Shipper's Letter of Instruction (SLI) |Meaning, importance, format

Shipper's Letter of Instruction (SLI) |Meaning, importance, format

A shipper’s letter of instruction is an authentic document that is issued by the exporters to provide shipping instructions to the freight forwarders . This document is also known as the shipper’s export declaration, through which the freight forwarder can export the goods to the international market. The freight forwarder acting on behalf of the exporter may provide a Bill of Lading (BIL) that includes the precise dimensions, weight, and packing specified in the SLI, ensuring that the cargo is loaded and unloaded without any damage.

In addition, the SLI also enhances export control, which contains required information, allowing the agent to file Electronic Export Information (EEI) and send it to the Automated Export System (AES).

Who fills out the Shipper’s Letter of Instruction?

The exporter fills out the Shipper's Letter of Instruction (SLI) form and sends it to the forwarding agent along with other export documents. The SLI acts as a cover memo, summarizing essential information needed for the agent to arrange transportation and complete the Bill of Lading on the exporter's behalf.

Why is Shipper’s Letter of Instruction (SLI) required for export?

A shipper’s letter of instruction is needed for every shipment of cargo. It allows the freight forwarders to conduct export processes and paves the way for customs clearance. Though the SLI is not a legally binding document, it varies from country to country in relation to foreign trade regulations. Prior to sending the goods, the exporter should fill out the document.

Why is it necessary to use the Shipper’s Letter of Instruction?

A Shipper's Letter of Instruction is one of the most convenient ways to share all the shipping details with the freight forwarder to avoid misinterpretation between the exporter and the freight forwarding agent. This is one of the ongoing practices in international trade.

How can the Shipper’s Letter of instruction be completed?

It is mandatory for the exporter to complete the SLI every time he deals with a freight forwarding agent or a company. The details included in the Shipper’s Letter of Instruction form are:

  • Contact details for the exporter and consignee, the parties to the transaction
  • Delivery method (direct or consolidated)
  • An inventory of the items included in the shipment: total number of pieces, weight (kg), size (cubic meters), and value of the cargo
  • HS codes
  • If the products are dangerous,
  • Whether the cargo is insured
  • Shipping conditions (prepaid or collected)
  • Any special guidelines, if any (such as how to package the items),
  • Time and verification

Let us briefly discuss the details that should be listed in the Shipper’s Letter of Instruction

  • Intermediate Consignee
  • Ultimate Consignee
  • Forwarding agent’s details
  • The carrier’s details
  • Notify the party
  • Details of the departure and destination
  • Details of the pickup and the kind of shipment

Intermediate Consignee : Here, it refers to a person or an organization serving as an agent for the participating party, such as a bank or a forwarding agent subject to the delivery of goods to the importer. They are responsible for the dealing party and possessions of items with the motive of securing delivery to the ultimate consignee.

Ultimate Consignee : The ultimate consignee refers here to the end user of goods, a company, or a person accepting goods in foreign lands. The consignee can be a person, a party, a dealer, or an actual possessor of goods receiving an import shipment.

Forwarding Agent : The person is responsible for handling all the export proceedings on behalf of the exporter or importer. The forwarding agent stipulates a hassle-free export operation.

Carrier : The carrier's information will be added to this section of the form if the freight transportation is contracted out to a different business or shipping line.

Notify the Party: The data of the third-party company (business name, office address, phone number, email address) might be included as a notification party if the consignee collaborates with that third party in the country of import.

Details of the departure and destination: The port of loading, where the cargo will start its voyage, is referred to as the departure. This area needs to be filled in with the port's name as well as the state or nation. The country of origin of the shipment must be indicated in the Country of Origin of Goods area.

Details of the pickup and the kind of shipment: Shipment type includes both the kind of shipment (such as FCL, LCL, breakbulk, etc.) and the method of dispatch (such as by road or sea). Details about the aircraft or vessel, as well as the trip number that the forwarder has assigned, may be needed.

If the forwarder must pick up the freight from the shipper's address, it must be specified by the exporter or shipper. The shipper additionally specifies whether insurance and an Export Declaration Number are necessary. The date of departure will be entered into the SLI form if one exists. If not, the carrier or forwarder will insert it.

Apart from these, the SLI also has some supporting documents that are given to the freight forwarders in terms of shipment:

Every country needs to meet some SLI-related requirements. Additionally, the US government needs these documents:

  • Validated License Number/General License Symbol

The export license is necessary for the perishable goods being shipped. It has the authority to export without an application by the exporter to the Office of Export Administration. Every license holds a designated symbol, such as LBS, CIV, and GBS.

  • Export Control Classification Number (ECCN)

The U.S. Department of Commerce allots the Export Control Classification Number (ECCN). Whenever there is a mention of a SED or AES record, an exporter must enter the ECCN number to carry out all exports in the SLI form.

What are the download versions of the Shipper's Instruction Form?

SLI in the NCBFAA Format

A conventional shipper's letter of instruction gives a freight forwarder directions on transportation and documentation, but it usually lacks precise line-item product information that the forwarder needs to file through the Automated Export System (AES). The Foreign Trade Regulations were amended in April 2014, and the National Customs Broker & Freight Forwarders Association of America (NCBFAA) has released a sample SLI that incorporates the new data fields and amount of detail needed to file through AES.

SLI in the SED Format

Many exporters use a variant of the SLI based on the obsolete Shipper's Export Declaration (SED) to provide their forwarder with this additional information. This updated SLI in SED format now includes the new data fields required by the Foreign Trade Regulations revisions from April 2014.

Conclusion

It is imperative that the shipper's letter of instructions adhere to the necessary regulations and national rules in order to prevent any disruptions during transportation. To ensure a seamless import-export shipment, it's critical to select a reputable freight forwarding company with extensive knowledge of all the documentation.