Are you confused when you see terms like Bill of Lading, Arrival Notice or Letter of Credit? Do you find it a bit difficult to understand the meaning of these documents? No problem. We are here to clarify the chief shipping documents that you might need or encounter when shipping your load.
Though the majority of these documents are non-negotiable, some of them still relate to the kind of cargo and the places you are shipping from and to. As such, it is of prime importance that one is aware of the documents that are mandatory for the shipment.
The most important shipping documents
Commercial Invoice
The Commercial Invoice is one of the most important documents when shipping your ocean freight. It is the invoice that is issued by the seller (exporter) to the buyer (importer). This is required in the customs clearance process.
Packing List
The Packing List is another essential ocean freight shipping document, especially when it comes to international destinations. It is a complete summary of the cargo mentioned in the Commercial Invoice. This document also has information on how the shipment has been packed and which marks and numbers are noted outside the shipment boxes, as well as information such as which marks and numbers, if applied, are noted outside the shipment boxes.
Export/Import Customs Declaration
An Export or Import Customs Declaration is a collection of information regarding goods that are to be imported or exported. This declaration is particularly important when transporting international freight. From a legal point of view, a Customs Declaration is used to show the shipper’s desire to place the goods under a specific customs procedure. The document is used for customs clearance and for the calculation of duties and taxes that are applicable to the cargo, and it must be filled out correctly. A customer’s broker would use the invoice and packing list to prepare it.
Bill of Lading & Sea Waybill
The Bill of Lading is a longer document that logistics will give to you. It is a binding document related to shipping, and it has some important details about the shipment. It is also a part of the ocean freight and the guarantee that the carrier has received the goods from the shipper in safe condition. This document belongs to the party that also controls the cargo.
A Sea Waybill is also a contract of carriage. However, the Sea Waybill is not required for cargo delivery and will only be handed out as a cargo receipt, which approves its receipt. Furthermore, a Sea Waybill is not negotiable, and it does not give the right to another third party.
Certificates (production, vessel, phytosanitary)
Whether your cargo may be asked for one of the following certificates varies with the kind of your cargo:
Certificate of Production: This certificate is related to the material or type of products using sustainable resources or following approved methods (e.g. sustainable wood sources). Cargo must be imported or exported into regions where there are regulations concerning production.
Vessel Certificate: The essential function of this certificate is to confirm the ownership of a vessel. It also mentions a few details of the vessel’s age and maintenance. The letter of credit requires it to be presented as a rule for releasing the shipment (refer to the following section).
Phytosanitary Certificate: This is a document certifying that regulated pests do not contaminate plants and plant products. It also lists that the cargo complies with other phytosanitary requirements as laid down by the importing country.
Air or Rail Waybill
Depending on your means of transportation, you can get an airway bill or rail waybill. The Air Waybill is a non-negotiable document and is issued by the air carrier as an acknowledgment of possession of a shipment. The AWB is also a type of bill of lading. However, it is issued in a non-negotiable form, so there is less protection with an AWB than with the bill of lading. The AWB also serves as a receipt for the consignor. The consignor’s address and contact information are shown on the document on one side, and the receiver’s information is represented on the other side of the paper.
On the other hand, the Rail Waybill is a document used for carriage via a railway. The customs broker prepares and submits this document by following the shipper’s instructions after receiving it.
Arrival Notice
Another crucial document to be prepared in this type of transportation is the Arrival Notice or Notice of Arrival. This is a brief document that gives you an idea that the goods are on the way to their destination and will be in the clearance system shortly. It contains information about the commodity, such as cargo description, date of sailing, destination country related to customs duties, and carrier’s contact details. Once they have completed the obvious physical presence, they should be handed the notice by the ship destination carrier through their agent and to the other parties, if any is still relevant from the Bill of Lading.
Certificate of Origin
The Certificate of Origin represents a document that states a product or an item’s point of production, meaning the country of origin. This fact is always true. It is a document that provides details such as the product information, destination, and export country. It is an important form as it helps to determine if goods are eligible for import and if they are subject to duties.
Importer Security Filing (local customs requirements)
Marking “Importer Security Filing (ISF) required” is quite possible. It is an American customs and border protection directive that is relevant only for ocean-going shipments. Prior to cargo shipment, importers are to send the necessary data for this document to their US customs associate, as it is a requirement to be filed with US customs and border protection 24 hours before the vessel sails from the last origin port. The seller’s and buyer’s name, address, and the importer of the record are the necessary data; the ultimate consignee, manufacturer’s name, and address, as well as the country of origin, are others.
Letter of Credit
In the case of trade, a Letter of Credit (L/C) serves as the chief means of payment. There is no option for it to be revoked. This document is a bank guarantee to the buyer. It states that the bank, in agreement with the buyer, will provide a specific sum of money in a certain currency to a specific seller. It is also mentioned that the seller is obliged to deliver the needed documents on the defined date. At the same time, the document contains the data on which the product is produced, its characters, and the documental requirements for technical description.
Final Thoughts
Whether a bill of lading is being handled, a packing list is being created for a shipment, a customs invoice or commercial invoice is being prepared, or a certificate of origin is being prepared at a port – Geedlaal Logistics guide the way.