What International Shipping Documentation is Required for Businesses?

Do you know the total U.S. trades with foreign countries was $5.6 trillion in the year 2019?

International shipping offers exciting growth opportunities to business owners in the U.S. However, it is a multi-level process with a lot of regulations, especially on documentation.

International shipping documentation forms a basis for trading and shipping goods across international borders.

Documents for international shipping decide the fate of a shipment. A simple mistake could lead to delays during custom clearance.

Here are ten documents needed to ship internationally.

1. Commercial Invoice

When shipping goods internationally, a commercial invoice is one of the necessary documents presented at customs.

It’s an invoice issued by the exporter to the importer and acts as proof of sale. The commercial invoice is a detailed document that offers information on the exporter, importer, freight forwarder, shipping lines, and banking information.

A commercial invoice acts as a one-place document that holds crucial information about transactions required for customs clearance.

2. Purchase Order

This contains information about the transaction, the type of product involved, parties involved in the trade, and the transaction date. It is the official exporter’s declaration of receiving an order.

The document specifies what the seller will deliver and the total shipping cost.

3. Commercial and Proforma Invoice

Commercial and proforma invoices are used interchangeably within the U.S. and are preliminary bills of sale. Before delivering goods, invoices are sent to the shipper to serve a commitment to ship goods at a specific time and date.

A proforma invoice lists the weight, work included in the allegiance, and costs involved. The invoice is essential for custom clearance, especially when shipping goods to Europe and South America. For a shipment to go through automated export systems, your proforma invoice should indicate the seller, the buyer, and the value of the merchandise.

4. Bill of Lading (BOL)

A BOL is a formal agreement between the owner of the goods (shipper) and the freight carrier. It is a document used to confirm the receipt of goods for shipment. For the shipment to be released, this document must be signed by authorized representatives of the freight carrier.

A bill of lading contains information about the goods included, how to handle them, and their shipping destination. There are two types of bill of lading; non-negotiable bill of lading and negotiable bill of lading.

A negotiable bill of lading can be transferred to a third party, while a non-negotiable bill of lading must be signed by the two parties involved.

5. Packing List

This is an important shipping document that contains an itemized list of the shipment.

An export packing list is similar to a packing slip provided for domestic shipment, but it’s more detailed. The list includes the quantity, weight, and dimensions of the cargo. In addition to this, the form mentions the packaging type and any safety measures required.

In most cases, shipping companies use the packing list to create a bill of lading. Banks also demand a packing list as a document of payment in case of a letter of credit. A freight forwarder uses the document to clear goods for inspection.

It’s paramount to have the shipping list attached at a visible spot for easy readability.

6. Certificate of Origin

A certificate of origin is an important document in international trade used to declare the country of origin for manufactured goods. The document is certified by the chamber of commerce or by the consulate. It’s a vital form required to prove whether the goods are eligible for export and import.

It’s the responsibility of the seller or exporter to provide the certificate of origin based on the legal requirements of the destination country.

7. Shipper’s Letter of Instruction

This is a letter from the shipper to the freight forwarder containing instructions on how to handle the shipment.

The letter helps communicate specific details about the cargo to the freight forwarder to avoid mistakes that can lead to financial losses.

8. Custom Bond

A custom bond is a document similar to an insurance policy that guarantees payment of fees and duties related to freight.

The importer should purchase a bond from a surety company. The surety company is obliged by the importer’s responsibility and expected to make the payment if the importer defaults.

Note a custom bond only covers the U.S. taxes and duties and not the goods being imported.

The custom and border protection regulations demand all types of commercial imports in the U.S. require to be bonded. This document ensures quick clearance of the shipment.

9. Dangerous Goods Note

A dangerous goods note is a transport document that provides detailed information about the contents of a shipment to concerned parties like carriers and forwarders.

The note is a mandatory requirement for any shipment containing hazardous goods.

10. Insurance Certificates

This is a certificate issued by insurance companies certifying that the seller has purchased insurance for the goods. The policy covers against liability and damages that may occur to goods while shipping.

International shipping exposes sellers to many perils. The exporter community confidently conducts business by having an insurance policy that covers monetary losses.

Learning the Key International Shipping Documentation

Understanding the international trade documentation process thoroughly will help you avoid shipment delays. Each country has its own set of policies and requirements for international shipping documentation. Business owners should spend time researching and seeking answers to any lingering questions.

Once you are ready, obtain all the required shipping documents. Fill out each document accurately before engaging a freight forwarder. Preparing ahead of time will ensure your shipment goes smoothly.

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