What is a “Shipper’s Letter of Instruction”?

The Shipper’s Letter of Instruction (SLI) is a critical document in the shipping and freight forwarding industry. It serves as a detailed guide for logistics providers, providing information about your shipment from start to finish. Having this document is essential for ensuring that the shipment is handled and delivered according to the shipper’s specifications.

The SLI typically includes information such as the names and addresses of the shipper and consignee, the type and quantity of goods being shipped, the desired shipping method and route, and any special handling or delivery instructions. This information is used by logistics providers to ensure that:

1. The shipment is handled correctly
2. It arrives at the correct destination on time, and 
3. That it is delivered to the correct person or organisation

Frequently Asked Questions about the SLI

Is the SLI a required document?

All export shipments require a complete SLI document. By fulfilling a well-documented SLI, instructions are formalised. There is clarity on the freight forwarder’s part on how and where to handle your export shipment. The document also grants permission to the forwarder to act as the authorised forwarding agent for customs and export control.

What is the importance of the SLI?

The SLI is a multipurpose document to assist the shipper in communicating information to the freight forwarder. To ensure that this process runs smoothly, it is important that the shipper provides accurate and complete information in the SLI. This can help to avoid delays or misunderstandings and can help to ensure that the shipment is handled and delivered according to the shipper’s specifications.

Who is responsible for preparing the Shipper’s Letter of Instruction?

The shipper is responsible for preparing and providing the SLI to the logistics provider. The logistics provider, in turn, is responsible for complying with the instructions outlined in the SLI.

Filling out the Shipper’s Letter of Instruction

To prepare an SLI, shippers should include the following information:

1. Shipper and Consignee Details

The first detail that needs to be in the Shipper’s Letter of Instruction includes information from both the exporting company (shipper,) and the receiving business (consignee). Accurate and up-to-date information is required such as contact information (telephone and email address), as well as company names, and location addresses.

2. Notify Party

When working with a particular forwarder in the country of destination, the forwarder’s details need to be included in the “Notify Party” section of the SLI. If this section is not completed, the shipment will pass to the freight partner of the agent in the destination country. In turn, the agent will need to approach the consignee to see if the goods can be cleared upon arrival.

3. Departure and Destination

The port or airport of departure and destination must be included in the quote from the forwarder.

4. Dangerous / Hazardous Cargo

Any cargo that contains product, material or substance that has the potential to be harmful to a person’s health or safety (both short and long term) is classified as “hazardous”.

Shipping hazardous cargo has its own requirements, compliance, and challenges. If the cargo is marked as hazardous cargo, the shipper’s documentation must include a Safety Data Sheet (SDS). Without it, the forwarder cannot ship the cargo.

McHugh and Eastwood has years of experience working with handling and transporting hazardous cargo. To learn more about how we can assist you with shipping hazardous cargo, you may contact us through this page.

5. Special Instructions

If the shipment has specific handling instructions, any special instructions need to be indicated in the special instructions box to fulfil these requirements. This way, potential damage to the cargo may be avoided. 

6. Product Descriptions, Weight, and Measurements

The SLI must include detailed product descriptions to ensure all parties are clear about what the goods are. Detailing the weight and measurements of the goods need to be as accurate as possible. If the shipment weight and dimensions are different from what is indicated in the SLI document the shipper may face additional charges.

When shipping by ocean freight, it is a legal requirement to detail the weight of goods with a 99.5% accuracy. The shipper may opt for 1 of 2 Verified Gross Methods. 

Method 1 will indicate that the entire goods or container are weighed and verified. Method 2 will indicate that the weight of the goods and packaging that is detailed are accurate and can be used for reporting purposes.

7. Payable Charges

The charges section on the SLI clarifies who is paying for what. The shipper will need to review the incoterms laid out between the shipper and their trading partner. To learn more about incoterms, you can read the article we wrote on the importance of incoterms.

The charges payable section also indicates insurance arrangements if there is any. Insurance covers the cargo for any damages or loss during transit.

8. Commercial Value

The products or goods’ Commercial Value need to be indicated on the SLI. The commercial value is the selling or buying value, and not the final sale price of the goods. Total value and relevant currency need to be indicated on the SLI.

9. Destination Requirements

Some shippers will have specific liaison requirements outside of normal shipping terms for the forwarder. In cases like this, instructions must be placed in the destination requirements box. 

10. Signature & Date

For the SLI to be complete, there needs to be a signature and date. Once signed and dated, the forwarder will take this as confirmation that the export can be processed.

Conclusion

The Shipper’s Letter of Instruction (SLI) is a critical document in the shipping and freight forwarding industry. It serves as a detailed guide for logistics providers and is essential for ensuring that shipments are handled and delivered according to the shipper’s specifications. Accomplishing an SLI is a crucial part of processing shipment, and detail and accuracy is a definite requirement. Preparing this documentation may be overwhelming and stressful. McHugh and Eastwood have the expertise and the industry knowledge to support you in preparing documentation for your shipment. We are your reliable freight forwarding partner that will help you minimise risk, and provide the expertise needed to assist with your cargo, shipment and freight forwarding needs. Contact us today to learn how we can help you with your shipment.