Documents Used in Transportation – SS2 Marketing Lesson Note (Second Term)

Transport documents are papers that record the carriage of goods between the sender, the carrier and the receiver.

Behavioural objectives

By the end of the lesson, students should be able to:

1. state what transport documents are;
2. name six documents used in transportation;
3. describe the purpose of each document;
4. distinguish between an invoice and a consignment note;
5. list factors that affect the choice of transportation.

What are transport documents?

Transport documents are written records that show the terms and details of carrying goods from one place to another.

• Parties involved: two or more entities, such as the seller, the carrier and the buyer.
• Type of document: it differs with the method of carriage, such as sea, air or road.
• Details recorded: each document records a different detail, such as receipt, insurance, price or delivery.

Why are transport documents important?

Transport documents give proof of what was sent, received and paid for.

• Proof of receipt: they show that the carrier has received the goods.
• Proof of delivery: they show that the goods reached the named receiver.
• Evidence of agreement: they record the terms agreed between sender and carrier.
• Settling claims: they help when goods are lost or damaged in transit.
• Payment: they show the price and the payment terms.

What documents are used in transportation?

Six main documents are used in transportation: the bill of lading, airway bill, insurance document, invoice, consignment note and manifest.

1. Bill of lading

• Meaning: a document issued by a carrier to acknowledge receipt of cargo for shipment.
• Use: the term once related only to carriage by sea, but today it may be used for any type of carriage of goods.

2. Airway bill

• Meaning: the document used when goods are sent by air.
• Use: it shows that specified goods have been received for carriage to a named destination.

3. Insurance document

• Meaning: the document that shows the goods in transit have been properly insured.
• Use: it protects the owner against loss or damage on the way.

4. Invoice

• Meaning: a commercial document issued by a seller to a buyer for a sale transaction. It is also called a bill.
• Contents: the products, the quantities and the agreed prices of the goods or services supplied.
• Payment terms: these are usually stated on the invoice.

5. Consignment note

• Meaning: a document prepared by the seller, who hands it over to the carrier with the goods.
• Use: the consignee countersigns it on delivery as proof that the goods have been delivered.

6. Manifest

• Meaning: a form completed by the captain of the ship.
• Contents: details of the passengers and the goods on board the ship.

Summary table of the documents

What is the difference between an invoice and a consignment note?

An invoice is a bill from the seller to the buyer, while a consignment note travels with the goods and proves delivery.

• Invoice: it states the goods, quantities, prices and payment terms of a sale.
• Consignment note: the seller hands it to the carrier with the goods, and the consignee countersigns it on delivery.

What factors affect the choice of transportation?

Five main factors affect the choice of transportation: the nature of the product, product variables, cost, nearness to the market and consumer behaviour.

• Nature of the product: perishability, fragility, durability and storage needs. Fresh fish and tomatoes need fast transport, and glass needs careful handling.
• Product variables: weight and packaging. Heavy goods such as cement need a carrier that can bear the load.
• Cost advantage: the cheapest suitable method is usually preferred.
• Nearness to the market and the company’s location: distance from the producer to the market affects the method chosen.
• Bargaining and behavioural patterns of consumers: how and when buyers want delivery affects the method used.

Evaluation

1. What are transport documents?
2. Which document is used when goods are sent by air?
3. What is a bill of lading?
4. Who completes the manifest, and what does it show?
5. State three factors that affect the choice of transportation.

Assignment

Explain the difference between an invoice and a consignment note, and give two examples of product variables that affect the choice of transportation.