UNIT 3

SHIPPING DOCUMENTS

BILL OF LADING
The document covering the carriage of goods by sea is called a bill of lading (B/L). The
B/L is the authentic receipt delivered by a carrier, confirming that the goods therein specified
(markings, types of goods, number of packages, etc.) have been loaded or taken in charge for
loading on a designated vessel for carriage to a specified port. It therefore acts as evidence that
there is a contract between the supplier or importer and a shipping company to transport the
goods by sea. Apart from the Master copy, the B/L is established in two or three “originals”,
signed and stamped by the carriers or their agent, anyone of which gives title to the goods.

WAYBILL
The waybill could be described as a B/L that is not a document of title and can thus be
defined as follows: a receipt for the goods; an obligation to deliver the goods to the named place
and to hand them over to the named receiver without him having to first present any documents;
a transporting contract which points out the terms on which the goods have been taken for
transport.

AIR WAYBILL
Air transport is widely used for moving valuable or urgently required goods. The
document covering the carriage of goods by airfreight is called an air waybill (AWB). The AWB
is to air transportation what the B/L is to ocean freight, with, however, a fundamental difference:
the AWB is not a negotiable document, and there is no original AWB to be given to the
consignee to enter into possession of the goods. The consignment is placed at the disposal of the
stipulated consignee against proof of identity, a signed receipt and payment of charges, if any.
(UNDP - Shipping and Incoterms. Practice Guide. UNDP Practice Series)

RAILWAY COSIGNMENT NOTE

Goods transported by rail between countries are covered by international “rail consignment
notes”. These documents are not negotiable with the cargo being placed at the disposal of the
designated consignee upon proof of identity. For road transportation, waybills are normally
issued. (UNDP)

COMMERCIAL INVOICE
The importer will receive a commercial invoice, which is a claim for payment for the
goods under the terms of the commercial contract. The invoice should include a detailed
description of the goods together with unit prices, totals, weight and terms of payment, as well as
packing details and shipping marks. A correctly completed commercial invoice should conform
to the sales contract. The information on a commercial invoice is usually used as the basis for
other necessary documents. Therefore, the information must be correct and precise.
 CERTIFICATE OF INSURANCE
The terms of a contract between the importer and the supplier should state who pays for
insurance while the goods are in transit and what risks are to be covered. Insurance certificates
are signed by the underwriters and the original certificate is normally required in the set of
documents to be presented to a bank for a transaction covered by a letter of credit. When not
required for banking purposes and to cut down on administrative work, certificates can be
replaced by much simpler notices of insurance. This can be arranged by an agreement between
the holder of a long-term-agreement and the insurance company.

CERTIFICATE OF ORIGIN
This is a declaration which states the country of origin of the goods and must be completed by
the supplier and authenticated by a chamber of commerce or other authorised body in the
supplier’s country. It must include the name and address of the exporter and the importer, a
description of the goods and the signature and seals of the authorising organisation.

CERTIFICATE OF HEALTH / SANITARY CERTIFICATE

Agricultural and animal products require a certificate stating that they comply with UK
health regulations. The certificate confirms that the goods are free from disease or insect pests. In
the case of food, it may state that the goods have been prepared to meet prescribed standards.
This certificate must be authorised and signed by the health authority in the supplier’s
country. Certificates are valid for six months, revocable if evidence of health risks are found, and
the ship remains liable to further inspection at all times.

Task 1. Complete the table with information regarding some of the shipping documents
presented above. The first one has been done for you.

Bill of lading Waybill Commercial Certificate of Certificate of Certificate of

invoice insurance origin health

covers the carriage

of goods by sea

authentic receipt
delivered by a
carrier
established in two
or three originals

a document of title
Task 2. Fill in the following text to find out how a bill of lading works. Choose from the list
of words below.

a. transported
b. carrier
c. defaults
d. terms
e. recipient
f. purchase
g. credit
h. shipper
i. receipt
j. transit
Company Cray Inc. is in Seattle and it wants to 1. ..... goods from a supplier, Company Tokyo
Tsushin, in Japan. The supplier gives the goods to a transatlantic shipping company for
transportation to Seattle. It obtains a bill of lading from the transportation company and the
goods are 2. ..... overseas.
A bill of lading specifies the quantity and type of goods being transported, as well as the
goods' final destination and the vessel on which they will travel. In many cases, the bill of lading
details whether the 3. ..... (Company Cray Inc. in our example) must pay for the goods upon 4.
....., whether certain terms must be met before the recipient's bank will secure the shipment with
a letter of 5. ....., and/or whether the goods are damaged or in the wrong quantity upon arrival.
A bill of lading is a contract. It covers the specific 6. ..... of the transportation agreement
between a 7. ..... and a carrier. A bill of lading is also a receipt, because it proves that the 8. .....
accepted the goods and agreed to take them to their agreed-upon destination. As a result, some
bills of lading can be bought, sold or traded when the goods are in 9. ..... In some cases, the
recipient of the goods (Company Cray Inc. in our example) can authorize its bank to take title of
the goods if it 10. ..... on a payment.
Task 3. Complete the following B/L form. Make sure you mention:

• The beneficiaries;
• The port of shipment, port of destination or transhipment;
• The complete markings and numbering of packages;
• The quantity and types of packages (cases, bags, bales, drums, pallets, etc.);
• The type of goods, with all the legal, compulsory notices, in case of restricted cargo;
• The weight and measurements by type of cargo;
• Whether freight is prepaid or payable at destination.
Task 4. Read the following certificate of insurance and answer the questions on the
following page.

ORIGINAL LLOYD’S THIS CERTIFICATE

REQUIRES
ENDORSEMENT
Lloyd’s Agent at Hong Kong Exporter’s
as authorized to adjust and settle on Reference
behalf of the Underwriters and to
purchase on behalf of the Corporation
of Lloyd’s in accordance with Lloyd’s
Standing Regulations for the Settlement
of Claims Abroad, any claim which may
arise on this Certificate

Certificate of Insurance No. C8700/

This is to Certify that there has been deposited with the Committee of Lloyd’s an Open Cover effected by Barclays Insurance
Brokers International Limited of Lloyd’s, acting on behalf of Speirs and Wadley Limited with Underwriters at Lloyd’s, dated
the 1st of January, 2011, and that the said Underwriters have undertaken to issue to Barclays Insurance Brokers International
Limited Policy/Pollicies of Marine Insurance at Lloyd’s to cover up to $300,000 in all by any one steamer or sendingby air
and/or by post and/or road and/or rail and/or conveyance and/or location, machine tools, other interests held covered
to be shipped on or before the 31st of December, 2011, from any port or ports, place or places in the United Kingdom to any port
or ports, place or places in the World or vice versa, other voyages held covered and that are entitled to declare against the said
Open Cover the shipments attaching thereto.

Dated at Lloyd’s London 2nd October 2010

Conveyance From
Cardigan Bay London

To
Hong Kong Warehouse, Hong Kong $4520

Marks and Numbers

WI 5Wooden Cases
124 Said to contain
Hong Kong 400 ELECTRIC POWER DRILLS
1/5 Model LM 425
2 Speed (900 rpm and 2400 rpm)
425 Watt high-torque motor
2chucks – 12 5mm and 8mm
supplied with each drill

We hereby declare for Insurance under the said Cover interest as specified above so valued subject t o th eterms on the Standard Form of Lloyd’s Marine Policy
providing for the settlement of claims abroad and to the special conditions stated below and on the back hereof.

Underwriters agree losses, if any, shall be payable to the order of Speirs and Wadley Limited on surrender of this Certificate.
In the event of loss or damage which may result in a a claim under this insurance, immediate notice should be given to the Lloyd’s Agent at th eport or place where
loss or damage is discovered in order that he may examine the goods and issue a ....report.
(Survey fee is customarily paid by .....valid claim aginst Underwriters)
thisCertificate not valid unless the Declaration be signed by
Speirs and Wadley Limited Dated at
London, 30th July 2010
Signed

Brokers
Barclays Insurance Brokers International Limited
8994 Leedenhess London pp Speirs and Wadley Limited
Questions:
1. Who will claim compensation if there is damage or loss?
2. Who are the brokers on this certificate
3. To what destination is the consignment covered
4. What is the total cover for the consignment?
5. What do the letters pp stand for?
6. When must the consignment be shipped?