Shipping Documentation process in 2020

A step by step guide for Shipping Documentation process in 2020

The shipping documentation requires the involvement of three parties who play major roles in the shipping industry. They are – the importers, exporters and freight forwarders or carriers. There needs to be reliable coordination between all the three parties who make a freight shipment possible. To achieve that, every individual must know his role in the process and the documents that are a part of it. The export documentation goes on with the systematic flow of all the activities. As long as all parties concerned know their responsibilities, there will be no hitches in the journey of the cargo. 

Earlier, the traders could choose between the offline and online process of filing all the shipping documents. However, after the outbreak of the COVID-19 pandemic in the world, the reliability of online portals like the EDI (Electronic Data Interchange) has grown swiftly. So, for traders who are not friendly with these platforms, the best bet is to hire the best shipping services. To know more about the documentation, click here and go through the details. 

From the shipping contract to the customs clearance paperwork, there is a lot to manage in the export documentation process. 

Steps Involved in the Shipping Documentation 

The export documentation involves a lot of layers, and each one of them plays a crucial role in the shipping process. Exporters can ease their burden by hiring a reliable shipping partner to look after all the formalities and handle the freight shipment on his behalf. 

Proforma Invoice: Importer Generates Inquiry 

The proforma invoice is issued by the exporter against the inquiry made by the importer. The export documentation starts with this invoice as the exporters respond to the buyer’s inquiry by enlisting all the required details related to the goods he sells. It comprises the details of the products, price, quality, etc. 

Letter of Credit: Arranging the Payment Method 

After receiving the proforma invoice, the importers and explorers can share a legal bond specifying the terms of trade. This shipping contract is an internal document, and it varies from one trader to another. Once the deal is final, the importer issues the letter of credit as the promise of payment as per the discussed terms. The letter of credit plays a crucial role in the payment settlement as well as the customs clearance process. 

Commercial Invoice: Issued by The Supplier 

The supplier of the goods has to prepare the commercial invoice cum packing list against his shipment. This document acts as the contract of sale between the two parties. The invoice contains the price and details of payment while the packing list contains a detailed description of the goods. The type of packaging, gross and net weight of the goods, date of export, license number of the exporter, etc. must be present on the list. 

Export Documentation: Prepared by The Exporter 

Once the goods are ready for shipment, the exporter needs to prepare a few documents for dispatching his goods from the port of shipment. The most important ones are:

  • COO (Certificate of Origin) – This certificate is to certify the country of origin of the goods. This is a very crucial document for getting customs clearance. 
  • SLI (Shipper’s Letter of instruction) – This letter is issued by the exporter to the freight forwarder for specifying the instructions for handling the goods on the journey. 
  • Shipping Bill – The shipping bill is the most vital part of export documentation. This bill is an application sent to the customs department for getting the “Let Export Order”. 
  • Dangerous Goods Forms – In the case of shipment of dangerous goods, the exporter needs to prepare certain forms on the instructions of the authorised department of his country. 
  • Manufacturer’s Declaration – This document is for the customs clearance process to assure the concerned parties about the authenticity of the goods. 

Documentation by The Freight Forwarder 

The freight forwarder or carrier also plays a commanding role in the export documentation process. The two influential documents that he must prepare and exhibit are: 

  • Bill of Lading – The Bill of Lading is a vital document that acts as a shipping contract between the exporter and the carrier. This bill includes all the minor details related to the goods, exporter and importer. 
  • IGM (Import General Manifest) – Before the goods arrive at the destination port, the carrier has to file a document to the customs department. This legal paper is what we term as Import General Manifest. 

Documentation by The Importer 

The importer also needs to prepare certain documents before receiving the goods to get import customs clearance. 

  • Importer’s Declaration – A few forms fall under the import declaration category that the importers have to prepare beforehand. 
  • Bill of Entry – Bill of Entry is similar to the Bill of Lading that the importer has to submit to the customs clearance department. 

Export documentation is a vast process, and every player involved in the shipping industry has a role in its success. The most reliable way to avoid last-minute confusions is to hire an experienced shipping service provider. The best one hires, the better it is! 

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