Industry Terms
Air Waybill The Air Way bill is a non-negotiable Bill of Lading, and is used as a receipt for cargo and a contract for transportation between shipper and air carrier. Unlike an ocean carrier with a “to order†Ocean Bill of Lading, the air carrier must deliver the shipment to the consignee named on the non-negotiable Air Waybill. International air waybills or “airline air waybills,†are used by the air carriers; “House air waybills, †are used as receipts by Freight Forwarders who then consolidate them with the air carriers international air waybills.
Aircargo Agent An agent appointed by an airline to solicit and process international airfreight shipments.
Airport Code A three letter code assigned to all airport locations worldwide.
BAF Bunker Adjustment Factor.
Barge To Ship When cargo is loaded directly from the barge to the ocean carrier, therefore avoiding delivery to the wharf.
Bonded Warehouse Goods that must be held until duties are paid are normally put in a bonded warehouse.
C/ Consignee.
C/Y Container yard.
CAF Currency Adjustment Factor.
Carnet Customs document, issued under the terms of a convention, that permits the holder to carry or send merchandise temporarily into foreign countries ( for display, demonstration, or similar purpose) without paying duty or posting bond. Examples are ATA (Admission Temporaire) and TIR ( Transport International Routier). Violation of any of the privileges of CARNET will result in assessment of duty and charges for damage. Click here for more info.
Certificate of Origin The document certifies that goods were manufactured in the Australia. It is signed by the shipper and may also be a certified by a local Chamber of Commerce, notarized, and even visaed by a resident foreign consul. A Certificate of Origin may be required by a foreign government for control purposes, or by the foreign importer to ensure that he receives Australian goods.
CFR (Cost and Freight) The Shipper is responsible for clearing the goods for export and for the costs to deliver the goods to the port of destination. Actual transfer occurs when the goods are brought over the ship’s rail, and, from the point that the goods cross the threshold of the vessel at the port of embarkation, the risk of loss or damage to the goods and any additional costs incurred while on the vessel are the responsibility of the Buyer. (This term is not appropriate for containerized cargo or for cargo carried aboard a roll on/roll off ro-ro vessel to which CPT should be used).
CFS Container Freight Station.
Chargeable Weight The shipment weight used in determining air freight charges. The chargeable weight may be the dimensional weight or for container shipments, the gross weight of the shipment less the tare weight of the container.
Charterparty A Charterparty is a contract signed between a ship owner and a charter who hires the vessel for a period of time (Time Charter) or for a particular voyage (Voyage Charter).
CIF (Cost, Insurance, and Freight) The Shipper has the same obligations as in CFR with the additional responsibility to provide at least minimum insurance coverage to protect the Buyer’s risk during ocean transport. The parties can agree for the purchase of insurance coverage greater than the minimum. (This term is not appropriate for containerized cargo or for cargo carried aboard a roll on/roll off ro-ro vessel to which CPT should be used).
CIP (Carriage and Insurance Paid to) The Shipper has the same obligations as in CPT with the additional responsibility to provide at least minimum insurance coverage to protect the Buyer’s risk during transport. As in CIF, the parties can agree to additional insurance coverage.
COD Collect on Delivery.
Collect Freight Freight payable to the carrier at the port of discharge or ultimate destination. The consignee need not pay if the cargo does not arrive at destination.
Commercial Invoice A commercial invoice is the basic statement of the seller to the buyer for payment of the goods shipped. It must conform to any Letter of Credit requirements and foreign government requirements. It is used as one of the primary documents in the collection process, and is the main document used by foreign Customs for control, valuation of the goods, pricing, terms of sale, payment and delivery, credit numbers, import license numbers, shipper and consignee names, and shipping marks and numbers. Commercial invoices are usually signed by the exporter.
Commercial Value Assessment of monetary value of manufactured goods including production costs, packaging, shipping, overhead and profit margin; used to determine duty.
Conference Rates Published rates which are applied equally by all the lines belonging to that particular conference for a specific commodity.
Consignee The receiver of the shipment.
Consular Invoice Prepared from the information on the commercial invoice by the buyer’s consulate or embassy in the shipper’s country, these documents are usually stamped with an official seal. They may be specific forms required by the destination country’s government or simply copies of the Commercial Invoice. Consular Invoices are required for control of certain commodities and to ensure valuation control.
Consularizaiton A document certified by the Consular of some foreign countries verifying the value, quantity and nature of a shipment.
Country of Transshipment The country through which a shipment must pass and be re-sorted to reach its ultimate destination.
CPT (Carriage Paid To) The Shipper is responsible for clearing the goods for export and for all risk and costs incurred in delivering the goods to their named destination. Additional costs incurred after the goods are in possession of the Carrier are transferred to the Buyer after the goods are in the possession of the Carrier. The definition of Carrier under this term refers to any mode or combination of modes used to transport the goods.
Customs Broker A firm that represents importers in dealings with Customs. Normally responsible for obtaining and submitting all documents for clearing merchandise through Customs, arranging inland transport, and paying all charges related to these functions.
Customs Clearance International procedure of declaring goods at the Customs Office to gain authorized entry of those goods into a country.
Customs Value The value of a shipment as declared by the shipper or appraised by Customs to enable determination of accurate import duties.
DAF (Delivered At Frontier) The Shipper is responsible for clearing the goods for export and for delivering the goods to a named point and place at the frontier, before reaching the Customs border of the destination country. Because the term can refer to any frontier, including the country of export, it is important to be clear in naming a specific frontier point and place.
Dangerous Goods Articles or substances which are capable of posing a significant risk to health, safety or property when transported by air or sea.
DDC Destination Delivery Charge.
Embargo The prohibition of accepting freight at origin because of a crisis at the point of destination.
ETA Estimated Time of Arrival.
ETD Estimated Time of Departure.
Export License A Government authorization which allows a shipper to export specified goods to designated countries.
Exporter The person sending goods produced in one country to another country.
Express B/L Ocean Bill of Lading issued by the carrier when cargo is consigned directly to the customer. Cargo is automatically released. No originals are issued.
F.O.B. (Free on Board) The responsibility is the Shipper’s to clear the goods for export and to deliver the goods over the threshold of the vessel. The Buyer assumes all costs and risks from that point. (This term is not appropriate for containerized cargo or for cargo carried aboard a roll on/roll off ro-ro vessel to which FCA should be used).
FCL Full Container Load.
Federal Maritime Commission (FMC) Regulatory agency responsible for rates and practices of ocean carriers shipping to and from the United States.
FEU 40 foot equivalent unit.
Flat Bed A type of truck with no side panels on to which cargo is usually strapped, chained or otherwise attached.
Forwarder’s Instruction Document issued by the appointed forwarder that goods have been received without exception for export.
Free Trade Zone A port designated by the government of a country for duty-free entry of any non-prohibited goods.
Freight Payable at Destination When the ocean freight of a shipment is paid at the time of delivery at the foreign port.
Gateway Key cities of entry/departure for international shipments, strategically located for the most efficient movement of goods.
Harmonized Commodity Description and Coding System (â€Harmonized Codeâ€) An international classification system that assigns identification numbers to specific products. The coding system ensures that all parties in international trade use a consistent classification for the purposes of documentation, statistical control, and duty assessment.
IATA (International Air Transport Association) International Air Transport Association. The trade and service organization representing international airlines from more than 100 countries.
ICAO International Civil Aviation Organization. A United Nations agency organized to ensure orderly worldwide technical development of civil aviation.
IMO International Maritime Organization. A United Nations affiliated organization representing all maritime countries in matters affecting maritime transportation, including the movement of dangerous goods. The organization also is involved in deliberations on marine environmental pollution.
Import License Many countries have currency exchange controls which serve to limit the amount of currency available for the purchase of foreign merchandise. The import license is used to control orders sent to foreign exporters. It is important for exporters to understand their foreign buyer’s licensing requirements as payment negotiations are made prior to any exportation.
Insurance Certificate An Insurance Certificate gives evidence of risk coverage for merchandise shipped. It is sent to the bank with other collection documents, and normally is used only when required by Letter of Credit or Documentary Collection procedures. There are many types of insurance policies available. Coverage requested is usually 110% of the value of the cargo shipped.
KGS Kilogram.
L/B Land Bridge.
L/C Letter of Credit.
Lash Down A method of securing cargo inside the hold or on deck of a vessel. Usually done with cables.
LCL Less than Container Load.
Letter of Credit The Letter of Credit is a financial Instrument issued by an importer’s bank (opening bank, on behalf of the importer). The opening bank substitutes its own credit for that of the importer, and undertakes a commitment to designated beneficiary (the exporter) to pay a stated amount within a stated time frame, provided that the exporter complies with all the terms and conditions of the Letter of Credit.
Limits of Liability The extent to which carrier is liable for loss or damage to a particular shipment.
M3 Cubic Metre.
Non-Conference Rate Rates which are assessed by those lines that do not belong to a particular conference. Rates can be approximately 10% lower than conference rates.
Non-Dutiable Those goods which are exempt from duty as per each nation’s Customs regulation.
OBL Ocean Bill of Lading.
Ocean Bill of Lading Each carrier has its own bill of lading form. Serves as contract of carriage between carrier and shipper, spelling out legal responsibilities and liability limits for all parties to the shipment. The B/L also can be used to transfer title to the goods to a party named in the document. Specifics shipment details, such as number of pieces, weight, destination, etc. Usually three signed originals issued. Licensed consolidators (NVOCCs) issue their own B/Ls to shippers.
On-Board Courier A dedicated messenger who physically accompanies an international shipment.
On-Deck Cargo Cargo usually stowed on the deck of a vessel. This cargo is usually subjected to wind and sea water.
On-Forwarding Forwarding a shipment from an intermediate stop to its final destination; subject to additional charge.
Packing List This important document describes all items in the box, crate, pallet, or container, plus the type, dimensions, and weight of the container. It is used to determine total shipping weight and volume (cubes) by Customs officials to check cargo, and by the buyer to inventory merchandise received. Prices and item values are usually omitted from the Packing List. Shipping marks, reference numbers and carton numbers are also important additions to the packing list.
Palletized Cargo Cargo that is placed on portable platforms for easier loading/unloading or transportation. Platforms are called pallets.
Perishable Products that require expedited transport or special attention to prevent spoilage or decay such as fruits, vegetables, frozen fish or certain chemical products.
Phytosanitary Inspection Certificates Also referred to as “plant health†certificates, these are required by many foreign countries for shipments of plants and plant products. They serve to certify conformity to local plant quarantine import regulation with respect to pest and disease infection.
POD Port of Discharge, also Proof of Delivery.
Point of Origin The location where a shipment first starts out.
POL Port of Landing.
Port of Entry The Port, airport, or other location whereby a shipment enters a country.
Postal Code A number identifying postal delivery zone.
Power of Attorney Exporters and Importers authorize Freight Fowarders and Customs Brokers to act as their agents, for export control and Customs purposes, with this document.
PPD Prepaid Charges.
PPD Prepaid Charges.
Prepaid freight Freight paid by the shipper to the carrier when merchandise is tendered for shipment. Not refundable if the merchandise does not arrive at the intended destination.
Preprinted Airbill Airbills preprinted with shipping company name, address and account number. Preprinted airbills help speed completion of shipping documentation and assure accurate billing.
Preprinted Airbill Airbills preprinted with shipping company name, address and account number. Preprinted airbills help speed completion of shipping documentation and assure accurate billing.
Pro forma Invoice The Pro Forma is used primarily to document to the buyer, in advance, the cost and terms of sale of a proposed export. It is used by the foreign buyer as a quotation from the exporter and also to assist in applying for a Letter of Credit from his bank. The Pro Forma Invoice serves as the basis for the subsequent Commercial Invoice.
Receipt For Shipment B/L When the steamship line gives the shipper a B/L indicating that cargo has been received at the pier, but not necessarily loaded on the vessel.
Reefer This container usually has a self-sustaining unity to keep cargo cool/cold at certain temperatures.
S/ Shipper.
Ship’s Gear Any equipment ( such as cranes, hatches, winches, cables) belonging to or part of the vessel.
Shipper’s Declaration for Dangerous Goods Under the regulations of the Department of Transportation, the International Air Transport Association (IATA), and the International Maritime Organization (IMO), shippers and exporters are required to declare dangerous cargos to the air and ocean carriers they use for shipment. Both the IMO and IATA require specific documents to report hazardous goods, and these requirements are published in their respective Codes. IATA also provides a document specifically for non-restricted articles.
Shipper’s Letter of Instruction These instructions, often prepared along with a Shipper’s Export Declaration, are the exporter’s direction to the freight forwarder on how to handle the exporter’s shipment. The information prepared on the SLI includes a description of the goods and containers, the ultimate consignee, shipping method desired, insurance requirements, and special instructions pertaining to the shipment.
Single Access Document Also referred to as “SAD†the Single Access Document required for movement of goods through the countries of the European Economic Community. Generally prepared by Customs Brokers in Europe for imports entering the EC.
Skidded Crate A crate with skids underneath for easy lifting with fork lifts.
SL&C Shipper Load and Count.
STC Said to Contain.
Steamship conference A voluntary collective ratemaking body representing member steamship lines.
Tariff A document issued by a carrier setting forth applicable rules, rates, and charges for the movement of goods. It sets up a contract of carriage between the shipper, consignee, and carrier. In international trade applications, the term also refers to a tax on imports.
Tariff Rate The rate or price schedule for transporting different items to various countries.
TEU Twenty-foot equivalent unit. Used to measure a vessel’s capacity.
THC Terminal Handling Charge.
Third Party Billing The designated payor of an invoice other than the shipper or the consignee.
Transshipment Shipment of merchandise to the point of destination in another country on more than one vessel or vehicle. The liability may pass from one carrier to the next, or it may be covered by “through bills of lading†issued by the first carriers.
ULD Unit load device. Refers to airfreight containers and pallets.
UnderBond A term applied to the status of merchandise admitted provisionally to a country without payment of duties, either for storage in a bonded warehouse or for transshipment to another point, where duties eventually will be paid.