When shipping products to or from a foreign country, specific documents are required. Known as international shipping documents, the paperwork enables customs officers to evaluate the goods’ origins and destinations, their commercial value, and their compliance with import and export regulations.
A custom shipping document is crucial to the effective shipment of goods internationally, which is why every shipper must know how it works and how to prepare theirs. Although the exact documentation requirements show slight variation, depending on the country, the rudiments remain the same. To understand the nitty-gritty of this paperwork for incoming and outgoing cargo, kindly read on.
What is International Shipping Documentation?
International shipping paperwork refers to a set of documents required to move goods between countries. The documentation requirements depend on the shipment’s nature, mode of transport, country of origin, and the goods themselves. From a general standpoint, it ensures a shipper’s cargo meets international shipping standards and trade regulations. This prevents any legal liability on the shipper’s part, especially if the goods are being shipped for sale or other commercial purposes.
For example, goods entering and leaving the U.S. are subject to extensive regulatory requirements. Hence, the U.S. customs broker (or agent, freight forwarder, or transport operator) is required to submit several supporting documents to enable customs to process their import or export cargo. Where a shipment entails customs clearance, the goods are considered liable for duty and tax.
As such, the shipment documentation should indicate the items that fall under the goods covered by the particular customs tax.
Types of Shipping Documents?
The overall paperwork comprises 10 documents that constitute the international shipping declaration. They are:
• Bill of lading (inland and ocean)
• Packing list
• Proforma and commercial invoices
• Certificates of origin
• Certificate of free sale
• Dangerous goods forms
• Bank draft
• Air waybill
• Shipper’s letter of instruction
• International shipping terms (incoterms)
Bill of Lading (Inland and Ocean)
Generally issued by an airline or shipping company, this commercial documentation guarantees successful shipment delivery. It describes the cargo (type and quantity) and its shipment destination. Initially, B/L applied to ocean freight. However, considering the ever-expanding shipping industry, the term is also now used as inland freight transportation.
The packing list is a shipping document that outlines the items contained in a shipment. It is completed by the consignor before shipping and serves as a useful tool to ensure the shipment’s accuracy. Contained within this document are:
• Shipper’s name and address
• Consignee’s name and address
• Shipping item list and quantity
Proforma and Commercial Invoices
A proforma invoice is a bill that is sent prior to a shipment. It states the sales terms, transactional parties involved, currency, goods description, pricing, classification, and many more. Similar to a commercial invoice, it is used to confirm an order and to obtain payment from the buyer. On the other hand, the commercial invoice embeds all exportation transaction details.
Certificates of Origin
Certificates of Origin (COs) are issued by a country’s trade agency, consulate, or other designated agencies. They demonstrate the origin of goods and confirm their compliance with the local laws and import-export regulations.
Certificate of Free Sale
Also called Certificate for Export, this document is issued by a local customs broker and provided by the exporter to indicate that goods are free of any duty or value-added tax (VAT) and government-approved in the country of origin. CFS is a mandatory requirement for export-bound goods, like medical products and cosmetics.
Dangerous Goods Form
A dangerous goods form or a hazardous materials declaration (HMD) is a form procured for all danger-classified cargo, regardless of the type. It ensures the proper transportation of such goods by providing relevant information that meets international regulations. Included within this form are the UN number, packing group, Shipper’s details, cargo name and class, quantity, and net weight, among others.
A bank draft is one of the most widely accepted methods of making payments for shipment costs and customs duty.
An air waybill (AWB) is an airline-issued receipt procured for air cargo shipping. Shippers use this document (air waybill number) to track shipments and ensure that they reach their destinations safely.
Shipper’s Letter of Instruction
A shipper’s letter of instruction (SLI) is a shipping document that contains the general guidelines of the shipment. It specifies the terms and conditions of payment, packing instructions, shipment details, and other relevant details. Usually, the forwarding agent redirects the SLI to the shipping line.
International Shipping Terms
Otherwise known as the International Commercial Terms (Incoterms), this terminology comprises a set of international trade rules applicable to ocean and air freights. They cover 11 shipping terms, including Cost & Freight (CFR), Delivery at Place (DAP), Ex Works (EXW), and Free Alongside Ship (FAS).
An Overview of Customs Documentation Related to Shipping
When preparing the customs documentation, a shipper must understand how it applies to the shipping process, which is divided into:
• Export customs clearance
• Import customs clearance
Within the two sub-processes are six variables that play key roles in the successful shipment and clearance of goods. They include:
• Origin warehouse
• Origin port
• Destination port
• Destination warehouse
Each variable is further linked by a suboperation that determines the documentation required to execute the shipment. Let’s begin with the consignor. This person in country A will have to transport the goods from their location to the non-vessel owning common carrier (NVOCC) origin warehouse, through what is known as export haulage.
The freight forwarder then transports the cargo from the origin warehouse to the origin shipping line at the port. This process is known as origin handling. The ocean freight company serves as the go-between carrier between the origin and destination ports.
On arrival, the goods undergo clearance, after which the logistics company in country B transports them to the destination warehouse. This process is known as destination handling. Upon request, it delivers the goods to the consignee through “import haulage.”
For an importer, the requirements bear similarities. The individual or entity must possess the following:
• Bank draft
• Import license
• Air waybill
• Commercial invoice
• Importer security filing
• Bill of lading
• Arrival notice
• Import customs declaration
Common Freight Document Filing Issues
One of the difficulties that exporters encounter is appropriately drafting a shipper’s letter of instruction. Freight forwarding start-ups experience similar challenges in developing comprehensive, solution-driven contracts that contain updated incoterms. Thus, the ideal solution would be to hire a top essay writing service that understands international shipping documentation. The provider's writing experience and in-depth knowledge of this multibillion-dollar market will prove invaluable.
From the above-detailed information, there’s no truer fact that freight shipping is complex, especially in the area of paperwork. Hence, we wrote this guide to help you navigate this requirement. However, if you still have trouble drafting certain documents, kindly hire legit essay writing services with proven records.