DOCUMENTATION

IN TRADE LOGISTICS

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 CHAPTER OBJECTIVES

• To understand the need of documentation in international

trade logistics.
• To appraise the legal aspects of trade documentation
practices in international logistics.
• To explain the commonly used trade documents by various
stakeholders in trade logistics.
• To explain the procedure of preparation and handling of
various documents in logistics.
• To discuss the international conventions on trade documents.

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 CHAPTER OUTLINE
• Introduction
• Legal Aspects of Documentation in Trade Logistics
• Need of Documentation in Trade Logistics
• Commonly Used Documents in Trade Logistics
• Transport Documents prepared by Exporter
• Transport Documents prepared by Importer
• Transport Documents prepared by Shipping/Transport
Company
• Transport Documents Prepared by Regulatory Agencies

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 INTRODUCTION
• Several international trade documents are required at various stage of
international trade logistics.
• The process of export–import begins with proforma invoice and ends with
negotiations of documents with the banks for payments of export deals.
• Documents are the soul of international trade transactions and fulfil the
commercial as well as regulatory requirements.
• Logistics of goods in international trade has altogether different challenges in
comparison to domestic logistics of any goods. There are several factors behind
it as there are longer distances involved, different languages and currencies
and trade documents used.
• There may be different set of business practices in various markets of the
world. More so, the transfer of title of goods from the seller to the buyer is not
direct and physical.
• Goods pass into different hands of various stakeholders involved in logistics
operations from the place of export to the place of import.
• Specific knowledge of various export import documents helps a successful
international trade and logistics operations.
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Role of Various Parties in International Trade
Logistics
Buy Ship Pay

Order/ Prepare Transport Customs Payment

• Export and import • Freight forwarder • Custom Clearance • Bank

• Packers & Consolidators • Packers & Consolidators • Custom House Agent • Financial Institutions
• Transporter • Transporter • ICDs/ CFSs • Factor / forfaitors
• Fumigation & Pest Control • Fumigation & Pest Control • Health Authorities/ PHO • Other Intermediaries
• Carrier /MTO • Carrier /MTO • Terminal Operators
• Shipping line • Shipping line • Port Management
• Export Inspection Agency • Export Inspection Agency • Other Intermediaries
• Other Intermediaries • Other Intermediaries

Source: Adapted from Trade Facilitation from a Developing Country Perspective; National Board of Trade Sweden; 2003

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 Need of Trade Documentation in
International Logistics

Need Of Trade Documents In

International Logistics

Trade Commercial Creating Superficial Non

Practices Of Regulatory Requirement Tariff Barriers To Restrict
A Country Requirements s Country Trade

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Commonly Used Documents in International
Trade Logistics

Documents prepared
Documents prepared by Documents Prepared
Documents Prepared by Exporter by Trade Facilitating
Carrier by Importer
Agencies
• Transport Documents: • Pro-forma Invoice • Import Order • Certificate of
• Negotiable Bill of Lading • Commercial Invoice • Bill of Entry • Inspection / Quality
• Non-Negotiable Sea Way Bill • Packing List • Authorization to Control
• Combined Transport • Shipping Instruction release the payment • Certificate of
Document • Intimation of Inspection for import Insurance
• Airway Bill • Insurance Declaration • Import Declaration • Certificate of Origin
• Courier and Postal Receipt • Application for COO Form • Receipt for Payment
• Railway Consignment • Bill of Exchange of Port Charges
Note /Road Transport • Shipment Advice • Vehicle Chit
Document • Letter to the Bank for Collection / Negotiation • Insurance Premium
• Shipping Order of Documents Payment Certificate
• Freight Payment Certificate • ARE ( I & II) Form
• Mate’s Receipt • Shipping Bill / Bill of Export
• Export General Manifest • Export Application / Dock Challan / Port Trust
• Import General Manifest Copy of Shipping Bill
• Exchange Control Declaration (SDF/GR / PP/
SOFTEX/VOP) Forms

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 Features of Bill of Lading

Document of Title & Ownership

Contract of Carriage of Cargo
Receipts of Goods & Freight Charges
Confirms Where Goods are to be Delivered
FEATURES
OF BILL OF Facilitate Process of Payments
LADING
Name the owner / consignee of goods
Ensures Ownership Transfer
Facilitates Sales on High Sea
Quasi- Negotiable Instrument

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 Kinds of Bill of Lading
• A straight bill of lading is a non-negotiable
document. The straight bill of lading is prepared to
Straigh a named consignee. Straight bill of lading is also an
t Bill of acknowledgement of payment of freight and
Lading shipping company ensures that it shall transport
the goods to destination.

• An Order bill of lading is a document that is

“to prepared to the order the foreign importer or its
Order” bank for the payment and custody of goods. It is
Bill of negotiable.
Lading

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Salient Objectives of Bill of Lading Electronic
Registry Organization
Bolero is platform of financial supply chain helping clients use it as faster
1.
modern physical supply chains.

2. It is safe; tamperproof; smooth and secures system of paperless-trading.

3. It ensures the seamless & real time integration of shipping and manufacturing systems for
companies and help reduce transactional costs.

4. It ensures the complete confidentiality of trade transactions between parties.

5. It ensures the fast and reliable delivery of trade documents anywhere in the world with non-
disputable proof of having made delivery.

6. It helps in timely dispute resolution; if any between parties at fraction of cost of what
otherwise it will be.

7. It ensures the transparency and visibility throughout the international trade process.

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 Salient Features of Sea Way Bill
If Sale Of The Goods In Transit Is Envisaged For Sale On High Sea Or String Sale

If Independent Documentary Security Is Required By A Buyer

If The L/C Issuing Banks Has Been Designated As Consignee, Documents Can Not Be
Endorsed To Buyer For Final Delivery

In Case The Final Delivery Is Intended To Someone Other Than Original Buyer

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Salient Features of Combined Transport
Document
Name of the carrier or Multi Modal Transport Operator with signature identified that of carrier;
transport operator; ship master or agent of any of them.

An indication that consignment has been “dispatched”; “taken charge” or loaded on board along with
the date.

Indication of the place of shipment which may be different from place of loading “ onboard” and the
place of delivery of shipment; which may be different from place of discharge.

A sole original or if issued in multiples’ then full set of such original multiples.

Terms and Conditions of carriage or reference to terms and conditions of carriage in another source or
document other than multimodal transport documents.

No indication that documents is subject to charter party document and no mention that the
mentioned vessel is propelled by sail only.

Must meet other stipulations of letter of credit if any.

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 Salient Features of Airway Bill
Airway
It Bill is
cannot benon-negotiable documents
used as a collection instrument for
receiving payments.

It is not a document of title to the goods.

It is proof of receipt of the goods for shipment

SALIENT It act as evidence of the contract of carriage

FEATURES OF
AIRWAY BILL It is an invoice for the freight relfecting ful freight
amount
It is certificate of insurance (if carriers insurance is
requested by the shipper)
It is a guide to airline staff for the handling, dispatch
and delivery of the consignment
ItA reflect
means oftheclearing
name oftheshipper, the consignee
goods through customsand the
details of goods being shipped.
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Recipient of Various Copies of Airway Bill in
International Trade Logistics
Number Copy Recipient Color Scheme
1 Issuing Carrier Air Lines Cargo Billing Blue
Accounting
2 Original for Consignee Orange
Consignee
3 Original for Shipper Blue
Shipper
4 Airport of Origin Gateway Domestic - maintain for 1 year.
Origin International - maintain for 5 years.
5 Delivery Delivery Receipt/Airport of Destination Yellow
Receipt/Airport Domestic - maintain for one year
of Destination International - maintain for five years

6 Extra copy Can suffice as Origin or Delivery Receipt/Airport White

of Destination copy for gateway or CFS
NOTE: Origin or Destination CFS must make a copy of MAWB and attach it to
the AC12 Register of Air Freight or work order to retain for their records.

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 Numbering of Airway Bills

The AWB number has 11 digits and 3

parts.

The first 3 digits are the Airline Prefix

The next 7 digits is the Serial Number of the AWB

The last digit is the Check digit

The check digit is derived by dividing the 7 digit Serial Number by 7. The remainder determines the Check
Digit. Example: Serial Number 8114074 divided by 7 is 1159153 remainder 3. Therefore the Serial Number +
Check Digit is 81140743.

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Documents to be submitted along with IGM
Deck Cargo Declaration/ Certificate.

Last port clearance copy.

Amendment application (when relevant)

Income Tax certificate in case of export cargo.

DOCUMENTS
TO BE Nil export cargo certificate
SUBMITED
WITH IGM
Port Trust ‘No Demand" certificate.

Immigration certificate.

Application for sign on/sign off of crew (when relevant)

Application for crew baggage checking when they sign on (when

relevant)

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Need for Separate IGM for Different Types of
Cargo
NEED OF SEPRATE IGM FOR DIFFRENT TYPES OF
CARGO

Cargo To Be Goods Same Bottom Or

Landed At The Unaccompani Intended To Retention Cargo Crew’s Effects
Land Customs ed Baggage Be Kept In The Declaration
Station Transhipped Vehicle

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Information Contents of Performa Invoice

Tentative prices of per unit of commodity

Tentative description of goods

Tentative idea about shipping terms

Tentative idea about payments terms

Quality benchmarks of the commodity

Mode of shipment

Expected time required by export for delivering date etc

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Types of Invoice in International Trade

Proforma Invoice
Regular
Commerical Invoice
TYPES OF
INVOICES Consular Invoice
On-Demand Legalized Invoice
Customized Invoice

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 Preferential Scheme Available to Indian
Exporters

a. Generalized System of Preferences (GSP)

b. Global System of Trade Preferences (GSTP)
c. SAARC Preferential Trading Agreement (SAPTA)
d. Asia-Pacific Trade Agreement (APTA)
e. India-Sri Lanka Free Trade Agreement (ISLFTA)
f. Indo-Thailand Free Trade Agreement
g. India-ASEAN Free Trade Agreement

Source: Foreign Trade Policy 2009-14, Director General of Foreign Trade

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 Specimen of a Bill of Exchange
USD - 2,00,000/-
Kolkata

March 1st, 2013

Three months after date pay Varun or (to his) order the sum of Rupees Ten
Thousand only for value received.
To Accepted
Stamp
Rajesh Rajesh
S/d
Address
Mukesh

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 The Parties to a Bill of Exchange

The
• The person who makes the order for making payment. In trade
Drawe transaction, it is an exporter .
r

The
• The person to whom the order to pay is made. He is generally a debtor
Drawe of the drawer. In trade transaction, it is an Importer.
e

The • The person to whom the payment is to be made. This is usually a bank
Payee invovled in trade transaction.

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 Features of Bill of Exchange
A bill must be in writing, duly signed by its drawer, accepted by its drawee and
properly stamped as per Indian Stamp Act.

It must contain an order to pay. Words like ‘please pay Rs 5,000/- on demand
and oblige’ are not used.

The order must be unconditional.

The order must be to pay money and money alone.

The sum payable mentioned must be certain or capable of being made

certain.

The parties to a bill must be certain.

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 Colour Scheme that are Used in Central
Excise Clearance of Exports
Original White

Duplicate Buff

Triplicate Pink

Quadruplicate Green

Quintuplicate Blue

Source: Central Excise Manual 2013

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Various Types of Shipping Bill or Bill of Export

VARIOUS TYPES OF SHIPPING BILL/ BILL OF

EXPORT

ATA Carnet Shipping Bill For Shipping Bill Shipping Bill Shipping Bill For
Form Of Bill Of Export Of Goods For Export Of For Export Export Of Duty
Entry Or The Under Claim For Dutiable Of Duty Free Free Goods Ex-
Shipping Bill Duty Drawback Goods Goods bond

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Documents to be Submitted Along With
Shipping Bill
4 copies of invoices which contains all relevant particulars like number of packages, quantity, unit rate, total f.o.b./ c.i.f.
value, correct & full description of goods to be exported.

4 copies of the packing list or cargo manifest mentioning the contents, quantity, gross and net weight of each package
of the cargo to be exported.

SDF/GR forms (in duplicate) for shipment to all the countries.

Export Sales Contract, L/C, and Purchase Order of the overseas buyer as the case may be.

ARE I & II (both original and duplicate) and commercial invoice/ legalized invoice/ customs invoice (as the case may be).

Pre-shipment Inspection/ Examination Certificate of quality control.

Source: Custom Manual 2011

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Colour Scheme of Different Types of Shipping
Bill in International Trade Logistics

White Shipping Bill in 3 copies for export of duty free of goods.

Green Shipping Bill in 4 copies for the export of goods which are
under claim for duty drawback.

Color Scheme and

Different No Of Yellow Shipping Bill in 3 copies for the export of dutiable goods.
Copies In Case Of
Various Types Of
Shipping Bills
Blue Shipping Bill in 7 copies for exports under the DEPB scheme.

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 Various Types of Port Charges Payments
Certificates in International Trade Logistics

Dock Challan • Port of Kolkata; Port of Paradip; Port of Vizag

Export • Port of Chennai; Port of Tuticorin; Port of Cochin; Port of Mangalore

Application

Port Trust Copy • Port of Bombay; Port of Kandala; Port of Mumbai; Port of Marmugao
of Shipping Bill

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 Various Types of Exchange Control
Documents
• SDF is used when shipping bill is filled electronically at
SDF /GR
www.icegate. com and GR is used when goods are cleraned
Form
throguh manual shipping bill/bill of export.

• Form EDF shall be applicable in all other cases of

merchandise goods exports. It replaces the earlier used form
EDF
PP in case of export of goods by Post, GR used in case of
Form
manual shipping and VOP/ COD used for value on payment
and cash on delivery sales.

Softex • Form softex is used in case of export of services as mandated

Form under appendices 10 of Foreign Trade policy 2009-14

Source: Foreign Exchange Manual, Reserve Bank of India

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 Types of Bill of Entry

Types of Bill of Entry

Bill of Entry for Home Bill of Entry for Bill of Entry for Home
Consumption Warehousing Consumption/ Ex-Bond

Source: Central Board of Excise & Customs, Ministry of Finance, GOI

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Types of Application for Release of Foreign
Exchange
Types of Application for Release of Foreign
Exchange

A1-ACU -
A1-FC- A1-NRB

Payment through Asian Remittance in Foreign Transfer of Rupees to the Account of

Clearing Union (Imports) Currency (Imports) a Non-resident Bank (Imports)

Source: Exchange Control Manual, RBI

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 Variants of Import Declaration Form Used
in Various Parts of the World
Tanzania, Ghana; Canada Import Declaration Form (IDF).

Hong Kong Six different form used for different product categories

Angola Pre-shipment Inspection Request (PIP)

Togo, Niger Intention d’Importation (I/I)

Bangladesh Inspection Order (IO)

Ecuador Solicitud de Inspection (SDI)

Nigeria Form M

Senegal, Congo, Burkina Déclaration Préalable d’Importation (DPI)

Faso

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Documents to be Submitted along with
Certificate of Inspection
Photo state copy of the Commercial Invoice for export consignment

Photo state copy of letter of credit in favor of exporter

Packing specifications ( standard and as per importer’s request)

Photo state copy of the export order or Export Sales Contract

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 Thank You

धनयवाद
Merci

Gracias Danke
Schon

Thank You
谢谢