In the complicated realm of international trade and logistics, shipping documents are crucial in facilitating the global transport of goods. These documents serve as evidence of ownership, offer essential cargo information, and allow customs authorities and other parties engaged in the shipping procedure to verify and govern international trade transactions.
Familiarizing yourself with the essential import and export documentation is crucial, regardless of whether you are a business owner, freight forwarder, or know the fundamentals of global shipping.
Each document provides a specific function and is frequently needed by both the importing and exporting countries. Non-compliance with the necessary paperwork can result in delays, fines, or even the denial of product entry.
This article will guide you to some of the most common shipping documents that every international trade participant should know.
Important International Shipping Documents
Regarding international shipping, the laws and regulations of various nations may differ. Consequently, the documents required for import and export may vary. The following documents are generally necessary for international shipment and can help make the shipping documentation process easy for you:
1. Purchase order
A purchase order is an official confirmation that an order has been received. This document includes information regarding the transaction, the parties involved, the goods involved, and the transaction’s date.
2. Bill of Lading
The Bill Of Lading (BL or BoL) is a legal export shipping document between the shipper and the carrier. It contains all the information the transportation company needs to deliver the products to the correct destination in optimal condition. The details include the shipment’s location, contents, and handling guidelines.
Moreover, the BoL must include the signatures of the vendor, shipper, and buyer and be affixed to the product. It ensures all parties who acknowledge the shipment’s contents validate the accuracy of the BL and, if necessary, pursue legal action against the responsible party.
3. Certificates Of Origins
The succeeding shipping document is the Certificate of Origin. Most international shipments must include a certificate of origin stating the country of origin. They must comply with the laws and regulations of the importing country and receive authorization from the consulate or chamber of commerce of the exporting nation.
The exporter is accountable for giving the certificate of origin under the destination nation’s laws and regulations.
Since the country of origin will set the duty rate, shippers must include this document to ensure compliance with all free trade agreements.
4. Letter of Credit
A creditworthy bank issues a Letter of Credit ensuring payment for goods. If the vendor cannot pay the remaining balance, the bank pays the difference to conclude the transaction.
Due to the complexity of international trade and as a consequence of country-specific rules and regulations, Letters of Credit, with their monetary guarantee, have become one of the most secure forms of economic transaction.
5. Export packing list
On the list of documents required for export is the export packing list. This list includes an itemized list of all the products included in the cargo and essential information about each item.
Likewise, this document can help issue other essential documents, like a bill of lading and a letter of credit. In international shipments, the packaging list is necessary for customs clearance. It can also be useful if a conflict between the shipper and carrier occurs.
The export packing list will contain essential details such as:
- Order date, delivery address, and contact details
- An itemized list of products dispatched
- List of out-of-stock items with descriptions
- Number of each item
- SKU or UPC numbers
- Purchase order number or slip number
- Dimensions and weight
- Packaging type
- Security measure
6. Export License
It is a legally binding and official government document. Exporters must apply for a license to export specific products in specific quantities.
Certain commodities might call for an Export License to start with the export process. Therefore, confirming whether one is necessary for a shipment is essential. Some countries require this document only under certain conditions, whereas others may demand it.
7. Insurance Certificate
The issuance of an Insurance Certificate from an insurance company confirms that a shipment insurance policy covers the exporter.
Also, exporters face certain risks during international shipping. Therefore, they need to have an insurance policy to avoid financial losses.
8. Commercial Invoice
The commercial invoice must accompany all international shipments as evidence of sale. It may resemble your proforma invoice but can include additional information like the order and PO number.
In addition, commercial invoices tend to be similar to regular ones, but they must include additional information to facilitate customs clearance. So this comprises the following details:
- Specific details about the buyer and seller
- Details about the freight forwarder
- Financial and banking information
- Shipping corridor
- Item description
- Country of origin HS code
- Value of the item
- Overall weight
- Delivery conditions
9. Certificate of free sale
The certificate of free sale is one of the documents required for export. It is also known as a certificate of export that proves that the item transported is sold or distributed lawfully on the free market and has no restrictions in its country of origin. A certificate of free sale certifies that a product has been allowed for export by the appropriate regulatory authorities.
This document is usually necessary for cosmetics, food, medical equipment, biologics, and more.
Understanding the shipping documentation process and essential shipping docs can save you time when delivering your cargo and prevent potential delays. However, the fact that each country has its policies, laws, taxes, obligations, and requirements for documentation may make international shipping laborious and time-consuming. We can help you navigate the complexities of shipping & logistics, and we can also advise on how you can optimize your transportation process. Contact us today for a cost-effective and fully-optimized supply chain.