Other documents used in sea transport

So far we have discussed bills of lading and their role; today we will see what other documents are used in sea transport.

The non-negotiable FIATA consignment note for multimodal transport
FWB (Non-negotiable FIATA Multimodal Transport Waybill)

“Where a carrier issues a document other than a bill of lading to evidence the receipt of the goods to be carried, such a document is prima facie evidence of the conclusion of the contract of carriage by sea and of the taking over by the carrier of the goods as described in that document.”

This paragraph is Article 18 of the Hamburg Convention of 1978. It refers to the documents that can replace the bill of lading.

With the exception of the function of document of title to the goods carried, this substitute document fulfils all the other functions of the bill of lading. In practice, the sea waybill is used as a substitute for the bill of lading.

Forwarding companies that are members of FIATA can use the non-negotiable FIATA consignment note for multimodal transport, the FWB (Non-negotiable FIATA Multimodal Transport Waybill).

FWB is a carrier-type transport document set up by FIATA for use by forwarding companies acting as multimodal transport operators (MTO). The FWB can also be used as a sea waybill.

It is evidence of the contract of carriage and of receipt of the goods, but it serves only as evidence. In this way, the carrier is discharged once the goods are delivered to the person identified in the document.

The FWB is not negotiable. It does not have to be presented by the consignee for delivery of the goods at destination. It is used when the shipper of the goods decides to release control of the cargo immediately. The goods can be delivered to the person identified in the document, without that person presenting any document to claim the goods.

It is advisable to use a sea waybill when the shipper of the goods knows the consignee of the goods well, where the goods will not be traded during the carriage or if they are paid for on an account with approved credit.

When issuing an FWB document, the forwarding company must make sure that:
1. it has taken over the goods specified in the document and that the right to dispose of these goods rests exclusively with it;
2. the goods appear to be in good condition;
3. the details on the document clearly correspond to the instructions it has received;
4. responsibility for cargo insurance cover has been agreed with the customer.

Packing list

Just like the bill of lading, the packing list is a mandatory and important document for shipping goods by sea.

• It lists, down to the smallest detail, information about the goods (weight, volume, etc.)
• Full contact details for the sender/exporter and the consignee must
  also be listed on the packing list.
• The packing list informs the forwarding company, the importer, the customs office and the carrier about the goods shipped. Where the customs authorities
• decide to inspect the goods, the packing list serves to make the process easier. It helps to identify the boxes or items about which customs has a suspicion. This saves time and reduces the risk of damage to the cargo, avoiding the need to open every box in the shipment.
• It is extremely important that the information listed on the packing list is as accurate as possible. It can be used to generate the bill of lading. The information about the goods on the packing list must therefore match that on the bill of lading. Both documents are required for customs clearance in most countries.
• If a letter of credit is used, banks may request the packing list as a supporting document for payment.
• In the event of a dispute between the carrier and the sender over the measurement and weight of the cargo, the packing list can be used as evidence. Where the goods are damaged, it may be needed in order to file a claim.

The commercial invoice

Any international transaction involving the import/export of goods must come with a proof of sale known as the commercial invoice. For the most part, it is similar to a standard invoice. Unlike a standard invoice, it includes details of the freight transport for customs clearance purposes and is one of the most important documents in sea freight.

The detailed information of all the parties involved, including the importer, the exporter, the forwarding company, the banks, the shipping lines, etc., must be properly entered on the commercial invoice. Even though the information listed on the commercial invoice may be very similar to that on the packing list, both documents will still have to be sent, and the information entered on them must
match. The commercial invoice must not be confused with the packing list, as they serve different purposes:
o The commercial invoice is a legal document that lists the goods sold and their selling price (that is, what the importer has agreed to pay in exchange for these goods) and is sent to the party paying for the goods.
o The packing list details the items in a shipment,
acts as evidence in the event of disputes and claims and is sent to the consignee
of the goods.

The certificate of origin

According to the International Chamber of Commerce (ICC), the certificate of origin (COO) is “an important international trade document that certifies that goods in a particular export shipment are wholly obtained, produced, manufactured or processed in a particular country. They also serve as a declaration by the exporter.”

In other words, the certificate of origin identifies the country in which the goods were produced. This document is drawn up by the exporter/manufacturer and must be certified by a government authority, such as a chamber of commerce or a consulate, in order to be valid.

The certificate of origin is required for customs clearance and determines the amount of customs duties to be paid. It also helps to identify goods that are exempt from customs duties, in cases where the exporting and importing countries have special trade agreements.

The typical information, such as the exporter, the consignee, the importer and the description of the goods, must be completed on the certificate of origin. A certificate of origin must be produced for each item that is exported.

The letter of credit

The letter of credit is a formal, binding payment agreement between buyer and seller. The international purchasing process is a long one, given the long delay between the moment the seller ships the cargo and the moment it reaches the buyer's hands.

This makes it difficult to determine when payment should be made, especially if importers cannot verify the authenticity of the purchase.
This is where a letter of credit comes into play. It is regarded as one of the safest methods of payment. The importer first draws up a list of terms and conditions, which must be agreed by both parties.

Honexpres offers complete sea freight services. From the shipper’s door to your door, including inland transport and customs procedures.

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