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Documents Used In Foreign Trade Transactions - Shipping

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Documents Used In Foreign Trade Transactions - Shipping

Post : Gaurav Akrani Date : 3/02/2011 11:29:00 AM IST Comment (1) Labels : Economics

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The Shipping Documents Used In Foreign Trade

Following is a list of various types of documents used in foreign trade transcations. The documents are related to either export trade or import trade.

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1. Indent
Indent is an order placed by the importers to the exports. It contains the essential information regarding the goods to be imported i.e. quality, quantity, packing, packaging, mode of payment, insurance, price of good, etc. When the price at which the goods are to be purchased by the importer is clearly stated in an order (Indent), with no options to the exporter, then it called "Closed Indent". If the prices are not mentioned by the importer and it is left to the discretion of the exporter, then it is known as "Open Indent".

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through the indent agencies.

Documents Used In Foreign Trade Transactions - Shipping

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Indent can be sent by the importer directly to the exporter or it may be sent

2. Mate's Receipt
Mate's Receipt is a receipt issued by Captain / Master / Mate of the ship. The Mate of the ship after receiving the goods on the board and after inspection of the goods issues this receipt. The loading of the goods on the ship is possible only after presentation of 'shipping order'. Mate's receipt contains de tails regarding name of ship, date on which the goods are loaded, description of goods, numbers and marks on the packages, conditions of cargo, etc. This receipt is issued to the exporter who has to present the mate's receipt in the office of shipping company by which he will get bill of lading. Mate Receipt may be clean or qualified. It is qualified if there is some defect in the cargo loaded on the ship, in such case the captain makes adverse remark on the receipt. In case of clean receipt, the cargo in good condition and the adverse remark is not mentioned. The bill of lading is always prepared on the basis of mate's receipt. In short mate's receipt is an acknowledgement of the receipt of goods on board of the ship. What is a Bank ? Introduction, Definition and Features of Bank Different Types of Banks - What are Various Kinds of Banks ? Commercial Banks - Definitions, Primary Secondary Functions Balance Sheet of Commercial Bank - Liabilities and Assets How to Open Bank Account ? 7 Steps To Open Bank Account What are the Advantages of Opening Bank Account ? Saving Account Bank - Meaning, Features and Advantages of It

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3. Bill of Lading
Bill of lading is one important shipping document necessary and useful in export-import trade transactions. It is a document issued by the shipping company after the shipment of goods. In simple, Bill of lading is a contract between the exporter or the shipper and the shipping company for the carriage of goods from the port of loading to the port of destination. Bill of lading is a document to title of goods and is transferable by endorsement and delivery. Hence, it is a semi-negotiable instrument. The bill of lading is prepared on the basis of mate's receipt. The importer has to produce this receipt for securing the deliver of goods. The bill of lading contains following information :1. Name and address of the exporter and the shipper. 2. Name and address of shipping company. 3. Name and address of importer or agent. 4. Quantity, weight and value of goods sent. 5. Place of loading and port of destination. 6. Date of loading of goods on the ship. 7. Mark description and number of packages. 8. Port at which the goods are to be discharged. 9. Freight paid or to be paid. 10. Signature of the issuing authority with date. 11. Any other relevant details.

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Important functions of bill of lading are as follows :1. It is useful to the importer for obtaining delivery of goods from the shipping company and port authorities. 2. It is a document of title to goods. A possessor of the bill of lading is entitled to take the delivery of goods. 3. It is a semi negotiable document and it is transferable by endorsement and delivery.

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Documents Used In Foreign Trade Transactions - Shipping

4. It is a legal document including the contract for carrying goods. 5. It is a proof of the fact that the goods are handed over to the shipping company for transportation to the port of destination. Life Guides Management Marketing Research Mumbai

4. Letter of Credit
Letter of Credit is an important document in international trade. It is for safety and security of the exporter as regards payment for the goods to be exported. Letter of Credit can be defined as "an undertaking by importer's bank stating that payment will be made to the exporter if the required documents are presented to the bank". Before executing an export order, the exporter of goods desires to have adequate proof regarding the credit worthiness of the importer. It is issued by the bank (in the importer's country) in favour of the foreign supplier, it contains a guarantee or an undertaking by one bank that the bill of exchange drawn on the importer will be honoured on presentation to the extent of the amount specified in the letter. Letter of Credit may also be issued on the strength of the business of the importer with the bank. The Letter of Credit also contains certain conditions such as date of bill, date for shipment, shipment by approved vessels with approved flags packing, etc. The advantages of the letter of credit to the exporters are many such as :1. Exporter gets safety and security of payment for the goods exported. 2. The exporter gets discounting facility from the bank. 3. It enables the exporter to take more initiative in promoting exports and earns foreign exchange for his country.

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5. Certificate of Origin
Certificate of Origin is an important shipping document sent by the exporter alongwith the other document to the importer. This document is showing or giving the information of the fact that the goods which are exported are manufactured in a particular country i.e. the document certifies that certain goods are manufactured within a specific country only. It is a proof about the origin of goods exported. This certificate is generally issued by the "Chamber of Commerce" or "Export Promotion Council" or "Trade Association" or "Such Other recognised body" on behalf of Government. It is issued to the exporter. It is very useful document to save custom/import duties. As a general rule the rate of import duty is not same for imports from all countries. The goods imported from some other countries are subject to less import duty. Thus, to get the benefit of saving import duty the importer can use the Certificate of Origin, because the government of importing country grants concession in import duty to the importer on the basis of certificate of origin.

6. Consular Invoice
Consular Invoice is an important document used in foreign trade. It is issued by the Trade consulate of the importing country stationed in the exporters country. Consular is a government officer having office in other countries. This document is also obtained by the exporter and is sent to the importer along with other shipping documents. This invoice is also useful for importer at the time of payment of importy duty. For obtaining document from the consular the exporter has to pay the prescribed fees. This document contains information about goods and the value of goods.

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Documents Used In Foreign Trade Transactions - Shipping

Sometimes, the custom authorities desire to open the packages and scrutinize the goods for the purpose of calculating custom duty. Due to which there is delay in clearing the goods from dock or port. To avoid this, one copy is sent to the custom authorities of the importing country, second copy is retained by the consulate office for reference and the third copy is given to the exporter which is forwarded by exporter to the importer with other documents.

7. Bill of Entry
Bill of entry is a document required in case of import of goods. It is like shipping bill in case of exports. A Bill of Entry is the document testifying the fact that goods of the stated value and description in specified quantity are entering into the country from abroad. The customs office supplies this form which is prepared in triplicate. Three different colours are used to prepare bill of entry. One copy is retained by custom department, other is retained by port trust and the third is kept by the importer. The bill of entry is divided into three classes :1. Entry for duty free goods. 2. Entry of goods which are meant for consumption at home. 3. Entry for goods to be re-exported. In India, all these entries are on the same form. The contents of Bill of Entry are :1. Name and address of importer. 2. Import License number of importer. 3. Name and address of exporter. 4. Name of port where goods are to be cleared. 5. Value of goods. 6. Description of goods. 7. Rate and amount of import duty payable. 8. Other relevant details. Scroll Top

8. Dock's Receipt
Dock authorities issue dock's receipt once the goods are stored in the sheds at the docks. The Clearing and Forwarding agent clears the documents from the customs authorities. Then he approaches the Port Trust authorities and obtains the Carting Order. The Carting Order is the permission to cart the goods inside the docks. The goods are then brought inside the docks. The goods may be loaded immediately on the ship. Many-a-times immediate loading on ship is not possible. The goods are then stored in sheds at the port or docks. The dock authorities then issues the dock receipt as an acknowledgement for goods received in sheds.

9. Commercial Invoice
Commercial invoice is a basic export document. It contains all the information, which is required for preparation of all other documents. It is the exporter's bill for goods which the importer has to pay. Commercial invoice contains the following information :1. Name and address of exporter and importer. 2. Description of goods (weight, quality, quantity, rate, etc.)

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3. Value of goods after discount, if any. 4. Net amount payable by the importer. 5. Terms and Conditions of sale

Documents Used In Foreign Trade Transactions - Shipping

Other details of shipment to be included are :1. Name of ship on which goods are loaded. 2. Letter of Credit Number. 3. License number of exporter. 4. Bill of lading number. 5. Packaging Specifications. 6. Shipping terms and Conditions, etc.

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1 Comment :
Anonymous said...
June 13, 2013 at 2:31 PM

It is so helpful. if possible next time try to discuss in details the documents that are related to payment.

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