– Abbreviation for Against All Risks (insurance clause).
Abandon – A proceeding wherein a shipper/consignee seeks
authority to abandon all or parts of their cargo.
Act of God – An act beyond human control, such as lightning,
flood or earthquake.
Ad Valorem – A term from Latin 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 and, if desired, a copy
of the bill of lading.
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 at a specified time and for a specified
price to accommodate an exporter or importer.
Agent (Agt) – 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
Air Waybill – The forwarding agreement or carrying agreement
between shipper and air carrier and is issued only in nonnegotiable form.
A phrase referring 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 temperature of a surrounding body.
The ambient temperature of a container is the atmospheric temperature to which
it is exposed.
The U.S. Customs’ “Automated Manifest System.”
Anti-Dumping Duty – A tariff imposed to discourage sale of
foreign goods, subsidized to sell at low prices detrimental to local
Average – See insurance.
Arrival Notice – A notification by carrier of ship’s arrival to the
consignee, the “Notify Party,” and – when applicable – the “Also
Notify Party.” These parties in interest are listed in blocks 3, 4 and 10,
respectively, of the Bill of Lading.
B/L – Abbreviation for “Bill of Lading.”
BAF – Abbreviation for “Bunker Adjustment Factor.” 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.
Barratry – An act committed by the master or mariners of a
vessel, for some unlawful or fraudulent purpose, contrary to their duty to the
owners, whereby the latter sustain injury. It may include negligence, if so
gross as to evidence fraud.
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; the entity for
whom a letter of credit is issued; the seller and the drawer of a draft.
Bilateral – A contract term meaning both parties agree to
provide something for the other.
Bill of exchange – In the United States, commonly known as a
“Draft.” However, bill of exchange is the correct term.
Bill of Lading (B/L) – A document that establishes the terms
of a contract between a shipper and a transportation company. It serves as a
document of title, a contract of carriage and a receipt for goods.
- Amended B/L: B/L requiring updates that do not change financial status; this
is slightly different from corrected B/L.
- B/L Terms & Conditions: the fine print on B/L; defines what the carrier
can and cannot do, including the carrier’s liabilities and contractual
- B/L’s Status: represents whether the bill of lading has been input, rated,
reconciled, printed, or released to the customer.
- B/L’s Type: refers to the type of B/L being issued. Some examples are: a Memo
(ME), Original (OBL), Non-negotiable, Corrected (CBL) or Amended (AM) B/L.
- Canceled B/L: B/L status; used to cancel a processed B/L; usually per
shipper’s request; different from voided B/L.
- Clean B/L: A B/L which bears no superimposed clause or notation which
declares a defective condition of the goods and/or the packaging.
- Combined B/L: B/L that covers cargo moving over various transports.
- Consolidated B/L: B/L combined or consolidated from two or more B/L’s.
- Corrected B/L: B/L requiring any update which results in money or other
financially related changes.
- Domestic B/L: Non-negotiable B/L primarily containing routing details;
usually used by truckers and freight forwarders.
- Duplicate B/L: Another original Bill of Lading set if first set is lost, also
known as reissued B/L.
- Express B/L: Non-negotiable B/L where there are no hard copies of originals
- Freight B/L: A contract of carriage between a shipper and forwarder (who is
usually a NVOCC); a non-negotiable document.
- House B/L: B/L issued by a freight forwarder or consolidator covering a
single shipment containing the names, addresses and specific description of the
- Intermodal B/L: B/L covering cargo moving via multimodal means. Also known as
Combined Transport B/L, or Multimodal B/L.
- Long Form B/L: B/L form with all Terms & Conditions written on it. Most
B/L’s are short form which incorporate the long form clauses by reference.
- Memo B/L: Unfreighted B/L with no charges listed.
- B/L Numbers: U.S. Customs’ standardized B/L numbering format to facilitate
electronic communications and to make each B/L number unique.
- Negotiable B/L: The B/L is a title document to the goods, issued “to the
order of” a party, usually the shipper, whose endorsement is required to effect
is negotiation. Thus, a shipper’s order (negotiable) B/L can be bought, sold,
or traded while goods are in transit and is commonly used for letter-of-credit
transactions. The buyer must submit the original B/L to the carrier in order to
take possession of the goods.
- Non-Negotiable B/L: See Straight B/L. Sometimes means a file copy of a B/L.
- “Onboard” B/L: B/L validated at the time of loading to transport. Onboard
Air, Boxcar, Container, Rail, Truck and Vessel are the most common types.
- Optional Discharge B/L: B/L covering cargo with more than one discharge point
- “Order” B/L: See Negotiable B/L.
- Original B/L: The part of the B/L set that has value, especially when
negotiable; rest of set are only informational file copies. Abbreviated as OBL.
- Received for Shipment B/L: Validated at time cargo is received by ocean
carrier to commence movement but before being validated as “Onboard”.
- Reconciled B/L: B/L set which has completed a prescribed number of edits
between the shipper’s instructions and the actual shipment received. This
produces a very accurate B/L.
- Short Term B/L: Opposite of Long Form B/L, a B/L without the Terms &
Conditions written on it. Also known as a Short Form B/L. The terms are
incorporated by reference to the long form B/L.
- Split B/L: One of two or more B/L’s which have been split from a single B/L.
- Stale B/L: A late B/L; in banking, a B/L which has passed the time deadline
of the L/C and is void.
- Straight (Consignment) B/L: Indicates the shipper will deliver the goods to
the consignee. It does not convey title (non-negotiable). Most often used when
the goods have been pre-paid.
- “To Order” B/L: See Negotiable B/L.
- Unique B/L Identifier: U.S. Customs’ standardization: four-alpha code unique
to each carrier placed in front of nine digit B/L number; APL’s unique B/L
Identifier is “APLU”. Sea-land uses “SEAU”. These prefixes are also used as the
- Voided B/L: Related to Consolidated B/L; those B/L’s absorbed in the
combining process. Different from Canceled B/L.
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.
Blocking or Bracing – Wood or metal supports (Dunnage) to keep
shipments in place to prevent cargo shifting.
Board – To gain access to a vessel.
Bonded Freight – Freight moving under a bond and to be
delivered only under stated conditions.
Bonded Warehouse – A warehouse authorized by Customs
authorities for storage of goods on which payment of duties is deferred until
the goods are removed.
Break Bulk – To unload and distribute a portion or all of the
contents of a rail car, container, or trailer.
- Loose, non-containerized cargo.
Bulk Cargo – Not in packages or containers; shipped loose in
the hold of a ship without mark and count.” Grain, coal and sulfur are usually
Bulk-Freight Container – A container with a discharge hatch in
the front wall; allows bulk commodities to be carried.
Bunker Charge – An extra charge sometimes added to steamship
freight rates; justified by higher fuel costs. (Also known as Fuel Adjustment
Factor or FAF.)
Bunkers – A Maritime term referring to Fuel used aboard the
ship. Coal stowage areas aboard a vessel in the past were in bins or bunkers.
Bridge Point – An inland location where cargo is received by
the ocean carrier and then moved to a coastal port for loading.
Bridge Port – A port where cargo is received by the ocean
carrier and stuffed into containers but then moved to another coastal port to be
loaded on a vessel.
Cabotage – Water transportation term applicable to shipments
between ports of a nation; commonly refers to coast-wise or inter-coastal
navigation or trade. Many nations, including the United States, have cabotage
laws which require national flag vessels to provide domestic interport service.
CAF – Abbreviation for “Currency Adjustment Factor.” A charge,
expressed as a percentage of a base rate, that is applied to compensate ocean
carriers of currency fluctuations.
Carnet – A Customs document permitting the holder to
temporarily carry or send merchandise into certain foreign countries (for
display, demonstration or similar purposes) without paying duties or posting
bonds. Any of various Customs documents required for crossing some international
Cargo Manifest – A manifest that lists all cargo carried on a
specific vessel voyage.
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.
Carrier’s Certificate – A certificate required by U.S. Customs to
release cargo properly to the correct party.
- The inland transport service which is offered by the
carrier under the terms and conditions of the carrier's through Bill of Lading
and Inland Haulage Tariff.
CFR (Cost and
Freight) (...Named Port of Destination): A Term
of Sale as defined by INCOTERMS here i.e. seller pays the costs and freight
necessary to bring the goods to the named port of destination, Terms of Sale
but the risk of loss of or damage to the goods, as (continued) well as any
additional costs due to events occurring after the time the goods have been
delivered on board the vessel, is transferred from the seller to the buyer when
the goods pass the ship’s rail in the port of shipment. The CFR term requires
the seller to clear the goods for export.
Clean B/L- A B/L which bears
no superimposed clause or notation which declares a defective condition of the
goods and/or the packaging.
Consignee- is the party shown
on the bill of lading to whom the shipment is consigned. Need not always be the
buyer, and in some countries will be the buyer's bank. He/ She is the actual
receiver of the cargo and a person or company to whom commodities are shipped.
Station (C.F.S)- A shipping dock where cargo is
loaded (“stuffed”) into or unloaded
(“stripped”) from containers. Generally, this involves less than container load
shipments, although small shipments destined to same consignee are often
consolidated. Container reloading from/to rail or motor carrier equipment is a
typical activity. These facilities can be located in container yards, or off
Manual, July 2013 Chapter 1 Page 3
(C.Y)- A place/area where FCL cargo and/or empty containers
are received from or delivered to the Merchant by or on behalf of the Line. A
materials–handling/storage facility used for completely unitized loads in containers
and/or empty containers
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, usually a commission house.
Certificate of Origin – A certified document showing the origin of
goods; used in international commerce.
CFS – Abbreviation for “Container Freight Station.” A shipping dock where cargo
is loaded (“stuffed”) into or unloaded (“stripped”) from containers. Generally,
this involves less than container load shipments, although small shipments
destined to same consignee are often consolidated. Container reloading from/to
rail or motor carrier equipment is a typical activity.
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. If no notation or exception is made,
the B/L is assumed to be “cleaned.”
COGSA – Carriage of Goods by Sea Act. U.S. federal codification passed
in 1936 which standardizes carrier’s liability under carrier’s bill of lading.
U.S. enactment of The Hague Rules.
Commercial Invoice – Represents a complete record of the transaction
between exporter and importer with regard to the goods sold. Also reports the
content of the shipment and serves as the basis for all other documents about
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.
Conference – An association of ship owners operating in the same trade
route who operate under collective conditions and agree on tariff rates.
Confirmed Letter of Credit – A letter of credit, issued by a foreign
bank, whose validity has been confirmed by a domestic bank. An exporter with a
confirmed letter of credit is assured of payment even if the foreign buyer or
the foreign bank defaults.
Confirming Bank – The bank that adds its confirmation to
another bank’s (the issuing bank’s) letter of credit and promises to pay the
beneficiary upon presentation of documents specified in the letter of credit.
Consignment – (1) A stock of merchandise advanced to a dealer
and located at his place of business, but with title remaining in the source of
supply. (2) A shipment of goods to a consignee.
Consignor – A person or company shown on the bill of lading as
Consolidation – Cargo containing shipments of two or more
shippers or suppliers. Container load shipments may be consolidated for one or
Consolidator – A person or firm performing a consolidation
service for others. The consolidator takes advantage of lower full carload
(FCL) rates, and savings are passed on to shippers.
Container – A truck trailer body that can be detached from the
chassis for loading into a vessel, a rail car or stacked in a container depot.
Containers may be ventilated, insulated, refrigerated, flat rack, vehicle rack,
open top, bulk liquid or equipped with interior devices. A container may be 20
feet, 40 feet, 45 feet, 48 feet or 53 feet in length, 8’0″ or 8’6″ in width,
and 8’6″ or 9’6″ in height.
Container Freight Station – See CFS.
Container Manifest – Document showing contents and loading
sequence of a container.
Contract – A legally binding agreement between two or more
persons/organizations to carry out reciprocal obligations or value.
Correspondent Bank – A bank that, in its own country, handles
the business of a foreign bank.
Cubic Foot – 1,728 cubic inches. A volume contained in a space
measuring one foot high, one foot wide and one foot long.
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
Customs Invoice – A form requiring all data in a commercial
invoice along with a certificate of value and/or a certificate of origin.
Required in a few countries (usually former British territories) and usually
serves as a seller’s commercial invoice.
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. See also Detention and Per Diem.
Density – The weight of cargo per cubic foot or other unit.
Detention – A penalty charge against shippers or consignees
for delaying carrier’s equipment beyond allowed time. Demurrage applies to
cargo; detention applies to equipment. See Per Diem.
Devanning – The unloading of a container or cargo van.
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
Dock Receipt – A form used to acknowledge receipt of cargo and
often 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
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 – Through transportation of a container and its
contents from consignor to consignee. Also known as House to House. Not
necessarily a through rate.
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. Same
EDI – Abbreviation for “Electronic Data Interface.” Generic
term for transmission of transactional data between computer systems. EDI is
typically via a batched transmission, usually conforming to consistent
Entry – Customs documents required to clear an import shipment
for entry into the general commerce of a country.
Ex – “From” – When used in pricing terms such as “Ex-Factory”
or “Ex Dock,” it signifies that the price quoted applies only at the point of
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. Exceptions are then noted
on the bill of lading.
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. To be completed by the
exporter and filed with the U.S. Government.
Export License – A government document which permits the
“Licensee” to engage in the export of designated goods to certain destinations.
FCL – Abbreviation for “Full Container Load.”
F.D.A. – Food and Drug Administration.
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 – Abbreviation for “Forty-Foot Equivalent Units.” Refers
to container size standard of forty feet. Two twenty-foot containers or TEU’s
equal one FEU.
FOB (Free on
Board)(…Named Port of Shipment): An International Term of Sale as defined by
Incoterms that means the seller fulfills his or her obligation to deliver when
the goods have passed over the ships.
Majeure – The title of a common clause in contracts, exempting the
parties for non-fulfillment of their obligations as a result of conditions
beyond their control, such as earthquakes, floods or war.
Foul Bill of Lading – A receipt for goods issued by a carrier
with an indication that the goods were damaged when received. Compare Clean
Bill of Lading.
Free Astray – An astray shipment (a lost shipment that is
found) sent to its proper destination without additional charge.
Free Time – That amount of time that a carrier’s equipment may
be used without incurring additional charges. (See Storage, Demurrage or Per
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. An Invoice.
Freight Forwarder – A person whose business is to act as an
agent on behalf of the shipper. A freight forwarder frequently makes the
Gateway – Industry-related: A point at which freight moving
from one territory to another is interchanged between transportation lines.
GRI – Abbreviation for “General Rate Increase.” 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.
Harmonized System of Codes (HS) – An international goods
classification system for describing cargo in international trade under a
single commodity-coding scheme. Developed under the auspices of the Customs Cooperation’s
Council (CCC), an international Customs organization in Brussels, this code is
a hierarchically structured product nomenclature containing approximately 5,000
headings and subheadings. It is organized into 99 chapters arranged in 22
sections. Sections encompass an industry (e.g., Section XI, Textiles and
Textile Articles); chapters encompass the various materials and products of the
industry (e.g., Chapter 50, Silk; Chapter 55, Manmade Staple Fibers; Chapter
57, Carpets). The basic code contains four-digit headings and six-digit
subheadings. Many countries add digits for Customs tariff and statistical
purposes. In the United States, duty rates will be the eight-digit level;
statistical suffixes will be at the ten-digit level. The Harmonized System (HS)
is the current U.S. tariff schedule (TSUSA) for imports and is the basis for
the ten-digit Schedule B export code.
House-to-House – See Door-to-Door.
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.
ICC – Abbreviation for (1) International Chamber of Commerce.
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.
The regulations published by the IMO for transporting hazardous materials
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 with
regard to 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 (for example, instability in a chemical that could cause
it to explode spontaneously). Insurance policies may exclude inherent vice
Inspection Certificate – A certificate issued by an
independent agent or firm attesting to the quality and/or quantity of the
merchandise being shipped. Such a certificate is usually required in a letter
of credit for commodity shipments.
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, collides, or sinks, all losses
are fully covered. In marine insurance, the word average describes partial
damage or partial loss.
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 – A Marine insurance term to
refer 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.
Known Loss – A loss discovered before or at the time of
delivery of a shipment.
Land bridge – Movement of cargo by water from one country
through the port of another country, thence, using rail or truck, to an inland
point in that country or to a third country. As example, a through movement of
Asian cargo to Europe across North America.
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 – Abbreviation for “Less than Container Load.” The
quantity of freight which is less than that required for the application of a
container load rate. Loose Freight.
Less Than Truckload – Also known as LTL or LCL.
Letter of Credit (LC) – A document, issued by a bank per
instructions by a buyer of goods, authorizing the seller to draw a specified
sum of money under specified terms, usually the receipt by the bank of certain
documents within a given time. Some of the specific descriptions are:
- Back-to-Back: A new letter of credit issued to another beneficiary on the
strength of a primary credit. The second L/C uses the first L/C as collateral
for the bank. Used in a three-party transaction.
- Clean: A letter of credit that requires the beneficiary to present only a
draft or a receipt for specified funds before receiving payment.
- Confirmed: An L/C guaranteed by both the issuing and advising banks of
payment so long as seller’s documents are in order, and the L/C terms are met.
Only applied to irrevocable L/C’s. The confirming bank assumes the credit risk
of the issuing bank.
- Deferred Payment: A letter of credit issued for the purchase and financing of
merchandise, similar to acceptance-type letter of credit, except that it
requires presentation of sight drafts payable on an installment basis.
- Irrevocable: An instrument that, once established, cannot be modified or
cancelled without the agreement of all parties concerned.
- Non cumulative: A revolving letter of credit that prohibits the amount not
used during the specific period from being available afterwards.
- Restricted: A condition within the letter of credit which restricts its
negotiation to a named bank.
- Revocable: An instrument that can be modified or cancelled at any moment
without notice to an agreement of the beneficiary, but customarily includes a
clause in the credit to the effect that any draft negotiated by a bank prior to
the receipt of a notice of revocation or amendment will be honored by the
issuing bank. Rarely used since there is no protection for the seller.
- Revolving: An irrevocable letter issued for a specific amount; renews itself
for the same amount over a given period.
- Straight: A letter of credit that contains a limited engagement clause which
states that the issuing bank promises to pay the beneficiary upon presentation
of the required documents at its counters or the counters of the named bank.
- Transferable: A letter of credit that allows the beneficiary to transfer in
whole or in part to another beneficiary any amount which, in aggregate, of such
transfers does not exceed the amount of the credit. Used by middlemen.
- Unconfirmed: A letter of credit forwarded to the beneficiary by the advising
bank without engagement on the part of the advising bank.
Letter of Indemnity – In order to obtain the clean bill of
lading, the shipper signs a letter of indemnity to the carrier on the basis of
which may be obtained the clean bill of lading, although the dock or mate’s
receipt showed that the shipment was damaged or in bad condition.
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 (general,
validated) and import as mandated by government(s).
Lien – A legal claim upon goods for the satisfaction of some
debt or duty.
Marine Insurance – Broadly, 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 Land bridge – An intermodal system for transporting
containers by ocean and then by rail or motor to a port previously served as an
all water move (e.g., Hong Kong to New York over Seattle).
Minimum Charge – The lowest charge that can be assessed to
transport a shipment.
Multimodal – Synonymous for all practical purposes with
Non-Vessel Operating Common Carrier (NVOCC) – A cargo
consolidator in ocean trades who will buy space from a carrier and sub sell it
to smaller shippers. The NVOCC issues bills of lading, publishes tariffs and
otherwise conducts itself as an ocean common carrier, except that it will not
provide the actual ocean or intermodal service.
Ocean Bill of Lading (Ocean B/L) – A contract for
transportation between a shipper and a carrier. It also evidences receipt of
the cargo by the carrier. A bill of lading shows ownership of the cargo and, if
made negotiable, can be bought, sold or traded while the goods are in-transit.
On Board – A notation on a bill of lading that cargo has been
loaded on board a vessel. Used to satisfy the requirements of a letter of
credit, in the absence of an express requirement to the contrary.
On Deck – A notation on a bill of lading that the cargo has
been stowed on the open deck of the ship.
Open Insurance Policy – A marine insurance policy that applies
to all shipments made by an exporter over a period of time rather than to one
Open Top Container – A container fitted with a solid removable
roof, or with a tarpaulin roof so the container can be loaded or unloaded from
Order-Notify (O/N) – A bill of lading term to provide
surrender of the original bill of lading before freight is released; usually
associated with a shipment covered under a letter of credit.
Original Bill of Lading (OBL) – A document which requires
proper signatures for consummating carriage of contract. Must be marked as
“original” by the issuing carrier.
Over height Cargo – Cargo more than eight feet high which thus
cannot fit into a standard container.
Perils of the Sea – Those causes of loss for which the carrier
is not legally liable. The elemental risks of ocean transport.
Pier-to-House – A shipment loaded into a container at the pier
or terminal, thence to the consignee’s facility.
Pier-to-Pier – Containers loaded at port of loading and
discharged at port of destination.
Place of Delivery – Place where cargo leaves the care and
custody of carrier.
Place of Receipt – Location where cargo enters the care and
custody of carrier.
POD – Abbreviation for: Port of Discharge or Port of
Destination or Proof of Delivery. A document required from the carrier or
driver for proper payment.
Point of Origin – The place at which a shipment is received by
a carrier from the shipper.
POL – Abbreviation for: Port of Loading or Petroleum, Oil, and
Pomerene Act, Also known as (U.S.) Federal Bill of Lading Act of 1916
– U.S. federal law enacting conditions by which a B/L may be issued. Penalties
for issuing B/L’s containing false data include monetary fines and/or
Port of Entry – Port where cargo is unloaded and enters a
Port of Exit – Place where cargo is loaded and leaves a
Prepaid (Ppd.) – Freight charges paid by the consignor
(shipper) prior to the release of the bills of lading by the carrier.
Pro Forma – A Latin term meaning “For the sake of form.”
Pro Forma Invoice – 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 specifications (weight, size, etc.).
Pro Rata – A Latin term meaning “In proportion.”
Reconsignment – Changing the consignee or destination on a
bill of lading while shipment is still in transit. Diversion has substantially
the same meaning.
Reefer – Refrigerated container.
“Ro/Ro” – A shortening of the term, “Roll On/Roll Off.” A
method of ocean cargo service using a vessel with ramps which allows wheeled
vehicles to be loaded and discharged without cranes.
Roll – To re-book cargo to a later vessel.
Schedule B – The Statistical Classification of Domestic and
Foreign Commodities Exported from the United States.
Sea Waybill – Document indicating the goods were loaded
onboard when a document of title (b/L) is not needed. Typically used when a
company is shipping goods to itself.
SED – U.S. Commerce Department document, “Shipper’s Export
Shipper – The person or company who is usually the supplier or
owner of commodities shipped. Also called Consignor.
Shipper’s Export Declaration (SED,”Ex Dec”) – A joint Bureau
of the Census’ International Trade Administration form used for compiling U.S.
exports. It is completed by a shipper and shows the value, weight, destination,
etc., of export shipments as well as Schedule B commodity code.
Shipper’s Load & Count (SL&C) – Shipments loaded and
sealed by shippers and not checked or verified by the carriers.
Sight Draft – A draft payable upon presentation to the drawee.
SL/W – Shippers load and count. All three clauses are used as
needed on the bill of lading to exclude the carrier from liability when the
cargo is loaded by the shipper.
Statute Of Limitation – A law limiting the time in which
claims or suits may be instituted.
STC – Said to contain.
Supply Chain – A logistical management system which integrates
the sequence of activities from delivery of raw materials to the manufacturer
through to delivery of the finished product to the customer into measurable
components. “Just in Time” is a typical value-added example of supply chain
Surcharge – An extra or additional charge.
Terminal Charge – A charge made for a service performed in a
carrier’s terminal area.
TEU – Abbreviation for “Twenty foot Equivalent Unit.”
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 container loads to cross national frontiers without inspection.
Transship – To transfer goods from one transportation line to
another, or from one ship to another.
UCP – Abbreviation for the “Uniform Customs and Practice for
Documentary Credits,” 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. This revised publication reflects recent
changes in the transportation and banking industries, such as electronic
transfer of funds.
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. See Terms of Payment.
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
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 nonpayment or nondelivered.
W.M. (W/M) – Abbreviation for “Weight or Measurement;” the
basis for assessing freight charges. Also known as “worm.” 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
Zulu Time – Time based on Greenwich Mean Time.