The invention of shipping containers brought together a whole new era in which the whole world was connected by one single thread. Containerization changed the way in which cargo could reach its destination as now the goods could be stored into containers and then transported from one location to another. For this entire process of transporting cargo, there is a certain protocol and procedures to be followed. There are a number of essential documents needed for international shipping when someone is considering shipping their cargo in a dry van container, high cube container, platform, hard-open top or any other container type.
Having access to international markets provides a whole new world to the companies that are looking to make their mark on the world. But with great power comes great responsibility. Any individual or company that wants to transport their cargo needs to comply with certain rules and regulations of importing and exporting that are necessary to be met in order to ship goods in any dimension of shipping containers.
Why is documentation necessary in the shipping process?
- International commerce relies upon specific documents that are required by both the country of origin as well as the destination country as well as by shipping line or transportation provider. The shipper has to make sure that they have detailed information regarding their shipment, business, and the reason for the transportation of cargo.
- This documentation procedure is vital to ensure smooth international transactions. The international shipping documents, if not handled and filled carefully, might cause several delays which will severely disrupt your supply chain.
- The shipping paperwork guarantees that your shipment arrives at its destination within the deadline and is handled the right way. It also protects the shipper from any liability or losses that could happen due to unforeseen circumstances and thus causes delays in your shipment.
List of essential documents needed for international shipping
1. Pro forma Invoice
A pro forma invoice is a preliminary bill of sale that is sent to the buyer in advance before the delivery of the cargo. It informs the buyer about the goods that are to be transported, the value, and other significant specifications. It is basically used as a price quotation of the cargo.
A pro forma invoice is identical to a commercial invoice, and it includes the following information:
- The name of the buyer and seller in the transaction
- A detailed explanation about the goods
- The prices of the cargo
- The terms of payment of the sale
- The delivery details about how and where the shipment will be delivered. It is basically an estimation that summarizes the goods or services that a seller promises to deliver to the buyer. It is simply a declaration by the seller to provide cargo on an agreed upon date and time.
An important tip to remember while filling out a pro forma invoice is to fill in the date and expiration date. Setting a time frame reduces the risk of mishandling the cargo.
2. Commercial Invoice
After the shipper has sent the pro forma invoice to his/her international prospective client, you need to then prepare the cargo that needs to be shipped along with the paperwork that has to go along with the cargo. A commercial invoice is one of the most important documents in that long list of documents.
The commercial invoice includes all the details of the sales transaction that has occurred between the seller and the buyer. This is the official proof of sale and includes the terms of shipping. It includes critical descriptions and instructions regarding both the parties, buyer, seller, shipping lines, carriers, etc. If there is no commercial invoice present or there are any errors, then the cargo will get held up and your shipment will not reach its destination in time.
3. Packing List
The packing list is a mandatory item in the long collection of documents that are required while the shipping of cargo. It includes item-wise detailed descriptions of the cargo like weight, components, safety measures, and quantity of cargo. The packing list is most often used for the creation of a bill of lading for your shipment.
The packing list is considered a more detailed version of the standard list. It contains information about the invoice number, shipping container details, details of the buyer, date of shipment, item quantity and description, type of package, total gross weight, its dimensions, etc.
This is a key document as it stays with your shipment throughout its course of the journey, right from the time it is backed at the departure location, to the time the buyers receive the cargo.
4. Bill of Lading
A bill of lading (BOL) is the official contract between the person who is sending the goods and the carrier of freight. It is the official document that is used for the confirmation of the shipment receipt. It can only be signed by certified representatives.
The bill of lading contains information like the shipping destination, the goods that are to be transported, the mode of transport to be used, voyage number, date of loading, estimated time of arrival at destination, and instructions regarding how cargo is supposed to be handled.
There are different types of BOLs, and it depends on the means of transportation by which the cargo will be traveling- land, sea, or air.
- Inland Bill of Lading
An inland BOL allows the freight forwarder to ship their cargo by road or rail across the domestic territory, but not overseas. It is a contract of carriage between the shipper of the cargo and the person who acts as the exporter. It can also be used as a receipt for the goods that have been transported.
- Ocean Bill of Lading
An ocean BOL is used for the transfer of cargo by sea, whether nationally or internationally. It serves as a contractual document for your cargo.
- Airway Bill of Lading
It is a legally binding document that is issued by a cargo carrier and includes details about cargo that is being shipped. Goods that are transported via planes require this BOL and it includes several important information about the components of the cargo, terms, and conditions, etc.
5. Certificate of Origin
A certificate of origin, as the name suggests, is the credential that provides proof as to what is the country of origin of that particular commodity. It is required on a regular basis, if one has to transport their cargo from one location to another.
This document includes the details about the products that are being shipped and the country of export. The exporter is responsible for providing the certificate of origin to comply with the rules and regulations of the nation that shipment is being sent to. It is an important piece of document that is a key criterion to determine whether the goods are eligible for import.
6. Letter of Credit
A letter of credit is a legal, binding agreement of payment between the buyer and seller of certain products. Once the purchase is made to export goods internationally, it takes a long time for the shipment to reach its final destination. This causes certain difficulties and delays in the payment.
This is when a letter of credit comes to the rescue. It is issued by a trustworthy bank that guarantees payment on behalf of the buyer, to the seller. It is an irrevocable document for the situation when the buyer is unable to make the payment that the bank has to make the full or remaining payment on their behalf.
The prerequisite of a letter of credit is that the seller has to submit the necessary document while meeting a particular deadline. It also includes information like description about the number of goods, physical description, and so on.
The above-mentioned documents are considered as few of the most essential documents needed for international shipping of cargo. If you have all these essential documents along with your shipment, you can easily avoid the issue of container shortage in the industry. The seaports infrastructure has developed over the ages and ensuring a shipment with all the official formalities makes the entire transportation process extremely smooth for both the importer and exporter of cargo. Anyone who is considering transporting their cargo via shipping containers internationally should ensure that all their paperwork is in order so that their shipment process is smooth and reaches on time.