Overview
Shipping and freight forwarding terms and acronyms can be a real minefield. We've explained a few of the more common ones, but get in touch if there are any we don't have listed.
An AWB is a bill of lading that covers both domestic and international flights transporting goods to a specified destination. Technically, it is a non-negotiable instrument of air transport which serves as a receipt for the shipper, indicating that the carrier has accepted the goods listed therein and obligates itself to carry the consignment to the airport of destination according to specified conditions. Normally, AWB refers to the Air Waybill issued by carrying airlines and also called Master Air Waybill (MAWB) which comes with three digits of numeric airline identification codes issued by IATA to non-U.S. based airlines and the Air Transport Association of America to U.S. based airlines. However, air freight forwarders also issue HAWB (House Air Waybill ) to their customers for each of the shipments.
All Risks Coverage, a type of marine insurance, is the broadest kind of standard coverage, but excludes damage caused by war, strikes, and riots.
A phrase referring to the side of a ship. Goods to be delivered alongside are to be placed on the dock or lighter within reach of the transport ship's tackle so that they can be loaded aboard the ship. Goods are delivered to the port of embarkation, but without loading fees.
An adjustment in shipping charges to offset price fluctuations in the cost of bunker fuel.
Bills of lading are contracts between the owner of the goods and the carrier. There are two types. A straight bill of lading is nonnegotiable. A negotiable or shipper's order bill of lading can be bought, sold, or traded while goods are in transit and is used for many types of financing transactions. The customer usually needs the original or a copy as proof of ownership to take possession of the goods.
A bill of sale is a legal document made by a 'seller' to a purchaser, reporting that on a specific date, at a specific locality, and for a particular sum of money or other "value received", the seller sold to the purchaser a specific item of personal, or parcel of real, property of which he had lawful possession. It is a written instrument which evidences the transfer of title to personal property from the vendor, seller, to the vendee, buyer.
The Customs Service authorizes bonded warehouses for storage or manufacture of goods on which payment of duties is deferred until the goods enter the Customs Territory. The goods are not subject to duties if re-shipped to foreign points.
A general cargo vessel designed to efficiently handle un-containerised cargo. Vessels are usually self-sustaining in that they have their own loading and unloading machinery.
A freight surcharge or adjustment factor imposed by an international carrier to offset foreign currency fluctuations. In some cases an emergency currency adjustment factor (ECAF) may be applied when a charge or rate has been originally published in a currency that is experiencing sustained or rapid decline. The CAF is charged as a percentage of the freight.
A customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries for display, domonstration or other purposes without paying import duties or posting bonds.
The commercial invoice is a bill for the goods from the seller to the buyer. These invoices are often used by governments to determine the true value of goods for the assessment of customs duties and are also used to prepare consular documentation. Governments using the commercial invoice to control imports often specify its form, content, number of copies, language to be used, and other characteristics.
The person or firm named in a freight contract to whom goods have been consigned or turned over. For export control purposes, the documentation differentiates between an intermediate consignee and an ultimate consignee .
Delivery of merchandise from an exporter (the consignor) to an agent (the consignee ) under agreement that the agent sell the merchandise for the account of the exporter. The consignor retains title to the goods until sold. The consignee sells the goods for commission and remits the net proceeds to the consignor.
In order to handle small lot of consignment efficiently and competitively, freight forwarder usually put many consignments into one lot then tender to carrier for forwarding. In this case, each consignment will be shipped with one HAWB respectively and all of them will be under one master AWB .
Cost and Freight (CFR) to a named overseas port of import. Under this term, the seller quotes a price for the goods that includes the cost of transportation to the named point of debarkation. The cost of insurance is left to the buyer's account. (Typically used for ocean shipments only. CPT, or carriage paid to, is a term used for shipment by modes other than water.) Also, a method of import valuation that includes insurance and freight charges with the merchandise values.
Cost, insurance, and freight ( CIF ) to a named overseas port of import. Under this term, the seller quotes a price for the goods (including insurance), all transportation, and miscellaneous charges to the point of debarkation for the vessel. (Typically used for ocean shipments only. CIP, or carriage and insurance paid to, is a term used for shipment by modes other than water.)
The government authorities designated to collect duties levied by a country on imports and exports.
An individual or company licensed by the government to enter and clear goods through Customs . The U.S. Customs Service defines a Customs Broker, as any person who is licensed in accordance with Part III of Title 19 of the Code of Federal Regulations ( Customs regulations) to transact Customs business on behalf of others. Customs business is limited to those activities involving transactions with Customs concerning the entry and admissibility of merchandise; its classification and valuation; the payment of duties, taxes, or other charges assessed or collected by Customs upon merchandise by reason of its importation, or the refund, rebate, or drawback thereof.
The procedures involved in getting cargo released by Customs through designated formalities such as presenting import license /permit, payment of import duties and other required documentations by the nature of the cargo such as FCC or FDA approval.
A document, required by some foreign countries' customs officials to verify the value, quantity, and nature of the shipment, describing the shipment of goods and showing information such as the consignor, consignee , and value of the shipment.
Department of Agriculture, Fisheries and Forestry, is now known as Department of Agriculture. Its responsible for Quarantine and Biosecurity at the boarder.
Deliver Duty Paid.
Deliver Duty Unpaid.
Commodities classified by IATA according to its nature and characteristic in terms of the effect of its danger to carrier's flying safety.
Excess time taken for loading or unloading a vessel, thus causing delay of scheduled departure. Demurrage refers only to situations in which the charter or shipper, rather than the vessel's operator, is at fault.
Drawback is a rebate by a government, in whole or in part, of customs duties assessed on imported merchandise that is subsequently exported. Drawback regulations and procedures vary among countries.
A tax imposed on imports by the customs authority of a country. Duties are generally based on the value of the goods, some other factors such as weight or quantity (specific duties), or a combination of value and other factors (compound duties).
A term of sale in which for the quoted price, the seller merely makes the goods avaliable to the buyer at the seller's "named place" of business. This trade term places the greatest responsibility 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.
Full Container Load, also known as CY . CY is the abbreviation of Container Yard. When the term CY to CY , it means full container load all the way from origin to destination.
Especially for heavy loads and over-dimensional cargo. Containers do not have sides or a top. This allows easy fork-lift and crane access.
FEU is a measure of a ship's cargo-carrying capacity. One FEU measures forty feet by eight feet by eight feet -- the dimensions of a standard forty-foot container. An FEU equals two TEUs.
Free Alongside Ship , FAS , at a named port of export. Under FAS , the seller quotes a price for the goods that includes charges for delivery of the goods alongside a vessel at the port of departure. The seller handles the cost of unloading and wharfage ; loading, ocean transportation, and insurance are left to the buyer. FAS is also a method of export and import valuation.
Free Carrier , FCA , to a named place. This term replaces the former " FOB named inland port" to designate the seller's responsibility for the cost of loading goods at the named shipping point. It may be used for multimodal transport, container stations, and any mode of transport, including air.
Common price term used in international trade meaning seller's responsible for the cost of goods is to the point of loading it to the vessel deck or aircraft loading deck. The risk of loss of or damage to the goods is transferred from the seller to the buyer when the goods have been so delivered. FOB normally comes with port of loading either airport or sea port.
This term is the same as "Freight/Carriage Paid to ..." but with the addition that the seller has to procure transport insurance against the risk of loss of damage to the goods during the carriage. The seller contracts with the insurer and pays the insurance premium.
Like C & F, "Freight/Carriage paid to ..." means that the seller pays the freight for the carriage of the goods to the named destination. However, the risk of loss of or damage to the goods, as well as of any cost increases, is transferred from the seller to the buyer when the goods have been delivered into the custody of the first carrier and not at the ship's rail. The term can be used for all modes of transport including multi-modal operations and container or "roll on-roll off" traffic by trailer and ferries. When the seller has to furnish a bill of lading , waybill or carrier's receipt, he duly fulfills this obligation by presenting such a document issued by the person with whom he has contracted for carriage to the named destination. (Also see incoterms )
An independent business which handles export shipments for compensation. At the request of the shipper, the forwarder makes the actual arrangements and provides the necessary services for expediting the shipment to its overseas destination. The forwarder takes care of all documentation needed to move the shipment from origin to destination, making up and assembling the necessary documentation for submission to the bank in the exporter's name. The forwarder arranges for cargo insurance, makes the necessary overseas communications, and advises the shipper on overseas requirements of marking and labeling.
FAK is a shipping classification. Goods classified FAK are usually charged higher rates than those marked with a specific classification and are frequently in a container which includes various classes of cargo.
Goods and Service Tax, GST in relation to importing, is payable on the landed cost of the goods, known as the CIF value. The GST is calculate thus: (Purchase price of goods + Duty + Insurance + Freight) x GST
House Air waybill issued by carrying airlines' agent, normally freight forwarder .
Import restriction, applied by a country with an adverse trade balance (or for other reasons), reflect a desire to control the volume of goods coming into the country from other countries may include the imposition of tariffs or import quotas, restrictions on the amount of foreign currency available to cover imports, a requirement for import deposits, the imposition of import surcharges, or the prohibition of various categories of imports.
Maintained by the International Chamber of Commerce (ICC), this codification of terms is used in foreign trade contracts to define which parties incur the costs and at what specific point the costs are incurred. (also see incoterm section)
This certificate is used to assure the consignee that insurance is provided to cover loss of or damage to the cargo while in transit.
"Insured Value” is calculated thus : (the value of the goods) + shipping costs + 10%) = Insured Value. The additional 10% is to allow for loss of profit and/or the cost of progressing an insurance claim. The premium is calculated as a percentage of the insured value, and is the maximum value that the insurer is liable for, in the event of a claim."
Movement of goods by more than one mode of transport, ie. airplane, truck, railroad and ship.
A letter of credit in which the specified payment is guaranteed by the issuing bank if all terms and conditions are met by the drawee. It is as good as the issuing bank.
Less than Container Load, consolidated container load.
A 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. An Irrevocable Letter of Credit is one which obligates the issuing bank to pay the exporter when all terms and conditions of the letter of credit have been met. None of the terms and conditions may be changed without the consent of all parties to the letter of credit . A Revocable Letter of Credit is subject to possible recall or amendment at the option of the applicant, without the approval of the beneficiary. A Confirmed Letter of Credit is issued by a foreign bank with its validity confirmed by a U.S. bank. An exporter who requires a confirmed letter of credit from the buyer is assured payment from the U.S. bank in case the foreign buyer or bank defaults. A Documentary Letter of Credit is one for which the issuing bank stipulates that certain documents must accompany a draft. The documents assure the applicant (importer) that the merchandise has been shipped and that title to the goods has been transferred to the importer.
A luxury car, for importing tax purposes, is a road vehicle designed to carry a load of less than 2 tonnes and fewer than 9 passengers. It doesn't include motorcycles or similar vehicles. Commercial vehicles designed for the purpose of carrying goods used for business or trade are not considered a luxury car.
Ministry for Primary Industries is commonly known as MPI(formally MAF). It is charged with leadership of the New Zealand biosecurity system. This encompasses facilitating international trade, protecting the health of New Zealanders and ensuring the welfare of our environment, flora and fauna, marine life and Maori resources.
Broadly, insurance covering loss of, or damage to, goods at sea. Marine insurance typically compensates the owner of merchandise for losses in excess of those which can be legally recovered from the carrier that are sustained from fire, shipwreck, piracy, and various other causes. Three of the most common types of marine insurance coverage are "free of particular average" (f.p.a.), "with average" (w.a.), and "All Risks Coverage."
No Value Declared.
Proof Of Delivery, or a cargo/package receipt with the signature of recipient. This term has been widely used in courier and express industry and also gaining more attention and implementation at air cargo industry..
A shipping document issued by shipper to carrier, Customs and consignee serving the purposes of identifying detail information of package count, products count, measurement of each package, weight of each package, etc.
An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value, and important specifications (weight, size, and similar characteristics). When an importer apply's for Letter of Credit as the means of payment, a Pro Forma Invoice from the beneficiary of such Letter of Credit , usually the exporter, is required by the L/C issuing bank.
A type of ship designed to load and discharge cargo which rolls on wheels or tracks. They are similar to a giant car ferry.
The letters, numbers or other symbols placed on the outside of cargo to facilitate identification.
Shipping weight represents the gross weight in kilograms of shipments, including the weight of moisture content, wrappings, crates, boxes, and containers (other than cargo vans and similar substantial outer containers).
The weight of a ULD and tie-down materials without the weight of the goods it contains.
When an importer makes entry of articles and claimed to be exempt from duty under Chapter 98, Subchapter XIII, Harmonised Tariff Schedule of the United States, a bond is posted with Customs which guarantees that these items will be exported within a specified time frame (usually within one year from the date of importation). Failure to export these items makes the importer liable for the payment of liquidated damages for breach of the bond conditions.
In the United States, the certificate of title for a vehicle or boat(also known as a car title or pink slip; or pinks in the plural) is a legal form, establishing a person or business as the legal owner of a vehicle.
Transhipment refers to the act of sending an exported product through an intermediate country before routing it to the country intended to be its final destination.
TEU is a measure of a ship's cargo-carrying capacity. One TEU measures twenty feet by eight feet by eight feet -- the dimensions of a standard twenty-foot container. An FEU equals two TEUs.
The value for customs purposes of imported merchandise should be based on the actual value of the imported merchandise on which duty is assessed, or of like merchandise, and should not be based on the value of merchandise of national origin or on arbitrary or fictitious values.
All road vehciles, trailers, caravans and motorcycles require a Vehcile Import approval before arrival in Australia. For non-road vehicles like dirt bikes, quadbikes or golf carts, an Advisory notice is strongly recommended to confirm your non-road vehicle does not need a permit and avoids any holdups with Customs.
A charge assessed by a pier or dock owner for handling incoming or outgoing cargo.