Trade Documents and Transportation
Documentation in Export-Import Trade
Transportation:
- Air transportation
- Ocean freight
- Land transportation
Documentation in Export-Import Trade
Bill of exchange – 5 loại
Inspection certificate
Insurance certificate
nhỏ
Commercial invoice Certificate of origin
Consular invoice Export packing list
Pro-forma invoice Dock receipt
Air waybill Destination control
Bill of lading statement
Shipper’s export
Through bill of lading
Clean/claused bill of
declaration
Manifest
lading
Trade Documents
Bill of exchange: An unconditional written order by
one party (the drawer) that orders a second party (the
debtor or drawee) to pay a certain sum of money to the
drawer (creditor) or designated third party
Trade Documents
Commercial invoice is a bill for the merchandise from
the seller to the buyer. It should include basic
information about the transaction: description of the
goods, delivery and payment terms, order date, and
number.
The overseas buyer needs the commercial invoice to
clear goods – thông quan hàng hóa from customs,
prove ownership, and arrange payment.
Governments in importing countries also use
commercial invoices to determine the value of the
merchandise for assessment of customs duties.
Trade Documents
Consular invoice: Must be obtained from the
consulate of the country to which the goods are being
shipped
Pro-forma invoice: A provisional invoice – hóa đơn
tạm tính sent to the prospective buyer – người mua
tiềm năng, usually in response to the latter’s request
for a price quotation –báo giá
Bill of lading
Bill of lading: A contract of carriage between the shipper
and the steamship company (carrier). It certifies ownership
and receipt of goods by the carrier for shipment. It is issued
by the carrier to the shipper.
The bill of lading has three main functions:
I The bill of lading has three main functions:
-it acts as a receipt for the goods being shipped;
-it is evidence that the carrier has contracted to transport
the goods;
-and in most cases, it acts as a document of title to the
goods.
Bill of lading (con’t)
A bill of lading can be issued in negotiable or non-negotiable
form:
-With a non-negotiable bill of lading: the underlying goods are
consigned directly to a named consignee - commonly the
importer or a bank - and only that consignee may gain
possession of the goods at the port of discharge.
-With negotiable bill of lading: the words “to order” (theo lệnh)
appear in the consignee box. This makes the document
negotiable in that title to the goods can be transferred from one
party to another by endorsement of the bill.
(Negotiable bills of lading can be issued in 2 ways:
+ to order of a named party, or
+ to order of shipper of lading).
Bill of lading (cont.)
Trade Documents (cont.)
Air waybill: Contract of carriage between the shipper and air
carrier
Certificate of origin (Giấy chứng nhận xuất xứ hàng hóa)
A statement of the origin of the export product that is usually
obtained from local chambers of commerce
Insurance certificate: The certificates are negotiable and
must be endorsed before presentation to the bank. The
certificate provides the type, terms, and amount of insurance
coverage.
Inspection certificate (chứng từ giám định)
Some purchasers and countries may require a certificate
attesting to the specifications of the goods shipped, usually
performed by a third party.
Trade Documents (cont.)
Packing list (phiếu đóng gói: trọng lượng, loại đóng
gói...)
An export packing list itemizes the material in each
individual package and indicates the type of package
(e.g., box, carton). It shows weights and measurements
for each package.
It is used by customs in the exporting and importing
countries to check the cargo and by the exporter to
ascertain the total cargo weight, the volume, and
shipment of the correct merchandise.
Dock receipt: Used to transfer accountability when the
export item is moved by the domestic carrier to the port
of embarkation and left with the international carrier for
export
Trade Documents (cont.)
Destination control statement: Intended to notify the
carrier and other parties that the item may be exported to
only certain destinations
Shipper’s export declaration: Issued to control certain
exports and to compile trade data. It is required for
shipments valued at more than $2,500
Manifest: A detailed summary of the total cargo of a
vessel (by each loading port) for customs purposes
Transportation
Carriage of Goods by Air
Factors contributing to the growth in airfreight:
Global economic growth, infrastructure investments in
many developing countries, faster delivery, technological
changes
Major international rules:
The Warsaw Convention (1929): Scope of application, air
waybill, liability of carrier, limitation of liability, limitation of
action
The Warsaw Convention (amended) (1955); Montreal
Convention (1999)
Generally expensive for high–bulk freight. Value must be
high enough to justify higher freight cost.
Inefficient for shorter distances, which are handled faster
by trucks. Only the express air services, such as UPS or
DHL, have equally competitive services.
Shipping containers must be small enough to fit into an
air carrier.
Not suitable for products that are sensitive to low
pressures and variations in temperature.
The Montreal Convention, 1999
Scope of application: Convention governs liability of carrier
while goods are in its charge, whether at or outside the
airport. Departure and destination countries to subscribe to
the convention. Also applies to passengers ticketed for
international travel.
Air waybill: The carrier requires the consignor to make out
and hand over the air waybill with the goods.
Liability of carrier: The carrier is liable for loss or damage to
cargo and for damage arising from delay.
The Montreal Convention, 1999 (cont.)
Limitation of liability: The liability of the carrier with respect
to loss or damage to the goods or delay in delivery is limited
to a sum specified under the convention unless the consignor
has declared a higher value and paid a supplementary
charge.
Limitation of action: The right to damages will be
extinguished if an action is not brought within two years after
the actual or supposed delivery of cargo.
Customs-Trade Partnership Against terrorism
(C-TPAT)
Air cargo advance screening (ACAS)
Certified cargo screening program (CCSP)
Indirect air carrier program
Ocean shipping is the least expensive and the dominant
mode of transportation in foreign trade
Continued growth in world seaborne trade (growth of 4% and
8.7 billion tons in 2011)
Growth in world shipping fleet (increase of 37 % in four years)
Increasing role of developing nations in the maritime sector:
One third of the world fleet is owned by ship owners from
developing nations.
Decline in freight rates and transportation costs mainly due to
vessel oversupply.
Types of ocean carriers
Private fleets: Large fleets of specialized ships owned and
managed by merchants and manufacturers to carry their own
goods
Tramps: Vessels leased to transport, usually, large quantities
of bulk cargo (oil, coal, grain, sugar, etc.) that fill the entire
ship
Conference lines: Voluntary association of ocean carriers
operating on a particular trade route between two or more
countries
Types of ocean cargo
Containerized: Cargo loaded at a facility away from the pier,
or at a warehouse into a metal container usually 20 to 40 feet
long, 8 feet high and 8 feet wide
Bulk: Cargo that is loaded and carried in bulk, without mark or
count, in a loose, unpackaged form, having homogenous
characteristics
Break-bulk: Packaged cargo that is loaded and unloaded on a
piece-by-piece basis, that is, by number or count
Types of ocean vessels
Tankers: Vessels designed to carry liquid cargo such as oil in
large tanks. They can be modified to carry other types of
cargo such as grain or coffee
Bulk carriers: Vessels that carry a variety of bulk cargo
General cargo vessels: Include containerships, Ro/Ro
vessels, and LASH vessels
Barges: Unmanned vessels
Combination carriers: Carry passengers and cargo
Tàu chở khí đốt hóa lỏng
Carriage of Goods by Sea
Major international rules:
The Hague Rules (1924): Scope of application, carrier’s
duty, liability and exemptions, limitation of action, limits of
liability
The Hague-Visby Rules (1968)
The Hamburg Rules (1978)
The Hague Rules, 1924
Scope of application: The rules apply to all bills of lading
issued in any of the contracting states.
Carrier’s duty:
(1) Making the ship seaworthy;
(2) properly manning, equipping, and supplying the ship;
(3) making the ship (holds, refrigerating chambers, etc.) fit and
safe for reception, carriage, and preservation of the goods;
and
(4) properly and carefully loading, handling, stowing, carrying,
and discharging the goods.
The Hague Rules, 1924 (cont.)
Carrier’s liability and exemptions: The carrier’s liability
applies to loss of or damage to the goods. It does not extend
to delays in the delivery of the merchandise.
Limitation of action: All claims against the carrier must be
brought within one year after the actual or supposed date of
delivery of the goods.
Limits of liability: The maximum limitation of liability is $500
per package. Hague Visby $1000 per package
Proposed Rotterdam Rules: A new treaty (Rotterdam Rules)
that replaces the Hague Rules was adopted in 2008 and
awaiting ratification. Establishes a modern, uniform legal
regime.
Container Security: CBP’s 24-hour rule, Automated
targeting system, the 10+ rule, Cargo-security initiative,
Customs-Trade Partnership against terrorism.
International Rules Governing
Inland Carriage
Convention on the Contract for the International Carriage of
Goods by Road (CMR), 1956
Convention Concerning International Carriage by Rail
(COTIF), 1980
Both conventions generally apply to contracts for the
carriage of goods by road or rail between two countries, of
which at least one is a contracting party. The convention
also applies to carriage by states or public institutions.
International Rules Governing
Inland Carriage (cont.)
In both cases, a carrier is required to issue a
consignment note (nonnegotiable) as evidence of
contract of carriage and condition of the goods.
Carriers are liable for loss, damage, or delays up to a
liability limit insofar as the contract is governed by the
CMR or COTIF (some exceptions apply).
In the United States, the Carmack Amendment applies
to domestic transportation. Under the Carmack
Amendment, rail and motor common carriers are liable
for the full value of the goods lost, damaged, or
delayed in transit.
Road Transportation: Major means of transport for trade
between neighboring countries (US-Canada-Mexico).
Rules affect trucking: domestic rules on weight, temperature;
state of infrastructure, and taxes
Rail Transportation: Accounts for 40% US freight moves by
ton-miles; mainly used for transportation of commodities.
Freight Forwarders (FF)
What is the role of FF in transportation? To facilitate the
movement of cargo to the overseas destination on behalf of
shippers and process the documentation or perform activities
related to those shipments. They advise shippers on the most
economical choice of transportation, book space, and arrange
for pickup, transportation, and delivery of goods.
Licensing requirements: To be eligible for a license as a
freight forwarder, the applicant must demonstrate to the FMC
that he or she has a minimum of three years’ experience in
ocean freight forwarding duties in the United States, has the
necessary character to render such services, and has a valid
surety bond filed with the FMC.
Freight Forwarders (FF) (cont.)
FFs versus NVOCCs: NVOCCs fulfill the role of the
shipper with respect to carriers and that of a carrier with
respect to shippers. Unlike freight forwarders, NVOCCs
publish their own tariffs and receive and consolidate
cargo of different shippers for transportation to the same
port. NVOCCs issue bills of lading to acknowledge
receipt of cargoes for shipment. Forwarders use the
services of NVOCCs and facilitate the movement of
cargo without operating as carriers. NVOCCs are often
owned by freight forwarders or large transportation
companies.
