Transport documents: CMR, Bill of Lading, CIM, and Air Waybill

A properly completed transport document will also ensure the smooth passage of your goods during police or customs inspections. This article goes into the various documents and lists several practical tips.

Road transport: CMR or waybill

If you transport goods by road, you need a waybill on which you document the agreements made between the sender and the carrier. The waybill also serves as a receipt for the goods; first for the carrier and then for the recipient. A waybill is also  evidence that can be used to prove that goods were damaged during transport.

Legislation

Domestic transport is governed by the Carriage of Goods by Road Act, while the CMR Convention  contains rules for international transport. CMR stands for ’Convention relative au Contrat de Transport International de Marchandises par Route’ and gave its name to the waybill CMR.

Contents of a CMR waybill

The law states that a CMR waybill must meet certain minimum requirements. For example, at the very least the name of the client, the name of the carrier, and the pick-up and delivery addresses.

Shula Stibbe is the general secretary of ‘Stichting Vervoeradres’. She makes an important point: "The CMR Convention also sets the amount the carrier will pay back if goods are damaged or lost at about €10 per kg. Often, the goods being transported are worth more. In that case it can be a good idea to take out transport insurance to cover the risk of damage.”

Stricter inspections

All information in a CMR waybill must be correct. Waybills are checked by the police and the Inspectorate for the Environment and Transport (ILT, in Dutch). Stibbe warns: “If the information is incorrect, both the carrier and the sender risk a fine."

Other terms and conditions

Carriers may also invoke the General Terms and Conditions of Transport from AVC2002 (in Dutch) in addition to the CMR terms and conditions. To do so, they must include a reference to the AVC2002 on the CMR waybill. The AVC Terms and Conditions were drawn up by ‘Stichting Vervoersadres’ and cover important matters that are not addressed in the CMR Convention. For instance, who is responsible for loading and unloading the goods.

What does a CMR waybill look like?

CMR waybills do not have to meet particular format requirements. Stibbe recommends using a standardised template such as the waybill template ('Standaard vrachtbrief’, in Dutch) for domestic transport from ‘Stichting Vervoeradres’ or the International Road Transport Union’s CMR template. “With a waybill of your own design, it is more difficult in a damage claim to prove that the damage occurred during transport. Moreover, all parties involved, such as the police and ILT, will recognise standard waybills immediately."

“You can also use digital CMR waybills”, Stibbe adds. "More and more companies do this. To digitalise CMR waybills, you need to invest in software, hardware, and training.”

Sea transport: Bill of Lading (B/L)

For ocean and inland shipping, you need a Bill of Lading (B/L). This document is a written agreement in which the carrier confirms that it will receive goods and provide transportation of those goods to an agreed destination.

Property

The document consists of several original documents and represents the goods. This means that if you have the full set of B/L documents, you own the goods. When you sell the B/L, you also sell the goods. Transporters and forwarders draw up the B/L.

Confusion

Wouter Engbersen is a director at Kuipers Logistics B.V. He warns: “a B/L is not the same as a Sea Waybill. A B/L demonstrates ownership and gives you control over cargo. A Sea Waybill is a common transport document that only serves as a proof of transport and receipt. It does not make you the owner of the cargo. In addition, the B/L gives the paying bank a pledge and security. A Sea Waybill has no significance in payment transactions,” Engbersen stresses.

B/L purposes

The B/L (in Dutch) has 3 purposes:

• Proof of transport agreement between carrier and document holder.
• Value document representing the goods.
• Proof of receipt. By issuing the document, the captain certifies that the goods are on board.

Checking a B/L

A B/L has to contain the following information:

• Name of seller/intermediary.
• Buyer/owner of cargo.
• Statement of receipt from shipping company.
• Transportation costs paid/not paid.
• Number of original documents and copies.
• Name of shipping company/nationality/marking.
• Clean bill of lading. This means that the goods are in order and in the agreed-upon condition. When this is not the case, the bill of lading is considered unclean. Make sure to clean the B/L before departure to guarantee payment.

Familiarise yourself with regulations in destination country

Communication is very important for Engbersen: "Always check carefully with your client whether the destination country has any rules with regard to the layout of the document. Product descriptions, quotations and correct HS codes are particularly important. The information on the B\L must be the same as the information on the documents and products. In countries such as Angola, Brazil, and Argentina, customs will only accept original B/Ls and immediately reject Sea Waybills.”

Freight payment

Engbersen always double-checks all the information on a B/L. The B/L should state clearly where the cargo is going and who will pay for the freight. "With Freight Prepaid, you pay for freight in advance at the port of departure. With Freight Collect, you pay for the cargo upon arrival at the port of destination. You can arrange this by agreeing on an Incoterm®."

Pay on time

Engbersen’s advice is simple: “pay for goods on time… If the shipping company or freight forwarder prepares an original document, they will need the original documents from the supplier. The supplier will usually not release them until payment has been made. Make sure to pay for your goods on time in order to prevent costs for delays, also known as demurrage, in the destination port.”

Letter of Credit (L/C)

According to Engbersen, Letters of Credit (L/C) are becoming less and less common. “An L/C may be the most reliable solution, but it is also by far the most expensive option. The documents are sent through a bank and have to meet certain specific requirements. Make sure that the information you share is correct and that your freight forwarder has the necessary information, because the bank will not pay if the information is wrong.”

Switch B/L

To hide your supplier’s identity, for example when reselling goods while they are still at sea, opt for a Switch B/L. This way, your customer will have a harder time stealing your supplier. Your logistics provider can arrange a Switch B/L for you, but be mindful of the fact that it can take a long time to set up. Even with a Switch B/L, you can never be completely sure that your customer does not find the identity of your manufacturer or supplier. Engbersen has often seen boxes and packaging at the loading dock that still proudly display the brands of their manufacturers.

Liability for transporters

Liability and obligations are contained in the Hague-Visby Rules. This is an international treaty that clarifies who is responsible for what in the case of loss or damage of products.

Rail transport: CIM

For international rail transport, you need a CIM international railroad waybill to document the arrangements made between the carrier and sender.

CIM is short for ’Contrat de Transport International ferroviaire des Marchandises‘. "Quite a mouthful, which is why we prefer CIM," says Thom Derks, director at Mthode Rail Solutions B.V. Derks lists some of the parties involved: "Carriers, owners, sender, recipient, and insurers. The CIM Agreement sets out what information has to be found on a railroad bill of lading."

The sender is responsible for the waybill, which is an instrument of mandatory law. In other words, you have to follow the rules, and if you do not, you are no longer entitled to protection under the COTIF convention, the umbrella treaty for international rail transport.

CIM and paperwork

Derks explains that the rail carrier will often do the paperwork on your behalf. "The railroad operator usually makes the loading lists, and on request, they can draw up the CIM, too. They take the information they need from CMR waybills, bookings, and loading lists.”

Final checks

According to Derks, the CIM is a key document for the final checks that have to be performed before a train is allowed to depart. "The infrastructure managers receive the CIM and look it up in WLIS, a wagonload information system (‘wagenlading informatiesysteem’). The information on the document has to be correct. In some cases, there will be differences between the CIM and the loading list. When that happens, the train is not allowed to leave.”

Derks has found that weights in particular are a common source of errors. "Carriers will sometimes provide incorrect information because the details on the waybills are incorrect and have not been verified, which causes delays. The information on the CIM also serves as evidence for insurers. This makes it an important document in cases of theft and damage, or in applying the rules for transporting hazardous materials set out in the ADR agreement."

Carrier liability

Derks stresses that the carrier is liable for damage to goods, from acceptance to delivery of the products. “That includes delay damages. If goods are damaged or lost, compensation is usually capped at 17 SDR per missing kilogram of gross mass. Damages for delays are limited to 4 times the value of the freight." SDR is short for Special Drawing Rights, a special currency for international trade.

Tips

Check your CIM document with these 4 tips from Derks:

• Check whether the document has been completed in 2 languages, in Dutch and in the language of the destination country.
• A full CIM waybill consists of 5 copies (in Dutch). Check that you have all 5 of them.
• The document must show how the cargo is secured, whether with lashing straps, non-slip material, cargo bars, or cover material.
• Check which pallets the goods are on and consider the requirements for and handling of wooden pallets and their markings.

Air transport: Air Waybill (AWB)

When transporting goods by air, you need an Air Waybill (AWB). The AWB documents arrangements for airport-to-airport transportation between carrier and client. The AWB was developed by the International Air Transport Association (IATA) as a standard format. The AWB has 2 purposes: serving as a transport contract and proof of receipt of goods.

Transport agreement

Johan Star is a project manager at air cargo trade association Air Cargo Netherlands (ACN). He explains that the AWB is a contract between the forwarder and the airline. "The contract states the conditions of carriage under which the airline will transport the goods. For the airline, the AWB provides important information about safety regulations. This includes what goods are being transported, in what quantities, and what they weigh."

One of the conditions of carriage deals with liability for damages. The airline is responsible for damage to goods in transit, and compensation for damage is capped at 19 SDR per kilogram (Article 22(3) of the Conditions of Carriage). You can take out transport insurance to cover the difference between this amount and the actual damage.

The airline is responsible for completing the AWB correctly, but some airlines may choose to have this done by an authorised airline agent on their behalf.

Receipt of goods

The AWB proves that the goods were transferred from the seller to the airline. When preparing the AWB, you have to indicate whether the goods are in good condition and specify how the airline should handle the products during transport. After signing the AWB, the sender will receive an original copy.

ACN slip

On top of IATA conditions, air cargo carriers also use local ACN conditions. Forwarders and carriers who deliver goods to the airline on behalf of forwarders can opt to invoke these local conditions by including an ACN slip. "The ACN slip is a logistics packing slip that serves as proof of delivery between the delivering party and the airline’s handling agent. Handling agents are responsible for everything that happens between the time an aircraft is loaded and unloaded and work on behalf of the airline," Star explains. “Since 1 September 2021, a new condition applies requiring information to be submitted digitally via eLink.

Digital AWB

IATA has also developed the digital e-AWB, which more and more freight forwarders are now using. According to Star, freight forwarders have started to notice that using an e-AWB at Schiphol speeds things up. “Especially when the destination country and destination airport use it too. The process is quickest when airlines have their own offices abroad, because they will be used to working with digital documents. Unfortunately, not all airlines have reached that stage yet."

FIATA-document

For smaller loads and groupage shipments, you need a FIATA document instead of a Bill of Lading or waybill. FIATA is short for International Federation of Freight Forwarders Associations. Groupage shipments are shipments containing goods from different customers who have decided to form a single load together because doing so would be cheaper and easier.

FIATA uses 2 documents:

• FIATA-FCR (Forwarding agents Certificate of Receipt). A certificate issued by the freight forwarder to certify that the goods have been received in good condition for international transportation. With this document, you do not agree on conditions about means of transport and date, but it does confirm that the goods were delivered and received in good condition.
• FIATA-FCT (Forwarding agents Certificate of Transport). A certificate issued by the freight forwarder to certify that the goods are in transit. This certificate also states the means of transport used and delivery date.

These 2 FIATA certificates cannot be traded, but you could find them mentioned in a Letter of Credit. The FIATA system reduces administrative work for the forwarder. Instead of needing 1 document per load, you can combine multiple smaller loads on 1 document. FIATA verifies the validity of its documents. Entrepreneurs Association evofenedex (in Dutch) has a page with more information on this document.