This is one of a group of informative pages on this web site which
we are providing for the benefit of people and companies who use
the services of Freight Forwarders and Customs Brokers such as
ourselves. See also: Forwarding
101 Soon to come: Example of OCP vs. IPI shipments
Several definitions have been provided by Freight Training.
They are good people and their training is outstanding.
The sooner we all speak the same language the better.
Cim skor zacneme hovorit spolocnov recou tym lepsie
A.A.R. - Against All Risks
An insurance term.
A.1. - First Class Condition
A.D. - After Date
ADD/CVD - Antidumping and Countervailing Duties
When Commerce determines goods are being imported at rates below the cost to manufacture and the importation is damaging, an Anti-Dumping/Countervailing Duty can be asserted.
Ad. val. - Ad Valorem
According to Value.
A.N. - Aft Hatch
A.S. - After Sight
An acceptance is a time draft that the drawee has either
stamped or written the word accepted across the face of the draft and
then signs the acceptance notation. If a bank is the drawee (the party
that the draft is drawn on), a Banker’s Acceptance is created. If the
drawee is an individual or company, it is referred to as a Trade
A charge made by a
carrier for other than basic ocean transportation.
FMC 514.2 "Accessorial means a particular service or condition other than
the basic transportation, which is usually described in a commodity
description, TLI, or Tariff Rule, and for which a charge may be added
to the basic ocean freight rate."
A letter of credit that has been authenticated by the
advising bank, insuring that the issuing bank did indeed issue the letter
of credit. The advising bank does not take on any responsibility to effect
payment as they would if they had confirmed the letter of credit. However,
they will most likely assist in facilitating payment.
A shipping rate that includes all
shipping and accessorial charges.
The account party may contact the issuing bank in writing
requesting that a term or condition in the original letter of credit be
changed or deleted, or that a new term or condition be added to the letter
of credit. According to the Uniform Customs and Practices (UCP) 500,
amendments must be accepted or rejected in their entirety. In other words,
if the amendment contains more than one change, and you like one change
but not the other, you have to either accept or reject the entire
ASSIGNMENT of PROCEEDS
The beneficiary of a letter of credit may
instruct the negotiating bank, in writing, to pay all or a portion of the
proceeds due them to a third party. The request to assign the proceeds
should be accompanied by the original letter of credit and the fee that
the negotiating bank may charge for this service.
BAF or FAF - Bunker or Fuel adjustment factor
charge for fuel.
B.B. - Break Bulk
Cargo loaded in bulk inside a vessel as
compared to containerized cargo.
B/L - Bill of Lading
A contract of carriage, used by ocean,
inland waterway, rail and truck common carriers, and contract carriers.
Variety of B/L’s include an Ocean B/L, a Multimodal B/L, a Uniform B/L,
& a Uniform Short B/L. The former two can be negotiable, and would carry
title to the goods.
B.O. - Bad Order
Rail term where the car is in need of
The party that the letter of credit is issued in favor of.
The beneficiary may also be referred to as the seller, exporter, the
supplier or the vendor.
C-TPAT - Customs - Trade Partnership Against Terrorism
On Feb. 28, 2003, we SSF, were C-TPAT certified. In order to develop, enhance, and maintain effective security processes throughout the global supply chain, U.S. Customs and Border Protection (CBP) certities entities who have satisfied the CBP requirements.
CAF - Currency adjustment factor
An accessorial charge to
compensate for fluctuations in currencies.
C.E. - Consumption Entry
CFR or CNF Cost of Goods, and Freight, see INCOTERMS below
paying the freight to destination.
CFS - Container Freight Station
A location where the
carrier controls the loading &/or unloading of containers.
CHB - Customs House Broker
A person/company who has passed
all requirements and is licensed to do import business with US Customs. The exam requires
a proficiency in CFR 19, NAFTA, and the Harmonized Tariff.
CIF - Cost of Goods, Insurance and Freight
seller is responsible for arranging & paying freight to destination and
covering insurance to destination.
Clean Truck Fee
Assessment by many California Ports for picking up or delivering in older vehicles.
C.O.D. - Cash on Delivery
COFC Container on Flat Car
Intermodal container without
C/O - Certificate of Origin
A document certifying that
the goods described were from the area stated on the certificate.
It usually is notarized and certified by the local Chamber of Commerce.
C.P. - Charter Party
This is a common expression used in Seafreight. The
hiring of a vessel or ship is referred to as a
‘charter’. So, when a vessel is ‘chartered’, it means
that the shipowner has hired it out to a second party
(the ship itself would be referred to as being ‘on
charter’ and so forth). The terms and conditions of
the charter, that is to say the contractual terms and
conditions of hire, are documented in a contract
called a ‘charter party’. Note that the expression is
sometimes written as one word (charterparty). In times
past, the terms and conditions of the arrangement would
have been uniquely drawn up on a document (the French
word for which is taken from the Latin expression
‘carta’). This document when signed by the shipowner
and the hirer would then be torn in two, with each
keeping one piece. The French expression for this being
‘a part’ (on the side). So, from carta a part,
the expression developed into an Anglicised form
These days, the underlying contracts are normally
standard formats with established conditions for the
trade, cargo type, trade route or vessel type employed.
As the terms and conditions of carriage are recorded
on a document (the charter party) separate from the
transport document, the transport document looses one
of its traditional attributes (that of being ‘evidence’
of the contract of carriage). So, if a documentary
credit was involved, the bank may call for both the
charter party and the transport document or at the
very least require the transport document to make
reference to the charter party.
C.R. - Carrier's risk
CY/CY - Container Yard to Container Yard
yard is a location where containers may be parked, picked up, or delivered
full or empty. A CY may further be a place of loading (stuffing) or
unloading and/or where ocean carrier accepts custody and control of cargo.
A Customs document that permits the party holding the carnet to
carry or send merchandise temporarily into certain countries without
paying duties or posting bonds. Used frequently for trade shows.
Frame with wheels used to transport containers.
A group of carriers exempt from Anti-Trust laws
because they can share services and establish rates.
When the advising bank guarantees the obligation of the
issuing bank, providing an extra layer of protection. Used most often when
the credit worthiness of the issuing bank is in question, or the political
or economic conditions of the issuing bank’s country are considered risky.
The party appearing on a bill of lading to which the carrier
has been instructed to deliver the goods.
D/D - Date Draft
D/S - Days After Sight
DDC - Destination Delivery Charge
An accessorial charge to
deliver at destination.
This is an amount paid to the Shipping Line, for cargo
withdrawn by the shipper or cancelled by the shipper
(and so not loaded) that the Carrier was advised would
be loaded under a contract of Carriage. The amount
claimed by the Carrier is the full freight less any
lifting charges either not included in the freight or
accepted as not incurred (although this deduction if
included in the original freight rate is at the
discretion of the Carrier).
Effectively, once the contract is in place (and this
is at the very moment of the verbal offer and
acceptance, regardless of if a tangible document has
been issued), the cargo must be shipped. If the shipper
fails to load or cancels the booking, the Carrier can
demand the full freight anyway this is even true if
they then rebook the space for use by another shipper.
It is uncommon to come across this condition in a
service which runs on a regular and frequent basis this
does not mean to say that the Carrier in such a service
does not have the right to claim Deadfreight, but rather
that they waive the right for commercial reasons. It
is a more common risk and a regularly imposed penalty
in less frequent or charter arrangements.
DGD - Dangerous Goods Declaration
Any substance that falls
under one of 9 UN hazardous classifications as defined in the IMDGC.
DOT - Department of Transportation
U.S. cabinet level agency
responsible for domestic transportation and US inland portions of
international shipments. DOT is also the parent agency of the US Coast
Charges caused by containers being stored at port
or CY beyond specified free time.
Charges caused by containers being kept outside port
or CY beyond specified free time.
A Direct Service in Airfreight can mean one of
two things. Either, it is a request for or a reference
to, the cargo being handed directly to the Air Carrier
as opposed to the Consolidator or Forwarder. In this
context then, a Direct Service is the opposite of a
consolidated service (see definition 28). Note that
this is frequently called Direct IATA (with
IATA being the International body that controls air
activity [refer to definition 157]). However, not all
Air Carriers are IATA members, so Direct with the
Carrier would be a more accurate statement.The second
use of the expression Direct Service is in requesting
the routing of the cargo using one aircraft only.
Whether or not the cargo is entrusted directly to
the Carrier or via a Consolidator or Forwarder is
not the point. What is important in this usage of
the expression is that the cargo flies from origin
to destination on a single craft. This would be the
opposite of the dogleg service (refer to definition 8).
The caution is that in using the expression in the
context of the second definition (i.e. one aircraft)
a consolidator may take it to mean the first definition
(i.e. directly with the Carrier). The consequence of such
a misunderstanding could be severe as the Freight Rates
charged by Carriers for ‘direct’ handling of cargoes is
often many times greater than the rate offered by the
DRAFT (Bill of Exchange)
A formal demand for payment from the drawer to
the drawee stipulating the amount and currency to be paid at a specified
time to the order of a named party, also referred to as the payee. A sight
draft is for immediate payment; a time draft allows for a financing
period, usually not more than 180 days.
The ability to be reimbursed for some or all of the duties paid
on imported merchandise at the time of re-exportation.
The trucking movement of a container.
Duty - Import Tax imposed by Customs
The Harmonized Tariff System (HTS) provides duty rates for virtually every item that exists. The HTS is a reference manual that is the size of an unabridged dictionary. Experts spend years learning how to properly classify an item in order to determine its correct duty rate. Duty can be imposed by ad valorum (a percentage of the value) and/or a flat charge per unit.
D.W. - Deadweight Ton
E&O - Errors and Omissions
EAON - Except as Otherwise Noted
EAR - Export Administration Regulations
EIN - Exporter’s identification number
(Federal ID No.)
FAA - Free of All Average
FAS - Free Along Side
Goods to be delivered by seller to
a location along side of vessel, loading and carrage charges are for the buyers
FEC - Foreign Exchange Contract or Forward Cover
This is a Banking facility devised to allow (normally) importers
to cost goods using a fixed exchange rate.
What this allows is for the importer to calculate the
landed cost of the goods and to therefore sell goods
at the first available moment, well in advance of the
due date for the supplier to be paid. In this way the
importer will avoid having to bear the risk of exchange
rate fluctuation. The rate of exchange used by the bank
is one that they anticipate will apply on the due date
i.e. the date that the supplier is to be paid. For
example: If cargo arrives on day one and is due to be
paid for on day 90, the importer contacts the bank and
enters into a contract with them, where the importer
undertakes to buy the required foreign exchange on day
90. In recognition of this undertaking, the bank then
fixes a rate of exchange, which will stand for that
future purchase of currency by the importer. The
importer uses this exchange rate in the costing
When day 90 arrives, the importer buys the exchange
at the agreed rate (and pays his supplier). If the
local currency has deteriorated against the foreign
one, the importer has no risk equally if it has
improved, he has no gain. However, it gives stability
in markets where the local currency is volatile.
Exporters also have a use for these contracts
especially when they give their prices to foreign
buyers in a currency other than their local currency.
The scenario is now reversed as the exporter obtains a
fixed rate at which the Bank will buy the foreign
currency from the supplier when the supplier is paid.
The exporter effectively ‘fixes’ their profit in this
manner, and again avoids any consequence of exchange
FEU - Forty foot Equivalent Unit
FIO - Free In and Out
Ocean Loading/Unloading term.
BEWARE, the term free is a dangerous one. In this term, free means
that the cost of loading and unloading are for the account
of the shipper, and not the carrier. For example, if you
shipped a container from Hong Kong to Los Angeles for
US$1,000 FIO, you would have to pay the carrier US$1,000
for the ocean freight, AND you would have to pay the
Port tariff charges to load the container in Hong Kong
plus the Los Angeles port tariff charges to unload the
container, which would about double your shipping cost.
In other words, Free In and Out (FIO) means that the loading (in)
charges, and unloading (out) charges are free as far as
the carrier is concerned.
FMC - Federal Maritime Commission
FOB - Free on Board
Incoterm where seller is responsible for
delivering goods to a specified port and the cost of loading goods onboard
the vessel. This term must be clarified by stating a specific location and
type of conveyance (i.e., FOB vessel, New Orleans, LA)
FTZ - Foreign Trade Zone or Free Trade Zone
An area where goods can enter the country duty free.
The goods can be stored, used or sold while in the zone without incurring
duties. Duties are only paid when the goods leave the Trade Zone FTZ as a FOREIGN Trade Zone. (see 19 USC 81a - The Foreign Trade Zone Act and 19 CFR part 146).
A natural disaster, riot terrorist act, or war
which is totally beyond a party’s control, and prevents them from fulfilling
obligations under a contract.
14 days (every other week).
This is an excellent example of how difficult it is
to ‘crack the code’ of the freight vocabulary. The
word Freight is used in many different ways to describe
many loosely associated things. The following is not
intended as a definitive list but should indicate the
need to be careful with the words you use in trade,
given also that the party you are communicating with
is not necessarily accomplished in English. (The
English word Freight being “Fret”, ”Fracht”, “Vracht”,
“Vrag” and “Nolo” in French German Dutch Afrikaans and
1. Freight as an expression used to indicate the actual
cost of movement. This would be in the context of a
‘freight rate”, but you will be asked, “how much
freight did you pay?” which could actually be the
total of all transport costs from A to B, whether
called freight-rates or not.
2. Freight as the actual action of movement. This
would be in the question “how do you want to freight
this?” e.g. air or sea or land.
3. Freight used to describe the actual cargo itself.
As in “I’m sorry, but we cannot find your freight!”
or in the expression Freight Forwarder.
4. (To) Freight is used to indicate that the charges
are to be shown on a given document. For example, to
freight a bill of lading is to endorse it with the
prepaid and/or collect charges due.
Interestingly – and perhaps tellingly – the word
derives from the Latin ‘onus’ meaning a burden!
A big ass crane used to lift cargo from the pier
to a vessel or vise versa.
GRI - General Rate Increase
An across the board rate increase
by a carrier or a conference.
GRI - General Rules of Interpretation
The universal rules
governing the Harmonized Tariff System.
HMF - Harbor Maintenance Fee
Another accessorial charge.
Ocean B/L terms covering carrier liability
established 25 Aug. 1924. Incorporated into US law in 1936 through COGSA
(Carriage of goods at sea act). Hague Visby amendments of 1968 are not
included in COGSA. Read the fine print on the back of the B/L.
Harmonized Tariff System
A comprehensive commodity
classification system. Schedule B is the export classification system, and
HTSUSA is the classification system used to classify cargo imported into
the US, and assess duty thereon.
H.W.M. - High Water Mark
IMO - International Maritime Organization
Part of the UN which
regulates international navigation and shipping safety through a framework
of rules, treaties and regulations.
IPI - Inland Point Intermodal (Microbridge)
Cargo moving from an
inland point, under control of the ocean carrier. FMC 514.2 "Intermodal
transportation means continuous transportation involving more than one
mode of service (e.g., ship rail motor and air), for pickup and/or delivery
at a point beyond the area of the port at which the vessel calls."
A carrier who is not a member of a conference.
Standard set of definitions for delivery terms
(terms of sale) established by the International Chamber of Commerce.
INCOTERMS 2010 Effective 01 January 2010 this new set of rules will supersede the 2000 rules. INCOTERMS are boiler-plate definitions for international transportation of goods, covering transportation responsibilities, but not necessarily the title of goods. The 2010 rules deal with the passing of title more than the 2000 rules, but they are not clearly definitive. The below listed are extremely general definitions.
The 2010 set has only 11 terms, broken into two (2) areas:
RULES FOR ALL MODES OF TRANSPORT
EXW - Ex Works
Seller delivers when goods are made available at named origin point.
FCA - Free Carrier
Seller delivers goods when loaded upon named carrier at origin point.
CPT - Carriage Paid to
Seller has responsibility for delivery to named point.
CIP - Carriage and Insurance Paid to
Seller has responsibility for transport and insurance to named point.
DAT - Delivered at Terminal
Seller becomes responsible for delivery to and unloading at named terminal.
DAP - Delivered at Place
Same as DAT (supra), with added duty to make goods available to buyer (such as clearing goods for export).
DDP - Delivered, Duty Paid
Seller assumes all responsibility to deliver goods to buyer at named point.
RULES FOR WATER TRANSPORT
FAS - Free Alongside Ship
Seller delivers when goods are delivered to a named location alongside a waterborne mode of transportation, where buyer is responsible for loading onto the vessel.
FOB - Free on Board
Seller delivers when goods are actually laden on board the vessel.
CFR - Cost and Freight
Seller bears responsibility for transport to the port of destination.
CIF - Cost Insurance and Freight
In addition to CFR terms, seller must also provide insurance.
INCOTERMS 2000, (old) The 13 Incoterms are:
EXW--Ex Works (named place):
any mode of transport;
seller makes goods available to buyer at seller's premises or
other location, not cleared for export and not loaded on a vehicle.
The buyer bears all risks and costs involved in taking the goods from the
seller's premises and thereafter.
FCA--Free Carrier (named place):
any mode of transport;
seller delivers goods, cleared for export, to the carrier named by
the buyer at the specified place. If delivery occurs at the seller's
premises, the seller is responsible for loading; if delivery occurs elsewhere,
the seller must load the conveyance but is not responsible for
FAS--Free AlongSide Ship (named port of shipment):
maritime and inland waterway only; seller delivers when the goods are
placed alongside the vessel at the named port of shipment.
The seller also clears the goods for export.
FOB--Free On Board (named port of shipment):
maritime and inland waterway only; seller delivers when the goods are
pass the ship's rail at the named port. The seller clears the goods
CFR--Cost and Freight (named port of destination):
maritime and inland waterway only; seller delivers when the goods
pass the ship's rail at the port of export. The seller pays
cost and freight for bringing the goods to the foreign port and
clear the goods for export.
CIF--Cost, Insurance and Freight (named port of destination):
maritime and inland waterway only; seller delivers when the
goods pass the ship's rail at the port of export. The seller
pays cost and freight for bringing the goods to
the foreign port, obtains insurance against the buyer's risk of
loss or damage, and clears the goods for export.
CIP--Carriage and Insurance Paid to (named place of destination):
any mode of transport; seller delivers the goods to a carrier it
nominates but also pays the cost of bringing the
goods to the named destination. The
seller also obtains insurance against the
buyer's risk of loss or damage during carriage and clears the goods
CPT--Carriage Paid To (named place of destination):
any mode of transport; seller delivers goods to carrier it nominates
and pays costs of bringing goods to the named destination. The
seller also clears the goods for export.
DAF--Delivered At Frontier (named place):
any mode of transport to a land frontier; seller delivers
when goods are placed at the buyer's disposal
on the "arriving means of transport" (not unloaded), cleared
for export but not cleared for import before the customs
border of the destination country.
DES--Delivered Ex Ship (named port of destination):
maritime and inland waterway only; seller delivers when goods
are at the buyer's disposal on board the ship not cleared for
import. The buyer pays discharging costs.
DEQ--Delivered Ex Quay (named port of destination):
maritime and inland waterway only; seller delivers when the goods
are placed at the buyer's disposal, not cleared for import,
on the dock (quay) at the named port of destination.
The seller pays discharging costs, but the buyer pays for
DDU--Delivered Duty Unpaid (named place of destination):
any mode of tranport; seller delivers the goods to the buyer not
cleared for import and not unloaded from the arriving means of
transport at the named destination, but the buyer is responsible
for all import clearance formalities and costs.
DDP--Delivered Duty Paid (named place of destination):
any mode of tranport; seller delivers the goods to the buyer
cleared for import (including import license, duties, and taxes)
but not unloaded from the means of transport.
Pre (or Post) - Shipment Inspection:
A Pre-Shipment inspection involves the inspection of
cargo prior to loading or shipment by either an
independent third party or by a representative of the
buyer. The inspection is called for to assess the
quantity, quality, composition or condition (or all of
these) of the cargo.
Essentially, there are two types of inspection. An
Inspection that is commercial in nature this is to say
that the buyer or buyer and seller have agreed to the
inspection or one that is mandated by law. When the
inspection is legislated, it is normally a requirement
of the government of the destination country. They will
normally appoint an independent inspection service to
act on their behalf in the various countries of origin
and frequently, the clean report issued by the
inspection service (or a certificate that the clean
report has been issued) is the ‘trigger’ for payment.
As such, the buyer cannot remit funds to the seller
unless the cargo has passed the inspection. The extent
of the inspection may be fixed and quite specific,
dependant on the nature of the goods. Equally, the
goods and circumstances dictate where and when such
inspections take place. They can range in extent from
a simple ‘tally’, e.g. counting boxes and opening a
random sample of these, right up to drawing samples
and subjecting them to chemical analysis in a
With a ‘commercial’ inspection, the buyer normally
appoints someone to be present at the loading, again
checking quantities and random samples. This may be
someone from the independent inspectorate field, or
their own local agent etc. There are no guidelines for
these informal commercial inspections but a common
application is to endeavour to check that the quality
of goods ordered on the strength of a high-grade sample
meet the standards of the sample goods.Post Shipment
Inspections are uncommon but still have their place in
freight. Clearly the cargo has already moved and if the
inspection reveals problems, these are compounded in
that the cargo is no longer with the seller. These are
often voluntary inspections and should not be confused
with inspections mandated through Customs and Excise,
E&O - Errors & Omissions
OS&D - Over, Short, & Damage
COGS - Carriage of Goods at Sea
Hague Visby - see Hague rules.
INSURANCE COVER (Calculation)
In 1906, an Act of Parliament was passed in Britain
governing the minimum requirements for maritime
insurance. This Act (the Maritime Insurance Act of
1906) specified that, in the absence of instruction,
the insuring party need only organise cover to the
value plus 10% (i.e. the commercial invoice plus an
Much has changed since 1906 and certainly the ratio of
freight-costs to freight-value is substantially
different. To simply add 10% to the invoice is perhaps
underplaying the true cover required.The Seller’s
Commercial Invoice will be for the goods and further,
the invoice may include some, none or all of the cost
of transport to get the goods onto the Buyer’s shelf
from the Seller’s point of manufacture.It is therefore
required that Cover is calculated by firstly
determining the costs of moving the cargo onto the
Buyer’s shelf from where the Seller’s freight charges
included in the sales invoice, end.
Dependent on the specifics of the transaction, this
may embrace freight, transport, duties and all
disbursements (although generally excluding recoverable
taxes such as VAT), with the addition of margins for
profit and exchange fluctuation in accordance with
allowances made by the insurer.
These additional costs over and above the Seller’s
invoice are then totalled and expressed as a percentage
of the Seller’s invoice.
Roughly speaking, there is a sliding scale between
value and freighting cost percentages. This is to say
that the higher the value of the cargo, the lower the
total movement costs as a percentage of that value
(provided that the freight costs are not raised in
relation to the value of the goods, a system that
is uncommon but not impossible).Normally freight
movement costs are related to the size of a product
rather than the value of it. Small traffic of high
value will normally result in the charges for the
movement of the freight being a low percentage of
the overall cargo value whereas bulky traffic of
low value would have the reverse effect, with the
freight percentage forming a substantial part of
the landed costs.
It should be emphasized that the 1906 standard of
values plus 10% is still given as a guideline in
the absence of instruction. The intention behind
the Act was to allow Sellers to proceed even if they
were unable to obtain direction from the Buyer, i.e.
the Buyer’s failure to notify the Seller of the correct
freight or other costs to be included in the calculation
would not inhibit the movement of the cargo.
However, Sellers have a vested interest in ensuring
that the insurance cover they undertake is adequate
as they are owners of the cargo until such time as
they are paid and in the most extreme example should
the Buyer fail (become insolvent) then the Seller would
retain the insurable interest irrespective of the
Commercial Terms employed. In an age of mass
communication the modern Seller should have no need to
default to the minimum cover of value plus 10% due to a
lack of instruction or information.In many countries, in
the absence of instruction, insurance brokers will normally
offer insurance cover to the value calculated to be CFR
plus 10% (Note. Do not confuse the use of the term CFR
with the Incoterm CFR. These identical expressions have
two different meanings one in the context of the Sales
Contract, one in the context of the Insurance Contract).
In the context of insurance, this term means the addition
of the freight to the destination point of entry on to the
cost or value of the commercial invoice.
This calculation stems from the common formula used in
insurance claims when determining values for General
Average liabilities, the base figure used to calculate
the percentage contribution being expressed as CFR plus
LASH - Lighter aboard Ship
A ship containing equipment to
L/C - Letter of Credit
Bank contract for guarantee of
payment. See UCP500 rules for boilerplate.
LIFO - Liner In, Free Out
This is a qualification to a freight rate and should not
be confused with, or used as, a term of sale. The
expression Liner In Free Out, means that the port to
port freight rate offered by the Carrier is inclusive
of the costs of loading on to the ship but excludes the
costs for the discharge of the goods at the port of arrival.
Terms such as these and there are many that you will come across
are a throwback to the past in many respects. Frequently they
are used with different definitions in different countries.
In many cases the variation is subtle often differing in some
slight detail between ports in the same country and you should
exercise great caution when working with terms like this to
the point where you might consider calling for an exact
definition from the party you are in discussion with. This
holds particularly true if that party is based in a
CAUTION: The word free can be very confusing in
a trade context. For example: In the above expression
the word ‘free’ means ‘free from inclusion of’. So, Free Out
means that the freight rate given does NOT include the costs of
discharge from the ship. However, in the sales term FOB
(Free on Board) the expression "free" means inclusive of
the costs to achieve the underlying condition, so the
purchase price under FOB includes all of the charges to
achieve a condition (in this case loading on board.)
LINER TERMS - or full liner terms
This is an ocean freight expression.
Liner terms are the opposite of Free terms. When you ship
liner terms, the carrier is responsible for the loading and
unloading of the cargo. If you ship LINER-IN, FREE-OUT, then
the carrier is responsible for loading, and the shipper is responsible
for unloading. FREE-IN, LINER-OUT means the shipper pays
for loading, and the carrier pays for the unloading.
MLB - Mini Land Bridge
The same as IPI except the origin is a
port instead of an inland point. If the origin is New Orleans, but the
vessel sails out of Los Angeles, the NOLA -> LA transport is MLB.
FMC 514.2 "Intermodal transportation means
continuous transportation involving more than one mode of service (e.g.,
ship, rail, motor, and air), for pickup and/or delivery at a point beyond the
area of the port at which the vessel calls."
NDNC - No Deal, No Contract
The context is when the seller/agents/brokers have sealed a deal,
prior to the final contract between buyer and seller.
NDNC is a agreement contingent upon a contract between the
seller and all agents in the deal.
No Contract, No Deal.
NLR - No License Required
The code that replaced G-DEST on the
NOS - Not Otherwise Specified
NVOCC - Non-Vessel Owning Common Carrier
An indirect ocean
carrier who does not operate vessels, but accomplishes carriage via
sub-contract with vessel operating carriers.
NVO or NVOCC (Non-Vessel Owning Common Carrier)
Although this is a common expression used by Seafreight
Forwarders in many countries, the expression NVOCC has
legal definition in the USA only. Sometimes, outside
of the USA, they may be given as Non Vessel Owning Or Cargo Carrier
rather than Common Carrier. As there is no formal definition outside of
the USA, these variations abound. What the expression is trying to convey is
the concept of the "Contractual Carrier" that is to say,
someone who will issue a transport document as though
they are the Carrier, although they themselves do not
own or operate the vessel.
Essentially, a Freight Forwarder (Ocean Transportation Intermediary) in all but name.
Forwarders who choose to use the expression NVOCC to
describe themselves outside of American operators who
have legal obligation to do so in many circumstances
are confusing the issue unnecessarily, and might be
further attracting unwanted risks. For example, to use
the variation Non Vessel Owning Common Carrier is rash.
The last thing a non-American Forwarder wants is to be
held accountable as a Common Carrier etc in America,
the legal status of the Common Carrier varies from
other countries, where such status is vigourously to
be avoided, because of the legal burden it places on
The exact American legal definition NVOCC means a common
Carrier that does not operate the vessel by which ocean
transportation is provided, and is a shipper in its
relationship with the Ocean Common Carrier. Note that
the "Ocean Common Carrier" is the actual shipping line.
OCP - Overland Common Point
Similar to IPI, but the shipper is
responsible for moving the container/cargo from the loading point to the
An ambiguous term on a B/L. On Board followed by a
date usually means received for shipment, and not necessarily Laden On
Board Vessel. The fine print on the back of the B/L should explain.
Transportation beyond the port of discharge. This
can also be another accessorial charge.
Ocean Transportation Intermediary. A Freight Forwarder or an NVO
according to the Shipping Act of 1998.
Overweight Container Law
Since April 9, 1997 any container or
trailer in intermodal commerce weighing over 29,000 lbs must provide all
parties with: actual gross weight, reasonable description of the cargo,
identity of the certifying party, the trailer or container no., and the
date of certification.
P.D. - Per Diem
Phyto means plants. Under
international (WTO) treaty, a competent government authority can issue a
certificate based on inspection of goods confirming that a plant(s), seeds,
or plant products are free of insects and disease which the destination
California Port assessment for accessing the port during peak (daytime) hours.
Latin phrase meaning "in the form of". A pro-forma
invoice based on a sales contract should be issued to help a buyer open a
letter of credit. A pro-forma invoice is not a demand for payment of money,
but a preliminary copy to aid documentation.
RORO - Roll On, Roll Off
Ships specially fitted so entire
trucks can drive onboard.
S/D - Sight Draft
SED - Shipper's Export Declaration
A declaration required by
Census, Customs, and the Department of Commerce, giving all the details of
who shipped what to whom, and the value of the goods. SSF does this
SHinc - Sundays and Holidays included
SHex - Sundays and Holidays excepted
Short Shipped (or Shut Out)
In Seafreight, this condition arises when the cargo is not
taken on board the vessel. The Cargo is booked, documents are
issued and the cargo is placed in the port, however it fails
to be loaded.
Traditionally, the main reason for this problem was over-booking.
Such over-booking arose because of poor communication or
rolled-over cargo rather than as a consequence of incompetence
or greed (which was frequently the common and incorrect
assumption). (Note that ‘Rolled Over cargo is cargo that
was previously short-shipped from a prior vessel).
In the modern era, short shipments usually come about
because of scheduling or weather problems. Vessels have
limited time under the lifting equipment in a modern port
and need to maintain schedules. If a tidal action is needed
to facilitate the departure of the vessel, it might have to
sail at a given time regardless of what it has or has not
The on-board stamp on a seafreight document
details the actual vessel that the cargo was loaded
on. It is therefore important to see if the on-board
endorsement indicates a different vessel than that for
which the document was issued. If cargo is found
short-shipped from a vessel for which ‘on board’ bills
have been issued, the merchant has every right to complain.
S.L.&C. - Shipper's Load and Count
STC - Said To Contain
On the body of a Seafreight Transport document, there
will be a broad description of the cargo. The detail
in this section will be prefixed STC, meaning Said
To Contain i.e., the stated number and type of
package in the previous columns are Said to Contain
(followed by a description of the goods.)
Under most laws, the Transport Document is a receipt
for Packages, not a receipt for the cargo. This is to
say that the law recognises that if the Carrier is
recording the receipt of cargo, the cargo condition
(other than its outward appearance) quality, value and
sometimes even mass and volume are unknown to the
The Carrier can tally that he has been given so many
cartons, but he cannot see what is in those cartons.
He relies on the Seller’s declaration as to what they
are "said" to contain.This is particularly important
when dealing with Full Containers when the document
given is a receipt for One Package (the container).
These issues are relevant to insurance claims and
Carrier’s liabilities that are normally linked to the
number of packages involved in the claim and not the
total value of the claim itself.
This matter is normally the province of the ruling
convention applicable to the transport document. Some
allow the Carrier the protection described above when
working with Full Containers, whereas some do not.
(You may care to look at the difference in this
particular point between the Hague-Visby and
SWIFT - Society for Worldwide Interbank Financial Telecommunications
An agreement between banks on communications and standards primarily pertaining to Letters of Credit.
TEU - Twenty foot Equivalent Unit
A 20’ container.
This is an americanized measurement. A TEU is about six
meters long. It is a standard box or container.
One FEU = two TEUs.
In those countries where Waybill or Express Release
documents are not readily acknowledged as customary to
the trade, there is still the option to operate a
‘waybill’ transaction by the Seller’s surrender of one
or more original Bills of Lading back to the Carrier.
The Carrier then notifies their destination representative
that the Buyer need not produce a further original
to obtain release. Although most modern communication
is by Email, or at least by Fax, Carriers generally
still refer to this process of notification as being
a "Telex Release".
Every Bill of Lading is claused in such a manner that,
on surrender of one original of the Document of Title,
any and all other originals fall void. The Carrier
issues more than one original as a necessity of trade,
but obviously that Carrier must then protect themselves
from the fact that several ‘original’ receipts have
But, it is important to note that this surrender need
not always be in the country of destination. For example
cargo moving from the Country A to Country B involving
a Document of Title may be released to the Buyer in
Country B on presentation of one original of that
Document of Title to any office in the world owned or
operated or associated to the said Carrier. This could
be in the countries of Origin or Destination, but
equally it could be in any other third location.
In certain countries where Waybills are not acknowledged
(the Far East mainly) this is an equally easy system
for removing the need to generate, transmit and produce
Documents of Title, should they not be required by the
(It should be noted that this type of release often
requires all originals to be surrendered simultaneously
i.e. 1, 2 or 3 dependent on how many were issued).
THC - Terminal Handling Charge
Another accessorial charge.
TOFC - Trailer on Flat Car
Intermodal trailer or container with
TWRA - Transpacific Westbound Rate Agreement
A Conference of
several ocean carriers allowed to meet and establish rates and schedules.
A published listing containing actual rates,
classifications, charges, rules, etc. A tariff is the distinguishing
feature of a common carrier consisting of its offer to the public to
provide transportation between published points/routes of service based on
a common set of rules, at specified costs.
When a shipment from point "A" to "C" must be
handled through "B" or other intermediate points.
Uniform Customs and Practices for Documentary Credits,
is a document published by the International Chamber of Commerce setting
forth standard rules and conditions under which Documentary Letters of
Credit are to be drafted, issued, notified, amended, negotiated, interpreted
and paid by commercial banks. These rules reflect general consensus among
banks worldwide, and provide a common basis on which to conduct business.
USDA - United States Department of Agriculture
agency in charge of regulating agricultural plants & animals. USDA oversees
the import/export of agricultural products, and issues animal health
certificates, (plant) phytosanitary certificates, and (meat & dairy)
sanitary certificates on products within its jurisdiction, as required by
foreign governments for exports. This is done respectively, through the
USDA veterinary service for live animals, the Animal Plant Health
Inspection Service (APHIS) for non food animal products, plants, and plant
products, and the Food Safety Inspection Service for meat & dairy products.
Comprehensive & current information on destination country documentation
requirements for agricultural products is maintained on the USDA sponsored
A division of the Department of Treasury is in
charge of controlling the admissibility of goods into the country, and
collecting duty and taxes thereon. Customs also enforces laws and
regulations otherwise applicable to imported goods.
This is a term for a non-negotiable
"straight" bill of lading. It represents a contract for
Y/A - York/Antwerp Rules
Southern States Forwarding, Inc.
5269 Brantford Road / Memphis, Tennessee 38120 USA
(901) 763-3044 ~ fax (901) 763-1999 ~