The Shipper’s Letter of Instruction (SLI) is a formal document that conveys an exporter’s instructions so there are no misunderstandings between the exporter and the freight forwarder who helps get their goods to foreign markets. A required export document in the U.S., the SLI is typically prepared by the exporter then provided to their freight forwarder.
The freight forwarder uses the information in the SLI for multiple purposes beyond where the goods are leaving from and arriving to – it provides them with an understanding of the weights and dimensions of the cargo to ensure its packed correctly to minimize damage, contains information required for an AES export filing, and enables them to prepare the Bill of Lading. In some countries, the SLI is considered to be a one-time power of attorney so it’s important that the exporter perform due diligence on the freight forwarder.
Common fields in an SLI include:
- All parties to the transaction – the exporter and consignee
- Origin and ultimate destination of the cargo
- Method of transportation (air, ocean, rail, etc.)
- Total pieces, weights and dimensions of the cargo
- EIN number and Schedule B number
- Method of delivery (consolidated or direct)
- Whether cargo insurance is selected
- Who’s paying for the freight – is it prepaid (exporter) or collect (foreign buyer)
- Any special instructions (e.g. how does the freight need to be packed)
Considering all of this critical information, exporters should consider choosing their own freight forwarder to assist them with their shipping needs and documentation to ensure that export customs clearance is done correctly. Also, EXIM requires Export Credit Insurance policyholders to provide a copy of the Bill of Lading (air or ocean) in case of nonpayment by the foreign buyer.
Whether you are new to exporting or have relationships with freight forwarders and others in place, EXIM’s financing support can minimize risk and level the playing field for U.S. exporters. To learn more, click here to schedule a free consultation with an EXIM trade finance specialist.