FUNDAMENTALS OF

OPERATIONAL LOGISTICS
PART 1: Understanding International Trade
Chapter 1, 2, 3 & 4
 FUNDAMENTALS OF
OPERATIONAL LOGISTICS
Chapter 2
Trade Documentation
Learning Outcomes

At the end of this chapter, you should be able to:

Explain the various types of international documentation

Apply the various types of international documentation
 Introduction

There is no international uniformity in the documenting

procedures that are governed by countries to ease freight
forwarders’ declarations.

Countries all over the world have different ways of managing

and doing business.
International Documentation

Seven of the most commonly used documents in shipping are:

(a) Air waybill (AWB)
• Issued by: Airline, consolidator
• Purpose: Serves as an evidence of contract of carriage
between the shipper and the carrier.
 International Documentation (cont.)

(b) Ocean bill of lading (BL/OBL)

• Issued by: Vessel/barge/steam line ship
• Purpose: Same purpose as the AWB, i.e. evidence of formal contract of
carriage between the carrier and the shipper.
• A BL can be termed ‘clean’ or ‘unclean’.
• A ‘clean’ BL is issued when the carrier has not contradicted the particulars
inserted by the shipper or made any comments on the BL.
• An ‘unclean’ or ‘claused’ BL is categorized if the carrier has doubts of the
cargo onboard the ship to protect the vessel owners from any claims by the
consignee.
International Documentation (cont.)
(c) Certificate of origin (CO )
• Issued by: Seller of goods/exporter
• Purpose: For statistical research of the importing countries.

(d) Commercial invoice

• Issued by: Seller of goods/exporter
• Purpose: It serves three main purposes:
(i) Cargo invoice whereby the payment has to be made;
(ii) International trade necessity for clearing the goods through
customs at destinations and,
iii. Calculation of taxes (if any).
 International Documentation (cont.)

(e) Packing list

• Issued by: Seller of goods/exporter
• Purpose: It serves three main purposes:
(i) A complete packing list allows faster checking and clearance of
customs at destination;
(ii) For filing claims on short landed or even damaged cargoes, and
(iii) For faster acceptance at buyers/importers location in order for faster
payment to be released to the exporter.
International Documentation (cont.)

(f) Dock receipt (D/R)Issued

• Issued by: Seller of goods/exporter
• Purpose: Often confused with a packing list, the D/R must include details
such as shipment description, shipping information and the packing list.

(g) Documentary Credit

• Issued by: Seller of goods/exporter or freight forwarder on exporter’s behalf
• Purpose: The sole purpose is to ensure that the seller of the goods
receives their payment and the buyer receives the cargo.
 Other Commonly Used Documentations

(a) Seaway bill (SWB)

• It is most often mistaken for the synonym of OBL or BL.
• A SWB is the replacement of the traditional BL. It is a non-negotiable document
and made to a named consignee.
(b) House bill of lading (HBL )
• Issued by: Forwarder
• Serves the same purpose as normal BL which is specifically issued whenever a
forwarder acts as a carrier and provides consolidation services by sea or air.
• The freight forwarder would enjoy the ‘freedom of contract’ and would be able to
create conditions favourable to them.
• Every HBL shall carry the same details as a normal BL, with the major differences
being on the contract.
Other Commonly Used Documentations (cont.)

• Exporters of the cargo must read the contact carefully as this may be crucial in cases of
losses or damages to the cargo.

(c) House air waybill (HAWB)

• It serves the same function as explained above in the HBL.

(d) Multimodal bill of lading (MBL)

• Issued by: Forwarder
• Purpose: Issued due to the transformation of logistics function from being a silo operator to
an incorporated business. It also serves as an the opportunity for the forwarders to limit
their exposure to any potential claims.
 Words of Wisdom

Management of export shipment is getting more and more complex due to

the many differences in documentation procedures between countries.
There are four major facilitators to ease the trade.
(a) Use customs brokers/international freight forwarders;
(b) Have complete documents;
(c) Learn the import/export procedures of each country you are
dealing with; and
(d) Use only reputable banks as your clearing agents.