Supreme Council of Universities

Arab Academy For Science,

Technology & Maritime Transport.

FINAL
ASSIGHNMENT

INTERNATIONAL DOCUMENTS USED IN LINER SHIPPING

NAME: MOHAMMED YASSER AHMED REFAT

REGISTRATION NUMBER: 3329387

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 TABLE OF CONTENT

SERIES HEADING FROM TO

1 TABLE OF CONTENT 2 2

2 INTRODUCTION 3 3

INTERNATIONAL DOCUMENTS USED IN LINER SHIPPING

3 4 7

4 Main players in the shipping process 7 8

5 Export Documents classification 9 9

6 Liner shipping export documents 9 13

7 Role of export Documentation 13 13

8 CONCLUSION 14 14

9 REFRENCES 15 15

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 INTRODUCTION
 Contrary to popular belief, the international shipping process does not start when a
product is loaded onto a ship. It starts much earlier, when an importer identifies the need
for that product and floats an enquiry to procure it. As such, the shipping process covers
the flow of goods and documents from the place of origin to the place of destination. For
the process to be completed successfully, the transfer of goods and documents from one
party to another must be highly synchronized.

 Export documentation plays a vital role in international marketing as it facilitates the smooth
flow of goods and payments thereof across national frontiers. Incorrect documents may lead
to non-delivery of goods to the importer.

 Every exporter should have an adequate knowledge about export documents and
procedures.
1
https://www.citeman.com/4112-role-of-export-documentation.html

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 INTERNATIONAL DOCUMENTS USED IN LINER SHIPPING

1.Proforma Invoice

 In a typical export exchange, everything starts when you receive an inquiry about one or
more of your products. That inquiry may include a request for a quotation. 2

 If the inquiry came from a domestic prospect, you probably have a standard quotation form
to use. However, in an international transaction, your quote would be provided as a
proforma invoice. That’s because your international prospect may need a proforma invoice
to arrange for financing, to open a letter of credit, to apply for the proper import licenses,
and more. 2

 A proforma invoice looks a lot like a commercial invoice, and if you complete it correctly,
they will be very similar indeed. A proforma invoice specifies the following:

a) The buyer and seller in this transaction.

b) A detailed description of the goods.

c) The Harmonized System classification of those goods.

d) The price.

e) The payment term of the sale, which would typically be expressed as one of the 11
current Incoterms.

f) The delivery details including how and where the goods will be delivered and how
much that will cost.

g) The currency used in the quote, whether it’s U.S. dollars or some other currency. 2

 The proforma invoice includes an expiration date. There can be a lot of volatility in the
export process, so minimize risk by setting a specific time frame for your quote. 2

2. Commercial Invoice
 Once you’ve sent a proforma invoice to your international prospect and received their order,
you need to prepare your goods for shipping, including the paperwork that must accompany
the goods. Of those documents, the commercial invoice is one of the most important. 2

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  The commercial invoice includes most of the details of the entire export transaction, from
start to finish. When completed properly, it provides important instructions and information to
the buyer, the freight forwarder, customs, the import broker, the marine insurance company,
and both your bank and the buyer’s bank. Done improperly, it can cause confusion, delays
and disagreements.2

3. Packing list
 Document used in international trade that provides the exporter, the international freight
forwarder, and the ultimate consignee with information about the shipment. This list also
includes details about how the shipment is packed and the marks and numbers that are
noted on the outside of the boxes. 2
 While a packing list is not a required document for customs in many countries, it is a good
document to include in your shipment as it makes the import/export process so much easier
for the shipper and customs. 2
 In addition to including the basic details about the international transaction, the packing list
will include:
 An export packing list must always include information about the number of units, boxes,
any other available packaging information, net and gross weight and dimensions of the
packages. 2
 The information must match the Commercial Invoice and should reflect the same parties to
the transaction. It should also clarify if solid wood was used to pack the shipment. Most
countries enforce certain Fumigation and Heat Treatment regulations when it comes to
transporting wooden materials. 2
 Additionally, the packing list must include a Fumigation or Heat Treatment Certificate. 2

4. CERTIFICATE OF ORIGIN
 A certificate of origin is a document that certifies the country where the goods originated. A
certificate of origin may be required by the customs authority of the country where the goods
are being imported. It’s also frequently used to determine how much duty the importer will
pay to bring in the goods. 2
 Some countries require a certificate of origin for your shipments in order to identify in what
country the goods originated. These certificates of origin usually need to be signed by some
semi-official organization, like a Chamber of Commerce or a country’s consulate office. A
certificate of origin may be required even if you’ve included the country of origin information
on your commercial invoice. 2
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 Usually a Chamber of Commerce will charge you a fee to stamp and sign your certificate or
requires you to be a member of the chamber. You’ll need to deliver a completed form to the
chamber office where they will stamp and sign it for you. 2

5. Shipper’s Letter of Instruction

 Depending on your agreed-upon terms of sale—remember, that’s typically the Incoterm you
choose-either you hire a freight forwarder to work for you, the exporter, or, in the case of a
routed export transaction, the buyer hires a freight forwarder. 2
 Regardless of who hired the forwarder, it’s important you provide him or her with a Shipper’s
Letter of Instruction (SLI) containing all the information needed to successfully move your
goods. The SLI may include a limited Power of Attorney giving him or her authority to act on
your behalf for this shipment.2

6. Bills of Lading
 There are three common bill of lading documents: inland, ocean, and air waybill.
 If your goods are shipping by ocean vessel, you’ll need an ocean bill of lading. An ocean bill
of lading can serve as both a contract of carriage and a document of title for the cargo. There
are two types: 2
 A straight bill of lading is consigned to a specific consignee and is not negotiable. The
consignee takes possession of the goods by presenting a signed, original bill of lading to the
carrier. 2
 A negotiable bill of lading is consigned “to order” or “to order of shipper” and is signed by the
shipper and sent to a bank in the buyer’s country. The bank holds onto the original bill of
lading until the requirements of a documentary collection or a letter of credit have been
satisfied.2

7. Dangerous Goods Forms

 Shipping dangerous goods internationally by vessel is regulated through the International
Maritime Organization (IMO). The IMO is a specialized agency of the United Nations. The
IMO uses the International Maritime Dangerous Goods Regulations Code (IMDG Code) as
the basis for international enforcement of dangerous goods transportation by vessel. These
regulations are amended every two years with each amendment valid for three years. 2
 The IMDG Code requires a declaration from the consignor stating that the particular
dangerous goods declared are identified, classified, packaged, marked, labeled and
placarded correctly. A declaration from the person packing the container is also required to

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 ensure it has been done so correctly. The DG declaration and Container Packing Certificate
can be in any format, but must be in accordance with Chapter 5.4 of the IMDG-Code. 2 

8. Bank Draft
 A bank draft is an important part of the international sales process for transferring control of
the exported goods from the seller in exchange for funds from the buyer. It is often called
a documentary collection, because the seller attaches various documents to a bank draft and
a cover letter. 2
 Usually the seller’s bank will send the bank draft and related documents via the freight
forwarder to the buyer’s bank or a bank with which it has a relationship in the buyer’s country.
When the buyer authorizes payment for the goods, the buyer’s bank releases the documents
to the buyer and transfers the funds to the seller’s bank. 2
 The bank draft may or may not include a transmittal letter, which includes details of the bank
draft transaction including the types of additional documents that are included and payment
instructions.2
2
https://www.shippingsolutions.com/blog/documents-required-for-international-shipping

Main players in the shipping process

1.Importer: The importer is the buyer. He identifies the need for a product at a
specific location, searches for the best supplier globally, and places an order for
purchase. 3

2. Exporter: The exporter is the seller. He manufactures or procures the product

required by the buyer. 3

3.Bank : Banks play multiple roles in international trade. They act as financiers,
providing loans and trade finance products such as Letters of Credit and Documentary
Collections. A Letter of Credit is a promise by a bank on behalf of the importer to pay the
exporter an agreed-upon sum. A Documentary Collection is when a bank takes charge of
collecting the payment due to an exporter from the importer’s bank. In addition, banks
negotiate trade contracts and are custodians of goods and documents. Documents are
vital to the import-export business. To know about the key documents required for a
hassle-free shipping experience. 3     

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4. Insurance Company: Shipping goods comes with risks, including but not limited to
lost or damaged cargo, delays and additional costs due to factors such as natural
disasters, human error, theft, piracy and more. Insurance companies help cover these
risks.3

5. Freight Forwarder: Freight is the cargo carried by ships and a freight forwarder is an
agent who, on behalf of the importer or exporter, coordinates with all the other players
(port and customs authorities, shipping company, etc.) in the ocean freight business. His
responsibilities include negotiating for better routes and rates, handling paperwork and
other formalities, organizing land transportation, being an advisor to the
importer/exporter, and much more. 3    

6. Shipping Company: the Company that owns the carrier (ship) that transports the
goods from the port of loading to the port of destinationz.3

7. Customs House Agent (CHA): A customs house agent assists exporters and
importers in getting clearance for the cargo from customs authorities. 3

8. Customs Authorities: In international trade, the customs authorities of at least two

countries – the country of export and country of import – are involved. They provide
clearance for goods to leave the country of export and to enter the country of import. 3

9. Port Authorities: Like customs authorities, the port authorities of at least two
countries are involved in the shipping process. In the exporting country , they provide
clearance for goods to be loaded on to the ship. In the importing country, they provide
clearance for goods to enter that country. 3 

10. Intermodal Transport Providers: Rail and road transport providers facilitate
the movement of goods from the factory/warehouse to the port of loading and from the
port of destination to the final destination. 3

3
https://www.cogoport.com/blogs/export-process-from-india

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 Export Documents classification

export documents can be classified under four categories:

1. Commercial Documents: These include commercial invoices, bills of exchange bills of

lading, letters of credit, marine insurance policy and certificates etc. 4
2. Regulatory Documents: These are the documents which are required for complying with
the rules and regulations governing export trade transactions such as foreign exchange
regulations, customs formalities export inspection etc. 4
3. Export Assistance Documents: These are the documents which are required for
claiming assistance under the various export assistance measures as may be in operation
from time to time. Presently these refer to drawbacks of Central excise and customs duties,
packing credit facilities etc. 4
4. Documentation required by importing Country: These are the documents which are
required by the importer in order to satisfy the requirements of his government. These
include certificates of origin, consular invoice, quality control certificate etc. 4

4
https://www.economicsdiscussion.net/international-economics/export-documentation-and-its-types-with-specimens/4273

Liner shipping export documents

 The following documents are required in export documents, they already mentioned
above:
1. Bill of lading 2. Commercial invoice 3. Certificate of origin 4. Packing list

5. Dangerous cargo declaration. 5

 6. Consular Invoice

 It is a document that is required in some countries. It describes the shipment of goods and
shows information such as the consignor, consignee, and value of the shipment. Certified by
the consular official of the foreign country stationed here, it is used by the country's customs
officials to verify the value, quantity, and nature of the shipment. 5

7. Inspection certificate
It is required by some purchasers and countries in order to attest to the specifications of the
goods shipped. This is usually performed by a third party and often obtained from
independent testing organizations. 5
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  8. Dock receipt and Warehouse receipt
These receipts are used to transfer accountability when the export item is moved by the
domestic carrier to the port of embarkation and left with the ship line for export. 5

9. Destination control statement

It appears on the commercial invoice, and ocean or air waybill of lading to notify the carrier
and all foreign parties that the item can be exported only to certain destinations. 5

10. Shipper’s Export Declaration (SED)

This document is used by the custom authority of the exporting country in order to exercise
control over exports. SEDs are prepared by the exporter or the exporter's agent and
delivered to the exporting carrier. The exporting carrier will present the required number of
copies to the customs at the port of export. Often, the SED is prepared as a substitute
document of the Shipper's Letter of Instructions. 5

11. Export license

It is government document that authorizes the export of specific goods in specific quantities
to a particular destination. This document is generally required for all countries to export any
commodity. 5

12. Insurance certificate
This is a very important document in export shipment. This is used to assure the consignee
that insurance will cover the loss of or damage to the cargo during transit. Insurance protects
exporter’s interest, as there are risk factors like bad weather, rough handling of cargo by
carriers, and other common hazards which may cause damage to cargo. If the terms of sale
make the exporter responsible for insurance, the exporter is to take a policy to insure the
cargo. If the terms of sale make the foreign buyer responsible, then the buyer has to obtain
an insurance policy. Shipments by sea are covered by marine cargo insurance. 5

13. Letter of Credit / Sales contract

An export documentary letter of credit is a document whereby your buyer instructs their bank
to pay you, assuming that the agreed conditions specified in the original documentary credit,
are met. It is an internationally accepted method of settling trade payments. Rules and
guidelines are governed by the International Chamber of Commerce (ICC). 5

14. Pre-shipment inspection survey

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 A thorough inspection of goods is to be carried out by renown surveyor before shipment in
order to satisfy the buyer that the goods are fit to export in all respect. In case of import,
similar documents will be required to ensure any transaction. 5

5
http://linershipping24.blogspot.com/2013/07/basic-documents-needed-in-liner-shipping.html

Explanation for insurance certificate / letter of credit

 Insurance certificate
 In some cases, exporters or importers do not prefer to make insurance for each shipment
separately, but they sign an insurance cover for a certain period of time such as 1 year.
 During the insurance period exporter’s all shipments will be covered with cargo insurance.
Periodic insurance contracts are also known as open cover.
 In case the exporter, whom uses open cover insurance, needs an insurance document for a
specific shipment, then insurance company issues an insurance certificate.
 Insurance certificates are not issued as a stand-alone insurance document for a specific
shipment, but they are issued under an open cover.
 Both insurance policy and insurance certificate should be issued by an insurance company
or an underwriter. 6
 Both documents should state identical information such as:

 Insurance terms and additional risks covered

 Amount of insurance premium
 Shipment details such as port of loading, port of discharge, vessel name and voyage
number, description of goods etc.
 Currency of the insurance cover
 Insurance cover amount
 Insurance company’s agent at the port of destination
 Procedures for the claim and required documents 6

 What is the difference between insurance policy and insurance certificate?

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 May be the only difference between insurance policy and insurance certificate occurs under
letter of credit payments. According to L/C rules, an insurance policy is acceptable in lieu of
an insurance certificate or a declaration under an open cover. But reverse situation is not
valid. 6
 As a result, if you are not dealing with a letter of credit there would be no difference between
an insurance policy and insurance certificate.
 If you will be presenting documents under a letter of credit, then you should keep in mind
that you can present insurance policy instead of an insurance certificate. But you cannot
present an insurance certificate instead of an insurance policy under a letter of credit. 6

6
https://blog.intradebook.com/en/what-is-a-cargo-insurance-certificate/

 Letter of Credit
A letter of credit, or LC, is a contractual agreement used as a credit instrument in
international trade to ensure payment for products that are shipped. The LC usually is
requested by an exporter when an overseas customer is considered high risk, cannot provide
adequate financial information to receive standard credit terms or is in a country that's
considered politically unstable. Since it is a contract, both the exporter and importer have
specific responsibilities to ensure a smooth transaction. 7
 Letter of Credit Process

An importer’s bank issues the LC in favor of the exporter -- or beneficiary -- for a specified dollar
amount. A U.S. bank also should confirm the LC as an additional guarantor if the foreign bank
is unknown or located in an unstable country. Specific documents, wording and validity dates
are part of the LC, and compliance is necessary to ensure payment. Failure to do so could
result in nonpayment. Once shipment is made and documents approved, the issuing bank
releases payment to the exporter. 7

 Letter of Credit Disadvantages

The confirmed LC is a reliable instrument to obtain payment; however, compliance with the
required documentation can be costly in time and labor. An exporter needs experienced staff to
create and review documentation or must contract this task to a freight forwarder. Clear,
concise instructions to the importer before opening the LC can avoid compliance problems on
the back end. The slightest variation in spelling or monetary values could negate the LC. 7

 Common Letter of Credit Errors

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The LC is fraught with opportunities for errors; the more documents required, the greater the
opportunity for mistakes. Some common discrepancies include missing or unendorsed
documents, inaccurate product name or quantities on the commercial invoice, bill of lading or
airway bill dates beyond those specified in the LC and freight and shipping terms not matching
the LC. 7

 Timing Is Important

When entering into the LC commitment, ensure that enough time is provided to ship and issue
the final documents before the LC expires. Unexpected production issues or carrier delays
could impact the exporter’s ability to present documents within the specified time. If necessary,
provide details and request an LC extension from the importer before the LC expiration. 7

7
https://smallbusiness.chron.com/letter-credit-export-74891.html

Role of export Documentation

Export documentation plays a vital role in international marketing as it facilitates the smooth
flow of goods and payments thereof across national frontiers. A number of documents
accompany every shipment. These documents must be properly and correctly filled. Export
documentation is, however, complex as the number of documents to be filled in is large, so also
is the number of concerned authorities to whom the relevant documents are to be submitted.
Moreover documents required differ from country to country. 8

Incorrect documents may lead to non-delivery of goods to the importer. You may get the correct
documents after some time but in the meantime storage charges may have to be paid. More
important, the importer will think twice before importing from the same exporter. 8

8
https://www.citeman.com/4112-role-of-export-documentation.html

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 CONCLUSION
 Exporting goods from one country to another requires fulfilling many documentation needs
that are completely different from those of domestic trading within a country. In
international trading, you may have to bear losses, penalties and delays without proper
knowledge and expertise in preparing various documents and certificates

 Every exporter should follow the following steps to run business in the right path;

 Step1: Learn which department or authorized body do you need to contact for different
documents. For instance, the certificates of origin are stamped by the chambers of
commerce while an export declaration number is issued with the Customs.

 Step2: Find out the international trade laws as well as various trade and export acts of
your own country to strictly comply with them.

 Step3: Get familiar with the exact formats and templates in which you need to prepare the
documents and apply for various certificates.

 Step4: Train your staff or hire an expert to ensure that there are no errors in preparing the
documents.

 Step5: Choose the fastest modes to apply for various certificates. You may save a lot of
time if you choose cloud software for export documentation and prepare trade documents
electronically rather than doing it manually.

 Step6: Maintain the right number of copies of each document for various parties
(warehouses, freight forwarders, cargo terminal operators, shipping companies etc.) and
also for your own records.

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 REFRENCES
1
https://www.citeman.com/4112-role-of-export-documentation.html

2
https://www.shippingsolutions.com/blog/documents-required-for-international-shipping

3
https://www.cogoport.com/blogs/export-process-from-india

4
https://www.economicsdiscussion.net/international-economics/export-documentation-and-its-types-with-specimens/4273

5
http://linershipping24.blogspot.com/2013/07/basic-documents-needed-in-liner-shipping.html

6
https://blog.intradebook.com/en/what-is-a-cargo-insurance-certificate/

7
https://smallbusiness.chron.com/letter-credit-export-74891.html

8
https://www.citeman.com/4112-role-of-export-documentation.html

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