What is a Shipper’s Letter of Instruction?
A Shipper’s Letter of Instruction (SLI) is a document is designed to detail all the requirements of your shipment from start to finish. When organising your export overseas, your freight forwarder will request you to have this document completed.
At International Cargo Express we have two SLI documents, one for seafreight exports and one for airfreight exports. Once you have downloaded your Seafreight SLI or Airfreight SLI read below for an overview of how to complete your shipper’s letter of instruction.
1. Is A Shipper Letter Of Instruction Required?
While the SLI is not a mandatory document or a legally binding document, all U.S. export shipments require a completed SLI. Nevertheless, it is strongly recommended to provide your shipper’s letter of instruction to your freight forwarder as it is a way to formalise how and where to handle the export shipment. It also grants permission to the forwarder to act as the authorized forwarding agent for export control and customs.
2. Why Is It Important?
SLI is multi-purpose document to assist you in communicating information to the freight forwarder SLI is designed to avoid misunderstandings that can result in financial loss to the exporter – so it is vitally important that this document be accurate.
If you are exporting to the US, the main benefit of an SLI is federal regulatory compliance! Prior to your goods being exported, Foreign Trade Regulations require a freight forwarder to transmit certain information to U.S. Customs and Border Protection on your behalf. To efficiently gather the required authorizations to act on your behalf and the information needed to be transmitted, the trade community developed a SLI.
Who Is Responsible For The Shipper’s Letter Of Instruction?
The SLI is completed by the exporter in advance and is sent to the freight forwarder. It is a written record of who received the shipping documents, who to contact for questions, who to contact for proof of export, and who issued the export control documentation that supports the decision to send your products to your foreign customer. Read on to find out more about the required fields.
How To Fill Out The Shipper’s Letter Of Instruction
1. Detail the Shipper and Consignee
When completing your Shipper’s Letter of Instruction you need to detail the exporting company (shipper) and the receiving business overseas (consignee). It is important that this information is accurate and up to date and contact information (telephone and email address) is provided accordingly.
2. Notify Party
If you or your consignee work with a particular forwarder in the country of destination you should include their details in the “Notify Party” section of the SLI. If you do not complete this section the shipment will pass to the freight partner of your agent in the destination country and they will approach the consignee to see if they can clear the goods upon arrival.
3. Departure and Destination
Your port or airport of departure and destination will be included on the quote from your forwarder. If you know which ports you would like to transit through ensure this information is included here.
4. Hazardous Cargo
Hazardous substances can be defined as “a product, material or substance that has the potential to be harmful to a person’s health, both short and long term.”
Shipping hazardous cargo brings its own regulations and challenges. If you tick yes and indicate that your goods are hazardous cargo you must have Material Safety Data Sheet (MSDS) to accompany your documentation. Without this MSDS your forwarder cannot ship your cargo.
Material Safety Data Sheets may be requested from the manufacturer, importer or supplier of a hazardous chemical and many manufacturers and importers make electronic copies of MSDS available on their websites.
5. Special Instructions
Is your cargo non-stackable? Does it need to be shipped a certain way up? Use the special instructions box to add in any additional detail that may be required.
6. Product Descriptions, Weight and Measurements
It is important that your SLI includes detailed product descriptions to ensure all parties are clear what the goods are. When detailing the weight and measurements of the goods be as accurate as possible. If your shipment weight and dimensions are different to your SLI document you may face additional charges and should be prepared for this.
When shipping by seafreight it is a legal requirement to detail the weight of your goods within 99.5% accuracy. When completing your seafreight SLI you can select VGM (Verified Gross Method) 1 or VGM Method 2. Method 1 will mean the entire goods or container are weighed and verified. VGM Method 2 means the weight of the goods and packaging you have detailed are accurate and can be used for reporting purposes.
7. Charges Payable By
The charges section on the SLI is for you to clarify who is paying for what. As an exporter, you are the shipper and your buyer is the consignee. If you need further help with this, refer to the incoterm you have agreed to sell on and check out our incoterm guide for further assistance.
The charges payable section also has an area to detail if you would like insurance. This will cover your cargo for any damages or loss during transit.
8. Commercial Value
This section of the SLI requests that you detail the Commercial Value of the goods you are buying or selling. This is the value that you are selling or buying your product for, not the final sale price of the goods. Ensure the total value and relevant currency are stipulated on the SLI.
9. Destination Requirements
If you require your forwarder to liaise at destination with your buyer in regards to anything outside of normal shipping terms, detail this in the destination requirements box. An example of a destination requirement would be “Please provide a POD once delivered”.
10. Signature & Date
The final part of the document requests a signature and date. Once signed and dated your forwarder will take as confirmation you would like the export to go ahead.
Now your document is complete.
One Last Tip
If this is your first time exporting your forwarder will be on hand to assist. Don’t hesitate to ask your forwarder to check your SLI document and revert back with any questions.
Should you have any questions regarding your Shipper’s Letter of Instruction please contact your ICE team member on 1300 CARGO1.
SLI Downloadable Template