Glossary

A

ABI-Automated Broker Interface

A system available to brokers with the computer capabilities and customs certification to transmit and exchange customs entries and other information, facilitating the prompt release of imported cargo.

Acceptance

1. A time draft (or bill of exchange) which the drawee has accepted and is unconditionally obligated to pay at maturity.

2. Drawee’s act in receiving a draft and thus entering into the obligation to pay its value at maturity.

Broadly speaking, any agreement to purchase goods under specified terms.

Ad Hoc Charter

A one-off charter operated at the whim of an airline or charterer.

Ad Valorem – Latin for “according to the value.”

1. An ad valorem duty is an import duty based on the value of an article as defined in the customs law of a particular country, rather than on weight or volume. A percentage of that value is charged, for example, 5% ad valorem.

2. A freight rate set at a certain percentage of the value of an article is known as an ad valorem rate.

Admiralty Court

A court having jurisdiction over maritime questions pertaining to ocean transport, including contracts, charters, collisions, and cargo damages.

Advance Against Documents

A loan made on the security of the documents covering a shipment.

Advising Bank

A bank operating in the exporter’s country that handles letters of credit for a foreign bank by notifying the exporter that the credit has been opened in his favor.

Advisory Capacity

A term indicating that a shipper’s agent or representative is not empowered to make definitive decisions or adjustments without approval of the party represented.

Affiliate

A company that controls, or is controlled by another company, or is one of two or more commonly controlled companies.

Affreightment, Contract of

An agreement by a steamship line to provide cargo space on a vessel at a specified time and for a specified price to accommodate an exporter or importer who then becomes liable for payment even though he is later unable to make the shipment.

Agency Agreement

An agreement whereby the steamship line appoints the steamship agent and defines the specific duties and areas of responsibility of that agent.

Air Cargo Agent

A type of freight forwarder who specializes in air cargo and acts for airlines that pay him a fee (usually 5%). He is registered with the International Air Transport Association (IATA). (See also Air Freight Forwarder and Forwarder, Freight Forwarder, Foreign Freight Forwarder)

Air Freight Forwarder

A type of freight forwarder who specializes in air cargo. He usually consolidates the air shipments of various exporters, charging them for actual weight and deriving his profit by paying the airline the lower consolidated rate. He issues his own air waybills to the exporter and has the status of an indirect air carrier. (See also Air Cargo Agent and Forwarder, Freight Forwarder, and Foreign Freight Forwarder)

Air Waybill

A non-negotiable contract for carriage of air transportation between an air carrier and a shipper, or an air carrier and an air freight forwarder. In the latter case the forwarder, as an indirect air carrier, issues his own house air waybill to the shipper.

All-Risk Insurance

The broadest form of coverage available, providing protection against all risk of physical loss or damage from any external cause. Does not cover loss or damage due to delay, inherent vice, per-shipment conditions, inadequate packaging, or loss of market. Loss must be fortuitous to be covered.

Alongside

The side of the ship. Goods to be delivered alongside are to be placed on the dock or lighter within reach of the ship’s tackle from which they can be loaded aboard the ship.

Anti-Trust Exemption

The immunity from prosecution under the Sherman Act, granted to steamship companies in 1916, in recognition of the special services and value American Flag merchant vessels provide in the defense of the country in time of war.

Arbitration

A standard clause to be included in the contracts of exporters and importers, as suggested by the American Arbitration Association. It states that any controversy or claim will be settled by arbitration in accordance with the rules of the American Arbitration Association.

ASEAN

Association of Southeast Asian Nations.

AT (American Terms)

A marine insurance term used to differentiate between the conditions of American policies and those of other nations, principally England.

Automated Broker Interface

(See ABI)

Automated Commercial System (ACS)

The electronic system of the U.S. Customs Service, encompassing a variety of industry sectors, that permits on-line access to information in selected areas.

Automated Manifest System (AMS)

The electronic system allowing a manifest inventory to be transmitted to the U.S. Customs Service data center by carrier, port authority, or service center computers.

B

b.t.

Berth terms.

B/B (Breakbulk)

(See Breakbulk Cargo)

B/L (Bill of Lading)

(See Bill of Lading)

B/s

Bags; bales.

B/S (Bunker Surcharge)

(See BAF)

BAA

British Airports Authority.

BACA

Baltic Air Charter Association.

BAF (Bunker Adjustment Factor)

An adjustment in shipping charges to offset price fluctuations in the cost of bunker fuel. Also known as a Bunker Surcharge (B/S).

Barter

The direct exchange of goods and/or services without the use of money as a medium of exchange and without third party involvement.

Belly Cargo

Freight accommodation below the main deck.

BENELUX

An economic union among Belgium, the Netherlands, and Luxembourg.

Bermuda Agreement

An agreement concluded in 1946 between the U.K. and the U.S.A. designed to regulate future international air traffic. Most governments accept its principles and follow it by limiting traffic rights on international routes to one or two carriers.

Berth

The place beside a pier, quay, or wharf where a vessel can be loaded or discharged.

Berth Liner Service

A regularly scheduled steamship line with regularly published schedules (ports of call) from and to defined trade areas.

Berth or Liner Terms

An expression covering assessment of ocean freight rates generally implying that loading and discharging expenses will be for the ship owner’s account, and usually applying from the end of the ship’s tackle in the port of loading to the end of the ship’s tackle in the port of discharge.

Bilateral Rights

Agreements on traffic rights concluded between two governments.

Bill of Lading

A document issued by a common carrier to a shipper that serves as:

1. A receipt for the goods delivered to the carrier for shipment.

2. A definition of the contract of carriage of the goods from the port of shipment to the port of destination listed in the bill of lading.

3. Evidence of title to the relative goods.

When in order form, a bill of lading is negotiable. (See specific types of Bill of Ladings below)

Bill of Lading, Claused

A bill of lading which has exemptions to the receipt of merchandise in “apparent good order” noted.

Bill of Lading, Clean

1. A bill of lading which bears no superimposed clause or notation which expressly declares a defective condition of the goods and/or the packaging (Article 18, Uniform Customs and Practice for Documentary Credits).A bill of lading that contains a clause declaring defective goods is called a Foul Bill of Lading.

2. A bill of lading that is silent as to the place of storage, indicating that the goods have been stowed under deck. (See Bill of Lading, Unclean)

Bill of Lading, Forwarder’s

A bill of lading issued by a forwarder to a shipper as a receipt for merchandise that the forwarder will consolidate with cargo obtained from other exporters and ship to his agent at the port of destination. In most cases, the Forwarder’s Bill of Lading has legal standing for banking purposes. Also called House Bill of Lading.

Bill of Lading, FoulA receipt for goods issued by a carrier bearing a notation that the outward containers or the goods have been damaged.

Bill of Lading, Inland

A bill of lading used in transporting goods overland to the exporter’s international carrier.

Bill of Lading, Ocean

A document defining the terms and conditions of carriage for transport of cargo by sea freight.

Bill of Lading, On Board

A bill of lading acknowledging that the relative goods have been received on board for shipment on a specified vessel.A bill of lading acknowledging that the relative goods have been received on board for shipment on a specified vessel.

Bill of Lading, Order

A negotiable bill of lading. There are two types: 1. A bill drawn to the order of a foreign consignee, enabling him to endorse the bill to a third party.

2. A bill drawn to the order of the shipper and endorsed by him either “in blank” or to a named consignee. The purpose of the latter bill is to protect the shipper against the buyer’s obtaining the merchandise before he has paid or accepted the relative draft. (See also Endorsement in Blank)

Bill of Lading, Received for Shipment

A bill of lading acknowledging the receipt of goods by a carrier for shipment on a specified vessel. This type of bill of lading is not acceptable under a letter of credit unless it is specially authorized. English law does not regard these bills as a valid tender under CIF contracts because the CIF seller is obligated to ship the goods, and a Received for Shipment Bill of Lading is not considered proof of shipment.

Bill of Lading, Straight

A non-negotiable bill of lading whereby the consignee named in the bill is the owner of the relative goods.

Bill of Lading, Through

A bill of lading that covers transportation by more than one carrier from the point of issue to the final destination (e.g., a bill from New York, via Curaao, to Pampatar, Venezuela).

Bill of Lading, Through Railway Export

A bill of lading showing the place of receipt by the carrier at an inland point, with transport to the port of exit accomplished using rail/intermodal connections.

Bill of Lading, Unclean

A bill containing reservations as to the good order and condition of the goods or the packaging or both. Examples: “bags torn,” “drums leaking,” “one case damaged,” and “rolls chafed.”

Bill of Sight

A written description of goods given by an importer to a customs officer in the event shipping documents have not arrived in time and the importer wishes to avoid delayed entry charges. When an importer enters goods on a bill of sight, he usually must make a cash deposit covering the estimated amount of duty. When the shipping documents are received and a correct entry is made, the exact amount of duty is levied.

Bloodstock

Pedigreed livestock. Often race horses or cattle for breeding.

Bonded Warehouse

A warehouse authorized by customs authorities for storage of goods on which payment of duties is deferred until the goods are removed.

Booking

Arrangements with steamship companies for the acceptance and carriage of freight.

Breakbulk Cargo

Cargo which is shipped as a unit (e.g., palletized cargo, boxed cargo, large machinery, trucks, and pre-slung cargo).

Breakbulk Vessel

A vessel designed to handle palletized, pre-slung, boxed, and unitized cargo. Holds can be at the open bay or between deck type. Between deck means the hold can be converted from multi levels to open bay. This type of vessel is usually self-sustaining.

Breakpoint

The weight at which freight charges change, e.g., 100 kilos.

Broker

A person or firm that establishes a connection between a buyer and a seller. Brokers operate in many fields: insurance, steamship transport, securities, drafts, and other phases of foreign trade. Not only do brokers bring buyers and sellers together, but they help to negotiate and close contracts and agreements between them.

Brussels Nomenclature-Kennedy Round

A standardized system, established in 1950, for classifying commodities for customs purposes. The ECU common external tariff and the tariffs of other major trading nations, except the U.S.A., are based on this nomenclature. The U.S. tariff schedule (TSUS) contains about 5,000 items compared to 2,800 in the Brussels Nomenclature.

Bulk Cargo

Loose cargo that is loaded directly into a ship’s hold.

Bulk Carrier

There are two types of bulk carriers, the dry-bulk carrier and the liquid-bulk carrier, better known as a tanker. Bulk cargo is a shipment such as oil, grain, or one which is not packaged, bundled, bottled, or otherwise packed and is loaded without counting or marking.

Bulk Solids

Dry cargo shipped in containers, loose and in bulk, without counting or marking.

Bureau of Standards

A bureau of the U.S Department of Commerce that maintains research and testing laboratories, working standards, weights, measurements, and norms by which business and government are guided. The Bureau of Standards furnishes development and consulting services to the government and helps business to establish quality standards in all industries other than food and drugs.

C

C&F (Cost and Freight)

An INCOTERM.

C&I

The cost of goods and insurance.

CAA (Civil Aviation Authority)

The government body responsible for regulating U.K. airlines.

Cabotage

Where cargo is carried on what is essentially a domestic flight and therefore not subject to international agreements that fix set rates. Cabotage rates are negotiable between shipper and airline and apply on flights within a country and to its overseas territories.

CAD (Cash Against Documents)

A method of payment for goods in which documents transferring title are given to the buyer upon payment of cash to an intermediary acting for the seller.

CAF (Currency Adjustment Factor)

A surcharge on freight charges by a carrier to offset foreign currency fluctuations.

Cargo

Merchandise/commodities carried by means of transportation.

Cargo Insurance

Insurance to protect the financial interest of the cargo owner during transportation in the event of a loss.

Cargo Receipt

Receipt of cargo for shipment by a consolidator (used in ocean freight).

CARICOM

Caribbean Common Market.

Carnet

A customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries without paying duties or posting bonds.

Carrier

Any person who, through a contract of carriage, undertakes to perform or procure the performance of carriage by rail, road, sea, air, inland waterway, or by a combination of modes. (See also Common Carrier)

Carrier Container/Shipper Container

A container over which the carrier or the shipper has control either by ownership or by the acquisition thereof under lease or rental from container companies or container suppliers or from similar sources. Carriers are prohibited from purchasing, leasing, or renting a shipper-owned container.

Cartel

An association of several independent national or international business organizations that regulates competition by controlling the prices, the production, or the marketing of a product or industry.

CCEF

Customs Centralized Examination Facility.

CE (Communaut Europene) Mark

A “passport” that allows manufacturers to trade industrial products freely within the internal EU market. The CE Mark is not a quality mark, but indicates conformity to the legal requirements of the EU Directives. It is mandatory for a wide range of products sold in the EU.

Certificate of Analysis

A certificate issued by a recognized organization or government authority confirming the quality and composition of goods. This is often required in importing countries for animal and plant products for consumption as well as pharmaceuticals.

Certificate of Inspection

A certificate usually required for industrial equipment and meat products. There are companies in every port city that specialize in issuing certificates of inspection for machinery. The Meat Inspection Division of the U.S. Department of Agriculture issues certificates of inspection for meat products that are recognized throughout the world.

Certificate of Manufacture

A document used under a letter of credit containing an affidavit that goods have been manufactured and are being held for the account and risk of the buyer. In war times when transportation facilities are disrupted, it is common for letters of credit to be paid against presentation of a certificate of manufacture. This is rare in ordinary times, except in the case of specially manufactured goods.

Certificate of Origin

A document containing an affidavit to prove the origin of imported goods. It is used for customs or foreign exchange purposes or both. Certificates of origin are commonly certified by an official organization in the country of origin such as a consular office or a chamber of commerce.

CFS (Container Freight Station)

The term CFS at loading port means the location designated by carriers for the receiving of cargo to be packed into containers by the carrier. At discharge ports, the term CFS means the bonded location designated by carriers in the port area for unpacking and delivery of cargo.

CFS Charge (Container Freight Charge)

The charge assessed for services performed at the loading or discharging port in the packing or unpacking of cargo into/from containers at CFS.

CFS Receiving Services

The service performed at the loading port in receiving and packing cargo into containers from CFS to CY or shipside. “CFS Receiving Services” referred herein are restricted to the following:

1. Moving empty containers from CY to CFS. 2. Drayage of loaded containers from CFS to CY and/or ship’s tackle. 3. Tallying. 4. Issuing dock receipt/shipping order. 5. Physical movement of cargo into, out of, and within CFS. 6. Stuffing, sealing, and marking containers. 7. Storage. 8. Ordinary sorting and stacking. 9. Preparing carrier’s internal container load plan.

CFS/CFS (Pier to Pier)

The term CFS/CFS means cargo delivered by breakbulk to carrier’s container freight station (CFS) to be packed by carrier into containers and to be unpacked by carrier from the container at carrier’s destination port CFS.

CFS/CY (Pier to House)

The term CFS/CY means cargo delivered breakbulk to carrier’s CFS to be packed by carrier into containers and accepted by consignee at carrier’s CY and unpacked by the consignee off carrier’s premises, all at consignee’s risk and expense.

Chargeable Kilo

Rate for air freight goods where volume exceeds six cubic meters to the tonne.

Charter

Originally meant a flight where a shipper contracted hire of an aircraft from an airline, but has usually come to mean any non-scheduled commercial service.

Charter Agreement/Charter Party

A lease or agreement to hire an airplane, vessel, or other means of conveyance to transport goods to one or more designated locations. Among other specifications, the contract usually stipulates the exact obligations of the vessel owner (loading the goods, carrying the goods to a certain point, returning to the charterer with other goods, etc.), or it provides for an outright leasing of the vessel to the charterer, who then is responsible for his own loading and delivery. In either case, the charter party sets forth the exact conditions and requirements agreed upon by both sides.

Charter Party Bill of Lading

A bill of lading issued under a charter party. It is not acceptable by banks under letters of credit unless so authorized in the credit.

Chassis

A wheel assemble including bogies constructed to accept mounting of containers.

CIA (Cash in Advance)

A method of payment for goods whereby the buyer pays the seller prior to shipping the goods.

CIF

An INCOTERM.

CITES

Committee on International Trade of Endangered Species.

Class Rates

A class of goods or commodities is a large grouping of various items under one general heading, and all items in the group make up a class. The freight rates that apply to all items in the class are called class rates.

Classification

A customs term for the placement of an item under the correct number in the customs tariff for duty purposes. At times this procedure becomes highly complicated; it is not uncommon for importers to resort to litigation over the correct duty to be assessed by customs on a given item.

Clean Draft

A draft to which no documents have been attached.

cm

Centimeters.

CNS (Cargo Network Services)

An agency to which IATA forwarders pay their freight bills.

Collective Paper

All documents (commercial invoices, bills of lading, etc.) submitted to a buyer for the purpose of receiving payment for a shipment.

Combi

An aircraft with pallet or container capacity on its main deck as well as in its belly holds.

Combination Vessels

A type of ship that accommodates both container and breakbulk cargo. It can be either self-sustaining or non-self sustaining. Also known as a Container/Breakbulk Vessel.

Commercial Invoice

An itemized list of goods shipped that is usually included among an exporter’s collection papers.

Commodity Specialist

An official authorized by the U.S. Treasury to determine the proper tariff and value of imported goods.

Common Carrier

A publicly or privately owned firm or corporation that transports the goods of others over land, sea, or through the air, for a stated freight rate. By government regulation, a common carrier is required to carry all goods offered if accommodations are available and the established rate is paid.

Common External Tariff (CET or CXT)

A uniform tariff adopted by a customs union or common market on imports from countries outside the union. It is often a required part of the entry process.

Conference

A group of vessel operators joined together for the purpose of establishing freight rates.

Confirmed Letter of Credit

(See Letter of Credit, Confirmed)

Confiscation

The taking and holding of private property by a government or an agency acting for a government. Compensation may or may not be given to the owner of the property.

Consignee

The individual or company to whom a seller or shipper sends merchandise and who, upon presentation of necessary documents, is recognized as the merchandise owner for the purpose of declaring and paying customs duties.

Consignee Mark

A symbol placed on packages for identification purposes generally consisting of a triangle, square, circle, diamond, or cross, with letters or numbers as well as the port of discharge.

Consignment

The physical transfer of goods from a seller (consignor) with whom the title remains until the goods are sold, to another legal entity (consignee) who acts as a selling agent. Only if there is a subsequent sale does the seller receive any payment.

Consignor

A term used to describe any person who consigns goods to himself or to another party in a bill of lading or equivalent document. A consignor might be the owner of the goods, or a freight forwarder who consigns goods on behalf of his principal.

Consolidated Shipment

An arrangement whereby various shippers pool their boxed goods on the same shipment, sharing the total weight charge for the shipment.

Consolidator

An agent who brings together a number of shipments for one destination to qualify for preferential rates.

Consortium

The name for an agreement under which several nations or nationals (usually corporations) of more than one nation join together for a common purpose (e.g., a shipping consortium).

Consul

A government official residing in a foreign country charged with representing the interests of his or her country and its nationals.

Consular Documents

Special forms signed by the consul of a country to which cargo is destined.

Consular Invoice

A document required by some countries describing a shipment of goods and showing information such as the consignor, consignee, and value of the shipment. Certified by a consular official, a consular invoice is used by the country’s customs officials to verify the value, quantity, and nature of the shipment.

Container

A single, rigid, sealed, reusable metal “box” in which merchandise is shipped by vessel, truck, or rail. Container types include standard, high cube, hardtop, open top, flat, platform, ventilated, insulated, refrigerated, or bulk. Containers (except for flat-rack vehicle rack and portable liquid tank types) have a closure or permanently hinged door that allows ready access to cargo. All containers have constructions, fittings, and fastenings able to withstand, without permanent distortion, all stresses that may be applied in normal service use of continuous transportation. Containers must bear the manufacturer’s specifications. (See also Container Dimensions)

Container (Air Cargo)

Air cargo containers are designed in various sizes and irregular shapes to conform to the inside dimensions of a specific aircraft.

Container (Ocean)

Designed to be moved inland on its own chassis, an ocean container can be loaded at the shipper’s plant for shipment overseas. The average outside dimensions are generally 20, 35, and 40 feet in length, 8 feet wide, and 8 feet high.

Container Ship

An ocean-going ship designed to carry containers both internally and on deck. Some are self sustaining.

Containerization

A concept for the ultimate unitizing of cargo used by both steamship lines and air cargo lines. Containers allow a greater amount of cargo protection from weather, damage, and theft.

Continuous Bond

An annual customs bond insuring compliance with all regulations and requirements.

Contract Rate

This can refer to “service contract” rates which are low, favorable rates fixed over an extended period of time in exchange for which the carrier receives a volume commitment from the shipper.

Countertrade

A reciprocal trading arrangement in which the seller is required to accept goods or other instruments or trade in partial or whole payment for its products. Common transactions include: barter, buyback, counterpurchase, offset requirements, swap, switch; or triangular trade, evidence, or clearing accounts.

Countervailing Duties

Special duties imposed on imports to offset the benefits of subsidies to producers or exporters of the exporting country.

Customs Broker

An individual or service company that transacts customhouse formalities on behalf of an importer. In the U.S.A., a customs broker must be licensed by the Treasury Department and pass a government examination covering a broad range of knowledge, including all phases of import regulations, rates of duties, and customs law. Licensing and requirements vary from country to country, so check with your local United Shipping Partner for details.

Customs Court

The court to which importers must appeal or protest decisions made by customs officers.

Customs Tariff

A schedule of charges assessed by a federal government on imported goods.

Customs Union

An agreement between two or more countries in which they arrange to abolish tariffs and other import restrictions on each other’s goods and establish a common tariff for the imports of all other countries.

CWO (Cash With Order)

A method of payment for goods where cash is paid at the time of order and the transaction becomes binding on both buyer and seller.

D

d.w. (deadweight)

The maximum carrying capacity of a ship expressed in tons of cargo, stores, provisions, and bunker fuel.

d.w.c. (deadweight cargo)

Cargo of such weight and volume that a long ton (2,240 lbs) is stowed in an area of less than 70 cubic feet.

Dangerous Goods

Articles or substances capable of posing a significant risk to health, safety, or property, and that ordinarily require special attention when being transported.

DAT

Dangerous Articles Tariff.

Date Draft

A draft that matures in a specified number of days after issuance without regard to date of acceptance.

DCA (Department of Civil Aviation)

Denotes the government department of any foreign country that is responsible for aviation regulation and granting traffic rights.

DDC

Destination Delivery Charge.

DDP (Delivered Duty Paid)

Also known as “free domicile.”

DDU (Delivered Duty Unpaid)

This reflects the emergence of “door-to-door” intermodal or courier contracts or carriage where only the destination customs duty and taxes (if any) are paid by consignee.

Dead Freight

Freight charges paid by the chart

IATA

The French and German acronym for the International Air Transport Association (IATA).