In order to carry out international shipping successfully, there are many important steps which have to be conducted. Of these crucial steps, preparation for shipping documents is clearly the one that needs to be carefully considered most. In fact, it will cost you a lot if you ignore this step and just push your products to the ports. Read this article to the end and Find out what you need for a full documentation process which decides the fate of your shipments.
Before reading this post, you could take a look at 6 Decisive Steps for Sourcing Goods from Vietnam to have a general view of sourcing goods from this manufacturing hub.
Check out our main points in this article:
1. Why do we have to carefully prepare for shipping documents?
It is always said that an adequate preparation for documents is extremely important in any international shipping. But why? Why do these documents matter a lot to our export/import process? In fact, these documents have to be prepared not only fully but also correctly. If there is a mistake in documents, even with a seemingly minor detail, it definitely causes shipping delays and your shipments will be waiting at customs to be shipped.
In fact, shipping delay will lead to many problems that could severely damage your business performance as well as reputation. There are three main ways in which delays can cost your business.
Firstly, delays in shipping can cause degradation of the products’ quality. These adverse effects are especially huge to companies that export or import perishable goods or use temperature sensitive containers for shipping.
Secondly, the reputation of businesses that have been acknowledged for its on-time delivery could be damaged if their goods are held at customs. These delays will lead to other ones, losing their precious reputation.
Last but not least, delay-related charges could become a serious problem if they are not solved as soon as possible. There are two main types of charges when it comes to the delay in international trade, including:
- Demurrage charges depend on how much time a container is stored in a port after arrival.
- Detention charges are applied for consignees holding on to the carriers’ equipment (container) beyond the allowed days.
Delay-related charges could cost you more than you think
You will run into these charges if your free time is exceeded. Free time is the number of days you are granted to pick up your container from the port, load/unload your cargo or deliver your goods to the designated port. In fact, not taking these charges into account will lead to unnecessary demurrage and detention charges, which can increase to many times its normal value.
For these reasons, carefully preparing shipping documents can help you avoid delays as well as loss of money. Check out the following section to know what documents must be prepared in any international shipping.
2. 4 Important required documents in Export/Import process
In the process of shipping internationally, there are many types of documents that have to be presented in order to pass the customs and release goods. The required documents could differ according to which country is the destination. However, 4 shipping documents below are absolutely necessary no matter what country is your destination.
Commercial Invoice
The first important document is commercial invoice, which is used for the Customs Declarations. This document includes all the critical information about the transaction. The customs will use this invoice to determine taxes, tariffs duties and other costs for your freight. For this reason, any practice of falsifying this document is considered as a criminal offence and receiving a severe punishment is obvious.
As has mentioned before, a commercial invoice encompasses a lot of important information. Below are the minimum data generally included in a commercial invoice:
- Importer and Exporter information
- Products’ Detailed Description (Products’ name, Quality, HS Code, Quantity, Price per unit,…)
- Country of Shipment
- Delivery Term
- Payment Term
This document could be prepared in any language, a translation in English, however, is highly recommended. The suppliers/manufacturers/exporters issue this invoice and then it then will be sent to the customs via the freight forwarder.
Packing List
A packing list is a document that provides all involved parties, including the exporter, the international freight forwarder, and the consignee, with all the information about the shipment. In particular, it could be details about how the shipment is packed, the number of cartons, units per carton, and other packaging information.
Besides, this document must match with the commercial invoice, which means that they have to reflect the same involved parties and other transaction details. Likewise the commercial invoice, this document is prepared by exporters/manufacturers and sent to the customs before goods arrive via carriers/freight forwarders.
Other names of Packing List:
- Bill of Parcel
- Packaging Slip
- Delivery List
- Shipping List
- Customer Receipt
Shipping documents have to be carefully prepared
Certificate of Origin
Certificate of Origin is a document that indicates in which country commodities and goods are manufactured. It is issued by manufacturers from a country of the exporter. In Vietnam, the Ministry of Industry and Trade is responsible for drafting, submitting to authorities to issue legal documents on the origin of goods, according to Vietnam Trade Promotion Agency. It also can authorize the Vietnam Chamber of Industry and Commerce to issue the certificates of origin.
This document is considered as an important one since it provides customs with the basis to calculate the taxes, tariffs for your dispatch. Vietnam now has 13 free trade agreements with many countries throughout the world, resulting that its goods can enter these countries without trade barriers.
Bill of Lading
Bill of Lading, abbreviated as BOL or B/L, is a legal document issued by the carrier, or shipping agent, that acknowledges they have received goods for shipment. Along with Commerce Invoice, Packing list, and Certificate of Origin, not only is Bill of Lading one of 4 required shipping documents, it is also the most important one.
In fact, this document plays a huge role in the international shipping process. It serves three main functions:
- A receipt acknowledging that goods have been loaded
- Evidence of Contract of Carriage between the carrier and the the shipper
- A document of Title to the goods that determines the right to the possession of the goods
Below are the main information that must appear on a bill of lading:
- Information of Shipper, Consignee, and Carrier
- Booking Number (provided by the Freight Forwarder)
- Vessel Name
- Port of Load and Discharge
- Container Number and its Seal Number
- Information on Goods (quantity/volume/weight)
- Delivery Terms, Payment Terms
- B/L number
Other Documents that could be needed when exporting or importing
- Proforma Invoice
- Dangerous Goods Form (for Dangerous Goods)
- Health Certificate (for Food)
- Bank Draft
- Import/Export License
- Insurance Certificates
- Sales Contract
Preparing documents for your international shipping requires a lot of effort. Not only do you have to prepare them all but you also make them right without any mistakes, even a very tiny one.
If you’re still confused about shipping terms like Bill of Lading, Commercial Invoice or you do not have much experience in Export/Import process, it is highly recommended that you should find a sourcing company to help you with this. A sourcing agent not only helps you to identify trusted suppliers/manufacturers but they also make your shipping process as smooth as possible.
Find out more about potential of Vietnam sourcing hub at Vietnam – A Promising Land for Sourcing
Viego Global – Your trusted sourcing partner in Vietnam
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