The paperwork that is required for an export sales transaction
The means by which the shipping process is facilitated and performed.
Documentation is essential for moving goods through the channels of distribution, transferring responsibility or possession, clearing goods through customs, and effect payment according to the agreed contractual obligations.
WHAT IS THE PURPOSE OF EXPORT DOCUMENTATION ?
Export documentation provides evidence that the negotiated terms between the buyer and the seller have been complied with.
Export documentation provides important information that is used by the seller, the freight companies, governments, and the buyer.
This is essential if the seller wishes to get paid
THE KEY INFORMATION CONTAINED IN EXPORT DOCUMENTS
Description of the goods
Mode of transportation
rail, air, ocean
Terms of sale
Who pays for what?
Origin of the goods
Identity of the seller/shipper
Identity of the buyer
Terms of payment
Evidence of shipment
COMMON EXPORT DOCUMENTS
Pro forma invoice
Bill of Lading
Certificate of Origin
Shipper’s export declaration
Letter of credit
Pro forma invoice - basically a price quote. Describes the type and quantity of the goods to be shipped, value of the goods, total cost of the transaction based on the terms of sale, and other specifications.
Bill of lading - a contract between the seller and the carrier. The BOL is usually prepared by the carrier of forwarder. It documents the condition of the goods upon the carrier’s acceptance. It is negotiable when it is consigned “to order of” meaning the buyer is allowed to take possession of the goods.
Certificate of Origin - a statement required by some countries that certifies the origin of the exported goods (eg. The NAFTA certificate of origin)
Packing List - An itemized list describing the contents of each package in a shipment. Used in determining the total weight and volume of a shipment and for verifying the cargo.
Commercial Invoice - Basically a bill for the goods from the buyer to the seller
Consular Invoice - A document required by some foreign governments for identifying and controlling imported goods
Inspection Certificate - a document required by some foreign governments that certifies that the goods imported conform to the order
Insurance Certificate - the document providing proof that the cargo (goods shipped) have been properly insured. (amount and type of insurance)
Dock/warehouse receipt - this document transfers accountability from the seller to the carrier.
Letter of Credit - a letter from your customer’s bank to you, in which the importer’s bank guarantees payment, provided that all the terms stated in the letter are met.
Draft - An unconditional order in writing from the drawer to the drawee that directs the drawee to pay a specified amount to a named drawer at a fixed or determinable future date.
A GUIDE FOR DOCUMENT PREPARATION
To ensure accurate document preparation, the services of a freight forwarder should be sought.
However, the exporter should understand the essentials of document preparation and at least review the prepared documents.
Seek explanation and instruction from the freight forwarder.
A GUIDE FOR DOCUMENT PREPARATION...
To determine the required documents for a given country and transaction, an exporter can:
solicit the services of a freight forwarder
consult the “Exporter’s Encyclopedia” or the National Trade Data Office
contact commercial attaches in the target markets
INTERNATIONAL CHAMBER OF COMMERCE PARIS http://www.iccwbo.org/iccdbibc/index.html
WHAT IS A FREIGHT FORWARDER?
The freight forwarding professional advises clients of the best rates, routings and modes of transporting goods to or from any area in the world. The forwarder is the exporter’s agent and provides the traffic and documentation services consistent with the exporter’s needs, arranging for carriage with vessel operators, trucking companies and airlines specializing in the consolidation of container-load shipments.
Using the many resources at their disposal, forwarders find the “right match” of services available so that products are moved by the most timely and cost-effective means.
“” Customized” services to fit the clients’ operational needs are forwarder’s specialty. Forwarders coordinate arrangements for storage, pick-and-pack operations, consolidations or full container movements as well as inland transportation to provide clients with true door-to-door service.
From assisting with initial quotations or preparation of proforma invoices, to banking clients’ documents for collection, the professional ocean and or air freight forwarder is and essential component in the facilitation of international trade.
STEPS IN THE DOCUMENTATION PROCESS
Receive the order under accepted terms & consult with a banker or a freight forwarder.
Begin organizing information for required export documents and export license applications.
Evaluate modes of transportation, requirements for perishable products, and cost of various alternative modes.
Prepare goods for shipping (marking/labeling, packing, consolidating/containerizing, insuring)
STEPS IN THE DOCUMENTATION PROCESS ...
Transport goods to a port of export.
Transfer goods to carrier.
Ship goods and forward appropriate export documents .
Unload goods at foreign port.
Transport goods from foreign port to intermediate and/or ultimate consignee.
THE TERMS OF SALE…… INCOTERMS
Understanding the INCOTERMS , also called the terms of sale, is the first step in responding to a trade lead or starting to prepare a quote.
Definition : An international rule for pricing terms which represent different levels of financial responsibility for the buyer and seller in an export transaction.
The INCOTERMS establish :
the geographical location where the buyer becomes responsible for the goods
payment of shipping, handling, insurance, inland freight, etc.
the point where ownership of the goods or the title for the goods changes ownership
THE THIRTEEN INCOTERMS
EXW - EX WORKS
FCA - FREE CARRIER
FAS - FREE ALONGSIDE SHIP
FOB - FREE ON BOARD
CFR - COST AND FREIGHT
CIF - COST, INSURANCE, FREIGHT
CPT - CARRIAGE PAID TO
DAF - DELIVERY AT FRONTIER
DES - DELIVERED EX SHIP
DEQ - DELIVERED EX QUAY
DDU - DELIVERED DUTY UNPAID
DDP - DELIVERED DUTY PAID
EXW (geographical location)
EXW signifies a precise location where the product is made ready to the buyer.
When offering a EXW quotation: the price includes only those costs involved up to an agreed point of origin, usually the shipper’s factory. The shipper/seller places the product at the control of the buyer at a concurred place, date, time, etc.