Terms and terminology

Ad Valorem Duty

a duty calculated as a percentage of the shipment value.

 

Agent

a person authorized to transact business for, and in the name of, another person or company.

 

Air Waybill (AWB)

Air Waybill (AWB) or air consignment note refers to 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 AWB is non-negotiable.

 

Awkward cargo

cargo of irregular size that can either be containerized (packed in container) or non-containerized (without equipment associated with) during transportation. it requires prior approval on a case by case basis before confirmation of booking.

 

Bill of Lading (B/L)

an instrument issued by an ocean carrier to a shipper that has three functions, namely it is a recept for goods shipped (not negotiable), as evidence of the contract of carriage (not the contract), and as a document of title for the goods ( i.e. if you have the Bill of Lading, you own the concerning goods). A bill of lading which is clean, indicates that the goods have been properly loaded on board the of the carrier’s ship. A bill of lading which is claused, indicates that something is wrong between the goods loaded and the goods listed on the bill. This must be done at the time of loading.

 

Bonded Warehouse

a building or other secured area in which dutiable goods may be stored, manipulated, or undergo manufacturing operations without payment of duty. It may be managed by the state or by private enterprise. In the latter case a customs bond must be posted with the government. This system exists in all developed countries of the world.

 

Break-bulk cargo

goods shipped loose in the vessel’s hold and not in a container.

 

Bulk cargo

is commodity cargo that is transported unpackaged in large quantities. This cargo is usually dropped or poured, with a spout or shovel bucket, as a liquid or as a mass of relatively small solids (e.g. grain, coal), into a bulk carrier ship’s hold, railroad car, or tanker truck/trailer/semi-trailer body. Smaller quantities (still considered «bulk») can be boxed (or drummed) and palletised. Bulk cargo is classified as liquid or dry.

 

Carrier

any individual, company or corporation engaged in transporting goods.

 

Certificate of Origin

a document that certifies the country where the product was made (i.e., its origin). A common export document, a Certificate of Origin is needed when exporting to many foreign markets. It may be required in order to obtain preferential tariff treatment under several Free Trade Agreements (i.e., NAFTA).

 

Commercial invoice

a document used in foreign trade. It is used as a customs declaration provided by the person or corporation that is exporting an item across international borders. Although there is no standard format, the document must include a few specific pieces of information such as the parties involved in the shipping transaction, the goods being transported, the country of manufacture, and the Harmonized System codes for those goods. A commercial invoice must also include a statement certifying that the invoice is true, and a signature.

 

Consolidated cargo

cargo containing shipments of two or more shippers, usually shipped by a firm called a consolidator. The consolidator takes advantage of lower FCL rates, and savings are passed on to shippers.

 

Consolidation

the combination of many small shipments into one container.

 

Consolidator

a person or firm performing a consolidation service for others.

 

Customs brokerage

a profession that involves the ’clearing’ of goods through customs barriers for importers and exporters (usually businesses). This involves the preparation of documents and/or electronic submissions, the calculation (and usually the payment) on behalf of the client of taxes, duties and excises, and facilitating communication between the importer/exporter and governmental authorities. Custom brokers may be employed by or affiliated with freight forwarders, but may be independent businesses or may be employed by shipping lines, importers, exporters, trade authorities and customs brokerage firms.

 

Cut-off time

latest possible time the cargo may be delivered to the  terminal or designated point.

 

CY — Container Terminal

a facility that receives full export containers from one shipper to loading the vessel and delivers full import containers to the consignee after; it is the same location where ocean vessels are loaded and unloaded.

 

CY/CFS

cargo loaded in a full container by a shipper at origin, delivered to pier facility at destination, and then devanned by the carrier for loose pick up.

 

CY/CY

cargo loaded by the shipper in a full container at origin, delivered to the carrier’s terminal at destination for pick up intact by consignee.

 

Dangerous goods

are solids, liquids, or gases that can harm people, other living organisms, property, or the environment. They are often subject to chemical regulations. Dangerous goods include materials that are radioactive, flammable, explosive, corrosive, oxidizing, asphyxiating, biohazardous, toxic, pathogenic, or allergenic. Also included are physical conditions such as compressed gases and liquids or hot materials, including all goods containing such materials or chemicals, or may have other characteristics that render them hazardous in specific circumstances.

 

Dimensional weight

dimensional weight, used in shipping and freight, is a billing technique which takes into account the volume of a package.

 

Door-to-door shipping

which is a service provided by many international shipping companies. The quoted price of this service includes all shipping, handling, import and customs duties, making it a hassle-free option for customers to import goods from one jurisdiction to another. This is compared to standard shipping, the price of which typically includes only the expenses incurred by the shipping company in transferring the object from one place to another. Customs fees, import taxes and other tariffs may contribute substantially to this base price before the item ever arrives.

 

Dry cargo

cargo that does not require temperature control.

 

Export Declaration

a government document permitting designated goods to be shipped out of the country.

 

Feeder Vessel

vessel employed for normally short sea routes to fetch or carry goods and containers to and from ocean going vessels.

 

Full container load — FCL

a standard container that is loaded and unloaded under the risk and accounts of one shipper and only one consignee, in practice it means that the whole container is intended for one consignee. FCL container shipment attracts lower freight rates than an equivalent weight of cargo in bulk. Ideally FCL means the container is loaded to its allowable maximum weight or volume. In practice, the FCL in the ocean freight does not always mean packing a container to its full payload or full capacity.

 

Gross Weight

entire weight of goods, packaging and container, ready for shipment.

 

Harmonized Commodity Description and Coding System

(HS) of tariff nomenclature is an internationally standardized system of names and numbers for classifying traded products developed and maintained by the World Customs Organization (WCO) (formerly the Customs Co-operation Council), an independent intergovernmental organization with over 170 member countries based in Brussels, Belgium.

 

Incoterms rules or International Commercial terms

are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) widely used in international commercial transactions. A series of three-letter trade terms related to common sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs and risks associated with the transportation and delivery of goods. The Incoterms rules are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove altogether uncertainties arising from different interpretation of the rules in different countries. First published in 1936, the Incoterms rules have been periodically updated in 1953, 1967, 1976, 1980, 1990 and 2000, with the eighth version—Incoterms 2010—having been published on January 1st, 2011.

 

Intermodal freight transport

involves the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation (rail, ship, and truck), without any handling of the freight itself when changing modes. The method reduces cargo handling, and so improves security, reduces damages and losses, and allows freight to be transported faster. Reduced costs over road trucking is the key benefit for intracontinental use.

 

Intermodal container

a standardized reusable steel box used for the safe, efficient and secure storage and movement of materials and products. TEU — Twenty foot equivalent unit — is a unit of capacity equal to one standard 20 foot container. 2 TEU = 1 FEU. FEU — forty foot equivalent unit — is a unit of capacity equal to one standard 40 foot container. 1 FEU = 2 TEU.

 

Less than container load — LCL

a shipment that is not large enough to fill a standard cargo container. The abbreviation 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. A system of transportation used in international trade, where various shippers pool their boxed goods in the same container.

 

Letter of credit — L/C

a binding document that a buyer can request from his bank in order to guarantee that the payment for goods will be transferred to the seller. Basically, a letter of credit gives the seller reassurance that he will receive the payment for the goods. In order for the payment to occur, the seller has to present the bank with the necessary shipping documents confirming the shipment of goods within a given time frame. It is often used in international trade to eliminate risks such as unfamiliarity with the foreign country, customs, or political instability.Types of letters of credit:

• Revocable letter of credit- Just like the name says the LC can be revoked by the Issuing Bank without the agreement of the beneficiary.
• Irrevocable letter of credit- Cannot be cancelled or amended without all the parties agreement.
• Standby letter of credit — Guarantee of payment. If the beneficiary does not get paid from its customer it can then demand payment from the Bank by forwarding the copy of the invoice that was not paid and supporting documentation.
• Revolving letter of credit- It is established when there are regular shipments of the same commodity between supplier and customer. Eliminates the need to issue an LC for each individual transaction.

Net Weight

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. Also called actual net weight.

 

Non-negotiable BOL

copy of original bill of lading which cannot be negotiated with the bank.

 

Oversized cargo

is a single item that exceeds the usable dimensions of a 463L master pallet (104 inches length x 84 inches width x 96 inches height for military aircraft).

 

Perishable Cargo

cargo subject to decay or deterioration.

 

Port of arrival

location where imported merchandise is offloaded from the importing aircraft or vessel.

 

Port of Discharge

a port where vessel is offloaded.

 

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.

 

Prepaid

one of the payment status where freight and charges are required to be paid by shipper before original bill of lading is released to them.

 

Rail Waybill

a document used to control the transportation of a shipment of goods via rail. It specifies the terms under which the rail carrier is agreeing to transport the goods and contains limitations of liability.

 

Refrigerated container

a container that is used for goods which need to be transported at a constant temperature above or below freezing point.

 

Release note

receipt signed by customer acknowledging delivery of goods.

 

Shipper

the person for whom the owners of a ship agree to carry goods to a specified destination and at a specified price. Also called consignor. The conditions under which the transportation is effected are stipulated in the bill of loading.

 

Specific Duty

a duty calculated as a rate per unit of measure (e.g. number, volume, weight, etc.).

 

Stripping

the unloading of a container.

 

Stuffing

the loading of a container.

 

Surcharge

an extra or additional charge.

 

Tare Weight

the weight of packing and containers without the goods to be shipped.

 

Transit cargo

goods onboard which upon their arrival at a certain port are not to be discharged at that port.

Please also read other articles in this section:

• Heat Insulation Inside Of Containers
• How to choose the right mode of transport for your goods
• Incoterms
• Intermodal container. Container types
• Packing and marking