Notice of Arrival ( NOA )

When the goods close to arrival at destination the notice of arrival or NOA will be performed by forwarding agent to be forwarded to importer. This notice of arrival containing the details of shipment and importer has to check strictly the contents till importer feels in no doubt.

The valid data on NOA is a must to ensure the customs clearance to be going easy and smoothly. For especially in description of goods and the consignee and shipper name. Better importer making the description of goods with the same description on all shipping documents, for instance, importer has a description " Yarns, 100 % Linen ", then shipper should mentions it on the invoice, packing list, bill of lading or house air waybill, and others documents are requested. This way to do is protecting to any possibility customs problems coming up. Not only the description of goods in uniform, the other data shown on documents should be uniformed, too.

Forwarding agent will follow the NOA to submit the data manifest to customs. It's mean that if the data in NOA is wrong this will leads to customs problem due to there are discrepancies between the goods and the data manifest.

We have ever got a problems concerning the difference data of consignee name. Forwarding agent did not sent us the NOA or the draft of data, we did not check the data manifest prior to submitted. Unfortunately, between data manifest and data on bill of lading is not uniform.The difference is only one letter. On the bill of lading wrote "GARMEN", contrary manifest showed "GARMENT". This difference is only on "T" letter, then this leaded to the customs process longer than common done. This took one week additional times for clearance and of course, this leaded to the additional warehouse fee or charges and such additional handling fee came to our account. So that the correction before the data submitted to the system is a must to do to avoid the additional times and charges happened.

Additionally, at the same time our production having very short time to the delivery date. Because the row material  came late, we should took overtime to finish the goods in time or to reach the delivery date buyer decided. Then the result is a higher production cost came up. Moreover, we had to air parts quantity left because this parts was not finish and can be delivered in time then buyer had decided the part of quantity left to be going aired. Unfortunately, the cost of air freight was came to our account or the term shipment was on prepaid.

This case gives us experience that we should extra strictly to follow up our importation and proactively keep in touch with forwarding agent and we have to get all the drafts of shipping documents before all the documents are issued up and prior to the shipper  ship out the goods.

Beneficiary's Certificate

Beneficiary's certificate is issued by exporter based on buyer or importer request. This kind of certificate is usually needs to issue especially for exportation to Europe union such as France. Almost our buyer from France requested this beneficiary's certificate that stated on the letter of credit or on the shipment manual they sent to us. However, not all buyer request us to provide this beneficiary's certificate. Some of them simply ask only packing list, invoice and bill of lading or air waybill to be provided.

There are various contents of beneficiary certificate. One buyer requested in different contents with another one. One of them ask us to issue a beneficiary's certificate of sending documents to a specific destination with a specific document and in a limit of time. Another one is requesting to provide the beneficiary's certificate of value contents of the goods to be shipped out. Or there is a buyer to mention on beneficiary's certificate doesn't contains a specific material to comply to their government's rules in importing any goods from around the globe.

For example we ever made a beneficiary's certificate for document sending with the the following contents :

"We beneficiary of Letter of Credit number certifying that : 

The following documents have been sent to the applicant's Indonesia office within ten days after shipment date :

1. Copy of commercial invoice.
2. Copy of packing list.
3. Copy of C/O Form A / GSP.
4. Copy of bill of lading or copy of air waybill.
5. Copy of AZO free coloring certificate.
6. Original certificate stating the exact composition of the goods.
7. Original certificate for item bearing accessories which contain nickel or original beneficiary certificate certifying that items do not bear accessories which contain nickel "

This is means that we have to send all above documents to buying agent within ten days after shipment date unless the discrepancy will comes up.

Concerning the beneficiary certificate of value content, we have made this kind of certificate with the following contents :

"We beneficiary of the following order certifying that the exact composition of the goods as follow:

Style number :

Order number :

Composition : "

This type of certificate showing the contents of the goods in " Composition"  for example we ever filled in with 100 percents of cotton for sweaters that the yarn's composition is cotton fiber.

We have ever made a beneficiary's certificate that mentioning no specific contents are found in the goods. The nickle is prohibit include to goods that exporting to France. The sample of this type of certificate as follow :

"We beneficiary of the following order certifying that below items:

Style number :

Order number :

Do not bear accessories which contain nickel. "

As a conclusion, a beneficiary's certificate is a statement from beneficiary or exporter to specific condition of the goods or shipment that are requested by buyer or importer for customs purpose to be going smoothly. Of course, shipper or exporter should respect in providing this document unless the discrepancy fee will came to exporter or beneficiary. In addition, the discrepancy will leads to the payment problem or even buyer will not be able to release the payment.

Download Beneficiary's Certificate

The Advantages of Letter of Credit

L/C is abbreviation from Letter of Credit that is issued by a bank based on applicant or importer request to be passed to exporter in abroad as their business relation. The exporter has an authorize to take the money through issue a draft ( a command for paying indebtedness ) to the importer for some amount of money as stated on the L/C. The issuing bank can accepts and can releases the payment as long as all requires as mentioned on the L/C could be followed by exporter or all terms and conditions are complying to the letter of credit.

The advantages of letter of credit :

• International transaction can be more easy.
• Funds that are provided by importer for their order putted in exporter will be safety. This because exporter can not takes the funds if there is discrepancy on the shipping documents presented by exporter even found one discrepancy. For instance, the description of the goods are not same with the L/C required.
• To ensure exporter provides the shipping documents completely. Exporters will give their efforts to provide the shipping document completely and comply to the letter of credit.
• Ensuring on keeping the delivery date in time. If exporter did not shipped out the goods in time, this will leads to discrepancy condition, then the importer may be did not release the payment.
• Ensuring fully quantity of the goods required are filling up. The quantity of the goods usually must be in tollerant range, sometimes importer can allow the quantities that are shipped out in more and less five percents. Exporter has to ship out the goods with the full quantities as the L/C mentioned up.
• To ensure the payment to order that is putted in exporter. Both exporter and importer sometimes don't know well to each others or occasionally they just have a business relation through an buying agent or importer never met with exporter. Of course, it's a big risk for exporter, what if importer did not release the payment while the goods have been received by them? Through this letter of credit buyer has a compulsory to pay or release the payment to exporter for the goods that have been exported as long as exporter has provided the shipping document with no discrepancy founded on the documents. Then bank will release the payment to the account of exporter. So that the L/C should be issued before the production are starting up.

To get the above advantages both exporter and importer have to check the L/C draft before the L/C is issued to avoid any discrepancies come up. Exporter has to check whether the L/C's terms and conditions are comply with rules in their country or not. And exporter has to check all documents format in its practice. If there is a content that is can not be followed by exporter they may ask importer to revise the L/C draft till exporter confidence in providing the shipping documents.

Protect Using L/C on Shipment by Air

L/C or Letter of Credit of course, this is very important in export and import any goods for especially in international trade. Using an letter of credit the funds of any order that is provided by importer are keeping on safety, because bank ensures will not ever release the payment to exporter or beneficiary till the shipping documents are perfectly presented which are having the correct contents as importer request that are mentioned on the L/C. In the other hand the goods that are provided by shipper will be paid by importer through bank if the documents require is perfectly fulfilled and all those documents comply to the L/C.

But, practically starting vessel departure till buyer or applicant received the documents require will be needed so much times to spending up. I have an experience about this matter, view moths ago we have a buyer that requested us to order a type of yarn that we could not found in our country to a company in Italy. This buyer came from Japan. The yarns is quite heavy and so expensive. Because they gave us a short time to finish the order they decided to air the yarns or the shipment mode to become by air prepaid.

Because the yarns supplier may be consider that we are new buyer for them they insisted to issue a letter of credit prior the production were running up. We were understand with this situation. At the time we didn't realize the effect of taking an L/C to this trade. At the event that exporter have finished the production and the yarns were already to ship out, they send us the shipping documents for our reference. When the goods arrived at the Jakarta airport I was shocked, because the shipping documents were still in buyer's hand and they did not sent the documents to bank. Then after view days buyer sent the documents to bank and then bank checked the documents to ensure the documents comply to the L/C. After the checking was finished then bank sent them to negotiating bank. The process needs twelve days starting the on boarding date till the documents were passed to our office. It's means that we have to pay the additional storage fee for the twelve days. If the shipment is not using L/C this additional storage fee can be avoided.

Based on above experience we decided that if we are willing to import any goods we will chose the T/T payment term is becoming our choice to protect the additional storage coming up. The L/C are applying to our import of sea shipment mode only. We choose the T/T payment with a note the shipper are perfectly credible and trusted. Or at least our buyer guaranties in which the goods will be exported to us.

However, if buyer insists on using an letter of credit to each international trade, the extra costs of storage should be included to the production cost when the price are being calculating. So that this matter should be decided whether shipper prefers to chose an L/C or not prior to the purchase order is created up by buyer.