Shipping Docs: Invoice, B/L, Packing

Document Categories

International trade requires three categories of documents: financial (invoices, insurance), transportation (Bill of Lading, AWB, CMR), and quality (inspection certificates, MTCs). Missing or incorrect documents cause customs delays, payment holds, and shipment rejections.

Common Shipping Documents

Quick Reference

Category	Key Documents	Who Issues
Financial	Proforma Invoice, Commercial Invoice, COO	Seller / Chamber of Commerce
Insurance	Cargo Insurance Policy	Insurer (buyer or seller per Incoterm)
Transport - Sea	Bill of Lading (B/L), House B/L	Carrier / Freight forwarder
Transport - Air	Airway Bill (AWB)	Airline
Transport - Road	CMR consignment note	Carrier
Quality	Third-Party Inspection, MTC	Inspection agency / Manufacturer
Regulatory	Export License, REACH, DGD	Government / Authorized body

Administrative/Financial Documents

Proforma Invoice (“PI”)

A proforma invoice is a preliminary bill of sale sent to buyers before shipment. It’s not a demand for payment-it’s a formal quotation that buyers use to:

Use	Purpose
Open Letters of Credit	Bank requires PI to establish LC amount and terms
Obtain import licenses	Some countries require PI before issuing import permits
Plan customs duties	Destination customs uses PI to estimate duties/taxes
Verify pre-shipment inspection	Inspectors compare goods against PI specifications

Required elements: Date, seller/buyer details, goods description, quantities, prices, total amount, delivery terms (Incoterms), payment terms, and validity period.

The PI is not legally binding for payment-that comes with the Commercial Invoice after shipment.

Commercial Invoice (“CI”)

The commercial invoice is issued after shipment as the final bill and legal record of the sale. Customs authorities use it to calculate duties and verify compliance.

Required elements:

Element	Details
Parties	Seller and buyer names, addresses, contact details
Goods	Description, quantities, weights, packaging
Value	Unit prices, total value, currency
Terms	Incoterms, payment terms
Shipment	Method, date, destination
Classification	Country of origin, HS codes

Inaccurate commercial invoices cause customs delays, penalties, or goods seizure. The CI serves as legal evidence in disputes.

Pro Tip

For piping materials, get the HS codes right the first time. A “pipe fitting” classified as 7307 (iron/steel fittings) has different duty rates than 7412 (copper fittings) or 3917 (plastic). Incorrect HS codes can trigger audits going back years - I’ve seen companies hit with back duties plus penalties exceeding the value of the original shipments.

Legalized Invoice and Consular Invoice

Some importing countries-particularly in the Middle East-require commercial invoices to be authenticated by their consulate in the exporting country before goods can clear customs.

Document	What It Is	Process
Legalized Invoice	Commercial invoice authenticated by destination country’s consulate	Prepare CI → Notarize locally (if required) → Submit to consulate → Pay fees → Receive stamped document
Consular Invoice	Specific form issued by the consulate, filled by exporter, certified by consulate	Request form from consulate → Complete with shipment details → Submit with fee → Receive certified invoice

Both serve the same purpose: fraud prevention, regulatory compliance, and customs facilitation. The key difference is that a legalized invoice authenticates your existing commercial invoice, while a consular invoice uses a specific form provided by the consulate.

Common destinations requiring legalization: Saudi Arabia, UAE, Qatar, Kuwait, Egypt, and other Arab countries.

Proforma vs. Commercial Invoice

Aspect	Proforma Invoice	Commercial Invoice
Timing	Before shipment (quotation stage)	After shipment (billing stage)
Legal status	Not legally binding for payment	Legally binding proof of sale
Purpose	Open LC, obtain import license, estimate duties	Request payment, customs clearance, accounting
Content	Estimated prices and terms	Final, actual transaction details
Customs use	Preliminary assessment	Official duty calculation

Cargo Insurance Policy

Cargo insurance protects goods against loss or damage during transport by land, sea, or air.

Policy Type	Coverage
All Risk	Full coverage-covers all physical loss/damage except specific exclusions
With Average (WA)	Covers partial losses from specific perils (sinking, fire, collision)
Free of Particular Average (FPA)	Only covers total loss or damage from major events

Insured value typically includes: goods cost + shipping cost + 10-20% margin.

Who subscribes? Depends on the Incoterm:

• CIF / CIP: Seller must arrange insurance
• Other terms: Buyer typically arranges coverage

Filing a claim requires: original insurance certificate, commercial invoice, packing list, Bill of Lading, and incident report (prepared with the insurance agent and carrier).

Export License

Certain products require government authorization before export-primarily for national security, foreign policy, or non-proliferation reasons.

Products typically requiring export licenses:

Category	Examples
Military items	Weapons, ammunition, military vehicles
Dual-use goods	Advanced computing, encryption software, precision machining
Controlled chemicals	Precursors for chemical weapons
Nuclear materials	Enrichment equipment, nuclear-grade materials

Application process: Submit product specifications, destination country, end-user identity, and end-use statement. The licensing authority reviews against control lists and sanctions before approval.

Non-Compliance Penalties

Exporting controlled goods without a license can result in criminal charges, heavy fines, imprisonment, and permanent loss of export privileges.

Dangerous Goods Declaration (DGD)

Required when shipping hazardous materials by any mode. The DGD informs carriers and handlers of the risks so they can take safety precautions.

Required information:

Element	Details
Identification	Proper shipping name, hazard class, UN number
Quantity	Amount and packaging type
Packing Group	I (great danger), II (medium), III (minor)
Emergency contact	24-hour contact for incidents
Parties	Shipper and consignee names/addresses
Certification	Shipper’s signed declaration of compliance

Applicable regulations: IMDG Code (sea), IATA DGR (air), ADR (road in Europe).

Incomplete or inaccurate DGDs result in shipment rejection, fines, and potential criminal liability if incidents occur.

REACH Certificate

Required for products exported to the EU that contain chemicals subject to REACH regulation (Registration, Evaluation, Authorisation, and Restriction of Chemicals).

When required:

Situation	Threshold
Chemical substances imported to EU	≥1 tonne/year
Products containing SVHC (Substances of Very High Concern)	>0.1% w/w concentration
Articles with intended chemical release	Any quantity

Compliance options: Either work with your EU-based importer or appoint an “Only Representative” (OR) in the EU to handle registration.

REACH compliance is mandatory for EU market access-non-compliant shipments face customs rejection.

Certificate of Origin (“COO”)

The COO certifies where goods were produced, manufactured, or processed. Customs authorities use it to determine applicable tariffs and verify compliance with import regulations.

Type	Purpose	Issued Under
Preferential COO	Qualifies for reduced/zero duties	Free Trade Agreement (FTA) between countries
Non-Preferential COO	Standard customs clearance	No FTA-used for quotas, anti-dumping measures

How to obtain: Apply through your local chamber of commerce or designated government body, providing commercial invoice and goods details. The chamber verifies and stamps the certificate.

False Origin Declarations

Serious Offense

Declaring a false country of origin (e.g., labeling Chinese goods as European) is customs fraud with severe consequences.

Consequence	Impact
Financial penalties	Fines often exceed the duties that would have been paid
Goods seizure	Customs confiscates misdeclared shipments
Criminal charges	Intentional fraud can result in imprisonment
Trading ban	Loss of preferential tariff rights, possible export/import bans
Reputational damage	Loss of customer trust and future business
Increased scrutiny	More frequent inspections, delays, higher compliance costs
Compensation claims	Partners may sue for losses caused by your misdeclaration

Form-A Certificate of Origin (GSP)

The Form-A is a specific COO used under the Generalized System of Preferences (GSP)-a program allowing reduced/zero tariffs for imports from developing countries into developed markets.

Key points:

• Not all products/countries qualify-check the importing country’s GSP rules
• Apply through your national authority with production details proving origin
• Valid for 10 months from issuance
• List of GSP beneficiary countries

Restricted Destination Statement

A clause in shipping documents or contracts specifying destinations to which goods cannot be shipped due to sanctions, embargoes, or export controls. Including this statement protects all parties from inadvertent sanctions violations.

Export Control Regulations

Export controls regulate the export of sensitive goods, technology, and information for national security and non-proliferation purposes.

International control regimes:

• Wassenaar Arrangement (conventional arms, dual-use)
• Nuclear Suppliers Group
• Missile Technology Control Regime
• Australia Group (chemical/biological)

Currently sanctioned destinations (verify current status before shipping):

US Sanctions (OFAC/BIS)	EU Sanctions
Iran, North Korea, Syria, Cuba	Iran, North Korea, Syria
Crimea region	Crimea region, Russia (sectoral)
Various entity lists	Various entity lists

Sanctions Change Frequently

Always verify current sanctions status before shipping. Check OFAC (US), EU sanctions lists, and your national authority. Targeted sanctions also apply to specific entities and individuals worldwide.

Transportation Documents

Packing List (“PL”)

The packing list details physical shipment information-attached to packages for customs and receiving verification. Unlike the commercial invoice, it contains no pricing.

Information	Details
Quantities	Net weight, gross weight, volume
Goods	Description, quality, HS codes
Packaging	Type (cases, crates, drums, pallets, containers)
Logistics	Shipment date, routing, forwarder

Fumigation Certificate (Phytosanitary)

Required when using wooden packaging (pallets, crates, boxes) to prevent pest spread across borders.

ISPM 15 standard requires wood packaging to be:

• Heat-treated (HT) to 56°C core temperature for 30 minutes, OR
• Fumigated with methyl bromide
• Marked with the ISPM 15 compliance stamp

Process: Treat wood packaging → Request inspection from national plant protection authority → Receive certificate or compliance stamp.

Timing: Treatment must occur 3-60 days before arrival (varies by country).

Non-compliant shipments face rejection, destruction of packaging, or treatment at importer’s expense.

Delivery Note

Accompanies the shipment for the buyer to verify contents against their order. Does not include pricing. The recipient signs to acknowledge receipt-this signed copy serves as proof of delivery.

Contents: Seller/buyer details, order reference, goods list with quantities, delivery date, handling instructions, signature field.

Bill of Lading (B/L)

The B/L is the most important document in ocean freight-it serves three functions simultaneously:

Function	Description
Contract of carriage	Terms under which goods are transported
Receipt	Carrier confirms receiving goods as described
Document of title	Controls ownership-can be endorsed to transfer goods

Types of B/L:

Type	Characteristics
Straight B/L	Non-negotiable-goods released only to named consignee
Order B/L	Negotiable-ownership transfers by endorsement
Clean B/L	No defects noted at loading
Claused (Dirty) B/L	Notes defects or discrepancies
Through B/L	Covers multiple transport modes
Electronic B/L	Digital version (requires all parties to accept)

Key contents: Consignor/consignee, carrier, goods description, vessel/voyage, ports, freight terms, cargo marks.

Letters of Credit typically require a clean, on-board B/L for payment.

Common Mistake

Accepting a B/L that shows consignee as “To Order of [Buyer’s Bank]” when payment is via open account, not LC. This creates a title problem - you can’t release goods to the buyer without the bank’s endorsement, and the bank has no reason to endorse since they’re not financing the shipment. Match the consignee field to your payment terms.

Airway Bill (AWB)

The AWB is the air freight equivalent of the B/L, but with one critical difference: it is non-negotiable and does not transfer title. It’s simply a receipt and contract of carriage.

Contents: Consignee, goods description (quantity/quality), LC-required text if applicable.

House B/L vs. Master B/L

In consolidated shipping, two B/Ls exist simultaneously:

Document	Issued By	To Whom	Covers
Master B/L (MBL)	Ocean carrier	Freight forwarder / NVOCC	Entire container, port-to-port
House B/L (HBL)	Freight forwarder / NVOCC	Individual shipper	Your portion of consolidated cargo

The shipper deals with the HBL; the forwarder deals with the MBL. Both represent contracts of carriage, but at different levels of the logistics chain.

Multimodal Bill of Lading (FBL)

Also called Combined Transport Document (CTD). Used when goods travel via multiple transport modes (sea + road + rail, etc.) under a single contract.

Key benefit: One contract, one carrier (the Multimodal Transport Operator), single point of accountability-regardless of how many subcontractors handle different legs.

Can serve as document of title (negotiable) like a standard B/L.

CMR (Carriage of Goods by Road)

The CMR consignment note is the standard document for international road transport, primarily in Europe. Based on the 1956 Geneva Convention, it establishes carrier liability for loss, damage, or delay.

Key points:

• Not negotiable-does not transfer title (unlike a B/L)
• Three copies: sender, carrier, receiver (all sign)
• Contents: Parties’ details, goods description, customs instructions, pickup/delivery locations
• Liability: Carrier liable per CMR Convention limits

Frequently required even for Letters of Credit despite being non-negotiable.

International trade requires three categories of documents: financial (invoices, insurance), transportation (Bill of Lading, AWB, CMR), and quality (inspection certificates, MTCs). Missing or incorrect documents cause customs delays, payment holds, and shipment rejections. Always verify document accuracy before shipment; fixing errors after goods are in transit is costly and time-consuming.

Quality Inspection Documents

Third-Party Inspection Certificate

Issued by independent agencies (SGS, DNV, Lloyd’s) to verify quality, quantity, and conformity to standards (ASME, API, EN) or contract requirements.

Types of inspection:

Type	Timing	Purpose
Pre-production	Before manufacturing	Verify raw materials and components
DUPRO	During production	Monitor quality during manufacturing
Pre-shipment	Before dispatch	Most common-random sample inspection
Container loading	At containerization	Verify goods match documentation
Arrival	At destination port	Final verification (less common)

Cost: Generally paid by buyer unless contract specifies otherwise.

LC Risk

If an LC requires an inspection certificate, ensure it specifies an independent third party. Never accept certificates issued by the importer-if they refuse to issue it, you cannot draw on the LC.

Certificate of Analysis and Mill Test Certificate

Document	Used For	Contents
Certificate of Analysis	Chemical products, raw materials	Composition, acidity, viscosity, moisture, REACH/RoHS compliance
Mill Test Certificate (MTC)	Metal products	Chemical composition, mechanical properties (per EN 10204 3.1, 3.2)

Both verify that materials meet specified standards. MTCs are issued by the manufacturer; Certificates of Analysis typically come from independent laboratories.

Field Note

When receiving piping materials, compare the heat numbers on the MTCs against the physical markings on the products before signing delivery notes. Mismatched documentation is surprisingly common - whether from warehouse mix-ups or clerical errors - and once you sign acceptance, proving non-conformance becomes your problem.