Shipping Documents

| 9 minutes

Below you can find the general description of terms used in shipping and documents usually required for shipment.

COMMON TERMS

1. Shipping Line - Carrier that arranges the shipment by sea, owner of the cargo ship and/or containers. Shipping Line is usually a global company that owns a lot of cargo ships and operates the routes all around the world. For example, MAERSK, CMA, MSC, OCCL, etc. Communication with the shipping line is done through an agent, almost never directly. Shipping Line issues the most important shipping document - Bill of Lading.
2. Freight Forwarder - an agent that arranges shipping formalities, such as export at the country of origin, or import at the destination country. Freight Forwarders in China usually have a warehouse available for storage of the goods, commonly located next to the port. Freight Forwarder coordinates the communication between the shipper, shipping line, and customs.
3. Shipper - the company that exports the goods, or sends the goods to the importer. AdvaCare is usually the shipper in all shipping documents.
4. Consignee - the company that imports the goods, or receives the goods at destination. AdvaCare's Customer is usually the consignee.
5. Customs clearance - the process of exporting the goods. All goods that are being sent out of any country of origin must be declared before they can leave the country. Customs clearance is done by customs agent, who receives the documents prepared by Exporter.
6. Exporter - the company that provides documents for customs clearance at the country of origin. Exporter might or might not be the same as Shipper. Exporter provides export customs declaration to the Freight Forwarder, and Freight Forwarder provides the documents to customs agent, who then submits them to customs before shipment departs.
7. Container - a shipping container with strength suitable to withstand shipment, storage, and handling. Usually a large reusable steel box, that can be rented from a shipping line and loaded on board of a cargo ship. Containers have standard sizes.
8. FCL - Full Container Load - the goods are transported in a sealed container, one shipper rents a full container to transport the goods to one destination.
9. LCL - Less than Container Load - the goods are transported in a shared container with multiple shippers and multiple destinations. Each shipper pays for the space their goods occupy.
10. Air Freight - transportation of goods via air.

BILL OF LADING

A bill of lading (BL) is a legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried. A bill of lading also serves as a shipment receipt when the carrier delivers the goods at a predetermined destination. BL contains the information of Shipper (company name, address, contact information of the sender) and Consignee (company name, address, contact information of the receiver).

BL is the most important document in every shipment. Whoever holds the BL legally owns the goods, which is extremely important as the value of goods can be very high. Nobody (neither Consignee nor Shipper) can get the goods without BL.

BL is issued by the carrier (shipping line or airline). BL can be issued in two different forms:

• Original BL: Carrier issues actual physical document, and physical document has to be given to the customs at destination to be able to collect the goods. When the original BL is issued, it is first sent to the Shipper, as at this point shipper is the owner for the goods. Original physical document would be sent to AdvaCare office, then Shipper can decide to send it to the Consignee (Customer) or not. The original BL is usually sent to the Customer by DHL or Fedex only after full order balance is covered (depending on specific Customer payment terms). Customer cannot clear (take) the goods from customs at destination without the original physical BL.
• Telex BL, or Telex Release: Carrier issues an officially authorized electronic copy of the BL, instead of Original BL. Telex BL can by issued only by the Carrier and is not the same as a scan of original BL - Customer cannot clear the goods from customs at destination with a copy of Original BL, only officially issued Telex BL. Telex BL might have an additional cost, depending on the Carrier.

IMPORTANT: no shipment can have 2 BLs (for example, original and Telex). If Original BL was already issued and it is required to issue Telex BL for whatever reason, then Original BL must be returned to the shipping line before Telex BL can be issued. If Telex BL is issued, there is no available Original BL in possession of either Shipper or Consignee.

There are 2 types of BL:

1. House BL (HBL): is issued for each exporter in cases when one shipment has consolidated goods from several exporters. House BL is used in India to prove the fact of export to tax government in order to receive GST refund. This BL is not used to clear the goods at the destination.
2. Master BL (MBL): the main BL, issued from one shipper to the consignee, and will be used by consignee to collect the goods at the destination.

AdvaCare requirement for MBL: one of AdvaCare companies has to be the Shipper on MBL, with Customer as Consignee.

In case of air shipment, Airway Bill is issued (AWB) in the form of Telex BL, not as original. It is always Telex BL due to the short time of the air shipment (hours up to one/two days rather than 30-40 days like ocean freight), therefore there is no time to issue original BL.

BL is a form of a legal contract between 3 parties - Shipper, Consignee and Carrier (shipping line or airline). The terms of the contract are written on the back side of the BL. Carrier is responsible to transport the goods intact from port of loading to port of discharge, while Shipper and Consignee are equally responsible for the goods before and right after the goods are on board of the ship (plane). If Consignee fails to collect the goods, Carrier will communicate with Shipper to collect the goods and cover any additional costs related to demurrage, storage, container, etc.

Switch BL in India

According to India customs rules, exporter of the goods has to be Shipper on BL, and the party that made payment for the goods has to be Consignee. In other words, India customs rules dont support 3-party trading. In AdvaCare situation, this regulation means that the first BL will have Vendor (exporter) or Freight Forwarder (if there are several exporters) as Shipper on BL, and AdvaCare as Consignee. However, for Customer to clear the goods the Customer has to be Consignee. Therefore, the first BL information has to be changed after the shipment departs, the new BL is called Switch BL.

Switch BL is issued after shipment departs, and can be issued in the form of Telex BL as well as Original BL. Switch BL needs to contain one of AdvaCare companies as Shipper and Customer as Consignee. Switch BL has additional cost and needs to be discussed with the Freight Forwarder in advance. AdvaCare covers the cost of Switch BL. Only MBL needs to be switched, HBLs are not switched.

Important:

Switch BL fee is being charged by the shipping line and we cannot openly charge the customer or mention Switch BL to the customer at all. Salesperson must include the charge for the switch BL when confirming the estimated shipping cost as a part of it.

CI & PL

CI refers to Commercial Invoice. Commercial Invoice is the shipping document that contains final products in the shipment, with final quantities and final prices. Commercial Invoice has many purposes, from balance payment request to customs clearance at destination. Commercial Invoice prepared for customs clearance at destination contains the Shipper information (AdvaCare) and Consignee information (Customer).

COA

COA (Certificate of Analysis) is a document that Vendor provides in order to verify the product they manufactured conforms to the requirements. Customers may request this document for import purposes. It is important to check if COA shall be provided with Vendor’s information included (applies most of the time when the product is registered at the Customer’s country and has the Vendor’s information on the packaging).

In case where COA is requested, however, the Customer does not know Vendor’s information and the product has AdvaCare as a manufacturer only, the COA provided by Vendor has to be revised to COA with AdvaCare letterhead and exclude all associated to Vendor information and shall contain only English language.

ECTN

The Electronic Cargo Tracking Note (abbreviated as ECTN) is a maritime certificate or waiver that is mandatory to export to most countries of the continent of Africa.

ECTN Certificate is to be requested by Salesperson when Customer requires it for import purposes. ECTN will be provided by an Agent and will be coming from Logistics Dept. (China shipments) or Purchasing Dept. (India shipments). .

IMPORTANT: ECTN certificate requires value of cargo and shipping cost to be mentioned. The cargo value has to match with Commercial Invoice provided for shipment’s booking. As for the shipping cost, Salesperson has to confirm the cost to be mentioned in the ECTN and inform the relevant department.

Insurance Certificate

Some Customers require the cargo be insured which AdvaCare can assist on preparing via Insurance Agent. The cost of the insurance depends on the cargo value mentioned in the Commercial Invoice used for the shipment booking and being calculated by the standard formula (China shipments):

Cargo Value in CI x 1.1 x 0.001 = Insurance Cost

Example: $149,043.06 (Cargo Value in CI) x 1.1 x 0.001 = $163.95

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