Glossary
17
Mar
A
| AAR | Against All Risks (abbreviation) |
| Abandon | A proceeding wherein a shipper or consignee seeks authorisation to abandon all or parts of the shipment |
| Ad Valorem | A Latin term meaning ‘according to value’ |
| Advice of Shipment | A notice sent to a local or foreign buyer advising that shipment has gone forward and containing details of packing, routing, etc. A copy of the invoice is often enclosed. |
| Advising Bank | A bank operating in the seller’s country, that handles letters of credit in behalf of a foreign bank |
| Affreightment | Contract of an agreement by an ocean carrier to provide cargo space on a vessel for a specific time and price to accommodate an exporter or importer. |
| Agent | A person authorized to transact business for and in the name of another person or company. Types of agent are:(1) brokers, (2) commission merchants, (3) resident buyers, (4) sales agents, (5) manufacturer’s representatives. |
| Alongside | Refers to the side of a ship. Goods delivered “alongside” are to be placed on the dock or barge within reach of the transport ship’s tackle so that they can be loaded. |
| Ambient Temperature | The ambient temperature of a container is the atmospheric temperature to which it is exposed. |
B
| B/L | “Bill of Lading.” (abbreviation) |
| BAF | “Bunker Adjustment Factor” (abbreviation). Used to compensate steamship lines for fluctuating fuel costs. Sometimes called “Fuel Adjustment Factor” or FAF. |
| Bank Guarantee | Guarantee issued by a bank to a carrier to be used in lieu of lost or misplaced original negotiable bill of lading. |
| Base Rate | A tariff term referring to ocean rate less accessorial charges, or simply the base tariff rate |
| Beneficiary | Entity to whom money is payable / Entity for whom a letter of credit is issued / The seller and the drawer of a draft. |
| BIFA | British International Freight Association. |
| Bilateral | A contract term meaning both parties agree to provide something for the other. |
| Bill of Lading Port of Discharge | Port where cargo is discharged from means of transport. |
| Bill of Sale | Confirms the transfer of ownership of certain goods to another person in return for money paid or loaned. |
C
| Cabotage | Water transportation term applicable to shipments between ports of a nation; commonly refers to coast-wise or inter-coastal navigation or trade. |
| CAF | “Currency Adjustment Factor” (abbreviation). A charge, expressed as a percentage of a base rate, that is applied to compensate ocean carriers of currency fluctuations. |
| Cargo Manifest | A manifest that lists all cargo carried on a specific vessel voyage. |
| Carnet | A Customs document permitting the holder to temporarily carry or send merchandise into certain foreign countries paying duties or posting bonds. |
| Carrier | Any person or entity who, in a contract of carriage, undertakes to perform or to procure the performance of carriage by rail, road, sea, air, inland waterway or by a combination of such modes. |
| Cartage | Usually refers to intra city hauling on drays or trucks. |
| Cash Against Documents (CAD) | Method of payment for goods in which documents transferring title are given the buyer upon payment of cash to an intermediary acting for the seller. |
| Certification of Origin | A certified document showing the origin of goods; used in international commerce. |
| CFS | “Container Freight Station” (abbreviation). A shipping dock where cargo is loaded into or unloaded (“stripped”) from containers. Generally, this involves less than containerload shipments, although small shipments destined to same consignee are often consolidated. |
| Claim | A demand made upon a transportation line for payment on account of a loss sustained through its alleged negligence. |
| Clean Bill of Lading | A receipt for goods issued by a carrier with an indication that the goods were received in “apparent good order and condition,” without damage or other irregularities. |
| CLECAT | European Association for Forwarding, Transport, Logistics and Customs Services. |
| Commercial Invoice | Represents a complete record of the transaction between exporter and importer regarding the goods sold. Reports the content of the shipment and serves as the basis for all other documents about the shipment. |
| Commodity | Article shipped. For dangerous and hazardous cargo, the correct commodity identification is critical. |
| Common Carrier | A transportation company which provides service to the general public at published rates. |
| Common Law | Law that derives its force and authority from precedent, custom and usage rather than from statutes, particularly with reference to the laws of England and the United States. |
| Customs | Government agency charged with enforcing the rules passed to protect the country’s import and export revenues. |
| Customs Bonded Warehouse | A warehouse authorized by Customs to receive duty-free merchandise. |
| Customs Entry | All countries require that the importer make a declaration on incoming foreign goods. The importer then normally pays a duty on the imported merchandise. The importer’s statement is compared against the carrier’s vessel manifest to ensure that all foreign goods are properly declared. |
| Customs Invoice | A form requiring all data in a commercial invoice along with a certificate of value and origin. |
D
| Demurrage | A penalty charge against shippers or consignees for delaying the carrier’s equipment beyond the allowed free time. The free time and demurrage charges are set forth in the charter party or freight tariff. |
| Density | The weight of cargo per cubic foot. |
| Detention | A penalty charge against shippers or consignees for delaying carrier’s equipment beyond allowed time. |
| Devanning | The unloading of a container or cargo van. |
| DGSA | Dangerous Goods Safety Advisor. |
| Discrepancy Letter of Credit | When documents presented do not conform to the requirements of the letter of credit (L/C), it is referred to as a “discrepancy.” Banks will not process L/C’s which have discrepancies. They will refer the situation back to the buyer and/or seller and await further instructions. |
| Dock Receipt | A form used to acknowledge receipt of cargo and serves as basis for preparation of the ocean bill of lading. |
| Documents Against Acceptance (D/A) | Instructions given by a shipper to a bank indicating that documents transferring title to goods should be delivered to the buyer only upon the buyer’s acceptance of the attached draft. |
| Documents Against Payment (D/P) | An indication on a draft that the documents attached are to be released to the drawee only on payment. |
| Door-to-Door | Transportation of a container and its contents from consignor to consignee. Also known as House to House. |
| Draft, Bank | An order issued by a seller against a purchaser; directs payment, usually through an intermediary bank. Typical bank drafts are negotiable instruments and are similar in many ways to checks on checking accounts in a bank. |
| Draft, Clean | A draft to which no documents are attached. |
| Draft, Date | A draft that matures on a fixed date, regardless of the time of acceptance. |
| Draft, Discounted | A time draft under a letter of credit that has been accepted and purchased by a bank at a discount. |
| Draft, Sight | A draft payable on demand upon presentation. |
| Draft, Time | A draft that matures at a fixed or determinable time after presentation or acceptance. |
| Drawback | A partial refund of an import fee. Refund usually results because goods are re-exported from the country that collected the fee. |
| Drawee | The individual or firm that issues a draft and thus stands to receive payment. |
| Drayage | Charge made for local hauling by dray or truck. |
E
| EDI | “Electronic Data Interface” (abbreviation). Generic term for transmission of transactional data between computer systems. |
| Entry | Customs documents required to clear an import shipment for entry into the general commerce of a country. |
| Ex – “Form” | When used in pricing terms such as “Ex Factory” or “Ex Dock,” it signifies that the price quoted applies only at the point of origin indicated. |
| Exception | Notations made when the cargo is received at the carrier’s terminal or loaded aboard a vessel. They show any irregularities in packaging or actual or suspected damage to the cargo. |
| Expiry Date | Issued in connection with documents such as letters of credit, tariffs etc. to advise that stated provisions will expire at a certain time. |
| Export Declaration | A government document declaring designated goods to be shipped out of the country. |
| Export License | A government document which permits the “Licensee” to engage in the export of designated goods to certain destinations. |
F
| FCL | “Full Container Load” (abbreviation). |
| Feeder Service | Cargo to/from regional ports are transferred to/from a central hub port for a long-haul ocean voyage. |
| Feeder Vessel | A short-sea vessel which transfers cargo between a central “hub” port and smaller “spoke” ports. |
| FEU | “Forty-Foot Equivalent Units” (abbreviation). Refers to container size standard of forty feet. Two twenty-foot containers or TEU’s equal one FEU. |
| FIATA | International Federation of Freight Forwarders Association |
| Force Majeure | A short-sea vessel which transfers cargo between a central “hub” port and smaller “spoke” ports. |
| Foul Bill of Lading | A receipt for goods issued by a carrier with an indication that the goods were damaged when received |
| Free Time | That amount of time that a carrier’s equipment may be used without incurring additional charges. |
| Freight Bill | A document issued by the carrier based on the bill of lading and other information; used to account for a shipment operationally, statistically, and financially. |
| Freight Forwarder | A person whose business is to act as an agent on behalf of the shipper who also frequently makes the booking reservation. |
G
| Gateway | A point at which freight moving from one territory to another is interchanged between transportation lines. |
| General Average | Expenses and damages incurred as the result of damage to a ship and its cargo and/or of taking direct action to prevent initial or further damage to the ship and its cargo. |
| GRI | “General Rate Increase” (abbreviation). Used to describe an across-the-board tariff rate increase implemented by conference members and applied to base rates. |
| Groupage | A consolidation service, putting small shipments into containers for shipment. |
H
| Harmonized System of Codes (HS) | An international goods classification system for describing cargo in international trade under a single commodity-coding scheme. This code is a hierarchically structured product nomenclature organized into 99 chapters arranged in 22 sections, the latter of which encompass an industry. The basic code contains four-digit headings and six-digit subheadings. Many countries add digits for Customs tariff and statistical purposes. |
| House-to-Pier | Cargo loaded into a container by the shipper under shipper’s supervision. When the cargo is exported, it is unloaded at the foreign pier destination. |
I
| I.M.C.O | International Maritime Consultative Organization. A forum in which most major maritime nations participate and through which recommendations for the carriage of dangerous goods, bulk commodities, and maritime regulations become internationally acceptable. |
| I.M.D.G Code | International Maritime Dangerous Goods Code. |
| IATA | International Air Transport Association. |
| ICC | International Chamber of Commerce. |
| IIFA | Irish International Freight Association. |
| Import | To receive goods from a foreign country. |
| Import License | A document required and issued by some national governments authorizing the importation of goods. |
| In Bond | Cargo moving under Customs control where duty has not yet been paid. |
| Indemnity Bond | An agreement to hold a carrier harmless regarding a liability. |
| Inherent Vice | An insurance term referring to any defect or other characteristic of a product that could result in damage to the product without external cause. Insurance policies may exclude inherent vice losses. |
| Inspection Certificate | A certificate issued by an independent agent or firm attesting to the quality and/or quantity of the merchandise being shipped. |
| Insurance with Average-clause | This type of clause covers merchandise if the damage amounts to three percent or more of the insured value of the package or cargo. If the vessel burns, sinks or collides, all losses are fully covered. |
| Insurance, All-risk | This type of insurance offers the shipper the broadest coverage available, covering against all losses that may occur in transit. |
| Insurance, General-Average | In water transportation, the deliberate sacrifice of cargo to make the vessel safe for the remaining cargo. Those sharing in the spared cargo proportionately cover the loss. |
| Insurance, Particular Average | Refers to partial loss on an individual shipment from one of the perils insured against, regardless of the balance of the cargo. Particular average insurance can usually be obtained, but the loss must be in excess of a certain percentage of the insured value of the shipment, usually three to five percent, before a claim will be allowed by the company. |
| Intermodal | Used to denote movements of cargo containers interchangeably between transport modes, i.e., motor, water, and air carriers, and where the equipment is compatible within the multiple systems. |
| Irrevocable Letter of Credit | Letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee and which cannot be revoked without joint agreement of both the buyer and the seller. |
| Issuing Bank | Bank that opens a straight or negotiable letter of credit and assumes the obligation to pay the bank or beneficiary if the documents presented are in accordance with the terms of the letter of credit. |
| Issuing Carrier | The carrier issuing transportation documents or publishing a tariff. |
L
| Landbridge | Movement of cargo by water from one country through the port of another country |
| Landed Cost | The total cost of a good to a buyer, including the cost of transportation. |
| Landing Certificate | Certificate issued by consular officials of some importing countries at the point or place of export when the subject goods are exported under bond |
| LCL | “Less than Container Load” (abbreviation). The quantity of freight which is less than that required for the application of a container load rate. |
| Less Than Truckload | Also known as LTL or LCL |
| Letter of Indemnity | In order to obtain the clean bill of lading, the shipper signs a letter of indemnity to the carrier. |
| Licenses | Some governments require certain commodities to be licensed prior to exportation or importation. Clauses attesting to compliance are often required on the B/L / Various types issued for export and import as mandated by governments. |
| Lien | A legal claim upon goods for the satisfaction of some debt or duty. |
M
| Marine Insurance | Insurance covering loss or damage of goods at sea. Marine insurance typically compensates the owner of merchandise for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier. |
| Mini Landbridge | An intermodal system for transporting containers by ocean and then by rail or motor to a port previously served as an all water move. |
| Minimum Charge | The lowest charge that can be assessed to transport a shipment. |
| Multimodal | Synonymous for all practical purposes with “Intermodal.” |
T
| Terminal Charge | A charge made for a service performed in a carrier’s terminal area. |
| TEU | “Twenty-foot Equivalent Unit” (abbreviation). |
| TIR | “Transport International par la Route.” Road transport operating agreement among European governments and the United States for the international movement of cargo by road. Display of the TIR carnet allows sealed containerloads to cross national frontiers without inspection. |
| Tranship | To transfer goods from one transportation line to another, or from one ship to another. |
U
| UCP | “Uniform Customs and Practice for Documentary Credits,” (abbreviation) published by the International Chamber of Commerce. This is the most frequently used standard for making payments in international trade; e.g., paying on a Letter of Credit. It is most frequently referred to by its shorthand title: UCP No. 500. |
| UN/EDIFACT | United Nations EDI for Administration, Commerce and Transport. EDI Standards are developed and supported by the UN for electronic message (data) interchange on an international level. |
| Uniform Customs and Practices for Documentary Credits (UCP) | Rules for letters of credit drawn up by the Commission on Banking Technique and Practices of the International Chamber of Commerce in consultation with the banking associations of many countries. |
W
| W.M. (W/M) | “Weight or Measurement” (abbreviation); the basis for assessing freight charges. The rate charged under W/M will be whichever produces the highest revenue between the weight of the shipment and the measure of the shipment. York-Antwerp Rules of 1974 Established the standard basis for adjusting general average and stated the rules for adjusting claims. |
| War Risk | Insurance coverage for loss of goods resulting from any act of war. |
| Waybill (WB) | A document prepared by a transportation line at the point of a shipment; shows the point of the origin, destination, route, consignor, consignee, description of shipment and amount charged for the transportation service. It is forwarded with the shipment or sent by mail to the agent at the transfer point or waybill destination. Abbreviation is WB. Unlike a bill of lading, a waybill is NOT a document of title. |
| Without Recourse | A phrase preceding the signature of a drawer or endorser of a negotiable instrument; signifies that the instrument is passed onto subsequent holders without any liability to the endorser in the event of non-payment or non-delivery. |
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