The ICC DSI released their 2023 Key Trade Documents and Data Elements (KTDDE) report. The report outlines 14 key trade documents, going into depth on the definitions, purpose, and legal frameworks.
Even for those with lots of experience, the international trade industry is incredibly complex. Cross-border trade requires a deep knowledge of numerous regulations, or an intricate web of local relationships to help break down the legal requirements.
While there have been some efforts to ease the process, there are still many aspects that need help and clarification.
The ICC DSI recognised the importance of creating a comprehensive guide to help break down the nebulous terminology of the international trade world.
In March 2023, they released the “Batch 1” report on 7 key trade documents, with the intent of building on further key terms over the next year and a half.
Today, they released their “Batch 2” Report on 14 key trade documents.
The ICC DSI said, “To ensure that our recommendations are, as far as possible, globally relevant and that they consider different challenges and circumstances faced by trade parties around the world, the working group was also designed to be cross-regional and cross-sectoral.”
All definitions and details are sourced from ICC DSI through the “Key Trade Documents and Data Elements” report.
To see the full report and more detailed recommendations, please view the ICC DSI report here.
14 key trade documents
1. Air Cargo Manifest
Air Cargo Manifests are an important document for the air forwarding industry for many reasons, including:
- Identifying cargo: The manifest provides a complete list of all items or goods loaded onto the aircraft. It facilitates clear identification, detailing descriptions, quantities, and types of goods.
- Regulatory compliance: This document is crucial for regulatory adherence, offering evidence that transported items comply with relevant laws, including safety and security regulations. It can also serve as a declaration of cargo content, value, and destination, aiding in customs compliance.
- Planning and management: Airline staff rely on the manifest for effective loading and unloading of goods. It guides them to the specific location of items and assists in planning for weight distribution and balance, ensuring safe aircraft operation.
- Tracking and accountability: Cargo manifests contribute to supply chain tracking. If discrepancies or issues arise, they help pinpoint when and where problems occurred, facilitating accountability.
- Insurance and liability: In the unfortunate event of accidents, damage, or loss, the manifest serves as a record of the aircraft’s cargo. This record is vital for insurance claims and determining liability.
2. Air Waybill
An airway bill is a contract of carriage between the shipper and airline, outlining both parties’ responsibilities. It also functions as a cargo receipt, provides essential customs information, enables tracking, and streamlines billing and accounting processes.
3. Bill of Exchange and Promissory Note
A Promissory Note (PN) is a written promise by the issuer to pay a specific sum to the payee on a specified date or on demand, while a Bill of Exchange (BE) is an order made by one party to pay a set sum to the designated payee, involving three parties.
Both PN and BE are independent payment undertakings (debt obligations) between parties, codified in various legal systems worldwide, and have a rich history of court interpretations.
4. Cargo Insurance Document
Cargo Insurance Documents provide evidence of insurance coverage, fulfilling multiple international trade and regulatory needs. Depending on the situation, it may be presented as:
- Certificate of Insurance and Insurance Policy: typically issued at the shipper’s request, often to fulfil Letter of Credit requirements.
- Debit Note (of insurance): typically issued in specific countries upon the consignee’s request to comply with import customs requirements.
5. Customs Bond
Customs Bonds are generally used as guarantee for exemptions of international trade duties, taxes and obligations set out under Custom rules and Regulations.
6. Export Cargo Shipping Instruction
Also known as Shipper’s Letter of Instruction (SLI), an SLI serves as instructions from the Exporter to the Freight Forwarder, providing the scope of services required as well as essential information for documentation and transport-related guidance.
7. Letter of Credit
A letter of credit (LC) is a bank-issued document that assures a seller of payment from a buyer under specific conditions, serving as a secure payment method for international trade, especially when trust is limited. LC ensures payment to the seller only after the goods meet agreed-upon conditions, reducing the risk of fraud and nonpayment, offering security to both parties in the transaction.
8. Payment Confirmation
The main purpose of a Payment Confirmation is to provide evidence that a payment has been made and received.
9. Purchase Order
An electronic purchase order document starts the transaction process, defining prices, quantities and delivery dates in accordance with pre-negotiated contractual conditions, between a buyer and a seller. The buyer uses it to request goods, items or services from a supplier.
10. Rail Consignment (CIM) Note
The CIM consignment note regulates international carriage of freight traffic by rail. The contract is finished when the railway undertaking accepts the shipment, and the dispatch station’s stamp (a date stamp) is placed on the consignment note.
Signed and stamped by both sender and the carrier, the CIM consignment note is used in most European countries and in several countries that are party to the Convention concerning International Carriage by Rail (COTIF). Both the sender and the receiver (consignee) have the right to modify the carriage contract.
11. Road Consignment (CMR) Note
The CMR consignment note is a significant document in the context of the UN Convention on the contract for the international carriage of goods by road (or CMR). Many European nations, along with many others, have already ratified this convention.
This document is an important tool for companies, drivers, and recipients involved in the transportation process, containing essential details about the transported goods, as well as information about the parties responsible for transport and receipt.
Although CMR notes were traditionally paper-based, there’s a growing push from businesses and government stakeholders to transition to an electronic format (e-CMR).
12. Sea Cargo Manifest
A Sea Cargo Manifest summarises all cargo loaded on a ship, including descriptions, container numbers, shipper and consignee details, weight, measurements, packing information, and cargo specifics like UN Numbers, International Maritime Organization (IMO) Class for hazardous goods, temperature settings for refrigerated cargo, and dimensions for over-dimensional cargo.
13. Sea Waybill
The Sea Waybill is similar to an ocean Bill of Lading, but it is non-negotiable. Its main purposes are to serve as evidence of the contract of carriage and to confirm the goods’ receipt.
14. Ship’s Delivery Order
A Ship’s Delivery Order is a release document issued by the carrier releasing the cargo to the consignee mentioned in the bill of lading.