According to the International Maritime Organisation (IMO), over 90% of the world’s trade is carried by sea. There are various parties involved in making sure all of these goods arrive at their final destination – from freight forwarders like us at Twill, to shippers, carriers, and of course you the customer!
So how exactly does a global logistics industry function? The answer is documentation! Or better saying, the so called freight documents.
Your cargo travels on paper. You can have all of the containers and carrier space you need, but without the right documentation, your cargo won’t move an inch. The right documents establish everything from ownership and responsibility right down to individual costs and receipts. This is how the shipping industry works – it is still very paper-driven!
At Twill, one of our key responsibilities is ensuring our customers have all the right documentation at each stage of the process. So, here are some of the key documents you’ll likely encounter as you start shipping your cargo.
Bill of Lading
The Bill of Lading is the most important document in the entire transportation process. It is required by any carrier before a shipment is taken and acts as a receipt and contract for the carriage of goods as well as proof of ownership. It contains the following information:
- Seller’s and Buyer’s (that’s you!) names
- Names of the ports of departure and destination
- Name of the vessel
- Dates of departure
- Itemised list of goods being transported
- Weight and/or volume of the cargo
A Bill of Lading is required in all claims for compensation for any damage, delay, or loss, as well as for the resolution of disputes regarding ownership of the cargo. So it’s an important document and is increasingly being created and transferred digitally, to minimise the risk of loss.
Shipper’s Letter of Instruction (SLI)
An SLI is a note from the exporter to the freight forward of your cargo, with instructions on how a shipment is being sent and where it’s going. Each freight forwarder has their own SLI form, but they all request the same details, such as: routing info, shipment dimensions and weight, contact info for seller/buyer and more.
A Packing List is for inspection and shipping purposes and shows how your cargo has been packed. It includes info about the shipper/buyer, description of goods, hazardous information if applicable and details about the type of packaging used.
A Commercial Invoice is a key accounting document for any cargo being transferred from the seller to the buyer. It’s used to determine the true value of goods for assessing any Customs duties and to clear it through Customs.
It must be completed in full and include – among other things – the Incoterms rule, net and gross weights, description of the goods, value, currency and certifications.
Laws and regulations differ from region to region – and this makes Custom documents a little more complicated than the other more standard documents covered here. Customs documents will be created when the buyer and supplier take their Commercial Invoice and Packing List and complete the Customs procedure with the local authorities; making sure they’re paying everything and are compliant with all local laws and regulations.
Buyers and suppliers will usually reach out to freight forwarders, like us at Twill, and we will help them complete this documentation.
Don’t forget Incoterms!
While not a document in itself, an International Commercial Term – or Incoterm as it’s more commonly known – is a universal term that defines a transaction between importer and exporter so that both parties understand their tasks, costs, risks and responsibilities. It forms part of your Commercial Invoice.
There are currently 11 different Incoterms which define these responsibilities in different ways. Some refer to all modes of transport and others to sea/water transport only.
This isn’t an exhaustive list and you’ll encounter others while shipping your cargo – but if you’re feeling a little daunted then don’t worry, that’s why we’re here! At Twill we can help you prepare the necessary documentation for your cargo. Get in touch with our team and book with us today – www.twill.net.