What is Shipper’s Letter of Instruction?
A shipper’s letter of instruction (SLI), also known as the shipper’s export declaration, is an authorization document that is issued by the exporter to its agents or freight forwarders. The SLI document mainly contains details about the shipping terms, allowing the transport company to issue an air waybill or Bill of Lading (BOL) on the exporter’s behalf. It also lays out directions for the carrier on how to handle, store, load and unload the shipment effectively or without any physical damage to the products.
Apart from providing transportation and documentation instructions, an SLI also facilitates export control, reporting information while allowing the agent to file Electronic Export Information (EEI) and send it to the Automated Export System (AES).
Who fills out the shipper's letter of instruction?
It is the exporter or shipper’s duty to sign the shipper's letter of instruction with all the important information and detailed instructions on how to process the order. The letter will act as a handbook for the freight forwarder/agent to process the order according to agreed terms and conditions of the shipping term, leading to easy movement of the goods.
Is SLI required for Export?
All export shipments require a complete SLI. Shipping instruction in export acts as a way to formalize how and where to handle your export shipment. It also grants permission to the forwarder to act as the authorized forwarding agent for export control and customs-related processes.
An SLI is not a mandatory or legally binding requirement. However, the dependency may vary from country to country, determining the country-specific rules and foreign trade regulations. It serves as an order form as well as proof of purchasing from the forwarder. Exporters need to fill out the document before sending out the goods.
Why should you complete an SLI?
According to industry standards, shipper's letter of instruction is one of the most secure methods of sharing the shipping information with the freight forwarder, leaving almost no room for miscommunication between the exporter and agent. Hence, it is amongst one of the most followed practices in the trading community.
How to complete a shipper’s letter of instruction?
SLI is an obligation that needs to be fulfilled by the exporter. The proceeding as such is to be completed in advance, so that the stated guidelines are followed by the freight forwarding agent.
Shipper's Letter of Instruction - Format/Template
Details required in an SLI Form:-
The Shipper's Letter of Instruction form should include the contact details of the following parties:
- The exporter or the seller of the goods
- Intermediate Consignee
- Ultimate Consignee
- Forwarding agent’s details
- The Carrier’s details
Intermediate Consignee
The person/entity that acts as an agent for the participating party, typically being a bank or forwarding agent subjected to the delivery of the goods to the importer. They seize full responsibility of the dealing party in interest and possession of items with the ultimate intention of effective delivery to the ultimate consignee.
Ultimate Consignee
The ultimate consignee acts as an end-user for the goods/products, a company, or a person accepting the goods in the foreign nation. It can be any person, party, dealer, an actual possessor of goods receiving an export shipment.
Forwarding Agent
A person to handle and organize the shipment/proceeding on behalf of the importer/exporter. An expert in the field who can handle operations seamlessly.
Inland Carrier
Typically, an enterprise that offers services to or from an export point of view. A transporting line that hauls export/import between ports and inland points.
Additionally, the SLI form also has details regarding the shipment and supporting documents. Some of the main shipping documents mentioned in the form are listed below:
The product shipped - Quantity, weight, and value of the good
Packaging details and handling requirements
Export restrictions, if any
Mode of Transport
Documents such as the letter of credit, commercial invoice, packing list, export license, proforma invoice among others required to export a shipment
Any other special instructions
Also read: Irrevocable Letter of Credit | What is it & How does it work
While every country has some SLI-related requirements that an exporter needs to meet, here are some details that the US government expects:
Validated License no./General License symbol
It is an export license number for the commodity you are shipping. The particular section contains details that are used for mail shipments. It authorizes exports without application by the exporter to the Office of export Administration. Every license has a designated symbol, such as LVS, GBS, CIV, GIFT etc, which is handled by the office of export administration (i.e. US Department of Commerce - that controls all exportations except for certain commodities and technical data licensed export).
Export Control Classification Number (ECCN)
The export commodity control classification number is given by the U.S. Department of Commerce. It is used whenever an exporter/importer has a mention of SED/AES record.
Note: It is advisable to revisit the model and check whether your SLI form meets your country guidelines and the minimum requirements to avoid last-minute hassles.
