Imagine this: your consignment waits to be processed at customs or another delivery point because of the wrong paperwork. Frustrating, right? That’s part of the reason that the Shipper’s Letter of Instruction (SLI) is important.
The SLI in shipping is like a roadmap for your shipment, showing information like what you ship, to whom, how expensive it is, and all the way to whom it is delivered.
In this article, you will learn what an SLI is, how to fill it out, and why it is a must-have for your international shipping. Let’s get to it!
What Is an SLI for Shipping?
A Shipper’s Letter of Instruction (SLI) is a document describing the exporter’s specific instructions to the freight forwarder or carrier for transporting goods. It gives your freight forwarder the authority to arrange transportation.
A typical SLI document contains basic information such as the details of the shipper and consignee, a description of the goods being shipped (including HS codes or HTS codes, weight, dimensions, quantity, and value), shipping routes, insurance amount, and the agreed shipping Incoterms.
It can also describe special handling requirements, such as temperature control or how fragile items should be unpacked.
The SLI delivers instructions to ensure compliance with regulations and to keep goods moving efficiently by steering the goods in the most efficient way possible.
Importance of SLI
In today’s international trade world, a shipment letter like an SLI can be your first line of defense.
Efficiency
With all the shipping information in one document, your freight forwarder, like Foresmart, can handle your cargo more efficiently. SLI also grants the freight forwarder certain rights to sign relevant shipping documents on behalf of the shipper.
Accuracy
The SLI clarifies the rights and obligations of the shipper and their freight forwarder, preventing disputes arising from unclear responsibilities during transportation.
Without it, the misunderstandings may cause shipping delays, fines, and much worse. Say, if the SLI fails to specify such requirements as temperature control, then a shipment of perishable goods may spoil, or the delivery may be held up at customs due to not having a sufficiently detailed description of the goods.
Compliance
On the other hand, a well-prepared SLI gives directive instructions and checks for compliance with trade and customs regulations. Of course, it’s not just a formality; it’s a safety measure that ensures that shipments and work move smoothly, saving you time and money.
How to Fill Out the Shipper’s Letter of Instruction Form?
Filling out an SLI doesn’t have to be overwhelming if these steps are followed.
-
Firstly, collect all the information necessary on the shipment, such as consignee details, product details, and agreed shipping terms.
-
A standardised template or shipping software ensures consistency and reduces errors. Many freight forwarders offer their own SLI form; ask if they offer one or not. Fill in all required details. Names, addresses, and contact details should be double-checked to avoid delivery mishaps.
-
Avoid vague descriptions, as “general goods” can result in customs delays. A 2020 report indicates that incomplete descriptions of cargo were a factor in a good chunk of global trade delays.
-
Define shipping terms clearly, such as FOB or CIF, so that responsibilities are specified between the exporter and the importer and between the vendor and the shipping company.
-
Never run out of special instructions like “keep refrigerated” or “fragile”.
-
Last of all, attach any needed regulatory documents, like export licenses or certificates of origin.
While it may seem tedious, taking the time to fill out the SLI accurately will save headaches later.
Shipper’s Letter of Instruction vs. Bill of Lading
Both the SLI and the Bill of Lading (BOL) are important in shipping, but for different reasons.
The SLI is an internal document that gives freight forwarders, or carriers, very detailed instructions as to how your shipment must be handled. For more complex shipments, the SLI also becomes critical. It is the “how-to” document.
Let’s take an example. The value of the pharmaceutical logistics market in 2023 was around USD $92 billion. Some of the pharmaceutical products require temperature control during transit, so the SLI would specify these parameters, ensuring they are handled well during shipping and avoiding heavy financial loss.
SLI is a guide, not a receipt. On the other hand, the BOL is a receipt for goods and proof of possession. It is a legally binding contract between the shipper and the carrier.
Besides, the BOL is shared with carriers and consignees, while the SLI is to stay within the shipper’s logistics chain.
To sum it up, the BOL takes care of the legals and is used to pick up goods for consignees, while SLI makes sure your shipment is handled exactly as you would like it, kept by your shipping partners.
Conclusion
Shipper’s Letter of Instruction is an essential document letting freight forwarders and carriers know exactly what to do with the shipment. Each part of the SLI is important to preventing delays, errors, and compliance issues.
FAQs
Is the SLI legally binding?
It’s not really legally binding. It is a written record and an important internal document that tells freight forwarders or carriers how to handle your shipment, but it does not have legal weight like a Bill of Lading.
Can I use the same SLI for multiple shipments?
Not every shipment requires an SLI, and different freight forwarders may use varying formats. In addition, shipment details such as consignee information, goods description, and shipping terms vary, making each SLI unique for different goods.
Are the SI (Shipping Instructions) and SLI the same thing?
They’re closely related, but not exactly the same. A shipper first sends the SLI to the freight forwarder, and then the forwarder submits the SI (Shipping Instructions) based on the SLI to the ocean carrier; the carrier finally uses the information to issue the bill of lading.
Who signs the SLI?
It is the shipper (usually the exporter) who signs the SLI to their freight forwarder. Freight forwarders have to be given proper instructions by it so that the shipment is taken care of correctly and meets the regulatory requirements.
Can an SLI be amended after it’s submitted?
Yes, but it depends on your freight forwarder or carrier. If the shipment hasn’t been processed yet, there are possibilities of amendments, but changes may lead to delays or extra costs; hence, make sure to get it right from the start.
It’s not really legally binding. It is a written record and an important internal document that tells freight forwarders or carriers how to handle your shipment, but it does not have legal weight like a Bill of Lading.
Not every shipment requires an SLI, and different freight forwarders may use varying formats. In addition, shipment details such as consignee information, goods description, and shipping terms vary, making each SLI unique for different goods.
They’re closely related, but not exactly the same. A shipper first sends the SLI to the freight forwarder, and then the forwarder submits the SI (Shipping Instructions) based on the SLI to the ocean carrier; the carrier finally uses the information to issue the bill of lading.
It is the shipper (usually the exporter) who signs the SLI to their freight forwarder. Freight forwarders have to be given proper instructions by it so that the shipment is taken care of correctly and meets the regulatory requirements.
Yes, but it depends on your freight forwarder or carrier. If the shipment hasn’t been processed yet, there are possibilities of amendments, but changes may lead to delays or extra costs; hence, make sure to get it right from the start.
