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Paperwork is a necessary annoyance of the trade industry. Making sure information is both accurate and complete on required documentation is required for trouble-free international commerce.
Key Takeaways:
In this article, we explain the importance of accurate shipping manifests in international trade.
A shipping manifest is specific to the ocean transport side of the trade industry. Since they are submitted to customs authorities, they are also known as customs manifests.
On a ship, the manifest serves many purposes, such as:
Carriers rely on accurate shipping manifests to move goods from port to port without issues. However, a manifest will only be as accurate as the other documents used to create it. This is where importers and exporters need to double-check accuracy.
The importance of a shipping manifest has to do with getting your cargo from point A to point B safely and in one piece. Since manifests are based on BoL details, an accurate bill of lading is essential to creating an equally accurate manifest.
Think about this scenario. You are importing porcelain vases from Japan in crates marked as ‘Fragile’ with directional arrows for proper placement. However, the BoL does not include care handling details, so special instructions aren’t added to the shipping manifest.
Your crates could end up sharing space with goods marked general handling, which means few pieces would survive the journey. The financial responsibility for the shipment will still be yours.
The same can be said of clearly indicating a shipment’s destination. Imagine arranging a large shipment of machine parts from China that are destined for Portland, Oregon and a nearby factory. An error in your shipping paperwork sends your parts to Portland, Maine instead.
Now you have to deal with extra costs for the shipping delays and figure out a way to get the parts across the country to their intended destination. The fault would lie with the importer, not the shipper.
Of course, if you did have special care instructions for the porcelain vases and shipping paperwork was reviewed to confirm delivery of machine parts to Portland, Oregon, then your shipper would on the hook for mistakes in documentation.
A clear and accurate shipping manifest protects everyone involved in international trade. Knowing the nature and quantity of everything on a ship is crucial for the physical safety of everyone involved and makes it easier to go through Customs quickly.
To handle the great variety of goods, different types of manifest exist to define special cases.
Regardless of the type of manifest you use, the details of the cargo need to be clearly outlined. If there are any special handling needs, they must be listed. Attention to detail is especially important on the final three types.
A list of cargo and their shipping routes. Additional details include:
A list of cargo details that must be filed by the shipper/carrier to the customs department of the importing country. Other requirements include:
Specific to each individual transport container. Must list:
Serves to provide information about any Hazardous Materials (HazMat) onboard in a single document. Additional requirements include:
Regulations for Dangerous Cargo Manifests are enforced by the Department of Homeland Security (DHS) and the U.S. Coast Guard. Volatile HazMat improperly documented and handled may spell disaster for the ship and crew responsible for their transport.
Provides description, dimension, and weight for cargo too large or heavy to fit inside a standard sized container. Other details include:
Items for transport listed on an Out of Gauge Manifest are usually awkward to place in ships and cost more than shipping standard containers. Since OOG items have abnormal dimensions, providing details such as proper lifting points allows the crew to load and unload the shipment safely.
A list of refrigerated containers on board for cargo requiring specific temperature settings (chilled or frozen) that must be monitored. The list should provide information on:
Transporting merchandise that needs to stay at a specific temperature can also be costly, so a Reefer Manifest should be carefully reviewed. Depending on whether materials need to be frozen or just chilled affects how the container itself is packed.
Correct manifest listing means when you import ice cream, you get ice cream - not a warm smoothie.
Merchandise that is transported by aircraft is documented in an air cargo manifest. A shipping manifest is usually specific to cargo that is transported by ship.
Importing merchandise via air freight has some unique characteristics. U.S. Customs and Border Protection (CBP) maintains a different system to track cargo called the Automated Manifest System (AMS). The AMS is used to inform the CBP about shipment details for specific flights.
An air cargo manifest must also be filled out according to a specific template found on CBP’s website. Items for import are assigned an airway bill (AWB) number by the shipper. An AWB is the evidence of a contract between the importer and the carrier. Imported items may still be inspected by CBP when they arrive at their point of entry.
Sometimes, a mistake slips through no matter how careful you are or how frequently you review your paperwork. Other times, a last minute change creates a crucial difference that can’t be corrected before the manifest is drawn up.
The most common error is when an item is on the manifest, but not actually included in the shipment. Usually referred to as “manifested-not-shipped”, this error is costly.
This typically happens when items are added or removed from a shipment at the last moment. A second manifest document is sent to the carrier but the original one is not voided. There is a good chance that you will be billed for the item twice, once for the original and again when you have to fix the mistake through a re-order.
Mistakes like this can add up quickly, especially for large companies that ship large amounts frequently. Consider this simple scenario:
Now imagine this mistake being multiplied across hundreds of possible shipments, especially if you are a frequent importer. By the end of the year, you might have lost thousands of dollars that could have been part of your profit.
Thankfully, there is a process for fixing some of these mistakes if they are caught in time.
A manifest corrector is a document that can be sent to the delivery destination by a shipping line agent before the ship is scheduled to arrive. An online submission might also be possible depending on the circumstances.
A shipping manifest is considered to be locked-in 72 hours after a ship leaves port. Making changes to the manifest isn’t possible after that unless it’s done through a manifest corrector.
Being able to send the changes directly to the Customs and port authorities also helps you avoid possible holds by Customs for discrepancies between containers and paperwork.
Keep in mind that the regulations regarding manifest correctors vary from one country to another. International ports may have different cut off times, impose penalty fees, or have product limitations. Because amending a manifest may also affect HTS codes that determine duty rates, Customs may reject corrections on some merchandise.
As with many aspects of international shipping and trade, consulting with an experienced customs broker who can review important documents is likely to save you money as you move forward with your business.
Related: A Beginner’s Guide to Documents Needed for Export and Import
International trade has gone through multiple changes in the last few years, but one thing that hasn’t changed is the need for clear and accurate documentation. Drafting correct Bills of Lading and shipping manifests saves your business money and time.
USA Customs Clearance offers consultation services from experienced and Licensed Customs Brokers who can help you avoid costly mistakes. The average customs audit can run a company over $9,000. Help us help you avoid such errors in a 1-on-1 session. We can provide guidance on filing procedures, required documentation, and other aspects of the customs process.
Work with us as partners to complete every step of the import process. Our full list of services includes:
Make USA Customs Clearance your go-to source for all your importing needs and see your business grow. Call us at (855) 912-0406 or submit a contact form online today!ur importing needs and see your business grow.
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