice includes most of the details of the entire export transaction, from start to finish. The commercial invoice may look similar to the preceding proforma invoice, although it should include additional details that weren't known before. Details such as order number, purchase order number, banking details and payment information. Info such as insurance coverage is helpful to ensure prompt delivery of the goods and full payment from the customer. 3. Packing List An export packing list may be more detailed than a packing slip for domestic shipments. The packing list identifies items in the shipment and includes the net and gross weight and dimensions of the packages. It identifies any markings that appear on the packages, and any special instructions for ensuring safe delivery of the goods to their final destination. Some other important uses of the packing list may be;
Your freight forwarder may use the information on the packing list to create the bills of lading for the shipment.
A bank may require a detailed packing list be included in the set of documents you present to get paid under a letter of credit.
Customs officials may use the packing list to identify the location of certain packed items they want to examine.
4. Certificates of Origin Some countries require a certificate of origin to identify what country the goods originated. These certificates usually need to be signed by some semi-official organization, like a Chamber of Commerce or a consulate office. A certificate of origin may be required even if you’ve included the country of origin information on your commercial invoice. Electronic certificate of origin (eCO) documents are much more popular now, as they remove the requirement to manual delivery of this document. An eCO is usually quicker to turn around and allows you forward a lot faster too. In addition to the generic certificate of origin form, there are also country-specific certificates of origin. These certificates may be required to conform with national trade agreements. 5. Shipper’s Letter of Instruction One of the most important groups in the export process are the freight forwarders, who usually arrange the transport of the goods with a carrier and help ensure all details are taken care of. Depending on your agreed term of sale, either you, the buyer, or the exporter need to hire a freight forwarder to complete the work. Regardless of who hired the forwarder, it’s important to provide them with a Shipper’s Letter of Instruction (SLI) containing all the information needed to successfully move the goods. The SLI may include a limited Power of Attorney giving the forwarder authority to act on your behalf for this shipment. The SLI may also grant the forwarder permission to file the export information electronically through the Automated Export System (AES). 6. Bills of Lading There are three common bill of lading documents: inland, ocean, and air waybill. Inland Bill of Lading An inland bill of lading is a contract of carriage between the exporter and the shipper of the goods that states where the goods are going; it also serves as your receipt that the goods have been picked up. Ocean Bill of Lading If the goods are shipping by ocean vessel, you’ll need an ocean bill of lading. An ocean bill of lading can serve as both a contract of carriage and a document of title for the cargo. There are two types: 1. A straight bill of lading is consigned to a specific consignee and is not negotiable. The consignee takes possession of the goods by presenting a signed, original bill of lading to the carrier. 2. A negotiable bill of lading is consigned “to order” or “to order of shipper” and is signed by the shipper and sent to a bank in the buyer’s country. The bank holds onto the original bill of lading until the requirements of a documentary collection or a letter of credit have been satisfied. Air Waybill Goods shipped on a plane require an air waybill. Unlike an ocean bill of lading, an air waybill cannot be negotiable. It is a contract of carriage between the shipper and the carrier. 7. Dangerous Goods Forms If your products are considered dangerous goods by either the International Air Transport Association (IATA) or the International Maritime Organization (IMO), you need to include the appropriate dangerous goods form with your shipment. Shipping dangerous goods or hazardous materials can be tricky. Before you do it, the appropriate people at your company need to be trained in the proper packaging, labeling and documentation of these shipments. The IATA form—the Shipper’s Declaration for Dangerous Goods—is required for air shipments. There is a different version of the form for ocean shipments. Again, these forms need to be completed by someone who has been trained to handle dangerous goods shipping. 8. Bank Draft A bank draft is an important part of the international sales process for transferring control of the exported goods from the seller in exchange for funds from the buyer. It is often called a documentary collection, because the seller attaches various documents to a bank draft and a cover letter. Usually the seller’s bank will send the bank draft and related documents via the freight forwarder to the buyer’s bank or a bank with which it has a relationship in the buyer’s country. When the buyer authorizes payment for the goods, the buyer’s bank releases the documents to the buyer and transfers the funds to the seller’s bank. The bank draft may or may not include a transmittal letter, which includes details of the bank draft transaction including the types of additional documents that are included and payment instructions.