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How to Ship Documents for Your Import/Export Business

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The following excerpt is from The Staff of Entrepreneur Media, Inc. & Rich Mintzer's book Start Your Own Import/Export Business. Buy it now from Amazon | Barnes & Noble | iTunes | IndieBound

Let's tackle the documentation needed to get your merchandise into the importer's hands. While you can have your freight forwarder handle all the paperwork for you, as the exporter, you need to know how each link in the chain functions. You need to understand these documents when you're the importer, too, because either you or your customs broker will use them to claim your cargo once it arrives at the harbor, loading dock or airport.

Here they are, in alphabetical order, for your review:

Bill of Lading. "Lading" means freight or cargo, so a bill of lading is basically a receipt from the cargo handler--the steamship, air, or truck line--showing that it's got your goods. To make things official, the document is signed by the ship's captain or other agent of the transporter as binding evidence that the merchandise has been shipped. There are various permutations of the bill of lading, including:

  • Clean or Clean on Board. This means the transport company hasn't noted any irregularities in the packing or condition of the goods. This is the standard bill of lading.
  • Foul. A foul bill of lading indicates that the transport company has discovered, for example, something sticky leaking from those boxes marked "blood byproducts." If your bill of lading gets marked "foul," you'll want to exchange the bum container for a "clean" one and have the shipment relabeled before it's presented to the importer.
  • On Board. This one confirms only that the cargo's been placed on board the vessel and carries no other guidelines or stipulations.
  • On Deck. This is relevant only if the goods, such as livestock, must be transported on the deck of the ship.
  • Order. A negotiable bill of lading that must be endorsed by the shipper before it's handed over to the bank for collection. An order bill of lading is usually made out to the bank or customs broker, or it can be left blank, like a blank check.
  • Order Notify. This is like the order bill, except that the consignee (the buyer) and sometimes the customs broker must be notified when the ship reaches port.
  • Straight. This one spells out to whom the merchandise is consigned. Because it prohibits release of the goods to anyone but the person specified on the documents and thus offers the most protection, the straight bill of lading is usually preferred by newbie importers.
  • Through Bill of Lading. This is the "pass it on down" bill used when several carriers are involved if, for example, the merchandise needs to go by rail or truck to the port and then by ocean, or vice versa.

Certificate of Manufacture. Used when the buyer pays for the goods before shipment, this document verifies that the merchandise has really been manufactured and really does fulfill the general product requirements. In other words, it's proof the goods are on hand and ready for shipment.

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Certificate of Origin. Some countries require a separate certificate of origin, even though this information is provided on the commercial invoice. The certificate is especially important when you're importing goods that require regulatory approval, such as medical equipment or food.

Commercial Invoice. The commercial invoice is the same as any invoice used by a domestic company and is essentially a finished version of the pro forma invoice. You can make up your own commercial invoice on your computer or buy preprinted blank forms at an office supply store. When you fill in those blanks, you'll want to be sure you've added the same particulars you have on your pro forma invoice and the letter of credit (L/C)  number, if you're using an L/C. Plus, you'll need to add the terms of the sale (i.e., FOB or DDP) and a statement certifying the goods were manufactured in the United States, followed by your signature. This will help skate the merchandise through customs.

Consular Invoice. Not every country will demand one of these--the ranks are mostly filled by emerging nation types. Basically, a consular invoice is one for which you fill out a form available from the local consulate office in the U.S., pay a nominal sum and go on your way. The presumed idea behind the invoice is to ensure that overpriced or underpriced goods don't enter the country, but in actuality, it's a sort of collection plate for the national economy.

Dock Receipts. This receipt is used if the importer is responsible for shipment from a U.S. port. It verifies that the merchandise has indeed made it as far as the dock.

Inspection Certificate. The importer may request one of these to certify the quantity, quality and/or conformity of the product. Say, for example, you're bringing in cookie-making equipment from Belgium. You may want to have an inspector check the machines to make sure they're in good working order before you take title. You can elect a standard export inspection, which is done by a standard inspector nominated by the exporter or shipping line, or you can hire a specialized private company to do the job.

Insurance Certificate. This confirms that marine insurance has been provided for the cargo and indicates the type and coverage.

Packing List. The packing list or packing slip details the merchandise in the shipment, along with information on how it was packed, how the various items are numbered, the serial numbers, if applicable, and weight and dimensions of each item.

Shipper's Export Declaration (SED). This one's required by the U.S. government on all exports in excess of $2,500 or ones that require an export license. It gives the Census Bureau fodder for their statistics and provides all the usual information, including product descriptions, value, net and gross weight, and license information.