18 May What transport documentation is required for food exports?

Exporting food (and other products) means transporting goods from one place to another which, in turn, involves crossing the borders of various countries with their own regulations. Some of these regulations have to do with transport documents which are essential for all export activities.

Thus, exporting requires in-depth knowledge of the sector and of all the documentation necessary to complete all the export operations. This includes various commercial, transport and customs documents:

⇒ Commercial documentation: proforma invoice, non-commercial invoice, commercial invoice and packing list.

⇒ Transport documentation: Bill of Lading (B/L), Airway Bill (AWB), Forwarding Certificate of Receipt (FCR), CMR consignment note and the transport insurance policy or certificate.

⇒ Customs documentation: Single Administrative Document (SAD) and certificates of origin.

In a previous post, we went through all the commercial documents required for exporting in the agri-food sector. In this post, we’ll be focusing on transport documentation.

EXPORT DOCUMENTS FOR SEA TRANSPORTATION

Bill of Landing (B/L)

A Bill of Lading (B/L) is an essential document for maritime exports since it’s much like a transport contract between the shipper and the shipping company. It is issued by the shipping company or its agent to state that the goods have been received for transport to the destination port onboard the indicated vessel and under the conditions agreed by and between the seller and buyer of the goods.

It is the most important document in maritime transport and must include the following information: issuer/dispatcher, recipient/consignee, freight forwarder/loader, type of goods transported, seller or exporter, vessel on which the goods are to be shipped and the shipping company.

Master Bill of Lading (MBL)

A Master Bill of Lading is a kind of Bill of Lading issued by the shipping company to the freight forwarder which is listed as the shipper, consignee and notify. The carrier is the shipping line and, therefore, any complaint must be filed with the shipping line. One of the main characteristics of this kind of B/L is that there is little flexibility in the clauses and with the replacement of documentation.

House/FIATA B/L

A House FIATA B/L is a type of Bill of Lading issued by the freight forwarder to the actual goods exporter. In other words, it’s issued by the freight forwarder in its own name and with its own guarantees. In this case, the carrier is the freight forwarder and any complaint must be filed with the freight forwarder.

This type of B/L provides more flexibility in the clauses and with the replacement of documentation. Moreover, it is easier to reach commercial agreements with a freight forwarder than with a shipping line, which will only abide by the laws in effect.

There are several reasons for issuing a House FIATA B/L. It’s recommended for consolidated shipments when goods owned by various customers are loaded for shipment together or when more flexibility is needed due to the conditions of a documentary credit. It’s also recommended when shipping under DAP/DDP terms so the freight forwarder can track the shipment at the origin as well as at the destination and so the freight forwarder may protect its own business.

EXPORT DOCUMENTS FOR AIR TRANSPORTATION

Airway Bill (AWB)

An air consignment note or Airway Bill (AWB) is issued by a transport company formalising the goods transport by air contract between a customer and a service provider. What’s more, it is used as a receipt certifying the reception of the goods by the carrier company for subsequent shipment. Just like a maritime consignment note, it also implies certification by the carrier of knowledge of the goods transported.

The AWB is a non-negotiable transport contract regulated by the International Air Transport Association (IATA) which certifies the commitment by the carrier company to transport the goods received from one airport to another.

This document must state: the air transport company’s identification number, the shipping code, the dispatching airport, the carrier’s identification, the transport route, the complete details for the contracting party, the recipient and the air transport company, the code and details for the IATA agent supervising the transport and the detailed data on the transport (costs, cargo, delivery dates and invoicing…). Moreover, if requested by the contracting party, it must also include the transport insurance and premium applied.

Master Airway Bill (MAWB)

A Master Airway Bill is a kind of Airway Bill issued in the name of the airline by the IATA agent. The carrier is the airline and, therefore, any complaint must be filed with the airline. One of the main characteristics of this kind of Airway Bill is that there is little flexibility in the clauses and with the replacement of documentation.

House/FIATA AWB

A House FIATA AWB is a kind of Airway Bill issued by a freight forwarder. In this case, the carrier is the freight forwarder and any complaint must be filed with the freight forwarder.

This type of Airway Bill provides more flexibility in the clauses and with the replacement of documentation. Moreover, it is easier to reach commercial agreements with a freight forwarder than with an airline, which will only abide by the laws in effect.

There are several reasons for issuing a House. It’s recommended for consolidated shipments when goods owned by various customers are loaded for shipment together or when more flexibility is needed due to the conditions of a documentary credit. It’s also recommended when shipping under DAP/DDP terms so the freight forwarder can track the shipment at the origin as well as at the destination and so the freight forwarder may protect its own business.

EXPORT DOCUMENTS FOR GROUND TRANSPORTATION

Road Consignment Note (CMR)

A road consignment note or CMR is proof of the road transport contract. It determines the scope of application and liability for the operation underway and identifies the intervening parties and goods being transported. Its use implies having endorsed the CMR Convention (Convention on the Contract for the International Carriage of Goods by Road) which regulates it.

It certifies the instructions given to the carrier meaning it must accompany the goods through all road shipments.

The use thereof is mandatory in all cases of international transport by road (both for inter-EU and non-EU operations) as the Convention thus specifies when the country of origin or the destination country are signatories to the Convention.

It is prepared by the road transport agent or the sender and is addressed to the seller, the carrier and the buyer.

EXPORT RECEPTION DOCUMENT

Forwarding Certificate of Receipt (FIATA FCR)

The FIATA FCR (Forwarding Certificate of Receipt) is proof of receipt of the goods by the carrier, certifying that the target dispatch will be completed in accordance with the instructions found on the document. It is prepared by the freight forwarding agents associated with FIATA (International Federation of Freight Forwarders Associations) and is addressed to the seller.

This document is not an actual transport document, but rather a receipt of identification issued by the carrier stating the goods have entered its custody and the commitment to completing the shipment of such goods. One single original document is issued along with the number of copies requested.

It is not a negotiable document and is particularly used for operations requiring confirmation of transport as contracted by the importer. It is normally used for sales when the delivery terms are EXW or FCA. For exporters, this document certifies compliance with what has been agreed with the importer with respect to the transport of the goods.

INSURANCE POLICY AS PART OF THE TRANSPORTATION DOCUMENTATION IN EXPORTS

Transport insurance policy/certificate 

The insurance policy or certificate is a part of the transport documentation needed to export as it legally protects the goods. Therefore, there are three intervening parties besides the insurance company, which vary depending on the export conditions. They are:

⇒ The policyholder: This would be the importer or importer’s carrier from EXW to CFR/CPT. With CIF/CIP and from DAP to DDP, it is the exporter or exporter’s carrier.

⇒ The insured party: the importer from EXW to CFR/CPT and in CIF/CIP yet the exporter in DAP to DDP.

⇒ The beneficiary: the importer or the importer’s bank from EXW to CFR/CPT and in CIF/CIP yet the exporter in DAP to DDP.

As concerns the insured value, one must remember that the ultimate value to be recovered in the event of an insured event must be that insured value. This depends on the Incoterms negotiated. For EXW/FCA/FAS/FOB/CPT/CFR, it would be 110% of the DDP value. For CIP/CIF, it would be 110% of the CIF/CIP value. And for DAP/DPU/DDP, it would be 100% of the DAP/DPU/DDP value.

All of this must appear on the insurance certificate, which is the document that confirms the establishment of cover for the risks to the goods during international transport. Therefore, it must state the name of the insurance company, the policy number and the cover contracted.