Transport documents not only facilitate the movement of goods but are also, in certain cases, “documents of title”, i.e. whoever holds the document is entitled to possession of the goods. They are also usually stipulated in Documentary Letters of Credit. This means that the documents are important for not only transportation but also provide for the ability to control the goods after despatch and control over payment timelines.
Bills of Lading
In virtually all circumstances in which goods are carried by container or conventional ship, the carriers issue Bills of Lading. Bills of Lading act as receipts for goods, and are also evidence of the contract to carry the goods, detailing the terms and conditions under which it has been agreed to carry them. However, a Bill of Lading also acts as a document of title. This means that, in order to take possession of the goods, the consignee must have an original of the document. Bills of Lading therefore have an additional, quite different, function from other freight documents. It is thus essential to keep “original” Bills of Lading secure (there are usually two or more originals, plus non‑negotiable copies).
Exporters can provide instructions to a freight forwarder using an Export Cargo Shipment Instruction (ECSI), which contains full details of the exporter, the consignee, the goods and packaging, and the nature of the exporter’s requirements. The freight forwarder will then arrange transport, delivery and all other transport documents.
The CMR form (Convention des Marchandises Routiers) is used for road freight between many European countries. It confirms receipt of the goods by the carrier, in good condition unless specified otherwise, and states conditions for the international carriage of goods by road. The carrier will normally complete it but the exporter is responsible for its accuracy. Although the CMR form does carry some insurance, this may not be sufficient and extra insurance may need to be arranged.
A CIM consignment note (Convention International des Marchandises par Chemin de Fer) which sets conditions for international transportation of goods by rail – can appear to look very complex. However, only the top half of the form is used for information about the goods and transportation: the bottom half is used during carriage as various railway companies enter charges and exchange rates. CIM conditions dictate that the carrier is responsible for loss and/or damage of the goods from the time he takes possession of them until they are delivered.
Air Waybills (AWBs) are consignment notes for air-freight. They act as a receipt for the goods “in apparent good order and condition” and are also evidence of a contract between the exporter and the carrier(s). The carrier completes the form. Unlike Bills of Lading, AWBs are not documents of title, so that the holder does not necessarily have ownership of the goods. The consignee can claim the goods on arrival merely by quoting the AWB number.
Sea Waybills are consignment notes for sea freight. They act as a receipt for the goods “in apparent good order and condition” and are also evidence of a contract between the exporter and the carrier(s). The carrier completes the form. Unlike Bills of Lading, Sea Waybills are not documents of title, so that the holder does not necessarily have ownership of the goods. They are increasingly used instead of Bills of Lading: they are simpler, which helps, e.g. when only short sea crossings are involved, or for regular shipments to established customers whose creditworthiness is not in doubt.
Courier Waybills are usually much shorter and simpler than Air or Sea Waybills. They do not conform to a particular standard and are issued by individual couriers to meet their own purposes.
Standard shipping notes are completed by the exporter or his representative to arrange shipments of non-hazardous goods. (A standard shipping note cannot be used for shipments of hazardous or dangerous goods). The notes act as instructions for the shipping line, and are delivered to the receiving authority at the port or freight terminal either with, or in advance of, the goods.
For the export of goods that carry a UN hazard code, a Dangerous Goods Note must always be used in place of a Standard Shipping Note. In the case of uncertainty about the hazard rating of your goods, advice could be sought from a reputable freight broker. Note that UN hazardous goods codes differ from Control of Substances Hazardous to Health (COSHH) ratings.
Certificates – origin, inspection and health
Certain destination countries require Certificates of Origin to prove the country of origin of the goods. Many countries give a preferential tariff for products imported from certain other countries. Conversely, countries that boycott goods from certain other countries will seek an undertaking that goods do not break their import restrictions.
The forms are obtained from a Chamber of Commerce and completed by the exporter. The certificates need to be authenticated by a Chamber of Commerce or by the destination country’s UK embassy or other representative, or by both. Getting Certificates of Origin authenticated may take seven working days or more. It may also be a substantial cost to the exporter, and the cost should be anticipated and reflected in quotations.
EU Certificates of Origin are internationally recognised under the terms of the International Convention relating to Simplification of Customs Authorities 1923, under which signatories have agreed to recognise the Certificates of Origin issued by official authorities or other designated organisations. Some countries also require EC certificates to be legalised by their UK embassy or other appointee in the UK.
Arab-British Chamber of Commerce Certificates of Origin are the only certificates accepted by certain Arab countries. Certification is by the Arab-British Chamber of Commerce, and, in some cases, the certificate must also be legalised by the destination country’s UK embassy.
EUR1 Movement Certificates are used to claim preferential duty rates (either a lower rate or nil) for goods exported to a European Free Trade Area (EFTA) country, the Baltic States or Eastern Europe (Bulgaria, Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia).
A Certificate of Conformity or inspection certificate states that goods comply with standards laid down by the destination country’s authorities in terms of (for example) physical condition, quantity, and technical specification. The goods must be inspected, before shipment, usually at the exporter’s premises, by an appointed inspection body. The exporter must pay for this service, and so should ensure that the cost is allowed for in quotations. For some destination countries, a Certificate of Conformity is a legal requirement. In other cases, a Certificate of Conformity is a condition for payment specified in the terms of the Letter of Credit. In countries where a Certificate of Conformity is required, if a shipment does not have one, it is likely to be impounded.
Health certificates, issued by the Department of Food and Rural Affairs (DeFRA), are required for all shipments of agricultural or fresh meat products. Phytosanitary and plant certificates, also issued by DeFRA, are required for exports of planting materials, trees and shrubs, and for certain raw fruits and vegetables.
This article is the second part of a guide to international trade documentation. The first part of the guide is available here:
A guide to trade documentation: financial documents