Definition of Transport and Office Documents

Documents Related to Transport

Documents related to transport of export goods are explained below:

Shipping Documentation

Shipping documents are the key to international trade, and have been used for thousands of years. Documents outline the sale, shipment, and responsibilities of each party so that the full transaction is understood and complete without delay or additional costs. Documents also ensure compliance with applicable regulations.

Using an experienced Freight Forwarder will help you to avoid problems and secure your relationship with your customers. Consider providing your Forwarder with a suitable “letter of authorization” to act as your agent on overseas documentation matters.

Although not a required or standardized document, preparing a thorough and well organized “Shipper’s Letter of Instructions” (SLI) is a good practice for your company to establish. You can give your Forwarder limited authorization and initial instructions with an SLI as soon as the shipment details emerge, which allows time to prepare documents, make arrangements, and ask questions. Although a Freight Forwarder is not absolutely required for a successful export shipment, a licensed Customs House Broker is required to clear goods imported into any country, including the United States.

Below are some factors to consider when determining which documents are needed for a particular shipment:-

Country of origin and destination, as well as transshipment

Mode of transportation — truck, rail, ocean, air, pipeline

Commodity — agriculture, livestock, safety/security, end-use, intangible- software, service

Size — value, volume, weight, dimensions

Parties to the transaction — shipper, consignee, agents, brokers, banks

Based on these factors, many of the following documents may be required for an international shipment. These documents can be prepared by the exporter and then processed or forwarded by a Freight Forwarder.

Invoices — Commercial, Pro-forma, Consular

Packing Lists — Dock, or Warehouse, Receipt

Bills of Lading (B/L) — Ocean B/L, or Motor/Truck or Air Bill, or Way Bill

Electronic Export Information (formerly the Shipper’s Export Declaration, or SED) is not an actual document but still a very important part of the export process

Certificates of Origin (C/O), sometimes country-specific — NAFTA C/O, Israel C/O

Declaration of Dangerous Goods (DGD) — Hazmat, placards

Certificates — Insurance, Free Sale, Inspection, Phytosanitary, Authentication (Apostille)

Miscellaneous: Letters of Credit, ATA Carnet, Duty Drawback

Shipping Order

Exporter should apply to a shipping company in order to reserve the required space for shipment of export cargo. After getting and scrutinizing the application, shipping company will send shipping order to the exporter confirming the space arranged in the ship for shipment. Shipping order shows ship details, route, approximate dates on which the ship will reach various ports, freight details and other relevant terms and conditions of shipping service.

Mate’s Receipt

Captain of the ship will issue Mate’s receipt after the goods are loaded on the board of the ship. It is prime facie evidence shows that the goods are loaded on the board of the ship. Master of captain of the ship will inspect the goods and packaging, when the goods are in the process of loading over the board of the ship. Any discrepancy of defective is noticed in the goods or packaging, a note about the specified discrepancy of defective is made on the Mate’s receipt

Bill of Lading

Bill of Lading is issued by the shipping company after the goods are loaded on the board of the ship. Master of captain of the ship will inspect the goods are loaded on the hoard of the ship. it is prepared based in the Mate’s receipt issued by the master of captain of the ship . Bill of Lading is an acknowledgement of goods loaded on the board of the ship. It is an undertaking of the shipping company to deliver the goods in the condition in which it is received and to execute the terms and conditions of carriage agreed between exporter and Shipping Company. Hill of Lading is a document of title to goods. Delivery of goods can be made by the person in whose favour the bill of lading is endorsed. As per the requirement of the exporter, Bill of Lading is also made available to exporter. Exporter can use any one of the original copies of bill of lading for negotiation with the bank. Bill of lading can be made transferable by endorsing in favour of a specified person or to his order. Bill of Lading may be endorsed in blank.

Contents of Bill of Lading

Name and other details of rthe ship and shipping company

name of the port of loading

name and address of the exporter

name and address of the importer (in certain cases this column may be either blank or in favour of a specified person or his order).

name and address of the person to be notified when the goods reach the port of destination

details of name of the port of discharge and delivery

details of freight paid or payable (to pay to collected)

Description of goods

number of packages, kind of packages and marks and numbers on packages.

remarks about condition of goods, if any.

Type of Bill Lading

Claused bill of Lading

Clear bill of lading

Through bill of lading

Direct bill of lading

Transshipment bill of lading

Freight paid bill of lading

Freight collect bill of lading

Shipped bill of lading

Received for shipment of lading

Stale bill of lading.

If the captain or master of the ship find, while inspecting the goods, that the goods are in damaged condition or packages are damaged, the captain will make a note in bill of lading about the damage of goods or packages. This bill of lading is known as claused bill of lading or dirty bill of lading.

While inspecting the goods, if the goods and packages are found in good condition a clear bill of lading will be issued by the captain of the ship. Sometimes contract of carriage of goods between exporters and carrier may cover transport by land on other sea carriers in addition to the main carriage of goods by sea. In order to cover the all stages of journey, a though bill of lading is issued. Direct bill of lading in issued when the same vessel carried the goods from the port of shipment to port of destination transshipment bill of lading is issued when the goods are transshipped from one ship to another ship for a part of the journey.

The second ship will carry the cargo for the remaining journey, and deliver the goods in the port of discharge freight collect bill of lading is issued when the imported in supposed to pay freight. Shipped bill of lady means that shipping company has received goods on board of the ship received for shipment bill of lading means that the goods are under the custody of the shipping company. It means that the goods are received for shipment. Generally, bill of lading should reach the importer before the goods reach the port of discharge (import Port).they only importer can take necessary steps to take delivery of goods. If the bill of lading is delayed to reach the importer, he cannot take the delivery of goods in time. He has to incur extra cost of demurrage. This type of bill of lading known as stale bill of lading.

Airway Bill

It is issued by the airline company. Within the goods are transported by air, the airline company will issue airway bill to the exporters. Airway bill is an evidence of contract of carriage. It is not document of title to goods, whereas bill of lading in a document of title of goods. Under airway bill the goods are delivered to the party mentioned by the exporter.

Shipping Bill

Shipping bill is an important document used in export transactions. It is an important document required by the customs authorities for certification of export transaction. It is used for claiming duty drawback and other export incentives. Shipping bill is classified into three types. They are

Drawback shipping bill,

Dutiable shipping bill and

Duty free shipping bill.

This classification is based on the type of goods exported i.e., drawback goods, dutiable goods and duty free goods.

Drawback shipping bill is used for drawback goods. Exporters can claim duty drawback or such goods. Dutiable shipping bill is used for dutiable goods and exporter should pay duty. Duty-free shipping bill is used for duty free goods. Exporter need not pay duty for such goods. Drawback shipping bill is Green colour for sea transport and for air transport. Duty free shipping bill is White color for sea transport and Pink color for aim transport. In the electronic data interchange system color of the shipping bill is not given importance and purpose is given due importance.

Contents of Shipping Bill given below

Name, address and IEA number of exporter and name and address of the consignee

Name of the ship

Name of the shipping agent

Description, quantity and value of goods

Type of cargo (bulk, liquid)

Number of packages, details of markings and numbers on packages, container numbers.

Port of loading and port of discharge

Country of destination

Nature of export continent

Customs house agent LIA Number

Invoice number and date

AR4/AR4A number and date

Shipping bill is prepared in five copies. The five copies are\

Customs and statistical copy,

Port trust copy,

Drawback copy,

Export promotion copy and

Exporter’s copy.

Marine Insurance Policy

Marine insurance is contract between policy holder (exporter) and insurance component. The insurance company will issue marine insurance policy to the exporter. Marine insurance policy in a basic document related to transport of exportable goods is indemnified the risks to the goods when the goods are transported by sea. Marine insurance policy is taken to cover the risk related to goods from the exporter’s warehouse to importer’s warehouse if the export contract is on CIF (cost, Insurance and Freight) term, exporter has to take necessary steps to take marine insurance policy and pay premium for the policy. Marine insurance policy is freely transferable by endorsement and delivery.

Contents for Marine Insurance Policy

Name and address of the insurance company

Name and address of the insured (name of the exporter in whose favour the insurance is effected)

Marine insurance policy certificate number and date of issue.

Name of vessel (ship)

Port of loading and poet of discharge

Description of goods, number and kind of packages and marks and number on packages

Insured value, period of insurance and terms of insurance

Clauses of insurance ( risk or risks insured against)

Post Parcel Receipt

Post Parcel Receipt is issued by the postal authorities when the goods are exported through post. It is and evidence of receipt of goods for export and it is not a document of title to goods. The goods are delivered to the consigned mentioned by the exporter. The terms of payment such as documents against payment and document against acceptance can be used while exporting goods through post also. It export through post, goods are consigned in the name of the concerned banks. Prior permission should be obtained from the concerned banks in this regard.

Port Trust Document

Port designs their documents (forum) for exporter’s use to pay port changes. The documents are used by the port authorities to record the details of transactions relating to shipment of goods in their ports. The port trust documents are designed by the ports based on the information required to they about export transaction. Information regarding cargo handled and port charges received are also recovered in the port trust documents. These documents are used by the ports for their internal management. Export application dock challan and port trust copy of shipping bill are different names of the port trust documents used in different ports in our country.

Document Related to Payment

Documents related to export payment are explained below:

Letter of Credit

Letter of Credit is one of the most important documents used in the export trade. it is defined as “a promise by the overseas importer through his banker where letter of credit is opened by him, to the exporter through his banker (known as negotiating banker ) to pay the proceeds on the receipt of documents certifying the shipment of goods”. It is defined by the Jacob Cherian in his book, Export Marketing as “a written undertaking issued by the buyer’s bank agreeing to pay a certain sum of money within a stipulated period against a specified set of documents.” letter of credit is classified into various types. They are irrevocable and revocable letter of credit, with or without Recourse letter of credit, confirmed and unconfirmed letter of Credit.

Bill of Exchange

It is a negotiable instrument and can be transferred to another person. it may be either sight bill on time (usance) bill. Sight bill is paid immediately on the presentation of documents to the importer. Time bill on usance bill is paid on a fixed date mentioned in the bill (usually after 30,60, or 90 days) after presentation of documents to the importer.

When a draft is drawn on a foreign bank, it is named as foreign draft or bill of exchange. It is a method of collection export payment from the importer through bank. bill of exchange is defined as “an unconditional order in writing addresses by one person to another, signed by the person giving it, requiring the person to when it is addressed to pay or demand or on a fixed on determinable future time a sum certain in money to or to the order of a specified person, or to bearer”.

Bank Certificate of Payment

This a certificate issued by the negotiation bank (exporter’s bank) stating that the export payment is received from the importer as per the exchange control regulations of the government of India.

Document Relating to Inspection

Document relating to inspection of export goods are explained below:

Certificate of Inspection

Exporters should obtain inspection certificate from the export promotion Agency as per the export (quality control and inspection) Act, 1962 and it is obligatory also to the exporters. Exporter should apply to the export inspection agency in the prescribed format for export cargo inspection. After inspection, export inspection agency will issue verification of inspection. Exporter should submit this document to the customs authorities to obtain then approval from shipment of export cargo. Exporter should attach the following documents with his application for inspection to the export inspection agency:

Copy of the commercial invoice

Drafrt/cheque for the fee payable for inspection

Copy of the export contract and

Declaration of the importer’s technical specifications of quality and /or a sample approved by the importer is support of the declaration of specifications.

Documents Related to Exchange Control

Documents related to exchange control for export goods are explained below;

Exporters should observe exchange control regulations in getting export payment from foreign countries. Exporters should take steps to get export payment from foreign countries. Exporters should take steps to get export payment within 180 days from the date of shipment.

Otherwise, notice will be served to the exporters and necessary action will be taken against the exporter. Exporter should give valid reasons and justification from the delay in getting export payment. In the recent EXIM Policy (2002) exporters are permitted 360 days from the date of shipment to get export payment from foreign countries. Exporters should take steps to get export payment within 360 days from the date of shipment

Guaranteed Remittance Form (GR)

Exporters are directed by the RBI to declare in time the amount of foreign exchange they receive in every export consignment. The declaration of exporter should be made in a prescribed form. This form is known as GR-I form. This form is prepared in triplicate. Exporter submits the original GR-1 Form to the customs authorities as the time off shipment.

Duplicate and triplicate copies of GR-1 form are submitted by exporter to the bank (authorized dealer in foreign exchange) help8ing is collection of export payment and export payment is routed through this bank. After the export payment is received from the importer, the hank will send duplicate copy of GR-1 form to the RBI certifying for the export money received.

Contents of GR-1 Form

Name, address and code number of exporter

Name and address of the consignee

Name of the negotiation bank (bank through which payment is to be received)

Name of the ship/airline

Date of shipmen, port of shipment and country of destination

Nature of export contract (FOB,CIF,C&F)

Describing of goods, quantity of goods, export value, customs assessable value.

Post Parcel (PP) Form

If the export is made through post parcel, exporter should declare the details of export in post parcel form. Exporter should submit this form to the bank (authorized foreign exchange dealer) for counter signature.

The bank will counter sign and return the original copy of the pp form to exporter. the counter signed pp form is submitted to the post office with the parcel (export goods for export. bank retains the duplicate copy of the pp form., exporter will submit relevant export documents within 21 days from the date post parcel to the bank for negotiation and collection. the duplicate pp form will be referred by the bank for documents negotiation and collection of behalf of the exporter.

Value Payable. Cash-On –Deliver (VP/COD) Form

Exporter should declare export details in VP/COD form in the export is made through post parcel and payment arrangement is made though postal channels value payable on cash on delivery basis. This form is to be submitted to the post parcel (export goods) for export.

Documents Relating to Excisable Goods

Documents relating to excisable goods are explained below

1 AR4 form

AR4 form is used to claim rebate on excise duty. Exporter should submit this AR4 form to the central excise officials before removal of excisable goods from the factory for export. Exporter should submit this AR4 from to customs authorities as the tome of shipment. After shipment, the customs authorities will certify, by endorsement in AR4 form that the goods have been shipped. Exporter can claim rebate or excise duty on the basis of endorsement made by the customs authorities.

Form C

Form C is used to apply for rebate on excise duty for export goods other than vegetables, non essential oils and tea exported by sea. This form is also submitted to central excise officials from necessary action and getting rebate on excise duty. The documentary procedure of AR4 form is applied for form C for claiming rebate on excise duty.

Aligned Documentation System

Mahajan, in his book export documentation has defined aligned documentation system as “a method of creating information on a set of standardized forms printed on paper of the same size and in such a way that items of identical information occupy the same position of each form.” Aligned documentation system is based on the UN Layout key. It helps to prove and effective alternative to the repetitive and unproductive method of preparation of export documents. Aligned documentation system organized export documents in such a way to facilitate the present day requirements of trade and transport this system simplifies and standardized document. The objectives of aligned documentation system are (i) to simplify, rationalize and priorities information required by various commercial interests and government agencies and align in a standardized format and (ii) to achieve economy of time and effort involved in the present method of export documentation

In the export trade, the organizations such as, Federation of Indian Export Organization, Federation of Indian Chamber of Commerce and Industry, Associated Chamber of Commerce, Federation of Freight Forwarders Associations of India, Shippers’ Association, Export Inspection Agencies, Port Trusts, Shipping Corporation of India, General insurance Corporation, Export Credit and Guarantee Corporation, Collectors of Custom Reserve Bank of India and export companies are involved. 16 to 25 export documents are prepared to fulfill the requirements of the above organizations in export trade. Most of the information available in these documents are the same and repetitive.

Further the export documents are in different size, shape and layout. So it becomes necessary to simplify and standardized all export documents and number of export documents should be reduced as much as possible. The Aligned Documentation System insist to prepare export documents on a uniform and standardized A4 size paper. It is planned to prepare only two master documents (One for commercial documentation purpose and another for regulatory documentation purpose) to fulfill all the documentary requirements of export and instead of preparing 16 to 25 export documents.

The Aligned Documentation System helps to prepare export documents with increased speed, convenience, economy and accuracy. The recently developed electronic data interchange (EDI) will contribute to simplify the export documents and fulfill the objectives of aligned documentation system. All major ports functioning in India are directed to implement electronic data interchange in their export documentary procedures and creating records relating to shipment and other export related activities.

Shipping Terms

Selected shipping terms are given below.

Anchor

A heavy iron implement usually in the form of a book, lowered by means of chains from the ship on to the bottom of the sea to keep the ship safe from moving

Berth

A loading or discharging anchorage allowing a ship to go to alongside.

This may also apply to cabin I ship.

Breakwater

Strong structure material to break the force of sea waves a breakwater us constructed outside an open harbor to protect it from waves, and it possible for ship to berth also a part of protection on the weather deck of ship to stop the waves over riding the deck.

Bunker

Fuel or coal utilized by engines of a ship

Cargo

The general meaning of various merchandise transported on a ship or airplane or by land vehicles. Cargo is accepted on production of a bill of lading as from of contract of affreightment showing the full details of the cargo carried, including freight charges involved.

Charter

The chartering or hiring of a ship. A ship which is hired out is said to be on charter and the time during which a ship is hired out is known as period of the charter.

Short term for charter party

Charter Party

Documents containing all the terms and conditions of the contract between a ship owner and charter, and signed by both parties and their agents, for the hire of a ship or the space in a ship. Most charter parties are standard forms with printed clauses and spaces or boxes in which details relating to the individual charter, such as freight, lay time, demurrage, the ship’s construction, speed and consumption are inserted. The printed document may be varied and/or added to by agreement of the two parties sometimes spelled charter party or charter party.

Container

Box designed to enable goods to be sent from door-to-door without the contents being handled. There are several standards sizes used worldwide such that the same container may be transferred from tone more of transport to other modes in the course of a single voyage.

Indeed, specially designed road and rail vehicles and special ships are frequently used to carry containers. the most common sizes of containers are the 20 footer, which measure about feet long by 8 feet wide by 8 feet 6 inches high and the 40 footer, measuring about 40 feet long and having the same width and height as the 20 footer. Typically made of steel, there are containers of several types whose use depends principally on the nature of the cargo, for example dry bulk, liquid or perishable cargoes.

Container Foreign Station

Place where consignments are grouped together and packed into a shipping container, or where such consignments are unpacked.

Dock

Enclosed bain surrounded by quays equipped with cargo handling equipment used for loading and discharging ships. A dock is not a pier or wharf (q.V) each of which has its own specific meaning. It would be appropriate, however, to say that a vessel docked at a pier.

Draught (or Draft)

Depth to which a ship is immersed in the water, this depth varies according to the design of the ship and will be greater or lesser depending not only on the weight of the ship and everything on board, such as cargo, ballast, fuel and spares, but also on the destiny of the water in which the ship is lying. A ship’s draught is determined by reading her draught marks, a scale marked on the ship’s stem and stem.

Feeder

Wooden boxes open at the bottom, which is built under the hatchway of a ship when grains in bulk are to be carried. The grain is loaded into the cargo compartment filling the feeder which feeds the hold with grain as the cargo settles during the voyage, in order to prevent it from shifting.

Forwarding Agents

Persons engaged in taking care of cargo or personal effect to be dispatched from one place to another by sea, land or air, similar to freight forwards.

Free Alongside Ship or Free Alongside Berth

Buyer is to pay all the expenses from the time shipment up to the time of destination. there include the loading and loading expenses, freight and all other charges involved in the process of its transportation route.