Logistics Vocabulary

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 carrier’s international air waybills.

Air cargo 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.

Arrival notice A notice from the carrier to the “notify party” indicating the vessel’s estimated arrival date; identifying shipment details such as number of packages, weight, and container number, and indicating when free time expires. Often includes a freight invoice.

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.

Break Bulk The movement by ocean of packaged goods that are not containerized.

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.

Carrier Certificate and Release Order Used to advise Customs of the shipment’s details. By means of this document, the carrier certifies that the firm or individual named in the certificate is the owner or consignee of the cargo.

CBM Cubic Meter (m3).

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.

CFS Container Freight Station.

CFS/CFS Container Freight Station to 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.

Charter party A Charter party 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).

Clean On-Board B/L A Bill of Lading issued without exceptions.

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.

Commodity Any article or goods of commerce.

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 Transhipment The country through which a shipment must pass and be re-sorted to reach its ultimate destination.

Country of Ultimate Destination Final country, as known by an exporter, where goods are scheduled to arrive.

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 Invoice Certain countries require special invoices containing specific information for the Customs clearance and valuation of imported shipments. These documents contain most of the elements of the Commercial Invoice, and are usually in the language of the importing country.

Customs Value The value of a shipment as declared by the shipper or appraised by Customs to enable determination of accurate import duties.

CY/CY Container Yard to Container Yard. A type of steamship line service in which freight is transported from origin container yard to destination container yard.

Dangerous Goods Articles or substances which are capable of posing a significant risk to health, safety or property when transported by sea.

DDC Destination Delivery Charge

Declared Value The value of a shipment as declared by the shipper, used to determine the value for duty and carrier liability

Delivery Order Document issued by the carrier / agent as authority to release the cargo.

Demurrage A charge for storage of incoming merchandise / container beyond the free time period allotted by a company or CFS.

Destination The location to which a shipment is being delivered

DG Dangerous Goods

Dimensional Weight The weight calculated by measuring the Length x Width x Height of a package.

Draft Sometimes called a Bank Draft Bill of Exchange, the Draft is a negotiable instrument which contains an order to pay. It must be signed by the drawer (seller) and be payable at sight or by a certain time. The Draft must contain an unconditional order to pay a certain sum of money to the drawee (buyer). Drafts are used in both collection and Letter of Credit methods of payment

Dutiable Those goods which are subject to duty as per each nation’s Customs regulation

Duty Drawback A refund of duty paid on imported merchandise when it is later exported

Duty A tax imposed by a government on merchandise imported from another country.

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 price including cost of loading the goods for transportation at a specified place

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 Forwarder A firm that represents shippers by arranging transport and completing documentation required for international shipping. Some freight forwarders also act as cargo consolidators

Freight Payable at Destination When the ocean freight of a shipment is paid at the time of delivery at the foreign port

Full Set Off B/L’s Usually means the issuance of the three originals and three copies of the ocean Bill of Lading. This term is generally accepted by banks and shippers

Gateway Key cities of entry/departure for international shipments, strategically located for the most efficient movement of goods

Gross Weight The total weight of a shipment including the goods and packaging.

Harmonized Commodity Description and Coding System (”Harmonized Code”) 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

HBL House Bill of Lading

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

Inspection Certificate To protect themselves, many foreign firms request a Certificate of Inspection. This may be an affidavit by the shipper, or by an independent inspection firm hired by the buyer, certifying the quality, quantity, and conformity of the goods to the purchase order

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

Insured Value Dollar amount of which goods are insured by shipper

KGS Kilogram

Knots Per Hour Units of measure for ship’s speed: Nautical Miles per Hour. One nautical mile is 1852 meters

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

Loss and Damage Claim This document is used to claim insurance compensation for goods lost or damaged during exportation. The items lost or damaged must be fully described. Supporting documentation would include copies of the Commercial Invoice, Bill of Lading, and Insurance Certificate

M3 Cubic Metre

Manufacturer’s Certificate A Certificate of Manufacture is used when a buyer intends to pay for goods prior to shipment, but the lead time for the manufacturing process is lengthy and the buyer does not which to tie up funds too far in advance. Usually, the goods are manufactured after a small down payment. when the goods have been manufactured, the seller prepares a Manufacturer’s Certificate stating that the goods ordered have been produced in accordance with the contract with the buyer. Upon receiving the certificate, the buyer forwards both payment and shipping instructions, and the shipment is made by the seller

Marine Cargo Insurance Average – A term in marine cargo insurance signifying loss or damage to merchandise. General average – A loss arising out of a voluntary sacrifice made of any part of a shipment or cargo to prevent loss of the whole and for the benefit of all persons concerned. FPA – Free of particular average – a provision in a marine cargo insurance policy that no claim shall be paid for damage to goods in the course of a voyage unless a loss is sustained that totals or exceeds a certain percentage of the value as specified in the policy. The object of such a provision is the avoidance of petty claims. Open Policy – A contract between an insurance company and the exporter by which all shipments made by the assured are automatically protected from the time the merchandise leaves the initial shipping. Particular average – A partial loss or damage of merchandise caused by a peril insured against, but which is not a general-average loss

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

NVOCC Non-vessel operating common carrier. A firm that offers the same services as an ocean carrier, but which does not own or operate a vessel. NVOCCs usually act as consolidators, accepting small shipments (LCL) and consolidating them into full container loads. They then act as a shipper, tendering the containers to ocean common carriers.

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-Deck Cargo Cargo usually stowed on the deck of a vessel. This cargo is usually subjected to wind and sea water.

On-Board Courier A dedicated messenger who physically accompanies an international shipment.

On-Forwarding Forwarding a shipment from an intermediate stop to its final destination; subject to additional charge.

Open Tops A 20′ or 40′ container with the top being open. Used for oversized cargo, and it’s covered by a tarp for protection of the cargo.

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.

Pre-printed Airbill Airbills pre-printed with shipping company name, address and account number. Pre-printed 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.

PTP Port to Port.

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.

Pick Up Retrieving goods from a shipper to be brought to their destination for a fee.

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 Forwarders and Customs Brokers to act as their agents, for export control and Customs purposes, with this document.

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.

Pre-printed Airbill Airbills pre-printed with shipping company name, address and account number. Pre-printed 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.

PTP Port to Port.

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.

Ro/Ro Roll-on/Roll-off. A type of vessel that transports wheeled vehicles. Also used to refer to the cargo itself.

S/ Shipper.

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 Interest Insurance Insurance, arranged for by carrier if specified on the Airbill, which covers shipments against risk of physical loss or damage from any external causes.

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.

Ship’s Gear Any equipment (such as cranes, hatches, winches, cables) belonging to or part of the vessel.

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.

Steamship line A company that owns and/or operates vessels in maritime trade.

Tariff Rate The rate or price schedule for transporting different items to various countries.

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.

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.

Transhipment 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.

TRC Terminal Receiving Charge.

ULD Unit load device. Refers to airfreight containers and pallets.

Unit Cost The cost associated with one unit of an item.

Under Bond 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 transhipment to another point, where duties eventually will be paid

W/M Weight or Measure: whichever is greater.

WT Weight or Weight Ton.

X-Ray Technology used to view the insides of containers and packages for screening.

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