What shipping instructions are
Shipping instructions, the SI, are what you send the shipping line or your forwarder once the container is booked. They give everything the carrier needs to draft the bill of lading: the shipper, the consignee and the notify party, the ports, the containers and their seals, the goods as they are to be described, the packages, the weights, the marks, the freight terms and how many originals to issue. The bill of lading is drafted from your SI. A mistake in the SI becomes a mistake in the bill of lading.
Why it matters for Indian exporters
The bill of lading is the document of title. If you are paid by letter of credit, or documents against payment, the buyer's bank checks it against the credit and your commercial invoice, word for word. A consignee in the wrong form, a description that strays from the credit or a missing notify party is a discrepancy, and the payment waits until it is resolved. The SI is where you get it right, before the bill is issued.
What a good SI covers
- The parties as the bill must show them. For a credit, usually "to order of" the issuing bank, with the buyer to notify.
- Routing and vessel. Port of loading and discharge, place of receipt and delivery if the carrier moves the box inland, vessel, voyage and dates.
- Containers and seals. Each container with its size, seal number and weights. The seal on the bill must match the seal on the box. The gross weight should agree with the VGM.
- The goods. The description as the credit or the buyer wants it, HS codes (many destinations' advance filings need at least six digits), packages and weights from the packing list, and the marks.
- Freight and release. Prepaid or collect, as the Incoterm says. Original bills, a sea waybill or a telex release.
- Special cargo. Reefer settings, and for dangerous goods the UN number, IMDG class, packing group and an emergency contact.
Mistakes that cost exporters money
- Missing the SI cut-off. A late SI can mean the container does not sail, or that a late-filing fee is charged.
- Amendments after the bill is drafted. Lines charge for every correction, and changing a negotiable bill can need the originals back.
- A consignee that does not match the credit. The bank will not pay against a bill that names the wrong party.
- Freight terms that contradict the Incoterm. "Freight collect" on a CIF sale makes the buyer pay freight twice, and the bank sees it.
- Seal numbers copied wrongly. A seal that differs from the documents gets the container stopped at destination.