INTERNATIONAL TRANSPORTATION IS THE KEY TO OPENING YOUR BUSINESS TO ALL MARKETS FOR GROWTH OPPORTUNITIES.
On the other hand, you also need to know and understand the rules and regulations of exporting and importing, and crucially, you need the proper shipping documents.
In today’s logistics environment, EDI (electronic data interfaces) and the Internet are the most used tools to transfer documents among buyers, sellers, vendors, banks, customers, and government entities. However, most documentation is still handled manually in some countries.
BELOW IS A LIST OF THE FUNDAMENTAL DOCUMENTS AND THEIR FUNCTIONS THAT ENABLES THE GLOBAL SUPPLY CHAIN TO EXIT.
These documents may be variable, helping the facilitation of movement of a shipment, such as logistics companies and shipping couriers.
1. Pro Forma Invoice
A pro forma invoice is a preliminary bill of sale sent to buyers in advance of a shipment or delivery of goods. Some countries’ custom authorizations require this document to compare with the actual commercial invoice to check if the terms of the trade such as contents, price, and quantity are matching.
2. Commercial Invoice
A commercial invoice includes the complete details of the sales transaction between vendor and buyer, including the shipping terms. It is the official proof of sale. While an invoice is a commercial instrument that states the total amount due, the pro forma invoice is a declaration by the seller to provide products and services on a specified date and time.
3. Packing List
A packing list is a shipping document containing an itemized detailed list of the cargo, including weight, dimensions, safety measures, and packaging type. The courier company may use it to create the bill of lading, and banks may also require it to be included in the documents for payment under a letter of credit. The packing list is used by freight forwarders in order for a shipment to clear U.S. customers for inspection, and often will be used in disputes between a shipper and carrier.
4. Bill of Lading (BOL)
A bill of lading (BOL) is the official contract between the shipper or owner of goods and the freight carrier. It is the document used to confirm receipt of goods for shipment and can only be signed by an authorized representative of the carrier upon receipt in order for the shipment to be released. A BOL will include detailed information about the shipping destination, the goods included, and how they should be handled.
A non-negotiable BOL must be signed by the parties listed, while a negotiable BOL can be transferred to a specified third party.
A BOL is the most important shipping document in international shipping and must be included no matter the form of transportation. It’s important to fully understand all the detailed information to be included to assure shipments are legally received.
5. Certificate of Analysis (Certificate of Inspection)
Most of the time, the buyer wants to be assured that the purchased goods meet the necessary standards. The seller provides this certificate himself or via an inspection agency to satisfy their customers.
6. Insurance Certificate
An Insurance Certificate is issued by an insurance company and certifies that the exporter has purchased an insurance policy for the shipment of goods. It covers liability and in the event of a loss of the goods shipped. Certain risks are carried by exporters so having an insurance policy is critical to avoid monetary losses.
7. Certificate of Origin
A Certificate of Origin (C/O) is a document that declares the country of origin for manufactured goods, usually certified by the consulate or chamber of commerce. It is required by many treaty agreements for international trade to assure the goods are eligible for export. The exporter is responsible for providing the certificate of origin according to the laws and regulations of the destination country. Since a rate of duty is determined by the country where the goods originated, it is critical shippers include this document to guarantee it meets all free trade agreements.
8. Export License
This is an official document issued by governments. This document serves as a license to ship certain items and in certain quantities. Some countries only need this document under specific conditions while for others, it can be a requirement. An Export License may be required to export certain goods, so it’s crucial to verify whether it’s required for a shipment or not.