RESOURCES

D

Deconsolidation Point

Place where loose or other non–containerized cargo is ungrouped for delivery.

Demurrage

A penalty charge against shippers or consignees for delaying the carrier’s equipment or vessel 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

Detention

A penalty charge against shippers or consignees for delaying carrier’s equipment beyond allowed time. Demurrage applies to cargo; detention applies to equipment.

Dockage

Refers to the charge assessed against the vessel for berthing at the facility or for morring to a vessel so berthed.

Drayage

Charge made for local hauling by dray or truck. Same as Cartage.

E

EBS (Emergency Bunker Surcharge)

Carriers implement an EBS once fuel costs have risen so high that they cut into carriers’ profits.

Export License

A government document which permits the “Licensee” to engage in the export of designated goods to certain destinations.

Export Rate

A rate published on traffic moving from an interior point to a port for transshipment to a foreign country.

Ex-Works

An Incoterm of sale meaning the seller delivers to the buyer at seller’s named premises.

F

FCL

Abbreviation for “Full Container Load.”

FD

Abbreviation for “Free Discharge.”

FOB (Free on Board)

FOB is an incoterm, which as of Incoterms® 2010 (and confirmed by Incoterms® 2020), is only suitable for ocean shipments that will be delivered straight to the vessel.

FMC (F.M.C.)

Federal Maritime Commission. The U.S. Governmental regulatory body responsible for administering maritime affairs including the tariff system, freight forwarder licensing, enforcing the conditions of the Shipping Act and approving conference or other carrier agreements.

Foreign Trade Zone

A free port in a country divorced from Customs authority but under government control. Merchandise, except that which is prohibited, may be stored in the zone without being subject to import duty regulations.

G

GRI (General Rate Increase)

A GRI is a general rate increase that carriers can apply to their ocean freight rates.

General Order (G.O.)

When U.S. Customs orders shipments without entries to be kept in their custody in a bonded warehouse.

H

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 Cooperations 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.

I

Importer of Record

The importer of record is responsible for Customs documentation and payment.

INCOTERMS

The recognized abbreviation for the International Chamber of Commerce Terms of Sale. These terms were last amended, effective July 1, 1990.

International Ship and Port Security Code (ISPS)

It is an amendment to the Safety of Life at Sea (SOLAS) Convention (1974/1988) on minimum security arrangements for ships, ports and government agencies. Having come into force in 2004, it prescribes responsibilities to governments, shipping companies, shipboard personnel, and port/ facility personnel to “detect security threats and take preventative measures against security incidents affecting ships or port facilities used in international trade.”

K

Known Shipper

Known shipper is a preferred status for companies shipping via air, and a necessary status to ship via passenger planes taking off from the US.

L

L/C

Abbreviation for “Letter of Credit.”

Laden

Loaded aboard a vessel. Lading Refers to the freight shipped; the contents of a shipment.

Landed Cost

The total cost of a good to a buyer, including the cost of transportation.

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.

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 and 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. 63
• 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.

M

Manifest

Document that lists in detail all the bills of lading issued by a carrier or its agent or master for a specific voyage. A detailed summary of the total cargo of a vessel. Used principally for Customs purposes.

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.

N

Net Tonnage (NT)

The replacement, since 1994, for “Net Register Tonnage.” Theoretically the cargo capacity of the ship. Sometimes used to charge fees or taxes on a vessel. The formula is(0.2+0.02 log10(Vc)) Vc (4d/3D)2 , for passenger ships the following formula is added: 1.25 (GT+10000)/10000 (N1+(N2/10)), where Vc is the volume of cargo holds, D is the distance between ship’s bottom and the uppermost deck, d is the draught, N1 is the number of cabin passengers, and N2 is the number of deck passengers.) “Ton” is figured as a 100 cubic foot ton. An approximate conversion ratio is 1NT = 1.7GT and 1GT = 1.5DWT.

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.

P

P&I

Abbreviation for “Protection and Indemnity,” an insurance term.

Packing List

Itemized list of commodities with marks/numbers but no cost values indicated.

Place of Receipt

Location where cargo enters the care and custody of carrier.

R

Roll

To re–book cargo to a later vessel

S

Shipper’s Letter of Instruction (SLI)

An SLI is a necessary document for exporting goods from the U.S.

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.

Shipper

The person or company who is usually the supplier or owner of commodities shipped. Also called Consignor

Shipper’s Instructions

Shipper’s communication(s) to its agent and/or directly to the international water–carrier. Instructions may be varied, e.g., specific details/clauses to be printed on the B/L, directions for cargo pickup and delivery.

Shipper’s Letter of Instructions for issuing an Air Waybill

The document required by the carrier or freight forwarders to obtain (besides the data needed) authorization to issue and sign the air waybill in the name of the shipper.

Shipper’s Load & Count (SL&C)

Shipments loaded and sealed by shippers and not checked or verified by the carriers.

Standard Industrial Classification (SIC)

A standard numerical code used by the U.S. Government to classify products and services.

Standard International Trade Classification (SITC)

A standard numeric code developed by the United Nations to classify commodities used in international trade, based on a hierarchy.

Storage Charges

Storage charges may apply to your shipment even if you don’t plan on putting your shipment into storage.

T

Tariff (Trf.)

A publication setting forth the charges, rates and rules of transportation companies.

Terminal Charge

A charge made for a service performed in a carrier’s terminal area.

Third Party Logistics (3PL)

A company that provides logistics services to other companies for some or all of their logistics needs. It typically includes warehousing and transportation services. Most 3PL’s also have freight forwarding licenses

Transportation & Exit (T&E)

Allows foreign merchandise arriving at one port to be transported in bond through the U.S. to be exported from another port, without paying duty

W

Wharfage

Wharfage is the fee charged for use of the wharf to unload a vessel.

Waybill (WB)

A document prepared by a transportation line at the point of a shipment; shows the point of the origin, destination, route, consignor, consignee, description of shipment and amount charged for the transportation service. It is forwarded with the shipment or sent by mail to the agent at the transfer point or waybill destination. Abbreviation is WB. Unlike a bill of lading, a waybill is NOT a document of title