What is a Shipper’s Letter of Instruction?
Importance of Letter of Instructions
A shipper’s letter of instruction (which you might often see abbreviated to SLI) gives an exporting shipper the chance to convey vital, specific information about a freight consignment to agencies involved in shipment execution.
*It’s worth mentioning here that, unlike many shipping documents, the SLI is optional. Your consignment will still ship without one. *
Nevertheless, it’s always a good idea to give your freight forwarder or other shipping agent a letter of instruction, and in this article, we’ll explain why.
What is A Shipper’s Letter of Instruction Used For?
Unless you ship the same goods with the same freight forwarder on a regular basis, it’s a good idea to provide the forwarder with a letter of instruction before shipping.
*Think of it as a bit like a recipe for a dish that the freight forwarder has never made before. The letter tells them what the ingredients are and what to do with them. *
In other words, the SLI provides a useful overview of the most important information freight forwarders need to know about your air or ocean freight. The more specific the details you include, the better.
Who Fills Out the Shipper’s Letter of Instruction?
The clue’s in the name. SLI documents are created by the shipper for their forwarder. It’s a task that needn’t take too long, but accuracy in the letter’s contents is critical. The SLI needs to be completed before the shipment takes place. It should be sent to the forwarder along with other shipping documentation.
The Purpose of the SLI
An SLI shipping document serves three key roles:
- It gives the freight forwarder specific instructions for smooth execution of the shipment.
- It provides a declaration of the contents in the shipment.
- It authorizes the forwarder to send Electronic Export Information (EEI) to the Automated Export System (essential for exports from the USA).
What Should Be Included In An SLI?
As an optional shipping document, there is no standard version of an SLI in common usage. Your business can create its own SLI template or use existing ones. We’ve included a link to our template further down this page.
If you choose to create your own letter of instruction, here are the items of information you should include:
- Your name and business address.
- Name and address of the freight forwarder.
- Name and address of the recipient of the goods.
- Where the freight is to be picked up from and delivered to.
- Contact information for the person in your business who the freight forwarder should contact for any discussion relating to the shipment.
- Details about the consignment, including quantity of goods, weight, license number (if applicable), and value of the goods.
- Whether the goods are hazardous.
- The signature of the shipper.
Which Type of Shipments Need an SLI?
If you are a first-time international shipper, or are using a freight forwarder or shipping agent for the first time, it’s a good idea to have an SLI. You can use the document to outline your expectations and how you want your consignment to be handled.
The Advantages of Completing an SLI
Although the SLI is an optional shipping document, completing one has several advantages:
Avoids unnecessary mistakes: Giving a forwarder clear, easy to understand instructions will help ensure they know precisely what to do with your goods.
Prevents avoidable delays: You’re giving your goods the best chance of arriving at the destination on time and in great condition by taking a little time to prepare a letter of instruction for your forwarder.
Reduces the risk of damage: A letter of instruction gives you the opportunity to tell the forwarder about the nature of your goods. This is especially important if the cargo is fragile or perishable and needs to be handled carefully and/or shipped under specific conditions, such as controlled temperatures.
Provides written evidence if problems arise: Spoken instructions can be misunderstood or misinterpreted. A clearly written SLI brings much-needed clarity.
Supplies important data: An SLI can contain vital data required for compulsory filing of the EEI in the USA. Provides a freight forwarder with power of attorney: The details on the form can be used by the freight forwarder to arrange the transportation of your freight, and to file formal documents and declarations, (such as the EEI to the AES) on your behalf.
See A Letter of Instruction Example
We’ve created a Shipper’s Letter of Instruction template that you’re welcome to use.
The National Customs Broker and Freight Forwarders Association of America (NCBFAA) in the United States has also created a Letter of Instruction that complies with regulations for shippers exporting from the USA.
SLI or SED?
The Shipper’s Export Declaration (SED) is still used by many shippers in the USA. However, it doesn’t give you the option to include all the details required by the EEI. This may mean your forwarder needs to contact you to get this additional information, and that could lead to shipping delays. To avoid this, you should include an SLI with your SED or make sure all the essential information is in your SLI, so you don’t need to rely on the SED.
The SLI—An Optional, But Beneficial Shipping Document
With so many shipping documents required to get goods from A to B, it’s tempting to overlook the optional letter of instruction. But that could be a big mistake.
*The letter of instruction gives you a chance to communicate with your freight forwarder without being limited by a format that’s set in stone—as is the case with other shipping documents. *
Your SLI can contain any information you feel your forwarder needs to know. There’s no letter of instruction format, so it makes sense to include a letter of instruction with those other mandatory shipping documents, especially if you are shipping or using a freight forwarder for the first time.
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