The field of international shipping & commerce involves immense economic possibilities and growth potential. However, to make sure you enjoy a smooth and hassle-free shipping & logisitcs experience, you must spend time understanding and decoding the various rules and regulations associated with the industry.

The international shipping documentation process is complex and involves the proper filing of multiple forms to ensure smooth transactions. The preparation and presentation of these documents must be done flawlessly to ensure that your shipment gets a smooth passage to its destination. Otherwise, it could lead to delays, and result in your goods getting held up at the customs, leading to financial damage and stress.

Listed below are the top few documents you will need for a smooth international shipping experience.

The Most Important Shipping Documents

Commercial Invoice

A commercial invoice or [CI] is one of the most vital documents that must be presented at the customs while shipping your goods. It refers to the invoice issued by the seller/exporter to the buyer/importer.

All international transactions involving the import and export of goods must have proof of sale. The commercial invoice satisfies that requirement. It is primarily similar to a standard invoice. But, unlike a standard invoice, it is a detailed document that offers information of all parties involved, such as the importer, exporter, freight forwarder, banks, shipping lines, and others. You must submit the standard invoice and the commercial document to the customs as they both serve different purposes.

A commercial invoice is essential because it is a one-place document that holds all the crucial information about the transaction needed for customs clearance of the goods.

A commercial invoice is also a handy instrument for several supply chain finance solutions that banks and other finance companies introduce to make global trade seamless & profitable

Bill of Lading

A Bill of lading click here for learning all about BLs represents the official contract between the shipper (owner of the goods) and the shipping company. The document confirms the receipt of goods by the freight carrier for the shipment. This contains information about the shipping destination, the goods included, and their handling details. The document must be signed by an authorized representative of the carrier upon receipt for the shipment to be released.

A negotiable BOL can be transferred to a third party, while a non-negotiable BOL can be signed only by the parties listed on the document.

A BOL is the most crucial shipping document in international shipping. It is a legal contract and can be used if there is any litigation involved. The BOL provides evidence of the contract of carriage, receipt of goods, and the document of title.

There are many different types of Bills of Lading:-

  1. Inland BOL :- An inland BOL is a contract between the shipper and the transportation company. It covers various clauses related to the overland transportation of goods and can be used as the carrier's receipt to the shipper and the carriage contract. The document has detailed information about the goods being transported.

  2. Air waybill :- An air waybill (abbreviated as AWB) is a document that must be sent out with the goods when an international air courier ships them. The AWB provides detailed information about the shipment. The consignment can also be tracked using this document.

  3. Ocean Bill Of Lading:- The ocean BOL is a contract for carriage and also a document of title for the cargo. The bill mentions both the parties involved in the transaction and a description of the goods and routing instructions.

Packaging List

A packaging list is an important shipping document that contains an itemized detailed list of the cargo. The form mentions the weight and dimensions of the cargo, safety measures, and the packaging type. The shipping company may use it to create the BOL, while the banks may also ask for it as a document for payment under a Letter of Credit (LC). Freight forwarders use the list to clear goods for inspection. It can also be used for settling disputes between a shipper and a carrier.

A packaging list prevents shipping the wrong cargo across international borders. All the parties involved in the shipping process can refer to the list and double-check its contents to avoid any mistakes or confusion. The list must be attached at a visible spot of the container for easy access and retrieval by the concerned officials.

We also have this handy sea container tracking tool that is available for free and can be quite useful regular importers/exporters

Certificate Of Origin

A Certificate of Origin (COO) is a vital document in international trade that declares the country of origin for the manufactured goods. This document is usually certified by the consulate or the chamber of commerce. It is an important form needed to assure if the goods are eligible for export. It is the exporter’s responsibility to provide the COO based on the rules and regulations of the destination country.

The COO is a document that establishes that all the trade agreement rules have been complied with. It also determines the duty rate and whether the goods meet all legal obligations of import and export.

Shipper’s Letter Of Instructions

A Shipper’s Letter of Instruction (SLI) is a letter from the exporter to the freight forwarder with instructions on how and where to handle the export shipment. The letter grants the required permission to the forwarder to become the authorized forwarding agent for US export control and customs.

The SLI is a multi-purpose document that helps communicate precise information to the freight forwarder and avoids any misunderstandings that can result in financial loss to the exporter.

Letter Of Credit

A Letter Of Credit (LC) is issued by a bank guaranteeing payment on goods sold from a seller to a buyer. If the buyer is unable to pay for any reason, then the bank takes the responsibility to pay the amount and close the transaction.

The field of international trade is complex as there are different rules and regulations of various countries with regard to the shipping process. An LC with its monetary guarantee offers the assurance of a guaranteed economic transaction.

Customs Bond

A customs bond is similar to an insurance policy as it guarantees payment of all duties and fees related to a shipment. The importer can purchase a bond from a surety company, which will ensure the US government that all corresponding shipment fees will be paid. The surety company is bound by the importer’s responsibilities and will have to make the payment if the importer defaults. A customs bond covers only the US customs taxes and duties. It does not cover the goods being imported.

As per the Customs and Border Protection (CBP) regulations, almost all the types of commercial imports in the US need to be bonded. It ensures speedy clearance of goods at the customs and helps reduce paperwork, thus saving time and hassle.

Insurance Certificate

An insurance certificate is a certificate provided by an insurance company to certify that the exporter has purchased an insurance policy for the shipment of goods. It provides cover for any liability and in the event of damage or loss to the goods shipped.

International shipping exposes exporters to many risks. The exporter community can confidently conduct business by having an insurance policy as the policy will cover monetary losses.

Other documents required for International Freight Shipping

Import License

An import license or permit is a document issued by the government, certifying that a business or an agent can import particular commodities to specific countries.

Power Of Attorney

A Power of Attorney (POA) is needed when the importer or exporter wants to appoint an agent such as a customs broker or a freight forwarder. The POA gives these external parties the authority to handle the various aspects of the shipment on the importer’s/exporter’s behalf as it assigns legal powers to the individual.

Fumigation Certificate

A fumigation certificate is a document confirming that the wooden packing materials used in a cargo shipment have been fumigated. The certificate provides details of the treatment, such as the fumigants used, temperature range, etc.

Inspection Certificate

An inspection certificate is a document which states that the shipped goods have been inspected and certified that they conform to the terms stated on the contract. It is only needed for specific types of goods like industrial equipment and perishable items.

Dangerous Goods Note

The dangerous goods note is a transport document that provides detailed information about the contents of a consignment to the concerned persons such as carriers, receiving authorities, and forwarders. It is a mandatory part of any consignment that contains hazardous goods.

Importer Security Filing

The CBP requires an Importer Security Filing (ISF) to document importing information and other vital details. The importers can be levied with a penalty if they do not file the ISF properly before shipping the goods. The ISF must be submitted at least 24 hours before the shipment’s departure to the US.

Conclusion

There are a variety of documents involved in the shipping process. Some may apply to specific situations, whereas others may entail a different set of documents. However, using and submitting the wrong forms can have severe consequences and lead to delay and stress. That is why all the shippers must be aware of the documentation process or involve an agent to ensure that every stage is completed smoothly.

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