A
AIR WAYBILL
An air waybill (AWB) or air consignment note is a receipt issued by an international airline for goods and an evidence of the contract of carriage, but it is not a document of title to the goods. Hence, the air waybill is non-negotiable.
The air waybill is the most important document issued by a carrier either directly or through its authorised agent. It is a non-negotiable transport document. It covers transport of cargo from airport to airport. By accepting a shipment an IATA cargo agent is acting on behalf of the carrier whose air waybill is issued.
Air waybills have eleven digit numbers, which can be used to make bookings, check the status of delivery, and check the current position of the shipment.
The number consists of:
1. The first three digits are the airline prefix. Each airline has been assigned a 3-digit number by IATA, so from the prefix we know which airline has issued the document.
2. The next seven digits are the running number/s - one number for each consignment.
3. The last digit is what is called the check digit. It is arrived at in the following manner:
The seven digit running numbers are divided by 7, by using a long division calculation. The remainder becomes the check digit. That is why no AWB number ends with a figure greater than 6. Air waybills are issued in 8 sets of different colours. The first three copies are classified as originals. The first original, Green in colour, is the Issuing Carrier's copy. The second, coloured Pink, is the Consignee's Copy. The third, coloured Blue, is the Shipper's copy. A fourth Brown copy acts as the Delivery Receipt, or proof of delivery. The other three copies are white.
A.TR CERTIFICATE
The ATR.1 Certificate is a customs document used in trade between EU members and Turkey, to benefit from cheaper rates of duty. The legal basis for the use of the certificate is the EU-Turkey Customs Union. It is important to remember that not all products are included in the customs union. Products not included in the customs union are steel & coal and some agricultural products. Many of these are instead included in the EU-Turkey FTA.
It is also worthwhile to note that the ATR.1 certificate is not a certificate of origin, but rather a status certificate. It therefore certifies that the product has been put in free circulation either in the EU or in Turkey, which means that the product had gone through the importation procedure in either country.
AD VALOREM
Latin for “according to value.” An ad valorem duty is an import duty based on the value of an article as defined in customs law of a particular country, instead of weight or volume. A percentage of that value is charged, for example, 5% ad valorem. A freight rate set at a certain percentage of the value of an article is known as an ad valorem rate.
ADVISING BANK
An advising bank (also known as a notifying bank) advises an exporter that a letter of credit opened by an issuing bank for an importer is available. Advising Bank's responsibility is to authenticate the letter of credit issued by the issuer to avoid fraud. The advising bank is not necessarily responsible for the payment of the credit, which it advises the exporter of. The advising bank is usually located in the exporter’s country. It may be a branch office of the issuing bank or a bank appointed by the importer. The important point is the exporter has to be comfortable with the advising bank.
The issuing bank often sends the Letter of Credit through its branch office to avoid fraud. The branch office maintains specimen signature(s) on file where it may counter-check the signature(s) on the Letter of Credit. It has a coding system (a secret test key) to distinguish a genuine Letter of Credit from a fraudulent one.
The exporter can also request the importer to specify his/her bank as the advising bank in a Letter of Credit application. In many countries, this is beneficial to the exporter, who may avail the reduced bank charges and fees because of special relationships with the bank. Under normal circumstances, advising charges is standard and minimal. In addition, it is more convenient to deal with the exporters own bank over a bank with which the exporter does not maintain an account
AHT (ANCHOR-HANDLING TUG)
Moves anchors and tow drilling vessels, lighters and similar.
AHTS (ANCHOR-HANDLING TUG/SUPPLY)
Combined supply and anchor-handling ship. Seismic ship: Conducts seismic surveys to map geological structures beneath the seabed.
AUTOMATED MANIFEST SYSTEM (AMS)
An electronic system allowing a manifest inventory to be transmitted to customs and excise.
B
BILL OF LADING
A bill of lading, sometimes abbreviated as B/L or BoL is a document issued by a carrier which details a shipment of merchandise and gives title of that shipment to a specified party. Bills of lading are one of three important documents used in international trade to help guarantee that exporters receive payment and importers receive merchandise. A straight bill of lading is used when payment has been made in advance of shipment and requires a carrier to deliver the merchandise to the appropriate party. An order bill of lading is used when shipping merchandise prior to payment, requiring a carrier to deliver the merchandise to the importer, and at the endorsement of the exporter the carrier may transfer title to the importer. Endorsed order bills of lading can be traded as a security or serve as collateral against debt obligations.
BIP (Border Inspection Post)
Control post operated by the Port Health Authorities
BUNKER ADJUSTMENT FACTOR (BAF)
The Bunker Adjustment Factor, or BAF, as it is more commonly known, is one of the charges levied on goods transported via Sea Freight. This particular charge represents the fluctuating costs to the shipping, as an example varying global oil prices. Also known as a Bunker Surcharge.
BTI (Binding Tariff Information)
Formal classification of an item / product to a specific Customs commodity code for your goods. Samples are sent to Customs for them to assess and advise the Commodity Code
BACKFREIGHT
The owners of a ship are entitled to payment as freight for merchandise returned through the fault of either the consignees or the consignors. Such payment, which is over and above the normal freight, is called Backfreight.
BACKLETTER
Where a seller/shipper issues a ‘letter of indemnity’ in favour of the carrier in exchange for a clean bill of lading.
BILL OF SIGHT
A written description of goods given by an importer to a customs officer in the event shipping documents have not arrived in time and the importer wishes to avoid delayed entry charges. When an importer enters goods on a bill of sight, he usually must make a cash deposit covering the estimated amount of duty. When the shipping documents are received and a correct entry is made, the exact amount of duty is levied.
BLACK CARGO
Cargo banned by general cargo workers for some reason. This ban could be because the cargo is dangerous or hazardous to health.
BONDED WAREHOUSE
A warehouse authorised by customs and excise authorities for storage of goods on which payment of duties is deferred until the goods are removed.
BREAK BULK
The process of assimilating many small shipments into one large shipment at a central point so that economies of scale may be achieved; to commence discharge of cargo.
BREAKBULK CARGO
Cargo, which is shipped as a unit, for example, palletised cargo, boxed cargo, large machinery, and trucks.
BULK CARGO
Loose cargo that is loaded directly into a ship’s hold.
BULK CARRIER
There are two types of bulk carriers, the dry-bulk carrier, and the liquid-bulk carrier, better known as a tanker. Bulk cargo is a shipment such as oil, grain, or one which is not packaged, bundled, bottled, or otherwise packed and is loaded without counting or marking.
C
CERTIFICATE OF ORIGIN
A certificate of origin, often abbreviated as C/O, COO, is a document used in international trade. In a printed form or as an electronic document, it is completed by the exporter and certified by a recognised issuing body, attesting that the goods in a particular export shipment have been produced, manufactured or processed in a particular country.
CHIEF (Customs Handling of Import and Export Freight)
HM Revenue & Customs computer system.
CUSTOMS CLEARANCE
Customs Clearance, Customs broking or customs brokerage is a profession that involves the "clearing" of goods through HM Revenue & Customs for importers and exporters. This involves the preparation of documents and/or electronic submissions, the calculation and payment of taxes, duties and excises. and facilitating communication between government authorities and importers and exporters. Custom brokers may be employed by or affiliated with freight forwarders, shipping lines, importers or exporters.
CURRENCY ADJUSTMENT FACTOR (CAF)
The currency adjustment factor (CAF) is a fee placed on top of freighting charges. The charge was developed to account for constantly changing exchange rates between foreign currencies. Thus its goal is to offset any losses from constantly fluctuating exchange rates. The CAF increases as the US dollar decreases. It is applied as a percentage on top of the Base Exchange rate, which is calculated as the average exchange rate for the previous three months. Due to this added charge, shippers tend to enter into "all inclusive" contracts at one price, that accounts for all applicable charges, to limit the effect of the CAF.
C.I.F.
Cost, Insurance and Freight: Export term in which the price quoted by the exporter includes the costs of ocean transportation to the port of destination and insurance coverage.
CABOTAGE
The carriage of goods or passengers for remuneration taken on at one point and discharged at another point within the territory of the same country.
Or, Where cargo is carried on what is essentially a domestic flight and therefore not subject to international agreements that fixes set rates. Cabotage rates are negotiable between shipper and airline and apply on flights within a country and to its overseas territories.
CARGO INSURANCE
Insurance to protect the financial interest of the cargo owner during transportation in case of a loss.
CARGO PREFERENCE
Reserving a portion of a nation’s imports and exports to national-flag vessels.
CARGO RECEIPT
Receipt of cargo for shipment by a consolidator (used in ocean freight).
CARGO RETENTION CLAUSES
Clauses introduced by charterer’s based on shortage of delivered cargo because of increased oil prices.
CARNET
A document allowing the importation of certain goods to countries without paying customs duty.
Three types exist:
ATA Carnet - for temporary importation of goods and equipment
Carnet de Passages - for motor vehicles
TIR Carnet - to simplify administrative formalities of transit commercial goods carried by international road transport
CARRIER
Any person who, through a contract of carriage, undertakes to perform or procure the performance of carriage by rail, road, sea, air, inland waterway, or by a combination of modes.
Or, Owners or operators of vessels providing transportation to shippers. The term is also used to refer to the vessels.
CARTEL
An association of several independent national or international business organisations that regulates competition by controlling the prices, the production, or the marketing of a product or industry
CERTIFICATE OF INSPECTION
A certificate usually required for industrial equipment and meat products.
CERTIFICATE OF MANUFACTURE
A document used under a letter of credit containing an affidavit that goods have been manufactured and are being held for the account and risk of the buyer. In war times when transportation facilities are disrupted, it is common for letters of credit to be paid against presentation of a certificate of manufacture. This is rare in ordinary times, except in the case of specially manufactured goods.
CFR – Cost and Freight
The seller pays for the carriage of the goods up to the named port of destination. Risk transfers to buyer when the goods have been loaded on board the ship in the country of Export. The Shipper is responsible for origin costs including export clearance and freight costs for carriage to named port. The shipper is not responsible for delivery to the final destination from the port (generally the buyer's facilities), or for buying insurance. If the buyer does require the seller to obtain insurance, the Incoterm CIF should be considered. CFR should only be used for non-containerised seafreight; for all other modes of transport it should be replaced with CPT
CFS (Container Freight Station)
The term CFS at loading port means the location designated by carriers for the receiving of cargo to be packed into containers by the carrier. At discharge ports, the term CFS means the bonded location designated by carriers in the port area for unpacking and delivery of cargo.
CFS CHARGE (Container Freight Charge)
The charge assessed for services performed at the loading or discharging port in the packing or unpacking of cargo into/from containers at CFS.
CIA (Cash In Advance)
A method of payment for goods whereby the buyer pays the seller before shipping the goods.
CIF (Cost, Insurance & Freight)
This term is broadly similar to CFR term, with the exception that the seller is required to obtain insurance for the goods while in transit to the named port of destination. CIF requires the seller to insure the goods for 110% of their value under at least the minimum cover of the Institute Cargo Clauses of the Institute of London Underwriters (which would be Institute Cargo Clauses (C)), or any similar set of clauses. The policy should be in the same currency as the contract. CIF can be used by any transport by sea and air not limited to containerised or non-containerised cargo and includes all charges up to the port/terminal of entrance. CIP covers additional charges at the port/terminal of entrance
CIP (Carriage and Insurance Paid to)
This term is broadly similar to CPT term, with the exception that the seller is required to obtain insurance for the goods while in transit. CIP requires the seller to insure the goods for 110% of their value under at least the minimum cover of the Institute Cargo Clauses of the Institute of London Underwriters (which would be Institute Cargo Clauses (C)), or any similar set of clauses. The policy should be in the same currency as the contract.
CIP can be used for all modes of transport, whereas the equivalent term CIF can only be used for non-containerised seafreight
CLASS RATES
A class of goods or commodities is a large grouping of various items under one general heading, and all items in the group make up a class. The freight rates that apply to all items in the class are called class rates.
CLASSIFICATION
A customs term for the placement of an item under the correct number in the customs tariff for duty purposes.
COFC
(container on flat car); a type of rail freight service involving the shipment of containers without chassis
COGSA
Carriage of Goods by Sea
CONGESTIONS
Port/berth delays
CONSIGNEE
The receiver of freight shipped by the shipper or, The individual or company to whom a seller or shipper sends merchandise and who, upon presentation of necessary documents, is recognised as the merchandise owner for the purpose of declaring and paying customs duties.
The person to whom cargo is consigned as stated on the bills of lading.
CONSIGNMENT
The physical transfer of goods from a seller (consignor) with whom the title remains until the goods are sold, to another legal entity (consignee) that acts as a selling agent. Only if there is a subsequent sale does the seller receive any payment.
CONSIGNOR
The person by whom freight is shipped or a term used to describe any person who consigns goods to himself or to another party in a bill of lading or equivalent document. A consignor might be the owner of the goods, or a freight forwarder who consigns goods on behalf of his principal.
The person named in the bill of lading as the one from whom the goods have been received for shipment.
CONSOLIDATED SHIPMENT
An arrangement whereby various shippers pool their boxed goods on the same shipment, sharing the total weight charge for the shipment.
CONSUL
A government official residing in a foreign country charged with representing the interests of his or her country and its nationals.
CONSULAR DOCUMENTS
Special forms signed by the consul of a country to which cargo is destined.
CONSULAR INVOICE
A document required by some countries describing a shipment of goods and showing information such as the consignor, consignee, and value of the shipment. Certified by a consular official, the countries customs officials to verify the value, quantity, and nature of the shipment use a consular invoice.
CONTRACT OF AFFREIGHTMENT (COA)
A service contract under which a ship owner agrees to transport a specified quantity of fuel products or speciality products, at a specified rate per ton, between designated loading and discharge ports. This type contract differs from a spot or consecutive voyage charter in that no particular vessel is specified.
COUNTERTRADE
A reciprocal trading arrangement in which the seller is required to accept goods or other instruments or trade in partial or whole payment for its products. Common transactions include barter, buyback, counterpurchase, offset requirements, swap, switch; or triangular trade, evidence, or clearing accounts.
COUNTERVAILING DUTIES
Special duties imposed on imports to offset the benefits of subsidies to producers or exporters of the exporting country.
CPT (Carriage Paid To)
CPT replaces the venerable C&F (cost and freight) and CFR terms for all shipping modes outside of non-containerised seafreight.
The seller pays for the carriage of the goods up to the named place of destination. Risk transfers to buyer upon handing goods over to the first carrier at the place of shipment in the country of Export. The seller is responsible for origin costs including export clearance and freight costs for carriage to named place of destination (either final destination such as buyer's facilities or port of destination has to be agreed by seller and buyer, however, named place of destination is generally picked due to cost impacts). If the buyer does require the seller to obtain insurance, the Incoterm CIP should be considered
CROSS-TRADES
Foreign-to-foreign trade carried by ships from a nation other than the two trading nations.
CWO (Cash With Order)
A method of payment for goods where cash is paid at the time of order and the transaction becomes binding on both buyer and seller.
D
DEFERMENT ACCOUNT
Bank account held with HM Revenue & Customs to pay Duty or VAT.
DAN - Deferment Account Number.
DEMURRAGE
A penalty for exceeding free time allowed for loading or unloading at a port or freight terminal. Also a charge for undue detention of transportation equipment or carriers in port while loading or unloading.
Or a fee levied by the shipping company upon the port or supplier for not loading or unloading the vessel by a specified date or time agreed upon by contract.
DEVAN (Devanned, Devanning, Deconsolidation)
Unloading of cargo from a Sea Freight Container
DG Cert (Dangerous Goods Certificate)
or DGN, Dangerous Goods Note. Document which must accompany hazardous cargo during transit
DAF (Delivered at Frontier)
This term can be used when the goods are transported by rail and road. The seller pays for transportation to the named place of delivery at the frontier. The buyer arranges for customs clearance and pays for transportation from the frontier to his factory. The passing of risk occurs at the frontier
DANGEROUS CARGO
All substances of an inflammable nature which are liable to spontaneous combustion either in themselves or when stowed adjacent to other substances and, when mixed with air, are liable to generate explosive gases or produce suffocation or poisoning or tainting of foodstuffs.
DANGEROUS GOODS
Articles or substances capable of posing a significant risk to health, safety or property and that ordinarily require special attention when being transported.
DDU (Delivered Duty Unpaid)
This term means that the seller delivers the goods to the buyer to the named place of destination in the contract of sale. A transaction in international trade where the seller is responsible for making a safe delivery of goods to a named destination, paying all transportation expenses but not the duty. The seller bears the risks and costs associated with supplying the goods to the delivery location, where the buyer becomes responsible for paying the duty and other customs clearing expenses.
DAP (Delivered at Place)
Inco Terms 2010 defines DAP as “Delivered at Place” that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. Under DAP terms, the risk passes from seller to buyer from the point of destination mentioned in the contract of delivery.
Once goods are ready for shipment, the necessary packing is done by seller at his own cost, so as to reach the material up to final destination safely. All necessary legal formalities in the exporting country are completed by seller at his own cost and risk to clear the goods for export.
After arrival of goods at the country of destination, the customs clearance in the importing country needs to be completed by the buyer at his own cost and risk, including all customs duties and taxes.
Under DAP terms, all carriage expenses with any terminal expenses are paid by seller up to the agreed destination point. The necessary unloading cost at final destination has to be borne by seller under DAP terms. If unloading can not be carried out by the seller, it might be better to ship under DAT (Delivered At Terminal) terms instead
DAT (Delivered at Terminal)
This term means that the seller covers all the costs of transport (export fees, carriage, unloading from main carrier at destination port and destination port charges) and assumes all risk until destination port or terminal. The terminal can be a Port, Airport, or inland freight interchange. Import duty/taxes/customs costs are to be borne by Buyer
DEQ (Delivered Ex Quay)
This is similar to DES, but the passing of risk does not occur until the goods have been unloaded at the port of discharge
DES (Delivered Ex Ship)
Where goods are delivered ex ship, the passing of risk does not occur until the ship has arrived at the named port of destination and the goods made available for unloading to the buyer. The seller pays the same freight and insurance costs as he would under a CIF arrangement. Unlike CFR and CIF terms, the seller has agreed to bear not just cost, but also Risk and Title up to the arrival of the vessel at the named port. Costs for unloading the goods and any duties, taxes, etc. are for the Buyer. A commonly used term in shipping bulk commodities, such as coal, grain, dry chemicals; and where the seller either owns or has chartered, their own vessel.
DDP (Delivered Duty Paid)
Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. The seller is not responsible for unloading. This term is often used in place of the non-Incoterm "Free In Store (FIS)". This term places the maximum obligations on the seller and minimum obligations on the buyer. With the delivery at the named place of destination all the risks and responsibilities are transferred to the buyer and it is considered that the seller has completed his obligations
DEDICATED TRAIN
One that exclusively carries intermodal equipment (containers and trailers)
DIM WEIGHT (Dimensionalised Weight)
An international airfreight formula determined by calculating length x width x height and dividing by 166. It is charged when the actual weight is less than the dimensionalised weight.
DIVERSION
A change made in the route of a shipment in transit
DRAWBACK
A remission of duty or charges paid, in whole or in part, when imported goods are re-exported or used in the manufacture of exported goods.
DRY CARGO
Merchandise other than liquid carried in bulk.
DRY CARGO SHIP
Vessel which carriers all merchandise, excluding liquid in bulk.
DUNNAGE
The material used to protect or support freight in or on railcars or trailers
Or a term applied to loose wood or other material used in a ship’s hold for the protection of cargo.
E
END-USE
Term used for exemption from duty or VAT for aircraft or Ship spares in transit
EXW (Ex Works)
The seller makes the goods available at their premises. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a buyer incurs the risks for bringing the goods to their final destination. Either the seller does not load the goods on collecting vehicles and does not clear them for export, or if the seller does load the goods, he does so at buyer's risk and cost. If parties wish seller to be responsible for the loading of the goods on departure and to bear the risk and all costs of such loading, this must be made clear by adding explicit wording to this effect in the contract of sale.
The buyer arranges the pickup of the freight from the supplier's designated ship site, owns the in-transit freight, and is responsible for clearing the goods through Customs. The buyer is also responsible for completing all the export documentation.
These documentary requirements may cause two principal issues. Firstly, the stipulation for the buyer to complete the export declaration can be an issue in certain jurisdictions (not least the European Union) where the customs regulations require the declarant to be either an individual or corporation resident within the jurisdiction. Secondly, most jurisdictions require companies to provide proof of export for tax purposes. In an Ex Works shipment, the buyer is under no obligation to provide such proof, or indeed to even export the goods. It is therefore of utmost importance that these matters are discussed with the buyer before the contract is agreed. It may well be that another Incoterm, such as FCA seller's premises, may be more suitable
ERTS (Enhanced Remote Transit Shed)
An approved warehouse by HM Revenue & Customs, where goods can be held as “Uncleared” i.e. Duty and VAT unpaid with Non EEC status. For example, groupage (LCL) containers may be moved to these locations for devanning and then each individual shipment may be cleared by the Importers customs clearance agent.
EORI Number (formerly TURN number or VAT Number)
An EORI number is a number, unique throughout the European Community,
assigned by a customs authority in a Member State to economic operators
(businesses) or persons. By registering for customs purposes in one Member State,
an Economic Operator (EO) is able to obtain an EORI number, which is valid
throughout the Community. The EO will then use this number in all communications
with any EC customs authorities where a customs identifier is required for example
customs declarations.
EUR.1 MOVEMENT CERTIFICATE
A form used for international commodity traffic, recognised as a certificate of origin. Importantly, completion entitles commodities originating from the UK or European Union to benefit from lower or zero import duty.
EXPORT LICENSE
A document secured from a government authorising an exporter to export a specific quantity of a particular commodity to a certain country. An export license is often required if a government has placed embargoes or other restrictions upon exports.
F
FCL (Full Container Load)
A full container load (FCL) is an ISO standard container that is loaded and unloaded under the risk and account of one shipper and only one consignee. In practice, it means that the whole container is intended for one consignee. FCL container shipment tends to have lower freight rates than an equivalent weight of cargo in bulk. FCL is intended to designate a container loaded to its allowable maximum weight or volume, but FCL in practice on ocean freight does not always mean a full payload or capacity - many companies will prefer to keep a 'mostly' full container as a single container load to simplify logistics and increase security compared to sharing a container with other goods.
FCA (Free Carrier)
The seller delivers the goods, cleared for export, at a named place. This can be to a carrier nominated by the buyer, or to another party nominated by the buyer.
It should be noted that the chosen place of delivery has an impact on the obligations of loading and unloading the goods at that place. If delivery occurs at the seller's premises, the seller is responsible for loading the goods on to the buyer's carrier. However, if delivery occurs at any other place, the seller is deemed to have delivered the goods once their transport has arrived at the named place; the buyer is responsible for both unloading the goods and loading them onto their own carrier
FAS (Free Alongside Ship)
The seller delivers when the goods are placed alongside the buyer's vessel at the named port of shipment. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment. The FAS term requires the seller to clear the goods for export, which is a reversal from previous Incoterms versions that required the buyer to arrange for export clearance. However, if the parties wish the buyer to clear the goods for export, this should be made clear by adding explicit wording to this effect in the contract of sale. This term can be used only for sea or inland waterway transport
FOB (Free On Board)
Under FOB terms the seller bears all costs and risks up to the point the goods are loaded on board the vessel. The seller must also arrange for export clearance. The buyer pays cost of marine freight transportation, bill of lading fees, insurance, unloading and transportation cost from the arrival port to destination.
FAK (Freight All Kinds)
A carrier’s tariff description for products pooled and all shipped at one rate. FAK cargo is usually shipped in a container filled with different merchandise or commodities.
FIO
Free in and out.
FIOST
Free in and out, stowed and trimmed
FLAT CAR
A freight car having a floor without any housing or body above. Frequently used to carry car trailers (TOFC) or oversized/odd-shaped commodities
FLAT RACK
A container without sides or frame members at the front and back. It can be loaded from the sides and top.
FMC
Federal Maritime Commission.
FORCE MAJEURE
Clause limiting responsibilities of charterers, shippers and receiver of cargo
Or the title of a standard clause found in marine contracts exempting the parties for nonfulfillment of their obligations by reasons of occurrences beyond their control, such as earthquakes, floods, or war.
FTZ (Foreign Trade Zone)
A port designated by the government for duty-free entry of any non-prohibited goods. Merchandise may be stored, displayed, and used for manufacturing within the zone and re-exported without duties being paid. Duties are imposed only when the original goods or items manufactured from those goods pass from the zone into an area of the country subject to customs authority. Also called a Free Trade Zone.
FOREIGN TRADE ZONE ENTRY
A form declaring goods which are brought duty free into a Foreign Trade Zone for further processing or storage and subsequent exportation from the zone into the commerce of another country.
FI (Free In)
Means the cost of loading a vessel is borne by the charterer.
FIO (Free In And Out)
Means the cost of loading and unloading a vessel is borne by the charterer.
FC&S (Free Of Capture And Seizure)
An insurance clause providing that loss is not insured if due to capture, seizure, confiscation, and like actions, whether legal or not, or from such acts as piracy, civil war, rebellion, and civil strife.
FO (Free Out)
The cost of unloading a vessel is borne by the charterer.
FREE PORT
A port which is a Foreign Trade Zone open to all traders on equal terms, or more specifically a port where merchandise may he stored duty-free pending re-export or sale within that country.
FREIGHT RATE
The charge made for the transportation of freight.
G
GAS TANKER
Specially designed for the transport of condensed (liquefied) gases. The most important gases are: ammonia, ethylene, LNG (Liquefied Natural Gas), which consists mainly of methane, and is cooled to a temperature of minus 163 degrees Celsius, and LPG (Liquefied Petroleum Gas) such as butane and propane.
GDP
Gross Domestic Product: The total value of goods and services produced by a nation over a given period, usually 1 year.
GENERAL ORDER WAREHOUSE
A government contract warehouse for the storage of cargoes left unclaimed for a designated number of days after availability. Unclaimed cargoes may later be auctioned publicly.
GNP
Gross National Product: GDP plus the net income accruing from foreign sources.
GR WT./GW
Gross Weight.
GRAIN CAPACITY
Cubic capacity in “grain”
GROSS AND NET TONNAGE (GT AND NT)
Gross tonnage is the basis on which manning rules and safety regulations are applied, and registration fees are reckoned. Port fees are also often reckoned on the basis of GT and NT. GT and NT are defined according to formulas which take account, among other things, of the volume of the vessel’s enclosed spaces (GT) and the volume of its holds (NT).
GROSS FREIGHT
Freight money collected or to be collected without calculating the expenses relating to the running cost of the ship for the voyage undertaken.
GROSS WEIGHT
The full weight of a shipment, including containers and packaging materials.
H
HAULAGE
Haulage generally refers to the business of being a haulier (UK English) or haulier (US English), also called haulage contractor, common carrier, contract carrier, or private carrier, in other words of transporting goods by road or rail for other companies or one's own company.
HAULIER
Person or Company making the Inland Delivery of Freight or Containerised Freight.
HAWB (House Airwaybill)
A freight forwarder offering a consolidation service, will issue its own air waybill or bill of lading. From now on AWB will be used to refer to both. This is called a Forwarder's or House AWB with its equivalent House BL. These act as contracts of carriage between the shipper and the forwarder, who in this case becomes a Deemed Carrier. The forwarder in turn enters into contracts with one or more carriers, often using more than one mode of transportation. The contract of carriage between the forwarder and carrier is called a Master Air Way Bill (MAWB or MBL). A House Air Waybill (HAWB) or Bill of Lading (HBL) could act as a multimodal transport document
HAGUE RULES
Code of minimum conditions for the carriage of cargo under a bill of lading
HAZ MAT (Hazardous Material)
Substance or combination of substances which, because of its quantity, concentration, or physical or chemical characteristics, may cause or significantly pose a substantial hazard to human health or the environment when improperly packaged, stored, transported, or otherwise managed
HAZARDOUS WASTE
Any material, whether solid, liquid or containing gaseous material, identified in the Resource & Conservation Recovery Act (RCRA) either by name (listed) or by characteristics
HEAVY LIFT VESSEL
A vessel specifically designed to be self-sustaining with heavy lift cranes to handle unusually heavy or outsized cargoes.
HEAVY LIFTS
Freight too heavy to be handled by regular ship’s tackle.
HI (OR HIGH) CUBE
Any container exceeding 102 inches in height.
HUNDREDWEIGHT (CWT.)
Short ton hundredweight = 100 pounds. Long ton hundredweight = 112 pounds.
I
IMO
International Maritime Organisation: Formerly known as the Inter-Governmental Maritime Consultative Organisation (IMCO), was established in 1958 through the United Nations to co-ordinate international maritime safety and related practices.
IMPORT LICENSE
A certificate issued by countries exercising import controls that permits importation of the articles stated in the license. The issuance of such a permit frequently is collected with the release of foreign exchange needed to pay for the shipment for which the import license has been requested.
INFLAMMABLE LIQUIDS
Liquids liable to spontaneous combustion which give off inflammable vapours at or below 80 degrees F. For example, ether, ethyl, benzene, gasoline, paints, enamels, carbon disulphide, etc.
INSPECTION CERTIFICATE
A document certifying that merchandise (such as perishable goods) was in good condition immediately prior to shipment.
INTERMODAL
This refers to the capacity to go from ship to train to truck or the like. The adjective generally refers to containerised shipping or the capacity to handle the same. Transport by more than one transportation mode, usually truck and rail
ISO 9000
A series of voluntary international quality standards.
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K
L
LCL (Less than Container Load)
Less-than-container load (LCL) is a shipment that is not large enough to fill a standard cargo container. The abbreviation LCL formerly applied to "less than (railway) car load" for quantities of material from different shippers or for delivery to different destinations carried in a single railway car for efficiency. LCL freight was often sorted and redistributed into different railway cars at intermediate railway terminals en route to the final destination.
LCL is "a quantity of cargo less than that required for the application of a carload rate. A quantity of cargo less than that fills the visible or rated capacity of an inter-modal container. It can also be defined as "a consignment of cargo, which is inefficient to fill a shipping container. It is grouped with other consignments for the same destination in a container at a container freight station.
LTL (Less than truckload shipping)
Less than truckload shipping (LTL) is the transportation of relatively small freight. The alternatives to LTL carriers are parcel carriers or full truckload carriers. Parcel carriers usually handle small packages and freight that can be broken down into units less than 150 pounds (68 kg). Full truckload carriers move freight that is loaded into a semi-trailer. Semi- trailers are typically between 26 and 53 feet (7.92 and 16.15 m) and require a substantial amount of freight to make such transportation economical
LO-LO (Lift-On, Lift-Off)
Denotes the method by which cargo is loaded onto and discharged from an ocean vessel, which in this case is by the use of a crane.
L&D
Loss and Damage.
L/C
Letter of credit
L/T
Long tons (2,240 lbs.).
LAY DAYS
The dates between which a chartered vessel is to be available in a port for loading of cargo.
LAYTIME
Time allowed by the shipowner to the voyage charterer or bill of lading holder in which to load and/or discharge the cargo. It is expressed as a number of days or hours or as a number of tons per day.
LETTER OF CREDIT (L/C)
A document issued by a bank per instructions by a buyer of goods authorising the seller to draw a specified sum of money under specified terms. Issued as revocable or irrevocable.
LIEN
Retention of property until outstanding dept is paid
LKG. & BKG.
Leakage and Breakage.
LNG
Liquefied Natural Gas, or a carrier of LNG.
LOI
Letter of indemnity
LPG
Liquefied Petroleum Gas, or a carrier of LPG.
LT
Long Ton = 1016.05 kilogram
LTGE.
Lighterage.
M
MOFFITT TRUCK
Lorry / Truck with a Fork-lift attached
M/T
Metric Ton (2204.6 lbs).
MANIFEST
A document containing a full list of the ship’s cargo, extracted from the bills of lading.
MARKINGS
The physical markings on a product indicating the country of origin where the article was produced.
MOA
Memorandum of agreement
MODU
Mobile Offshore Drilling Unit.
MT.
Empty.
MW
Minimum Weight Factor.
N
NET CAPACITY
The number of tons of cargo which a vessel can carry when loaded in salt water to her summer freeboard marks. Also called cargo carrying capacity, cargo dead weight, and useful dead weight.
NET WEIGHT (Actual Net Weight)
The weight of the goods alone without any immediate wrappings; e.g., the weight of the contents of a tin can without the weight of the can.
NT
Net Tons.
O
O&R
Ocean and Rail.
OCEAN WAYBILL
A document, issued by a shipping line to a shipper which serves as a receipt for the goods and evidence of the contract carriage.
OPEN POLICY
A cargo insurance policy that is an open contract; e.g., it provides protection for all of an exporter’s shipments afloat or in transit within a specified geographical trade area for an unlimited period of time, until the policy is cancelled by the insured or by the insurance company. It is “open” because the goods that are shipped are also detailed at that time. This usually is shown in a document called a marine insurance certificate.
ORF
Owner’ Risk of Fire or Freezing.
ORL
Owner’s Risk of Leakage.
ORW
Owner’s Risk of Becoming Wet.
OS&D
Over, Short and Damaged.
p
P & I
Protection and indemnity insurance
PA (Particular Average)
Partial loss or damage to goods.
PERISHABLES
Any cargo that loses considerable value if it is delayed in transportation. This usually refers to fresh fruit and vegetables.
PIGGYBACK
An ocean container or trailer riding on a rail car (COFC or TOFC)
PIGS
A railroad term for trailers loaded on flat cars
PORT AUTHORITY
A government body (city, county, or state) which in international shipping maintains various airports and/or ocean cargo pier facilities, transit sheds, loading equipment, or warehouses for air cargo. It has the power to levy dockage and wharfage charges, landing fees, and other costs.
PORT OF DISCHARGE
A port where a vessel is off-loaded and cargo discharged.
PORT OF ENTRY
A port at which foreign goods are admitted into the receiving country.
PORT OF LOADING
A port where cargo is loaded aboard the vessel, lashed, and stowed.
gin or destination terminal in excess of allotted free time
PREPAID FREIGHT
Generally speaking, freight charges both in ocean and air transport may be either prepaid in the currency of the country of export or they may be billed collect for payment by the consignee in his local currency. On shipments to some countries, however, freight charges must be prepaid because of foreign exchange regulations of the country of import or rules of steamship companies or airlines.
PRE-SLUNG CARGO
Cargo shipped already in a cargo sling or net, such as coffee in bags or coconut shells. It is usually prepared and loaded at the pier, ready for the vessel’s arrival and subsequent loading.
PROFORMA
When used with the title of a document, the term refers to an informal document presented in advance of the arrival or preparation of the required document, in order to satisfy a customs requirement.
POD (Proof Of Delivery)
The delivery receipt copy of a freight bill indicating the name of the person who signed for a package with the date and time of delivery.
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R
RELEASE (Commercial Release)
Instructions, usually a fax or email, stating that all monies have been paid, and the goods are Customs cleared, therefore the warehouse operator can release the cleared goods to an authorised collecting party
RESTITUTION
Return of Container to Port (or other designated location as specified by the leasing shipping line)
RO/RO (ROLL-ON/ROLL-OFF) VESSEL
A ship designed to accommodate cargo that is rolled on and rolled off. Some Ro/Ro vessels can accommodate containers and/or breakbulk cargo. A Ro/Ro Vessel can be self-sustaining. Freight ship or ferry with facilities for vehicles to drive on and off (roll-on roll-off); a system of loading and discharging a ship whereby the cargo is driven on and off on ramps. Equipped with large openings at bow and stern and sometimes also in the side, the ship permits rapid loading and discharge with hydraulically operated ramps providing easy access. Fully loaded trucks or trailers carrying containers are accommodated on the deck.
REEFER
Refrigerator ship; a vessel designed to carry goods requiring refrigeration, such as meat and fruit. A reefer ship has insulated holds into which cold air is passed at the temperature appropriate to the goods being carried.
REEFER BOX
An insulated shipping container designed to carry cargoes requiring temperature control. It is fitted with a refrigeration unit which is connected to the carrying ship’s electrical power supply.
REFG
Refrigerating; Refrigeration.
REGS.
Registered Tonnage.
RELEASED VALUE
Value assigned a shipment with a maximum value per pound; used for liability purposes
RETURN CARGO
A cargo which enables a ship to return loaded to the port or area where her previous cargo was loaded.
ROLLING CARGO
Cargo which is on wheels, such as truck or trailers, and which can be driven or towed on to a ship.
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SCHEDULED FLIGHT
Any service that operates under a set timetable.
SCR (Specified Commodity Rate)
A rate applied to narrowly specified commodities and usually granted on relatively large shipments. Theoretically, it is of limited time duration.
SEAL
A device fastened to the doors on a railcar or trailer used to secure its contents and to insure the integrity of a shipment
SEAWORTHINESS
Statement on the condition of the vessel. It has valid certificates, is fully equipped and manned. The sufficiency of a vessel in materials construction, equipment, crew and outfit for the trade in which it is employed. Any sort of disrepair to the vessel by which the cargo may suffer – overloading, untrained officers, etc., may constitute a vessel unseaworthy.
SEAWORTHINESS CERTIFICATE
A certificate issued by a classification society surveyor to allow a vessel to proceed after she has met with a mishap that may have affected its seaworthiness. It is frequently issued to enable a vessel to proceed, after temporary repairs have been effected, to another port where permanent repairs are then carried out.
SELF-SUSTAINING
A vessel that has its own cranes and equipment mounted on board for loading and unloading. Used in ports where shore cranes and equipment are lacking.
SELF-SUSTAINING SHIP
A containership which has her own crane for loading and discharging shipping containers enabling the ship to serve ports which do not have suitable lifting equipment.
SELF-UNLOADER
A bulk carrier which is equipped with gear for unloading cargo.
SEMISUBMERSIBLE
Deck supported by pillars, fastened to pontoons. The pontoons are half submerged during operations. Kept in position by anchors (or by dynamic positioning). Normally equipped with its own propulsion machinery.
SHORT TON
2,000 pounds.
SHORT-SHIPPED
Cargo manifested but not loaded.
STORAGE CHARGE
A penalty assessed to shippers or consignees for holding private trailers or containers at the origin or destination terminal in excess of allotted free time
SURETY BOND
A bond insuring against loss or damage or for the completion of obligations.
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T1 / TAD (Transit Accompanying Document)
Community Transit Status Document accompanying uncleared goods during transit from one authorised location to another. These are generated within the Customs NCTS system
Tremcard (Travel Emergency Card)
Document identifying Hazards, Instructions on how to handle and also actions to be taken when transporting hazardous cargo in the event of an Accident.
Turn Number
Now refer to EORI
T.E.U.
Twenty-Foot Equivalent Unit (containers): A measurement of cargo-carrying capacity on a containership, referring to a common container size of 20 ft in length.
TEU
A twenty-foot equivalent unit (6.1m). A standard unit for counting containers of various lengths and for describing container ship or terminal capacity. A standard 40′ container equals 2 TEUs.
THC (Terminal Handling Charge)
A charge made for certain handling services performed at terminals.
TOFC
trailer on flat car, also known as piggyback; a container with chassis or rail trailer transported on a rail car
TON
2,240 pounds – Freight rates for liner cargo generally are quoted based on a certain rate per ton, depending on the nature of the commodity. This ton, however, may be a weight ton or a measurement ton.
TON MILE
A measurement used in the economics of transportation to designate one ton being moved one mile. This is useful to the shipper because it includes the distance to move a commodity in the calculation.
TOWAGE
Charges for the services of tugs assisting a ship or other vessels in ports or other locations; the act of towing a ship or other objects from one place to another.
TRACKING
A carrier’s system of recording movement intervals of shipments from origin to destination.
TRADING LIMITS
Maritime area usually specified by range of ports in which a vessel may operate
TRANSSHIPMENT
The transfer of a shipment from one carrier to another in international trade, most frequently from one ship to another. Because the unloading and reloading of delicate merchandise is likely to cause damage, transhipments are avoided whenever possible.
TRUCKLOAD
Truckload rates apply where the tariff shows a truckload minimum weight. Charges will be at the truckload minimum weight unless weight is higher.
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UCN (Unique Consignment Number)
Unique Consignment Number, this is a number generated which identifies your Shipment with Customs, Freight Carrier and Port / Airport
ULD (Unit Load Device)
A pallet or container for freight.
V
VALUATION CHARGES
Transportation charges assessed shippers who declare a value of goods higher than the value of carriers’ limits of liability.
VLCC
Very Large Crude Carriers: Tankers between 200,000 and 300,000 dwt.
W
WET BOND
Term used to describe a Bonded Warehouse which is authorised to store Alcohol (and other excisable goods) which are not if EC free circulation
WAR RISK
The possible aggressive actions against a ship and its cargo by a belligerent government. This risk can be insured by a marine policy with a risk clause.
WAR RISK INSURANCE
Insurance issued by marine underwriters against war-like operations specifically described in the policy. In former times, war risk insurance was taken out only in times of war, but currently many exporters cover most of their shipments with war risk insurance as a protection against losses from derelict torpedoes and floating mines placed during former wars, and also as a safeguard against unforeseen warlike developments. War risk insurance may be written in a separate policy from the ordinary marine insurance; it is desirable to take out both policies with the same underwriter in order to avoid the ill effects of a possible dispute between underwriters as to the cause (marine peril or war peril) of a given loss.
WAREHOUSE RECEIPT
A receipt of commodities deposited in a warehouse identifying the commodities deposited. It is non-negotiable if permitting delivery only to a specified person or firm, but it is negotiable if made out to the order of a person or firm or to a bearer. Endorsement (without endorsement if made out to bearer) and delivery of a negotiable warehouse receipt serves to transfer the property covered by the receipt. Warehouse receipts are common documents in international banking.
WAREHOUSE-TO-WAREHOUSE
A clause in marine insurance policy whereby the underwriter agrees to cover the goods while in transit between the initial point of shipment and the point of destination with certain limitations, and also subject to the law of insurable interest. The warehouse-to-warehouse clause was once extremely important, but marine extension clauses now often override its provisions.
WAYBILL
A document covering a shipment and showing the forwarding and receiving station, the names of consignor and consignee, the car initials and number, the routing, the description and weight of the commodity, instructions for special services, the rate, total charges, advances and waybill reference for previous services, and the amount prepaid
WEIGHT
(1) The gross weight of the goods including packing, wrappers, or containers, both internal and external. The total weight as shipped. (2) Net – The weight of the goods themselves without the inclusion of any wrapper. (3) Tare – The weight of the packaging or container. (4) Weight/Measurement Ton – In many cases, a rate is shown per weight/measurement ton, carrier’s option. This means that the rate will be assessed on either a weight ton or measurement ton basis, whichever will yield the carrier the greater revenue. For example, the rate may be quoted based on 2,240 pounds, 40 cubic feet, one metric ton, or one cubic meter. (5) Weight Ton There are three types of weight ton: the short ton, weighing 2,000 pounds; the long ton, weighing 2,240 pounds; and the metric ton weighing 2,204.68 pounds. The last is frequently quoted for cargo being exported from Europe.
WEIGHT LOAD FACTOR
Payload achieved as against available, expressed as a percentage. Volume rather than weight frequently limit cargo; load factors of 100 percent are rarely achieved.
WEIGHT, LEGAL
Net weight of goods plus the inside packing.
WA (With Average)
A marine insurance term meaning that shipment is protected for partial damage whenever the damage exceeds a stated percentage.
WPA (With Particular Average)
An insurance term meaning that partial loss or damage of goods is insured. The damage generally must be caused by sea water, and many terms specify a minimum percentage of damage before payment. It may be extended to cover loss by theft, pilferage, delivery, leakage, and breakage.