Shipping documents are the crucial step in international trade to ensure that the goods are transported smoothly and in compliance with customs regulations. Below is a step-by-step guide line & how to prepare the necessary documents for shipments.
1. Commercial Invoice
- Purpose: This is a main document for both the seller (exporter) and the buyer (importer). It provides as a proof of sale and helps to determine the customs value for duties and taxes.
- Information to Include:
- Include the Seller’s and buyer’s name and address.
- It describes the goods, including the quantity, weight, and price.
- Total value of the goods, along with any need for any taxes or discounts.
- Declare the payment terms (e.g., Letter of Credit, Cash in Advance).
- Incoterms which are like FOB, CIF.
- Shipping details, including the port of the destination country.
- Included with Invoice number and date.
- Currency used for the transaction.
2. Packing List
- Purpose: It provides the details of the goods that are packed, which helps both the seller and customs authorities to easily verify the shipment’s contents.
- Information to Include:
- Number of packages like boxes, crates, pallets, etc.
- Sizes and weight of each package.
- Type of packaging like cartons, drums.
- Marks and numbers on each package for identification easily.
- Description of goods, as per stated in the commercial invoice, but with vast detail about packaging.
- Special handling instructions, if applicable, e.g., fragile or perishable goods.
3. Bill of Lading (B/L)
- Purpose: The Bill of Lading performs as a receipt for the goods. It is a document of title, and a contract for the transportation of goods.
- Types of Bill of Lading:
- Ocean Bill of Lading used for sea freight.
- Air Waybill (AWB) used for air cargo.
- House Bill of Lading if using a freight forwarder.
- Master Bill of Lading is provided by the shipping company.
- Information to Include:
- Shipper and importer details.
- Shipping terms like FOB, CIF, DAP.
- The description of the goods.
- Delivery instructions.
- The carrier’s details (shipping line or airline).
- Port of departure and destination.
- Date of shipment.
- Bill of Lading number and references.
4. Certificate of Origin (COO)
- Purpose: The manufacturer country or certifies the origin of the goods, which can impact the duties and taxes applied by the importing country.
- Information to Include:
- Exporter’s details.
- A declaration confirming the origin country of the products.
- Description of the sold goods.
- The issuing authority like Chamber of Commerce, government office.
- Signature of an authorized person from the issuing authority.
5. Export Declaration (Shipper’s Export Declaration – SED)
- Purpose: Required by customs to identify the shipment for compliance and statistical purposes. It is often submitted electronically through a government platform.
- Information to Include:
- Exporter’s name and address.
- Importer’s name and address.
- Export value of goods.
- Description of the goods and their classification (HS code).
- Destination & departure country.
- Intended use like commercial, personal.
- Mode of transportation which can be air, sea or land.
6. Insurance Certificate
- Purpose: It provides coverage for the goods during transport, protecting against risks such as damage or loss during transit.
- Information to Include:
- Insurance company details.
- The type of coverage e.g., all-risk insurance.
- Value of the goods being insured.
- Shipment details (e.g., shipping dates, origin, and destination).
- Terms of coverage and exclusions.
7. Import License (if required)
- Purpose: Some of the time certain goods may require an import license or permit from the importing country’s government before they can be imported.
- Information to Include:
- Licensing authority.
- License number.
- Description of the goods.
- Quantity and value.
8. Proforma Invoice
- Purpose: It is an estimate of the cost of goods sent before the final commercial invoice. It can be used as a quote or offer for the buyer and is mostly required by customs for duties and taxes assessment.
- Information to Include:
- LIkely same as a commercial invoice, but without the actual sale and payment details.
- It describes the goods, prices, and payment terms.
9. Letter of Credit (L/C) or Terms of Payment
- Purpose: If payment is made through a Letter of Credit, this document is crucial to outline the terms and conditions of the agreement between the seller and buyer.
- Information to Include:
- Terms of payment (e.g., irrevocable, confirmed, sight, usance).
- Bank details for both the buyer and seller.
10. Dangerous Goods Declaration (if applicable)
- Purpose: If the goods being shipped are hazardous or dangerous, a special declaration is required to ensure safe handling and compliance with regulations.
- Information to Include:
- Identification of hazardous goods (e.g., chemicals, flammable materials).
- Handling instructions.
- Classification code according to international standards (e.g., IMDG for maritime).
