Transportation documents

Documents involved in Transportation

Air waybill, bill of lading, carrier’s certificate, etc., that serves as an evidence of acceptance and receipt of goods for carriage and may also serve as a document of ownership (title).

When items are transported either domestically or internationally the delivery must be accompanied by the relevant documentation. The amount of documentation varies depending if the shipment is within the Nigeria or to another country. As far as interstate transportation of goods in the Nigeria, there are three documents that are of greatest importance; the bill of lading, freight bill, and the Free On Board (FOB) terms of sale.

Bill of Lading

The bill of lading is the most important document that is used in transporting goods. The legal definition of a bill of lading is a contract for the carriage of goods and a document of title to them. It provides any and all information that the carrier will need to transport the items. It contains the shipment origin and the contract terms for the transportation and is required by a carrier before the shipment is taken.

Freight Bill

The freight bill is the carriers invoice to the shipper for all the charges that the carrier has incurred.

The carrier’s freight bill will include the details of the shipment, the items being shipped, the consignee, the origin, and destination, as well as total weight and total charges.

Some carriers can ask for prepayment from the shipper if the value of the items being shipped is less than the total expected freight charges. If the charges are not prepaid then the carrier can present a freight bill on collect. This implies that the carrier will present the freight bill on the day of delivery.

FOB Terms of Sale

Free on Board (FOB) terms of sales documents which party will be liable for the transportation costs, which party is in control of the movement of the goods, and when the title passes to the buyer.

If the FOB terms of sale indicate that it is FOB Delivered then this implies that the shipper will be responsible for all of the carrier’s costs. If the terms of sale show FOB Origin, then this means that the buyer will take the title for the goods when they are shipped and they will incur all the transportation costs.

CMR Document

The CMR transport document is an international consignment note used by drivers, operators and forwarders alike that govern the responsibilities and liabilities of the parties to a contract for the carriage of goods by road internationally.

The carrier usually completes the form, but the sender – in other words, the exporter – is responsible for the accuracy of the information and must sign the form when the goods are collected. The consignee will also sign the form on delivery, which is essential for the carrier to be able to confirm the delivery of the goods and to justify the payment for its services.

Air Waybill AWB

An Air Waybill AWB is a non-negotiable transport document covering transport of cargo from airport to airport.

The Air Waybill must name a consignee (who can be the buyer), and it should not be required to be issued “to order” and/or “to be endorsed” as it is not a title of property of the merchandise. Since it is not negotiable, and it does not evidence title to the goods, in order to maintain some control of goods not paid for by cash in advance, sellers often consign air shipments to their sales agents or freight forwarders’ agents in the buyer’s country.

Cargo Insurance Certificate

The Cargo Insurance Certificate is a document indicating the type and amount of insurance coverage in force on a particular shipment. It includes the name of the insurance company and conditions of coverage.

The original copy of the Cargo Insurance Certificate is required in the filing of a claim. Copies of documents necessary to support an insurance claim include the insurance policy or certificate, bill of lading, invoice, packing list, and a survey report (usually prepared by a claims agent).

Some Terminologies associated with transportation

• Accessorial Charge:Amount billed for additional, supplemental or special services provided, usually a flat fee. Examples include: Tarps, dunnage, layovers, detention, etc.
• All-in Line Haul:FSC + Line Haul.
• Backhaul (Head haul):The return movement of a transportation vehicle from its delivery point back to its point of origin.
• Bill of Lading (BOL):Paper document between a shipper and carrier acknowledging the receipt of goods for transport. Describes the nature of the cargo, amount of cargo by weight, size and/or number of pieces, and the origin and destination of cargo.
• Broker (freight):Individual or company that serves as a liaison between another individual/company that needs shipping services and an authorized motor carrier. Determines the needs of a shipper and connects that shipper with a carrier capable of transporting the items at an acceptable price.
• Carrier:Utilizes trucks and/or trailers to move goods from point A to point B.
• Coil Racks:Prefabricated cradles made of wood or steel made to hold rolled coils to keep them from rolling on a trailer.
• Compliance, Safety, and Accountability (CSA):An FMCSA program designed to provide motor carriers and drivers with attention from FMCSA and State Partners about their potential safety problems with the ultimate goal of achieving a greater reduction in large truck and bus crashes, injuries, and fatalities.
• Commodity:Any article of commerce, including raw material, manufactured or grown products.
• Consignee:The person or location to whom the shipment is to be delivered whether by land, sea or air.
• Container (Shipping Container):Standard-sized rectangular box used to transport freight by ship, rail or highway. International shipping containers are 20’ or 40’, conform to International Standards Organization (ISO) standards and are designed to fit in ships’ holds. Domestic containers are up to 53’ long, of lighter construction and are designed for rail and highway use only.
• Distribution Center (DC):A location where goods and materials are stored until they are ready to be moved to their end destination.
• Dead-Heading:Operating a truck without cargo.
• Declared Value:The value of a shipment imported for resale, as declared by the shipper or owner.
• Dedicated Team:A team of drivers who take turns driving a dedicated truck.
• Dedicated Truck:Refers to a driver pulling freight for one specific customer only, where only that load is on the truck. No partial loads can be added.
• Detention/Demurrage:Charge by the carrier for excess retention of their equipment. Typically caused by untimely loading or unloading.
• Door-to-Door:Synonymous with Thru Trailer Service (TTS) but can also mean simply handling the shipment from the shipper to the consignee.
• Double Drop:A flatbed with the lowest deck. Normally used for oversized or over-height loads.
• Department of Transportation (DOT):Oversees U.S. federal highway, air, railroad, maritime and other transportation administration functions.
• D.O.T. Number:License administered to for-hire carriers by the Department of Transportation. (Not the same as Motor Carrier #).
• Dunnage:Filler material placed in empty spaces to keep cargo from moving or falling. Typically lumber, foam padding or inflatable bags.
• Duty Status:Drivers must maintain a daily 24-hour logbook (Record of Duty Status) documenting all work and rest periods. It must be kept current to the last change of duty status. Records of the previous 7 days must be retained by the driver and presented to law enforcement officials on demand.
• Escorts:Vehicles assisting in the movement of large, over-dimensional shipments. Escorts make sure the truck has plenty of space to move and alerts drivers of a shipment coming towards them. Help stop traffic with beacon lights and/or flags.
• Excess Value:Amount of declared value of a shipment that is above the carrier’s limit of liability.
• Expedited:The process of shipping at a faster rate than normal. Usually includes team drivers, overnight and/or air services.
• Federal Motor Carrier Safety Administration (FMCSA):Operates within the D.O.T. with a mission to prevent commercial motor-vehicle related fatalities and injuries by enforcing safety regulations and improving safety information systems.
• Freight Class:In LTL shipping, the category of freight as defined by the National Motor Freight Traffic Association. Identifies the size, value, and difficulty of transporting your freight. This determines the carrier’s shipping charges.
• Freight Forwarder:Facilitates shipping of goods for a third party. Similar to a ‘Freight Broker’ but typically handles international goods, is defined as a carrier and can be held responsible for claims and loss of cargo.
• Fuel Surcharge (FSC):The price of fuel can substantially change the cost of moving freight. Therefore, the Energy Information Administration of the U.S. Department of Energy publishes a U.S. National Average Fuel Index every week. Transportation companies will often include a FSC to the cost of moving freight either based on cents per mile or percentage of the line haul amount.

Exercises

1. Explain the importance of transportation documents in commerce.
2. What are the most important documents used in transportation in Nigeria?
3. What is the meaning of Air Waybill?
4. How is Cargo Insurance Certificate used in transportation?
5. Write short notes terminologies associated with transportation:
6. a) Bill of lading
7. b) Compliance, Safety, and Accountability

c) Freight class