Shipping documents 101: A beginner’s guide of important documents for all the budding traders
Shipping documents are the bricks that lay the foundation of a shipping contract as well as the safe journey of a cargo. The international shipping industry does not run on verbal agreements between the exporters and importers. It is one of the largest economic sectors and holds a more comprehensive significance than just a mere business sector. Therefore, the budding traders and aspirants wishing to be a part of this enormous industry must know about all the important shipping documents used in the shipping process. The ones who realise the importance of each legal document can settle their business conveniently.
The total number of shipping documents and their nature depends upon the importing country and the nature of the shipment. So, one cannot assess the need for all the important documents beforehand. However, it is better to know the details of the most obvious ones to get a clear picture.
Preparation of all the shipping documents takes time and patience to make accurate entries.
List of All the Shipping Documents Traders Must Know About
The shipping documents create the chain of supply between the importers and exporters. A trader must know about the purpose of these bills and documents to keep them safe, updated and accurate. Remember, any unnecessary negligence or mistakes in the documents can invite legal trouble in the long run.
Proforma Invoice
The export process starts with an inquiry made by the importers willing to know about the products. The quotation that the exporters provide in return for that enquiry is what we know as the Proforma invoice. This document includes the price of the goods, terms of trade that lie in general and other descriptive information.
Shipping Bill
The shipping bill is the document sanctioned by the export customs clearance department to the exporter. Without this document, an exporter cannot avail the “Let Export Order” from the customs representative. This bill contains all the details of the freight shipment, including the payment, importer, exporter, payment methods, GST number, etc. The exporters must take the help of a CHA (Customs House Agent) to file the shipping bill through the electronic platform.
Bill of Lading
The Bill of Lading (B/L or BOL) is one of the most crucial shipping documents, mandatory in all forms of international trade. This bill acts as a term of the contract between the shipper and the carrier. It includes all the information about the trading parties and a detailed description of the goods.
Bill of Entry
Just like the Bill of Lading, the importers need to prepare and submit a Bill of Entry to the import customs clearance department. In the absence of this bill, the port authorities and the customs department do not grant any clearance to the importers. The Bill of Entry also includes the description of import goods.
Commercial Invoice and Packing List
Earlier, the commercial invoice and the packing list were two different documents that the traders had to submit separately. After the Central Excise and Customs Board issued a notice dated on 12th January 2015, the exporters can now file these two documents as one. The commercial invoice is the legal bill of the goods, and the packing list includes its descriptive information.
Shipper’s Letter of Instruction
The exporters need to debrief the carrier or the freight forwarder about the instructions he must follow to carry and deliver the cargo safely to the importer/buyer. It is usually the responsibility of the exporter to mention the product handling instructions even if the importer hires him.
COO (Certificate of Origin)
The COO (Certificate of Origin) is the document that acts as the proof of the producing country of the goods. The Chamber of Commerce issues the COO. It is an important document to get customs clearance as the authorities need to ensure that the exporter has legally acquired the goods.
IGM (Import General Manifest)
The carrier needs to file a document to the customs department of the importing country 24 hours before the goods arrive at the port. This document is referred to as the Import General Manifest (IGM).
Forms for Hazardous Goods
In the case of shipment of hazardous materials and goods, the exporters need to acquire certain documents and certificates from the liable authorities. Some of these documents may be country specific as well. The exporters must produce all the papers in the customs department.
Bank Draft
The payment of the consignment is mostly done through bank drafts issued by the importer. The exporter must collect this draft and make it copy to produce at the time of customs clearance.
Shipping documents play a very vital role in binding the exporter, importers and carriers under the certified branches of law and legal authorities. Every trader must be well aware of the purpose of these documents as well as the consequences of false documentation. Taking the help of a renowned shipping partner can help one in managing all the documents electronically!
