One might assume that the organizational challenge associated with sending freight from one destination to another is the most difficult aspect of international shipping. After all, your company has to coordinate between the shipper and recipient and deliver the goods in excellent condition within the time specified. Unfortunately, another significant hurdle that your company must overcome is the management of your ocean freight shipping documents.
Freight Shipping Forms
There is a large number of freight shipping forms required in order to move goods from one destination to another. While you may not need all of these forms for each shipment, it’s important to understand the reasons and requirements for each form.
Bill of Lading
A Bill of Lading is essentially the contract between the owner of the goods and the carrier. This is the same with domestic shipments. There are actually two types of Bills of Lading—the first type is non-negotiable, while the second is a negotiable or shipper’s order Bill of Lading. The difference is that a negotiable Bill of Lading can be bought, sold, or traded while the goods are in transit whereas a non-negotiable Bill of Lading cannot.
Your shipping documents will include a commercial invoice. A commercial invoice is a bill for the goods from the seller to the buyer. Governments often use these invoices to determine the true value of the goods when they’re assessing tariffs and custom duties. The governments that rely on commercial invoices to control imports usually specify the details these invoices need to have. You may also need to provide additional copies of the commercial invoice.
Some countries require a consular invoice. Consular invoices are documents that describe the shipment of goods and show other information, such as the consignor, consignee, and value of the shipment. A consular invoice differs from a commercial invoice insofar as a consular invoice is certified by the consular official of the foreign country stationed there.
Certificate of Origin
Certain nations require a Certificate of Origin. This is essentially a signed statement that details the origin location of the export item. Generally, Certificates of Origin are signed through semiofficial organizations, such as a local Chamber of Commerce. It’s important to understand that a Certificate of Origin may be required even if the commercial invoice already contains the same information.
If products are traded among the countries included in the NAFTA agreement, then a NAFTA Certificate of Origin is required. The NAFTA countries are Canada, the United States, and Mexico.
For some purchases you may be required to include an inspection certification, depending on the country. The inspection is usually performed by a third party or independent testing organization.
Destination Control Statement
The commercial invoice includes a Destination Control Statement. This statement also appears on the ocean or airway Bill of Lading. The purpose of the Destination Control Statement is to notify the carrier and all foreign parties that the item can be exported only to certain destinations.
Shipper’s Export Declaration (SED)
Freight shipping documentation is not limited to the documents required by the destination country. Exports are also documented for official purposes. That’s why you need to fill out a Shipper’s Export Declaration (SED). Your SED must be prepared for shipments whose value is over $2,500.
SEDs also must be prepared, regardless of value, for shipments that require an export license or are destined for countries that are restricted by the Export Administration Regulations. Generally, SEDs are prepared by the exporter or exporter’s agent and delivered to the carrier. The SED may also be prepared in conjunction with the Shipper’s Letter of Introduction.
Export Packing List
Domestic shipments often require a packing list, but an export packing list is considerably more informative and detailed. An export packing list itemizes the material in each individual package and includes information about the type of package. Export packing lists also show weights and measurements for each package in both the US standard and metric system.
The packing list is used by the shipper or forwarding agent to determine the total weight and verify that the correct cargo is being shipped. Custom officials in the US and foreign countries can use this export packing list to check the cargo, too.
An insurance certificate is used to assure the consignee that insurance will cover the loss of or damage to cargo during transit. The insurance certificate will detail what is covered and for how much.
Importance of Having Correct Documentation
It’s extremely important to have the correct documentation when exporting goods of any kind. You should set up proper document management practices to ensure that your exports arrive on time. Even slight discrepancies or omissions can have serious consequences, such as:
- Non-payment for the exporter
- Seizure of exporter’s goods by US or foreign government customs
- Goods may be prevented from being exported in the first place
- Delays in shipping
- Fines for incorrect or missing documents
- Additional fees for storage (while awaiting proper documentation)
Clearly, it is in your best interest to follow the requirements set forth by the applicable foreign country for exporting goods. Fortunately, eFileCabinet makes it easy for your company to store the appropriate documents and find them quickly when they are needed. Learn more about how eFileCabinet can help you with managing shipping forms by starting your demo. Just fill out the information on this page to get started.