Documents in International Logistics Ondrej Castek

The role of documentation Control and liability Purposes of documentation: Fulfill regulations Manage risk Common understanding Record keeping The basic principle of documentation in trade is control and liability: who is in control of goods should be liable for it. customs, duties, export permit, import license etc. States, who is responsible for what Different languages and different cultures mean different understanding of terms. Written documentation should express common understanding of these terms. Such as for book keeping etc.

Example The basic principle of documentation in trade is control and liability: who is in control of goods should be liable for it. customs, duties, export permit, import license etc. States, who is responsible for what Different languages and different cultures mean different understanding of terms. Written documentation should express common understanding of these terms. Such as for book keeping etc.

Business-related and Law-related Types of documents Transportation Banking Commercial Government Or Business-related and Law-related For the physical movement of the cargo For financing of the shipment For the purchase of the goods To fulfill government regulations

IT and documentation Time and costs Time – to deliver documentation and to collect information Costs – Pocuca et. al found in 2000, that for a set of 103 documents in one shipment the electronic handling: decreases costs by 39 % decreases government importance by 73 % The government is represented by consulate, export and import licensing, health control, chamber of commerce, export and import customs, port authority and police. Usually about 10 documents Can be over 103 documents, as in this example I US foreing trade in 1982 avg costs of documentation was 395 USD per one set of documents In UK 3 – 4 % of costs of SME import and export companies spent on trade facilitation. In 1990 air cargo: it takes 36 separate handling functions generating 16 documents as same as 26 years ago.

Pocuca et al research model Difference in time: 33 hours!!! Costs of documents 4 – 7 % of the value of the goods

IT and documentation - example One piece of information, port of discharge (POD). POD is used by the: exporter, the port terminal operator (to know where to load the freight on the ship or airplane), the carrier, the insurance company, the bank (particularly in letters of credit), the customer’s customs broker, customs, the customer. produce, send, read and key manual documents

Documentation as a non tariff trade barrier import license (quantity, value, other) consular legalization 2. has to be processed by consular offices located in exporters country or near (closest Australian embassy is located in Vienna)

more information than domestic invoice Commercial invoice more information than domestic invoice not only a collection document, but also used by governmental authorities: duties admission under quota

Consular invoice special form and data or just a copy of commercial invoice language of importing country might require legalization or approvement by consul

Ocean Bill of Lading contract of carriage documentary evidence of title receipt for goods

delivery instructions export license hazmat bill of lading Other documents carnets dock receipts certificate of origin air waybill collection letter customs invoice delivery instructions export license hazmat bill of lading import license 1. sample goods carried by salespeople – duty free, usually has to return without change within a period given to the country of origin 2. proof of delivery in ocean transport 3. Might be required by importing country government or by importer. Might need to be signed by shipper, chamber of commerce, consulate or notarized 4. non negotiable bill of lading in air traffic. Receipt for cargo and trasportation contract. No „to order“ allowed. 5. says what, when and with what information to collect. eg. for LoC purposes 6. bears information needed for customs 7. from exporter to the shipper or from the shipper to the carrier – specific port, pier, terminal, airport, connection, route 8. individual, general etc. 9. for hazardous material

inspection certificate packing list Other documents inland bill of lading inspection certificate packing list phytosanitary inspection certificate pro forma invoice 11. non negotiable 12. by third parties – independent companies – to protect the one, who is handing the cargo over to another chain member 13. describes items in box, crate, pallet, container – dimensions, pieces, weight – usually not a price 14. plants and plant products – to comply quarantine import regulation (Austrálie) 15. not for payment purposes, but for all other – customs, duties, licenses etc.

„Clean“ documents Document, which has been processed and no objection were raised. Objection might be breakage, leaking, shortage. Used with dock receipts, bills of lading and other.

Insurance

Insurance Package for domestic trade is not good enough for long and rough transportation in international trade.

Sea transport Condensation (falling like rain) Waves Corrosive salt water Rain, sun, frost

US is 3x mor risky than Japanese US repairs are more expensive Hull insurance Japanese 1.00 Norwegian 1.10 American 1.25 Greek 1.50 US is 3x mor risky than Japanese US repairs are more expensive US crew is more expensive Insurance of the vessel itself

War risk and pirates Standard 0.1 % of hull value and 0.0275 % of cargo value Might climb to 7.5 % and 3 % (Persian gulf in 1984) Pirate attacks in 1990: 100, 2000: 450, 2009: 406.

Study material: Chapter 12 International Logistics (2nd Edition) Wood, Donald F. Barone, Anthony Murphy, Paul Pages: 456, Publisher: AMACOM Books ISBN: 9780814426739 Available at: http://site.ebrary.com/lib/masaryk/ Risk and costs, sellers’ and buyer’s view LoC fees: 0,5% - 2% or more, minimum fees, amendment fees (50 – 100 USD per amendment)