Invoice, packing list, bill of lading and air waybill

Every shipment travels with a small set of papers that customs, banks, the buyer and the carrier all read and compare. ICEGATE lists the bill of lading or air waybill, the commercial invoice and the packing list as mandatory supporting documents for an import or export. A combined invoice-cum-packing list is also accepted.

• Commercial invoice: the seller and buyer, a description of the goods, quantity, unit price, total value, currency and the Incoterm. Customs values the goods from it, and the bank collects payment against it.
• Packing list: how the goods are packed. The number of packages, what is in each, the marks on them, and the net and gross weights.
• Bill of lading, for sea: issued by the shipping line or its agent when it takes the goods. It is a receipt, the evidence of the contract of carriage and, when negotiable, the paper that controls who can collect the goods.
• Air waybill, for air: the airline's receipt and contract of carriage. It is not a document of title: the airline delivers to the consignee named on it.

Before any of these comes the proforma invoice, the seller's quote. The buyer uses it to place the order or open a letter of credit, but it is the commercial invoice that goes to customs.

Section 46 of the Customs Act says a bill of entry must include all the goods in the bill of lading. Section 50 makes the exporter answer for the accuracy of the shipping bill and the documents behind it. A bank paying under a letter of credit pays only against documents that match the credit's terms.

• A negotiable bill, made out to order, can be endorsed and passed on. The line releases the goods only against an original, which is what lets a bank hold the goods as security under a letter of credit or a collection.
• A straight bill names one consignee and cannot be passed on by endorsement.
• A sea waybill is never negotiable. The line delivers to the named consignee without any original: fast, but the seller has no hold over the goods.

Originals are issued as a set. With a telex release, also called a surrendered bill, the shipper hands the originals back at the port of loading and the line tells its office at destination to release the goods without them. Agree to it only once you have been paid, or fully trust the buyer, because after that you no longer control the goods.

When a freight forwarder or consolidator books your cargo, there are two bills. The shipping line issues a master bill of lading to the forwarder, and the forwarder issues you a house bill of lading. In air freight the same pair are the master and house air waybills. Your buyer collects the goods through the forwarder's agent at destination.

If you are paid under a letter of credit, check before you ship that the transport document your forwarder will issue is one the credit accepts.

1. 1Check the invoice and packing list against the order: description, quantity, price, Incoterm and currency.
2. 2Check the draft bill of lading or air waybill before it is issued: consignee, notify party, ports, marks, packages and weights.
3. 3Decide the release, original bills, telex release or sea waybill, from how and when you are being paid.
4. 4Keep copies of everything with the shipping bill or bill of entry number, for your bank and for customs.