International Trade Documents: Key Functions

Posted on Feb 10, 2025 in Transport and Vehicle Maintenance

Key Documents in International Trade

Banking Documents

  • Banking Documents: Used for paying and getting paid.
  • Bill of Exchange: The exporter completes a form instructing their bank to prepare a draft and send it to the importer’s bank.
  • Cash in Advance: The importer sends a check or deposits funds into the exporter’s bank account.
  • Letter of Credit: Must be completed by the importer and given to the opening bank.

Transportation Documents

  • Transportation Documents: Used to keep track of merchandise.
  • Packing List: Provides information about what is included in a shipment.
  • Bill of Lading: Serves as a title for the purpose of transportation.
  • Consignor: Party delivering the goods to the carrier.

Understanding the Bill of Lading

Key Parties:

  • The carrier is the party accepting legal responsibility to provide transportation.
  • The consignee is the third party to a Bill of Lading entitled to receive the cargo.

Types and Features:

  • A straight Bill of Lading is also called a direct consignment.
  • In a straight Bill of Lading, the title to the goods is not transferable to another party.
  • The order Bill of Lading is negotiable.
  • An Order Bill of Lading can be used to help protect the shipper from nonpayment for goods.
  • A Through Bill of Lading can be either a straight or order Bill of Lading.
  • An interline agreement is a contract between carriers to combine their lines.
  • Taking Exception is the process of noting damage or discrepancies on the Bill of Lading.
  • If the Bill of Lading is marked “received,” the cargo has been delivered to the carrier but not yet loaded on the conveyance.
  • If the Bill of Lading is marked “on board,” the cargo has been loaded on the conveyance, but the conveyance has not yet begun its journey.

True/False Questions

  1. If the Bill of Lading is marked “shipped,” the conveyance has not left the point of origin. False
  2. A shipper’s letter of instruction may be presented in a variety of forms. True
  3. The Delivery Instruction document indicates when and where the shipment is to be picked up. True
  4. The Pier Release is for an inland carrier. False
  5. The Delivery Order is for an ocean carrier. False
  6. An Airway Bill is similar to the Bill of Lading. True
  7. A Rebilling Invoice is used if the shipment is to be divided. True
  8. If an Inspection Certificate is determinative as to the quality of goods. True
  9. The Packing List is a Banking Document. False
  10. The Packing List simplifies unpacking and warehousing. True
  11. The Bill of Lading is a receipt issued by a shipper. False
  12. The Bill of Lading is evidence of the title to the goods in case of dispute. True
  13. The consignor is usually the seller. True
  14. The consignee may be the buyer, the seller, or a bank. True
  15. The Bill of Lading must state the points of origin and destination. True
  16. The Bill of Lading is not negotiable. False
  17. The carrier is not responsible for delivering to the right consignee. False
  18. A Foul Bill of Lading is issued if there is any damage to the contents. True

10 Essential Transportation Documents

  1. Packing List
  2. Bill of Lading
  3. Shipper’s Letter of Instructions
  4. Delivery Order and Freight Release
  5. Air Waybill
  6. Certificate of Origin
  7. Customs Invoice
  8. Consular Invoice
  9. Rebilling Invoice
  10. Inspection Certificate

What is a Bill of Lading?

Answer: It is a contract between a carrier and a shipper for the transportation of goods.

What are the functions of the Bill of Lading?

Answer:

  • As a receipt: Shipped on board in apparent good order and condition.
  • As a contract of carriage: The contract itself is made before the Bill of Lading is issued.
  • As evidence of title: Gives the right to possession; the key to the warehouse.

Which requirements shall contain a Straight Bill of Lading?

The bill shall have prominently stamped upon its face the words “not negotiable.” Nothing herein shall be construed to prohibit the insertion on a straight Bill of Lading of other terms or conditions not inconsistent with the provisions of this act.

What is the purpose of transportation documents?

The purpose of most of these documents is to keep track of merchandise.