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CONTENTS
ACKNOWLEDGEMENT............................................................................................ 2
INTRODUCTION...................................................................................................... 2
EXPORT DOCUMENTATION USED IN MALAYSIA.......................................................3
EXPORT DECLARATION K2...................................................................................4
EXPORT PERMIT JK59.......................................................................................... 4
PRO FORMA INVOICE.......................................................................................... 4
COMMERCIAL INVOICE........................................................................................ 5
BILL OF LADING.................................................................................................. 5
AIRWAY BILL........................................................................................................ 5
PACKING LIST...................................................................................................... 6
CERTIFICATE OF ORIGIN...................................................................................... 6
INSURANCE DOCUMENT...................................................................................... 6
STRATEGIC TRADE ACT.......................................................................................... 7
SHIPPING LINE........................................................................................................ 7
FREIGHT FORWARDER........................................................................................... 8
INCOTERMS............................................................................................................ 9
DELIVERY DUTY PAID (DDP).................................................................................10
PROCESS DIAGRAM.............................................................................................. 10
IMPORT & EXPORT PROCESS EXPLANATION......................................................11
CONCLUSION....................................................................................................... 13
BIBLIOGRAPHY..................................................................................................... 14

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ACKNOWLEDGEMENT
Alhamdulillah, first of all, we would like to thank God as finally we are able to finish
our assignments that have been given by Shipping Practices & Documentations lecturer to
us. This task had been done with all afford by group members even though a little bit problem
were happened among us while doing this assignment. Luckily, all the problems can be settle
down and we were able to adapt properly and wisely.
Besides, big thank we address to our lecture, Mr. Pandiyan because without his guide,
our assignment cannot be done properly like this. He always give us supports and guide to us
how to do our assignment in purpose to produce a good outcome from research that been
studied. Now, we are clearly known about the export and import transaction between two
countries.
On the other hand, big thank also to our beloved parents that always supports and
encourage us to finish this assignment. Besides, thanks to our beloved friend that always
sticks together and also works hard to produce a good assignment with all afford and
responsibility. Hope that all the affords will give a lot of benefits to us and also to our group
project.
Million thank also we wish to our entire classmate because they also help us in doing
our group. They always give us ideas and comments on our project so that we can improve
our project in many ways.
Thank you.

SHIPBOARD PRACTICES &

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INTRODUCTION
Documents is a set of documents provided on paper, or online, or on digital or
analogue media, such as audio tape or CDs. Example are user guides, white papers, on-line
help, quick-reference guides. It is becoming less common to see paper (hard-copy)
documentation. Documentation is distributed via websites, software products, and other online applications.
In the marine industry, we use many documents such as Bill of Lading, commercial
invoice, certificate of origin, insurance certificate, packing list, or other documents required
to clear customs and take delivery of the goods. Without it, the process cant be done.
Full Container Load (FCL) is an ISO standard container that is loaded and unloaded
under the risk and account of one shipper and only one consignee. In practice, it means that
the whole container is intended for one consignee. FCL container shipment tends to have
lower freight rates than an equivalent weight of cargo in bulk. FCL is intended to designate a
container loaded to its allowable maximum weight or volume, but FCL in practice on ocean
freight does not always mean a full payload or capacity.
(Wiki, 2015)
(Wiki, Wikipedia, 2015)

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EXPORT DOCUMENTATION USED IN MALAYSIA

To export goods from Malaysia, the exporter need to fulfill certain document such as
declaration document and supporting document. The declaration document consist of K2 and
export permit JK59 while the supporting document involve pro forma invoice, commercial
invoice, B/L, airway bill, packing list, certificate of origin, insurance document, and strategic
trade act.

EXPORT DECLARATION K2

Export declaration is a standardize export document for the exporter that wishing to ship the
good. This K2 form is required by the government when the value of the shipment is
exceeding certain amount or when a duty drawback is claimed. This document is issued by
the freight forwarder.

EXPORT PERMIT JK59

Export permit is a document that issued by the government allowing the exporter to export
the specific good to the specific country. This document may be required for most or all
exports to some countries or for other countries only under special circumstance.

PRO FORMA INVOICE

Pro forma invoice is an estimated invoice sent by a seller to a buyer in advance of
a shipment or delivery of goods. It notes the kind and quantity of goods, their value, and other
important information such as weight and transportation charges. Pro forma invoices are
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commonly used as preliminary invoices with a quotation, or for customs purposes in
importation. They differ from a normal invoice in not being a demand or request for payment.
(Kaijin, 2011)

COMMERCIAL INVOICE

Commercial invoice is a document that describing the commercial transaction between the
exporter and importer. It is also required b y the custom to determine the true value of the
imported goods, for assessment of duties and taxes. The content of the commercial invoice
must clearly identify both buyer and seller and indicate the date and term of sale, quantity,
weight or volume of the shipment. This invoice will also describe the type of packaging,
complete description of the good, unit value and total value also the insurance, shipping and
other charges.

BILL OF LADING
Bill of lading is a document issued by a carrier to the shipper as a contract of carriage of
goods. It also act as a receipt for cargo accepted at port of discharge and must be presented
for taking delivery at the port. The content of the bill of lading include:
1. Consignors and consignees name.
2. Names of the ports of departure and destination.
3. Name of the vessel.
4. Dates of departure and arrival.
5. Itemized list of goods being transport with number of package.
6. Weight or volume of the cargo.
7. Mark and number of the packages.
8. Freight rate and amount.
9. Limitation of liability.
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10. Description of commodity.
Bill of lading is also consider as a document of title as it proof the ownership of the cargo and
can be used as a proof in the court if there is any dispute. The bill of lading can be issued as a
negotiable or non negotiable form.

AIRWAY BILL
Airway bill is a document that is similar to bill of lading but it is for transport of air freight.
An airway bill is a non-negotiable transport document and it does not specified on which
flight the shipment will be sent and reach the destination. The detail on the airway bill
includes:
1. Condition
2. Limitation of liability
3. Shipping instruction
4. Description of commodity
5. Applicable transportation charge

PACKING LIST
The packing list is prepare by the shipper and sent to the consignee for the purpose of tallying
the delivered goods. It also recognize as bill of parcel, packing slip, or unpacking note. In the
document it describes the type and quantities of the goods in a particular shipment.

CERTIFICATE OF ORIGIN
Certificate of origin is a document to certify the place of manufacture and production of
goods. This document is required when exporting to specific country. The certificate of origin
falls into two type preferential certificate of origin and non-preferential certificate of origin.

SHIPBOARD PRACTICES &

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INSURANCE DOCUMENT
A document issued by an insurance company that is used to verify the existence of insurance
coverage to cargo while in transit, in form of policy or a certificate granted to listed
individuals.
(Matrade, 2011)

STRATEGIC TRADE ACT

Strategic Trade Act (STA) 2010 is the legislation that controls the export, transhipment,
transit and brokering of strategic items, including arms and related material, as well as
activities that will or may facilitate the design, development, production and delivery of
weapons of mass destruction. Those who violating this act is subjected to a fine,
imprisonment or death sentence. The specific item is:
(i) nuclear materials, facilities and equipment;
(ii) special materials and related equipment;
(iii) materials processing;
(iv) electronics;
(v) computers;
(vi) telecommunications and information security;
(vii) sensors and lasers;
(viii) navigation and avionics;
(ix) marine;
(x) aerospace and propulsion; and
(xi) military items.

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SHIPPING LINE
Shipping agent is the designated person or agency held responsible for handling shipments
and cargo, and the general interests of its customers, at ports and harbours worldwide, on
behalf of ship owners, managers, and charterers. In some parts of the world, these agents are
referred to as port agents or cargo brokers.
The term shipping agent refers to the relationship between the principal (in this case the
shipping company conveying the goods) and its representative, whereby the principal,
expressly or impliedly, authorizes the agent to work under his control and on his behalf.
Shipping agents will usually take care of all the regular routine tasks of a shipping company
quickly and efficiently. They ensure that essential supplies, crew transfers, customs
documentation, and waste declarations are all arranged with the port authorities without
delay. Quite often, they also provide the shipping company with updates and reports on
activities at the destination port so that shipping companies have real-time information
available to them while goods are in transit.
The responsibilities/competencies as well as the remuneration of the agent may be explicitly
entered into a contract which has been concluded between himself and the ship owner. This
practice is very common in the cargo trade, booking agents, etc.

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FREIGHT FORWARDER
A freight forwarder or forwarding agent is a person or company that organizes shipments for
individuals or corporations to get goods from the manufacturer or producer to a market,
customer or final point of distribution. Forwarders contract with a carrier to move the goods.
A forwarder does not move the goods but acts as an expert in the logistics network.
International freight forwarders typically handle international shipments. International freight
forwarders have additional expertise in preparing and processing customs and other
documentation and performing activities pertaining to international shipments.
The freight forwarder provides all necessary documentation for the import and export of
goods having regard to legal- and customs requirements and the terms of the sales con-tract.
He performs this function as an agent of the customer.
Document issued by Freight Forwarder:

Export Declaration K2
Bill of Lading

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INCOTERMS
Incoterms is a set of rules that state the responsibility of the seller and the buyer in a
contract. There is several type of incoterm and it was being practise by the exporter and also
the importer. It was published by the International Chamber of Commerce (ICC). In this
transaction, they use the DDP type of incoterm for the smoother of their responsibility. DDP
is defining by Delivery Duty Paid.

DELIVERY DUTY PAID (DDP)

DDP is the type of incoterm used in the transaction between the buyer and the seller.
DDP is delivery duty paid which all the responsibility is on the seller until the goods are
reached at gthe port of destination. The seller need to cover all the taxes, port charges, the
loading process etc. The buyer responsibility only start when the goods is reached the
destination which means the unloading process were being paid by the buyer and all the
responsibility will be transfer to the buyer.
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For the assignment which involve with A shipper from Seremban need to ship cartons
of hand glove to the California, US, the shipper from Seremban need to bare all the
responsibility for the goods until it reached the California, US port. Until then, the
responsibility will be given to the buyer on that particular country.
(Investopedia, 2015)

PROCESS DIAGRAM
The transaction is an export and import transaction between Malaysia and US. They
use the FCL which mean Full Container Load. This is because all the 100 containers were
being consolidated which only 1 type of product that consist of cartons of hand gloves. There
are only one shipper that covering the whole container in process. Thats why the FCL is
being used rather than LCL. The process can be explained in the diagram below:

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Malaysia is the exporter and US is the importer in this

transaction.

(Mitsui, 2013)

IMPORT & EXPORT PROCESS EXPLANATION

In the diagram, we can see that the process were very complicated as the good is
keep transferring from one point to another point. But that what is meant to be logistic. From
Malaysia, when the order from US is accepted, then the hand glove is needed to be ready to
be export. The order process is only through the internet as it is much easier and faster. Then
the incoterm will be selected by the agreement between seller & buyer. The Incoterm that is
selected was the DDP define as Delivery, Duty, and Paid. After that, the seller must reserve
the space in the ship from the shipping company.

When the cargos have been packed into the container, they will be sent to the port
where the custom will do some inspection towards the item inside the container. The
document needed here is the packing list. When all the charges including the tax have been
cleared, the custom will release the cargo and they can be load on the ship. This is where the
bill of lading will be issued by the master. Then, when the bill of lading have been passed to
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the seller, the cargo is now are the carrier responsibility. The cargo will start the journey to
the US.

After reached the port of destination at the Long Beach, California, the master will
unload the cargo only when the freight has been paid. The seller is the one who is responsible
to pay the freight according to the DDP incoterm agreement. Then, the master will pass the
cargo to the person that holds the bill of lading. Then the cargo is transferred to the buyer
hand also the responsibility. The buyer also needs to pay the unloading process charges and
the tax. Then the item will be trough some inspection before it can be release at the port gate.

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CONCLUSION
As a conclusion, we had really a better understanding of how the export and import
procedure transaction is happening around the world. The document needed uncountable and
very important such as Export declaration K2, Export permits JK59, and Pro forma invoice.
We also learn that technology is very important nowadays. The transaction is much easier
with the internet and the document used in the computer as it can transfer very fast and
efficient without any delay.

In the above transaction also use the shipping line and the freight forwarder. So, we
learn who is the shipping line and freight forwarder and what are their responsibility towards
the cargo. There are many responsibilities that they must take into the account such as follow
the regulation including the convention of IMO, and issuing the documents such as the export
and import documents.

Furthermore, we also get a good knowledge of Incoterms where the transaction used
DDP in their agreement. DDP is Delivery Duty Paid where most of the job is the
responsibility of the seller. This type of Incoterms is an unusual type of Incoterms as the
seller need to do more work than the buyer.

The import and export flow are very clear as we learn how the goods are carried from
the port of origin to the port of destination till the goods being take away through the exit gate
by the buyer or the freight forwarder. The flow diagram is very clear and can make us better
understanding of how the transaction is being done.

As a conclusion, Malaysia should make improvements and increase the export and
import business to increase the GNP of the country so that it could increase our Malaysian
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economies. Thus, it could also make our country richer in the term of economy in the eyes of
the world.

BIBLIOGRAPHY
Investopedia.

(2015).

Investopedia.

Retrieved

2015,

from

Delivery

Duty

Paid:

http://www.investopedia.com/terms/d/delivery-duty-paid.asp
Kaijin. (2011). Business Dictionary. Retrieved 2011, from Pro Forma Invoice:
http://www.businessdictionary.com/definition/pro-forma-invoice.html#ixzz3UC9zVBUI
Matrade. (2011). Malaysia External Trade Development Coperation. Retrieved 2011, from
Logistics and Export Documentation: http://www.matrade.gov.my/en/malaysia-exporterssection/119-going-global-beginners-guide/636-logistics-and-export-documentation
Mitsui. (2013). Mitsui Soko. Retrieved 2013, from Sea import/export fowarding:
http://msc.mitsui-soko.com/en/service/forwarding_s.aspx
Wiki. (6 January, 2015). Wikipedia. Retrieved 6 January, 2015, from Shipping Agency:
http://en.wikipedia.org/wiki/Shipping_agency
Wiki. (25 February, 2015). Wikipedia. Retrieved 25 February, 2015, from Freight Fowarder:
http://en.wikipedia.org/wiki/freight_forwarder

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