Freight Forwarding & Incoterms: Key Terms Explained in Detail

A Letter of Authorization (LOA) is a written document that formally allows an agent, freight forwarder, or service provider to act on behalf of a shipper or consignee. It grants permission to perform specific tasks such as booking cargo, handling customs clearance, collecting documents, or communicating with carriers and authorities. The LOA clearly defines the scope of authority, ensuring actions are taken legally and transparently.

This document is commonly required by customs authorities, carriers, and terminals before they accept instructions from a third party. It protects all parties by confirming that the agent is officially empowered to represent the cargo owner. Without an LOA, requests for cargo release, documentation changes, or regulatory filings may be rejected. It also helps prevent unauthorized handling of shipments.

LOAs can be issued for a single shipment or as a standing authorization for ongoing business. They typically include details such as the names of both parties, the authorized activities, the validity period, and signatures. A well-drafted LOA simplifies operational processes and reduces delays caused by verification issues.

Overall, the Letter of Authorization is a key control document in logistics operations. It enables smooth delegation of responsibilities, ensures compliance with legal requirements, and supports efficient cargo handling. Clearly defining representation rights, it helps keep shipments moving without unnecessary obstacles.