What is a Shipper’s Letter of Instruction (SLI)?

Shipper’s Letter of Instruction, A Shipper’s Letter of Instruction (SLI) is a critical document in the full container load (FCL) shipping process. This letter provides detailed instructions to freight forwarders on how to handle the shipment from origin to destination. As international trade grows in complexity, the SLI remains an indispensable communication tool between shippers and logistics providers.

Why is the SLI Vital for FCL Shipping?

For FCL shipments, the shipper leases an entire container from the ocean carrier. The shipper is responsible for packing the container according to set guidelines. The carrier transports the sealed container by sea to the destination port.

As the shipper controls the stuffing of the FCL container, clear communication with forwarders is imperative. The SLI transmits origin/destination details, commodity information, shipping timeline, and special instructions. Without this document, misunderstandings can easily occur, jeopardizing delivery.

Provides Origin/Destination Details

The SLI specifies critical logistics nodes. This includes origin (shipper location), port of loading, port of discharge, and final delivery address.

For example, a US shipper exporting to Europe would list their factory as the origin. The port of loading could be New York, while Rotterdam is the discharge port. Finally, the consignee’s warehouse address in Germany would be shown as the final destination.

Communicates Commodity Details

The shipper must provide an accurate description of the goods and their quantities. This enables forwarders to handle, load, and declare the shipment properly to customs and other regulatory agencies. Hazardous materials, oversized cargo, refrigerated goods, etc. require special handling, so upfront details are essential.

Sets Pickup/Delivery Timeline

The SLI sets expected timelines for container pickup from the shipper, vessel loading, estimated transit time, and delivery to the consignee. This schedule coordination helps avoid delays and penalties.

For instance, the shipper may instruct freight forwarders to pick up the loaded container on September 15th in New York, load it on the ocean vessel by September 20th, discharge it at Rotterdam by October 5th, and deliver it to Germany by October 10th.

Provides Special Instructions

Beyond standard transport details, the shipper may have unique requirements. For example, they may request one original Bill of Lading be couriered to their bank for Letter of Credit purposes. Other special needs like temperature monitoring or customs clearance can also be specified in the SLI.

What Information is Included in the Shipper’s Letter of Instruction?

While the exact SLI format varies between companies, several data fields are commonly included:

  1. Shipper/Consignee Contacts: Names and addresses of both shipper and consignee are provided. Email and phone numbers should be included as well.
  2. Forwarder Details: The SLI specifies which forwarders are handling origin and destination services. This ensures seamless handover at the port of discharge.
  3. Container Details: The type and size of the container (20FT, 40FT, 40FT HC, etc.) along with the container number should be shown. Any container seal number affixed by the shipper should also be noted.
  4. Cargo Details: Commodity description, HS codes, quantities, weights, dimensions, package details, etc. Help forwarders classify the shipment for customs, carriers, and handling purposes.
  5. Origin/Destination: Full pickup address at origin and delivery address at destination are required. Any cut-off times for pickup/delivery should be mentioned as well.
  6. Routing Instructions: Port of loading, discharge port, vessel name/voyage number, transshipment details, etc. Provide forwarders with routing specifics.
  7. Documentation Needs: The number of original Bills of Lading needed by the shipper along with any special document distribution instructions are noted.
  8. Special Instructions: Any special needs like monitoring, declarations, customs clearance, etc. that require action from forwarders are specified here.

In essence, the SLI contains origins and destination details, cargo specifications, timeline, and special instructions needed to transport the FCL container properly. As an official order to forwarders, this document helps align the multi-stage shipment activities between various service providers.

How is the SLI process initiated?

The shipper kick-starts the SLI process by submitting the letter to the origin freight forwarder. This is done after reserving space with the ocean carrier and finalizing key shipment details.

Booking Confirmation

Before providing the SLI, the shipper will get a booking confirmation from the carrier which confirms vessel space. The booking confirmation provides critical details like voyage number, vessel name, container cutoff time, etc. which are then incorporated into the SLI.

Drafting the Letter

The shipper will use the booking details along with their internal order specifications to draft a comprehensive SLI. This draft letter along with shipping instructions is sent to the origin forwarder.

Review and Finalization

The origin forwarder reviews the initial draft for accuracy and completeness. After aligning pickup, customs clearance, terminal operations, and other facets, a final SLI is approved. Amendments get incorporated into the final instructions.

Issuing the Final Shipper’s Letter of Instruction (SLI)

The shipper issues the finalized letter to the origin forwarder for execution. Copies are also provided to the destination forwarder and booking carrier for information. With the SLI, all parties are now aligned on the FCL shipment specifics.

Streamlining Communication

The Shipper’s Letter of Instruction enhances stakeholders’ coordination through:

Defining Roles

By listing the originating and destination forwarders in the SLI, the shipper clearly defines roles for each provider. This prevents confusion and duplication of efforts.

Aligning Timelines

Through pickup and delivery schedules stated in the SLI, forwarders can book trucks, customs entries, and inland transports aligned with the overall plan.

Managing Handoffs

With port handling and vessel details, forwarders on both ends can ensure seamless handover of the container at the port of discharge for delivery.

Providing Instructions

Special needs like consolidating documents or monitoring refrigerated containers are communicated upfront. Forwarders can make necessary arrangements in advance.

Minimizing Errors

As all parties work from the same SLI document, there is minimum room for miscommunication on the shipment details. This reduces costly errors. A well-crafted SLI allows the shipper to provide comprehensive FCL transport instructions to all service partners in one place. The document remains a vital cog in the international shipping process.

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