SHIPPING TERMINOLOGY MADE EASY!
It’s important to note that the definitions listed here are intended purely as a guide and are not binding. We always suggest that you call us with any questions so that we can talk you through any terms which you need clarifications on.
Act of God
Marine Insurance term meaning an act beyond man’s control, e.g., lightning, flood, earthquake, etc. The carrier is not legally responsible under most circumstances for such damage.
According to value. Rates are based on value of goods.
The Bank which advises the seller that a Letter of Credit has been opened in his favour by the buyer; however, the advising bank does not necessarily guarantee payment.
Notice sent by the carrier informing the consignee, notify party, and also notify party of the arrival date of the cargo. Other pertinent information for shipment may be included, such as bill of lading number, weight, charges due and location of cargo.
Cargo of irregular size that is either containerized or un-containerized. It requires prior approval, depending on the circumstances, before confirmation of booking.
Document accepted in lieu of original bill of lading to release cargo. Protected in writing to carrier for performing a deviation from normal business, guaranteed by a bank.
Conveyance used to carry loose cargo or containers in small volumes.
Bill of Exchange
An official order by one company instructing another company to pay a third party a specified amount. Usually used in foreign transactions.
Bill of Lading
A receipt for the cargo and a contract for transportation between a shipper and the ocean carrier. It may also be used as an instrument of ownership, which can be bought, sold or traded while the goods are in transit. To be used in this manner, it must be a negotiable “Order Bill of Lading.”
A warehouse, section of a warehouse, or secured area designated as a bonded warehouse. It is a temporary storage area (usually limited for five years) for goods until duties are paid or otherwise properly released and cleared from Customs.
The arrangement of space of cargo in a container (CFS or CY), or as a break bulk or bulk. One would call an international carrier and reserve space for specific cargo.
Slang term for an ocean container for cargo.
A term used to describe cargo which does not constitute a full container, or which is palletised, boxed, etc., or large machinery, trucks, etc. Also used to describe cargo, which cannot be containerised due to its size and/or nature.
Fee paid to freight forwarder by the carrier for services performed.
Not in packages or containers, shipped loose in the hold of the ship. Grain, coal, timber and sulphur are usually bulk freight.
Bunker Adjustment Factor (BAF) or Bunker Surcharge (BSC)
Surcharge assessed by carrier to freight rates to supplement increased fuel costs.
General term for ship’s fuel.
Cost and Freight.
Cargo movement delivered loose at origin point, devanned by carrier at destination, and picked up loose at destination terminal.
Loose cargo received at origin point, loaded in a container by carrier, then delivered intact at destination.
Cost Insurance and Freight.
Contract of Affreightment.
Collect (Cash) on Deliver; Carried on Docket (pricing); Change of Destination.
CY (Container Yard)
Storage area where full containers are received and picked up.
Cargo loaded in a full container by a shipper at origin, delivered to pier facility at destination, and then devanned by carrier for loose pick up.
Cargo loaded by shipper in a full container at origin and delivered to carrier’s terminal at destination for pick up intact by consignee.
Trade or transport in coastal waters or between two ports within a country especially by parties other than domestic carriers. Many countries have laws protecting domestic carriers to perform domestic interport water transportation.
Carrier Certificate and Release Order (Carrier Certificate)
Used to advise Customs of the details of the shipment, its ownership, port of lading, etc. 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.
Certificate of Origin (C/O)
Formal document, required at destination, stating the origin of cargo and relevant cargo details.
An agreement by the shipowner to carry goods or to furnish a ship for that purpose.
When used in Marine Insurance, means a demand made by a shipper or insurance company upon a carrier for payment of a loss sustained through its negligence.
Classification Society (e.g. ABS, BV, DNV, GL, RINA, etc..)
Organisations whose main function is to carry out surveys of ships whilst being built and at regular intervals after construction. Their purpose is to set and maintain standards of construction and upkeep of ships and their equipment.
This is issued when the shipment is received in good order. If damage or a shortage is noted, a clean bill of lading will not be issued.
Clean on Board
Clause inserted in the bill of lading confirming that no irregularities or discrepancies was noted in the packing or in the general condition of the cargo.
Combined Transport Bill of Lading
Provides a combined transport by at least two different modes of transport from a place from which the goods are taken to a place designated for delivery.
A bill for the goods from the seller to the buyer. It is often used by government to determine the true value of goods for the assessment of customs duties. It is also used in the preparation of consular documentation. Governments using the commercial invoice to control imports often specify its form, content, number of copies, language to be used, etc.
An association of ocean common carriers permitted to engage in concerted activity and to utilise a common tariff. It is basically a group of shipping companies offering equitable freight rates, standardised shipping practices and regularly scheduled services between designated ports.
An intermediary carrier utilized to connect cargo to/from the mother vessel. Also known as “feeder service.”
Receiver of shipment.
A company who combines small shipments to a common point for convenience and special rate to accommodate the customer.
Group of carriers pooling resources in a trade lane to maximize their resources efficiently.
Consular Invoice – is used to control and identify goods shipped to them. It usually must be prepared on special forms and may require legalization by their Consul.
A weatherproof box designed to transport cargo of many types in continuous transportation. They are constructed as to not fail under stress or handling over a long period of time. Most ocean vessels can accommodate 20′ and 40′ length ocean containers for below deck storage and any size above deck. Containers may be ventilated, insulated, flat rack (open sided), reefer (refrigerated), vehicle rack, or open top.
Container Freight Station (CFS)
Storage/warehouse facilities for loading/unloading less than full container orders.
Container Load Plan (CLP)
A document prepared to show all details of cargo loaded in a container, e.g. weight (individual and total), measurement, markings, shipper, the origin of goods and destination, as well as location of the cargo within the container.
An ocean vessel specifically designed to carry ocean cargo containers. It’s fitted with vertical cells for maximum loading/discharge efficiency.
Country of Origin
The country of manufacture, growth or production of cargo.
Agreement between carrier and shipper for release of cargo with promise to pay ocean freight within specified time.
Currency Adjustment Factor (CAF)
Surcharge percentage applied to freight rates to adjust currency fluctuations in order to equalize different currency values.
Last possible date cargo may be delivered to vessel or designated point.
Amount of money payable by a shipper or charterer to a shipowner or shipping line for failing to load the quantity of cargo stipulated in the contract of carriage.
The vessel’s carrying power/capacity.
These instructions provide specific information to the inland carrier about the merchandise to the particular pier or steamship line. This term is not to be confused with “Delivery Order” which is used for import cargo.
Issued by the consignee or his agent to the a terminal operator as authority to release the cargo to another party. Includes all data necessary for the terminal delivery clerk to determine that the cargo can be released to the domestic carrier.
A penalty charge against shippers or receivers for delaying carriers equipment beyond allowed time.
Where demurrage is to be paid for an agreed number of days. Any further delay is termed ‘detention’ in respect of which the carrier can claim unliquidated damages.
The process of unloading cargo from a container. Also referred to as un-stuffing, unloading, or stripping.
Sums paid by a ship’s agent on behalf of the shipowner at a port and recovered from the shipowner via a disbursement account.
A fee for diverting cargo from the original intended destination port to a new location.
Door to Door
Shippers use the container to carry goods directly from their premises to their customer’s location. The shippers are responsible for proper stowage and security of cargo within container.
Wood, mats etc.. used in stowing a cargo to prevent damage to the cargo by contact with bottom or sides of a vessel or with other goods.
Tax imposed by Customs on imported merchandise. There are three basic types: (1) ad valorem – based on the entered value, (2) specific – an amount per unit of quantity, (3) compound – combination of ad valorem and specific rates.
Electronic Data Interchange.
Estimated Time of Arrival.
ETD / ETS
Estimated Time of Departure / Sailing.
Ex Works (….named place).
An order of prohibition on trade or shipping issued by a Government including the prohibition from sailing of a vessel from port.
The document or set of documents required to be filed with Customs to secure the release of imported merchandise. The entry is the appropriate Customs document accompanying required supporting documentation. The final disposition of the imported cargo will determine the type of entry to be filed.
Required by the U.S. Department of Commerce to control exports and to act as a source document for export statistics. It includes complete particulars on the shipment. Common abbreviation is Ex Dec.
Freight all kinds.
Free In and Out Stowed.
Federal Maritime Commission (FMC)
U.S. Government Agency responsible for overseeing regulatory aspects of all maritime activities.
Transportation conveyance utilised to relay cargo from the mother vessel to the ultimate destination or vice versa.
Superior power. Circumstances beyond one’s control, excusing fulfilment of contract.
Foreign Trade Zone (FTZ)
A facility which – under license issued by the Foreign Trade Zone (FTZ) board – has acquired extra-territorial status. Merchandises entered into a FTZ are considered as having been “exported” and can be subjected to manipulation or manufacturing processes without Customs supervision, but will be subject to other applicable federal or state laws and terms of the storage contract.
Forty Foot Equivalent Unit (FEU)
A 40′ container equals 2 TEUS.
Person or company who arranges the carriage of goods and the associated formalities on behalf of an exporter or importer.
Free On Board (FOB)
An international term of sale. The goods are placed on board a ship by the seller at a port of shipment named in the sales contract. The risk of loss or damage to the goods is transferred from the seller to the buyer when the goods pass the ship’s rail.
Time allowed for shippers or consignees/receivers to load or unload cargo before demurrage, detention and other charges accrue.
Amount of money paid to a shipowner or shipping line for the carriage of cargo.
A commission paid to a licensed Freight Forwarder or Custom House Broker by the shipping line usually for export transactions. Commission is paid either as a percentage or the freight charges or as a lump sum amount per container, depending on the carrier and/or trade lane.
Freight Forwarder (FF)
Federally licensed company that handles documentation details for shipper of export cargo.
Freight Release (Freight Bill Receipt)
Evidence that the freight charges for the cargo have been paid. If in writing, it may be presented at the pier to obtain release of the cargo. (Normally, once the freight is paid, releases are usually arranged without additional documentation).
Full Container Load (FCL)
A container of goods with the shipper being responsible for the packing and the consignee being responsible for the unpacking of the container at his own premises.
Greenwich Mean Time.
General Rate Increase.
Gross Registered Tonnage.
General Average (GA)
Coverage for loss resulting from voluntary sacrifice, e.g., jettison, or the act of expending cargo to prevent loss of vessel, crew, passengers, or total cargo. The value of such a loss is averaged among all interested parties.
General Order (GO)
Cargo seized by customs due to failure on part of consignee to make customs entry within allotted free time.
The weight of the goods including packaging, wrapping, and internal and external containers.
House to House (same as CY/CY).
House to Pier (same as CY/CFS).
Single commodities too heavy to be lifted by the ship’s regular equipment.
Immediate Container Transfer Facility.
Inward Foreign Manifest.
International Maritime Dangerous Goods Code.
International Maritime Organisation.
The transportation of a shipment to an inland point for Customs clearance rather than filing an entry to clear the goods at the port of arrival.
Rules governing the interpretation of terms used in international trade published by the International Chamber of Commerce (ICC).
Inland Bill of Lading
Also known as the “Waybill” on rail or the “Pro Forma B/L” in trucking. It is used to document the transportation of the goods between the port and the point of origin or destination. It should contain information such as marks, numbers, steamship line, etc., to match with a dock receipt.
Inland Point Intermodal (IPI)
Inland carriage by another mode of transportation after port discharge, cargo moving to/from an inland point.
Assures the consignee that insurance is provided to cover loss or damage to the cargo while in transit.
Transfer of a container from one party to another.
Contract between carrier and trucker that legally permits interchange of equipment.
The combining of two forms of transportation, usually refers to ocean/rail, rail/truck/ocean, air/truck/rail/ocean movements.
The bank that has issued or opened a letter of credit. Also called an Opening Bank.
Liquid Natural Gas.
Liquid Petroleum Gas.
Long Ton (equiv. to 2,240 lbs).
Time allowed by a shipowner to the voyage charterer or bill of lading holder in which to load and/or discharge the cargo.
Less Than Container Load (LCL)
Cargo in any quantity (usually loose cargo) intended for carriage in containers, the carrier is responsible for packing and unpacking the container at the carrier’s premises.
Letter of Credit (L/C)
Financial document issued by a bank at the request of the consignee guaranteeing payment to the shipper for cargo if certain terms and conditions are fulfilled. Normally it contains a brief description of the goods, documents required, a shipping date, and an expiration date after which payment will no longer be made.
A right to retain property until a debt due in respect of it to the person detaining it is satisfied. Goods carried by sea are subject to a lien for freight.
The management of freight and information throughout the total supply chain from the original raw material source to the ultimate consumer of the finished product.
M & R
Maintenance and Repair.
Document containing a full list of the ship’s cargo, extracted from information shown on the bills of lading
The minimum amount one can charge per individual bill of lading.
Main ocean vessel in a liner service designated to move containers from set origin points to set destination ports/points on a regular service.
Notice of Readiness
Net Registered Tonnage
NVOCC (Non Vessel Operating Common Carrier)
A company who charters space aboard vessels, then sells that space to prospective shippers.
Original Bill of Lading endorsed by shipper that is used for negotiating documents with bank.
The weight of the commodity only.
Non Conference Carrier
An independent ocean carrier who does not belong to any group or conference of ocean carriers and who establishes their own pricing and policies.
Non Negotiable B/L
Copy of original Bill of Lading which cannot be negotiated with bank.
Company/person who appears on the bill of lading or waybill to be notified when cargo arrives at destination.
Original Bill of Lading.
Ocean rates are classified in many ways. The following are a few examples:
- Class – Grouping of articles.
- Commodity – Specific articles.
- Arbitrary – Fixed rate according to port to port.
- Minimum – Lowest charge.
- Heavy Lift Charge – Extra Charge for cargo which needs extra or heavy equipment to load or unload, charge assessed for cargo over a certain length.
- Charter – Use of an entire vessel.
- Ad Valorem – Based on value of cargo.
- Refrigerated – Cargo which requires refrigeration equipment.
- Dangerous Cargo – Needs special handling or stowage.
- On Deck Cargo – Cargo which must be shipped on the deck of the vessel.
On Board B/L
Certifies that the cargo has been placed aboard the named vessel and is signed by the master of the vessel or his representative. On letter of credit transactions, an On Board B/L is usually necessary for the shipper to obtain payment from the bank. When all bills of lading are processed, a “ship’s manifest” is prepared by the shipping line. This summarizes all cargo aboard the vessel by port of loading and discharge.
Pier to House (same as CFS/CY).
Pier to Pier (same as CFS/CFS).
Protection and Indemnity.
Port of Discharge. Also an acronym for Proof of Delivery.
Port of Loading.
Port of Origin.
A chart that indicates the temperature reading in a reefer container.
Costs per day. Charge on containers held by customers for an extended time; charges levied upon a trucker due to late return of equipment.
Cargo stolen from containers, warehouse or terminal.
Port of Arrival
Location where imported merchandise is off-loaded from the importing aircraft or vessel.
Port of Departure
In export, the final ocean port of aircraft where the shipment in the vessel or aircraft departs from the United States.
Port of Discharge
Port where goods are unloaded from vessel.
Freight paid prior to movement; money to be paid prior to issuance of bill of lading.
Refrigerated Container (Reefer)
A specialised type of container with built-in diesel power generator, engineered for the transportation of refrigerated and perishable commodities.
Tonnage used to calculate freight rates as in ocean cargo.
Roll on/Roll off. Vessel used for carrying cars, trucks and other rolling stock. Vehicles are driven on and off as opposed to being loaded with cranes.
Special Drawing Rights.
Seals on Containers
Used to locking device on container to prevent pilferage and to certify no tampering; they are made of steel, by customs or carrier.
A contract between a shipper (or a shipper’s association) and an ocean carrier (or conference) in which the shipper makes a commitment to provide a certain minimum quantity of cargo or freight revenue over a fixed time period, and the ocean common carrier or conference commits to a certain rate or rate schedule as well as a defined service level (such as assured space, transit time, port rotation, or similar service failures). The contract may also specify provisions in the event of non performance on the part of either party.
Person who negotiates the terms for the charter of a ship on behalf of a charterer or shipowner.
Person who consigns something. Legal entity or person named on the bill of lading or waybill as shipper and in whose name a contract of carriage has been concluded with a carrier. Also known as Consignor.
Shippers Load and Count
Shipments loaded and sealed by shippers and not checked or verified by the carriers.
Cargo volume count (at destination) less than originally shipped.
Cargo missing from vessel that it was originally intended for.
A carrier’s chartering of slots/spaces on other carrier’s vessels.
Terminal operator who facilitates the operation of loading and discharging vessels and other terminal activities.
To place cargo aboard a carrier in a pre-planned and organized manner.
The weight of a container and the material used for packing exclusive of cargo. When applied to a loaded truck, the weight of the truck exclusive of its contents.
A schedule of charges, rules and regulations, which must be followed. This can be for transportation charges, loading and unloading charges, and import duties, etc.
Terminal Handling Charge (THC)
Charge assessed by terminal for loading, unloading, fork lifts, document fees, and other assessments for import and export cargo.
Terminal Receiving Charge (TRC)
Charge assessed by the terminal for cargo being delivered for export.
Trailer Interchange Receipt (TIR)
Interchange receipt between trucker and carrier; document showing condition of container/equipment at the time of interchange.
The transfer of cargo from one carrier to another.
Contains a list of the particulars of the shipment, a record of the documents being transmitted, and instructions for disposition of these documents. Any special instructions are also included.
Twenty-foot Equivalent Unit (TEU)
A 20′ container is a TEU. Term used to express the carrying capacity of container vessels.
Vessel Sharing Agreement (VSA)
A term agreement between two or more carriers in which a number of container slots equal in space are reserved on particular vessels for each of the participants. The number of slots on different vessels on the same route can vary by vessel type abd direction but may be expressed as each party’s capacity use of the vessels employed jointly.
Document used to allow cargo carriage by different flag vessels other than the original destination country vessels. Also for government cargo where vessels under certain flags cannot carry the shipments.
Document issued by a shipping line or shipowner to a shipper or charterer, which serves as a receipt for the goods and evidence of the contract of carriage. Unlike a bill of lading, it is not a document of title and is not negotiable.
The dues paid for using a wharf. Accommodation at a wharf.