Glossary of Shipping
The shipping trade uses ‘Incoterms’ in their communications. Short for International Commercial Terms, these are globally recognised rules that define the terms of trade for the sale of goods all around the world and clarify the obligations for buyers and sellers.
Some of the main Incoterms include
EXW
CPT
CIP
DAP
DPU
DDP
FOB
CFR
CIF
Ex Works
The seller makes the goods available at their premises. In this case it is the buyer who selects and arranges shipping.
Carriage Paid To
The seller pays for shipping the goods to a named destination. The risk transfers to the buyer when the goods are handed over to the carrier.
Carriage and Insurance Paid To
Similar to CPT, but the seller also pays for insurance against the buyer’s risk of loss or damage to the goods during transit.
Delivered at Place
The seller bears all costs and risks to the named destination, excluding import clearance and duties.
Delivered at Place Unloaded
The seller delivers and unloads the goods at the named place. The seller bears all risks involved in bringing and unloading the goods at the named place of destination.
Delivered Duty Paid
The seller is responsible for delivering the goods to the named place in the country of the buyer, including paying all costs and handling import duties and taxes.
Free On Board
The seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment. The risk transfers to the buyer once the goods are on board the vessel. In this case the seller handles export clearance and delivery onto the ship; the buyer takes on risk and costs from that point forward.
Cost and Freight
The seller pays the costs and freight to bring the goods to the port of destination. The risk transfers to the buyer once the goods are on board the vessel.
Cost, Insurance, and Freight
Similar to CFR, but the seller also pays for insurance against the buyer’s risk of loss or damage to the goods during transit.
Other standard acronyms and terminology in shipping include
3PL
CFS
DC
EDI
ETA
ETD
FTL
FCL
LCL
NVOCC
Third-Party Logistics
The seller makes the goods available at their premises. In this case it is the buyer who selects and arranges shipping.
Container Freight Station
A facility where goods are consolidated or deconsolidated before being loaded into or after being unloaded from containers.
Distribution Centre
A warehouse or other specialized building where goods are stored and then distributed to retailers or customers.
Electronic Data Interchange
The computer-to-computer exchange of business documents in a standard electronic format.
Estimated Time of Arrival
The estimated time when a shipment is expected to arrive at its destination.
Estimated Time of Departure
The estimated time when a shipment is expected to leave its point of origin.
Full Truckload
A shipment that occupies the entire space of a truck.
Full Container Load
Less than Container Load
A shipment that does not fill a full container and is consolidated with other cargo.
Non-Vessel Operating Common Carrier
Shipping Terms and Documents
AWB
BL/BoL
COO
POD
RORO
TEU
FEU
Air Waybill
A document accompanying goods shipped by an international courier to provide detailed information about the shipment.
Bill of Lading
A legal document required in the shipping and logistics industry. It serves as a receipt of goods, confirming that the carrier has received the goods from the shipper in good condition, it serves as a document of title, providing proof of ownership of the goods, and permitting the holder to claim the shipment, and lastly it outlines the terms and conditions under which the goods are transported from the shipper (sender) to the consignee (recipient).
Commercial Invoice
This is a request for payment, for goods sold internationally. A special export document it is required by customs who use it to determine the taxes, tariffs or duties that apply.
Packing List
Lists all items in the shipment, aiding customs in inspecting the goods. It provides the exporter, international freight forwarder, and ultimate consignee with information about the shipment, including how it's packed, the dimensions and weight of each package, and the marks and numbers that are noted on the outside of the boxes.
Customs Declaration Forms
Required by the destination country to declare the contents and value of the shipment.
Certificates of Origin
A document certifying the country in which the goods were manufactured.
Proof of Delivery
A document signed by the recipient to confirm delivery of goods.
Transport Modes and Methods
Roll-On/Roll-Off
A method of shipping wheeled cargo that can roll on and off the vessel.
Twenty-Foot Equivalent Unit
A standard measure for containerized cargo, referring to a container size of 20 feet long.
Forty-Foot Equivalent Unit
A measure for containerized cargo, referring to a container size of 40 feet long.