Glossary of shipping terms
Unsure of a shipping term? New to the logistics industry? We have put together an A to Z Glossary of Shipping Terms for your convenience.
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Agent (AGT) – A person who is authorized to transact business in the name of another person or company. Types of agent are brokers, commission merchants, resident buyers, sales agents and manufacturer’s representatives.
Air waybill – A required shipping document that evidences the contract between the shipper and carrier, providing shipment details including destination, shipper, and type of delivery service.
Automated Manifest System (AMS) – A US Customs & Border Protection Agency system used to notify the details of shipments loaded onto a specific flight.
BIFA – The British International Freight Association.
Bill of Lading (B/L) – A contract between shipper and carrier, broker or agent that binds the parties together and defines all aspects of the freight shipping arrangement including what is being shipped and where to.
Booking – The allotment in advance of space or weight capacity of goods.
Broker – A person who makes freight shipping arrangements on behalf of a person or company. The broker has experience in the industry and negotiates the best possible shipping rates on behalf of the client.
Bunker Adjustment Factor (BAF) – an adjustment to shipping companies’ freight rates to take into account fluctuations in the cost of fuel oil (bunkers) for their ships.
Cargo – goods carried on a ship, aircraft, or motor vehicle.
Carnet – A customs document permitting the holder to send or carry merchandise into certain foreign countries temporarily without paying duties or posting bonds.
Carrier – A person or company who transports freight for a fee.
Certificate of Origin – Stamped official document declaring Country of Origin.
Commercial Invoice – Shipper’s document that describes both the goods being shipped and their value. It must accompany all international and transborder shipments.
Commodity – Description of goods being shipped.
Consignee – The receiver of a freight shipment.
Consolidation – When two or more shipments are combined to make a full container.
Container – Containers are used for intermodal shipping and come in standard sizes
Currency Adjustment Factor (CAF) – A charge, expressed as a percentage of a base rate that covers changes to the differing currency exchange rates.
Customs – The Government Service which is responsible for the administration of
customs law and the collection of duties and taxes.
Customs Clearance – The accomplishment of the Customs formalities necessary to allow goods to enter the country, to be exported or to be placed under another customer’s procedure.
Customs Clearance Agent – A customs broker or other agent of the consignee designated to perform customs clearance services for the consignee.
Customs Entry – All countries require that the importer make a declaration on incoming foreign goods.
Customs Handling of Import and Export Freight (CHIEF) – HM Revenue & Customs computer system.
Dangerous Goods (DG) – Articles or substances which are capable of posing a significant risk to health, safety or to property when transported by air.
Deferment Account – An account with HM Revenue & Customs (HMRC) that postpones tax liabilities until a future date.
Delivered Duty Paid (DDP) – Shipper pays both shipping charges and duty tax on international shipments.
Demurrage – The use of a container beyond the time allowed by a Shipping Line is referred to as Container Demurrage
Description of Goods – Plain language description of the nature of the goods sufficient to identify them at the level required for banking, customs, statistical or transport purposes.
Destination – The final stopping place according to the contract of carriage.
Devan – Unloading of cargo from a Sea Freight Container.
Documentation – The required paperwork accompanying a shipment such as air waybill, Export Declaration, Health Certificates.
Electronic Data Interface (EDI) – Generic term for transmission of transactional data between computer systems.
Embargo – Any event that prevents freight from being accepted or handled. Embargo events include floods, tornadoes or congested motorways.
EORI Number – A number, unique throughout the European Community, assigned by a customs authority in a Member State to economic operators (businesses) or persons.
Exceptions – When a problem such as shortage or damage is noted at the time of delivery, an exception is noted on the delivery sheet before it is signed to designate there was a problem with the shipment.
Export Declaration – Document declaring designated goods to be shipped out of the country. To be completed by the exporter and filed with the U.S. Government.
Express Release Bill – Where a Shipping line do not require the surrender of an Original of the Bill of lading to release the goods to Consignee as per their Freight manifest.
FIATA – International Federation of Freight Forwarders Associations.
Freight Forwarder – A person whose business is to act as an agent on behalf of the shipper.
Food and Drug Administration (FDA) – Responsible for protecting and promoting public health through the regulation and supervision of food and drugs.
Full Container Load (FCL) – Relating to a full Sea Freight Container, these are typically 20ft or 40ft units.
Fumigation – The process of Fumigation is where a container is filled with gases or pesticides to kill vermin, insects and other infestations.
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.
General Cargo – Non containerised cargo loose loaded to vessels, this can be on a pallet or it maybe for example something which is to big for a container.
Gross Weight – The weight of a shipment, its container and packing material.
Groupage – A mixed container packed with different importers goods.
Harmonized System of Codes (HS) – An international goods classification system for describing cargo in international trade under a single commodity-coding scheme.
Haulage – Inland Delivery.
Haulier – Person or Company making the Inland Delivery of Freight or Containerised Freight.
Import Permit/License – A document required and issued by some national governments authorizing the importation of goods into their country.
Inbound Freight – Shipments coming from vendors to a storage facility.
Inland Clearance Depot (ICD) – Warehouse where goods are moved to an approved Customs warehouse for Clearance.
Insurance, All-risk – This type of insurance offers the shipper the broadest coverage available, covering against all losses that may occur in transit.
Intermodal Transportation – When freight is shipped using two or more modes of transportation.
International Air Transport Association (IATA) – trade association for the world’s airlines.
Less than a Container Load (LCL) – Used to describe cargo that would not fill a full container load (FCL). LCL consignments would be combined/ consolidated with other parties’ cargo at the loading warehouse to create a Full Container Load.
Letter of Credit (L/C) – A letter from a bank, on behalf of a buyer, addressed to the seller authorizing him or her to draw drafts for a stipulated amount, under specified terms and to provide eventual payment for drafts within a given time.
Load-On, Load-Off (LO-LO) – A charge for loading and unloading a container.
Master Air waybill (MAWB) – Transit document issued by an airline.
Net Weight – The actual weight of an article exclusive of the packaging.
New Computerised Transit System (NCTS) – The New Computerised Transit System (NCTS) is a computer system that has been developed to enable traders to submit Community/Common Transit declarations electronically.
Notification of Arrival – A written notice sent to the consignee notifying them of a shipment’s arrival.
Origin – Starting point of a shipment.
Original Bill of Lading – Where a Shipping line requires the surrender of an Original of the Bill of lading to release the goods to the Authorised party mentioned on the Bill of lading.
Port Health – Port Health Authorities and Local Authorities have a number of different port health functions which together protect the Public, Environmental and Animal Health of the UK.
Quota – The Import Quotas system allows the import of limited amounts of goods at a rate of duty lower than would otherwise apply.
Release (Commercial Release) – Instructions, usually a fax or email, stating that all monies have been paid, and the goods are Customs cleared, therefore the warehouse operator can release the cleared goods to an authorised collecting party.
RO-RO (Roll-on, Roll-Off) – Non-containerised cargo e.g. Car, Bus
Shipment – One or more pieces of goods accepted by the carrier from one shipper at one time and at one address, receipted for in one lot and moving on one air waybill or shipment record to one consignee at one destination address.
Shipper – The person who originates the shipment of goods. Also known as the “consignor”.
Supply Chain Management – provides solutions for the re-engineering and management of global supply chains.
Tariff – A tariff establishes the cost and contract of freight shipment for the shipper and the carrier.
Tariff Code – Tariff codes exist for almost every product involved in global commerce. Required on official shipping documents for tax assessment purposes, a tariff code ensures uniformity of product classification worldwide.
Terminal Charge – A charge made for a service performed in a carrier’s terminal area.
Transit Time – Determines delivery dates and times for all UGL import and export services from over 1000 origins and destinations.
Transportation Charges – These represent the base shipping costs for a package. Transportation Charges do not include declared value fees, adjustments or refunds.
Transhipment – The unloading of cargo from one flight and loading onto another for onward carriage.
Twenty foot Equivalent Unit (TEU) – Standard unit for describing a ship’s cargo carrying capacity, or a shipping terminal’s cargo handling capacity.
Unique Consignment Number (UCN) – A number generated which identifies your Shipment with Customs, Freight Carrier and Port / Airport.
Value-Added Services – Optional services to enhance your pickup, delivery, or tracking, like C.O.D., Delivery Confirmation, Return Services, Declared Value, or Notification services.
Value Added Tax (VAT) – UK Tax which applies to most goods imported into the UK.
Vehicle Booking System (VBS) – System in place at many UK Ports whereby vehicles must be booked-in prior to Collection / Delivery of Containers.
Warehousing – The storage of goods for a specified period of time.
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.
Weight or Measurement (W/M) – 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.
Wet Bond – Term used to describe A bonded warehouse which is authorised to store Alcohol (and other excisable goods) which are not in EC free circulation.