Understanding the Shipper’s Letter of Instruction (SLI)

Introduction

The Shipper’s Letter of Instruction (SLI) is a foundational document in international trade, serving as the primary means by which an exporter communicates shipping, regulatory, and documentation instructions to a freight forwarder. While often viewed as an administrative form, the SLI plays a critical role in export control compliance, customs accuracy, and risk allocation between parties. A properly completed SLI enables freight forwarders to arrange transportation, prepare export documentation, and file Electronic Export Information (EEI) in compliance with U.S. export regulations. Conversely, incomplete or inaccurate SLIs can expose exporters and forwarders to regulatory penalties, shipment delays, and enforcement actions.

Key Elements and Compliance Considerations of the SLI

1. Exporter and USPPI Identification

The SLI must clearly identify the U.S. Principal Party in Interest (USPPI), along with accurate contact information and tax identification details where required. This information establishes who is legally responsible for the export under the Export Administration Regulations (EAR). In routed export transactions, the SLI should also identify the foreign principal party in interest (FPPI) and reflect the appropriate allocation of responsibilities. Clear party identification is essential to avoid confusion over EEI filing obligations and export control accountability.

2. Product Description and Classification Information

Accurate product descriptions are a core requirement of the SLI. The exporter is responsible for providing sufficient detail to allow proper regulatory handling, including the correct Export Control Classification Number (ECCN) or a designation of EAR99, where applicable. If a license or license exception applies, this information must be stated explicitly. Freight forwarders rely on this data to assess whether the shipment may proceed as instructed and to avoid filing incorrect or misleading export information.

3. License, Authorization, and Regulatory Statements

The SLI must clearly indicate whether an export license is required and, if so, identify the relevant license number and conditions. Where exports are made under a license exception, the specific exception and eligibility basis should be provided. For shipments subject to other regulatory regimes—such as International Traffic in Arms Regulations (ITAR) or Office of Foreign Assets Control (OFAC) sanctions—the SLI may include additional certifications or statements confirming authorization. These representations are critical, as freight forwarders generally rely on them when executing the shipment.

4. End-User, End-Use, and Destination Information

End-user and end-use information included in the SLI helps support export control screening and red-flag analysis. The exporter should identify the ultimate consignee, intermediate consignees, and the intended end use of the goods. Any restrictions on reexport or diversion should be noted. Inconsistent or vague end-use information can delay shipments and trigger heightened scrutiny by freight forwarders or government authorities.

5. EEI Filing Authorization and Certifications

When a freight forwarder is authorized to file EEI on the exporter’s behalf, the SLI typically includes an explicit authorization and certification of data accuracy. In routed export transactions, the SLI must reflect the USPPI’s authorization to the FPPI or its agent to file EEI, as required by regulation. These certifications allocate responsibility for the accuracy of export data and are often relied upon in enforcement actions.

Conclusion

The Shipper’s Letter of Instruction is far more than a logistical checklist—it is a compliance-critical document that underpins lawful export activity. By clearly identifying responsible parties, accurately describing products, confirming licensing authority, and authorizing EEI filings, the SLI enables freight forwarders to act with reasonable care and exporters to meet their regulatory obligations. Companies that invest in standardized, well-controlled SLI processes reduce compliance risk, improve operational efficiency, and strengthen their overall export control posture. In an environment of increasing enforcement and regulatory complexity, a thorough and accurate SLI remains an indispensable tool in compliant global trade.