In general terms, a Power of Attorney is a legal document that transfers certain powers from one person to another person. Powers of Attorneys are often used if Person A needs Person B to make a financial, health or other personal/commercial decision on their behalf.
In shipping, Powers of Attorney (POA) are important when an importer or an exporter appoints an agent – namely, a freight forwarder – to act on their behalf to handle all aspects of their shipment.
What Is A Power Of Attorney For?
A Power of Attorney is used when a buyer or a supplier seeks to engage an agent, whether they be domestic or foreign, to undertake business on their behalf. They are commonly used in the USA to allow a forwarder to obtain control of the cargo. In Australia, we use a Customs Clearance Authority (or CCA) in place of a POA.
In the USA, the Power of Attorney will transfer decision-making power, including the power to sign and arrange the relevant shipping documentation, from the importer/exporter to the freight forwarder. This is so the freight forwarder can properly and lawfully act in its role as an intermediary between a supplier and a purchaser.
Powers of Attorney will last until a specified time, at which point the power is revoked. This may occur at the completion of a shipment, for example.
What Does It Include?
Powers of attorney will typically include:
- The importers business name and address
- The business IRS (Internal Revenue Service Number) Equivalent to Australian ABN
- A declaration that the nominated forwarder can act on behalf of the importer; and
- the witnessed signature of the importer/exporter;
Note that a Power of Attorney does not operate as a contract between an importer, exporter or freight forwarder. It is simply an assignment of legal powers from one entity to another.
It is important that a Power of Attorney is worded appropriately to allow a forwarder to act on your behalf in the USA, as it is this document that will facilitate a freight forwarder’s completion of your shipment.
It is therefore vital that you select a freight forwarder that you trust prior to signature, as they will obtain authority to handle and clear your cargo.
Leave a comment below if you have any queries or talk to one of our friendly freight experts at ICE.