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in this glossary have been carefully selected from those
encountered in the shipping business.
We hope you will find them useful.
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According to the value. For example, an import duty rate of 10%
ad valorem means 10% of the value of the
An independent person or corporation acting as a
representative, usually in a foreign market, who attempts
to sell products
for an overseas seller (principal) and earns a
commission on successful sales. Agents are not
normally involved in delivery or
servicing of product.
Air Waybill (AWB)
The document which covers transport by air. It is issued by
the carrier, whether an airline or a freight forwarder,
non-negotiable document serving as a receipt to the
consignor for the goods, and containing the conditions of transport. It
also shows the details of the consignee so that
they can be contacted on arrival of the goods.
House AWB issued by a freight forwarder acting as a carrier.
The term used for the AWB issued on airline's stationery to
a freight forwarder for all of the goods covered by
one or more
House AWB's on the one flight going from one loading
airport to one destination airport.
bank to arrange
arranging an import license, the applicant may be a
third party acting on behalf of the buyer.
Bunker Adjustment Factor -
an adjustment to shipping companies
freight rates to take into account fluctuations
in the cost of
fuel oil (bunkers) for their ships.
A document issued by a bank acting as a guarantor for their
customer. The bank's guarantee is accepted
because of their
status and creditworthiness compared to that of
their customer. Often used in conjunction
with major projects, in the form of
Bid Bonds, Performance Bonds
and Warranty Bonds, commonly for 10% of
the contract value, all of which provide the buyer
measure of comfort should the seller not fulfill his
obligations at various stages of the contract.
The seller in whose favor an L/C is issued, ie the person
who will "benefit" from the L/C.
(See also Letter of Credit).
Bill of Exchange
(drawer) instructing the buyer (drawee)
a specified amount (normally the full
invoice value) on demand (at sight) or at a fixed
or determinable future time.
form can be obtained
from the seller's bank, or drawn up on a blank
sheet of paper.
Bill of Lading (B/L)
The document which covers transport by sea. Signed by the
carrier, whether a shipping line or a freight
forwarder, it serves
as a receipt to the consignor for the
goods, as evidence of the contract of transport
containing the conditions of transport,
and as a document of
title by which possession of the goods can be
transferred. Typically a B/L is issued in a set of three
originals or negotiable, one of which must be
presented to claim the goods upon which the others become void.
* Combined Transport / Multimodal B/L
A B/L covering transport by shipping container from an
inland place prior to the loading port, to an inland place
destination port. Most freight forwarders and
shipping companies title their B/Ls as "Bill of Lading
for Combined Transport or
Port-to-Port shipment" or similar.
* Congen B/L
A standard form of bill of lading used in shipments by
* Clean B/L
A bill of lading indicating that the goods were received by
the carrier in good order and condition, without any
declaring a defective condition in the goods and/or
* Dirty/Foul/ Classed B/L
A bill of lading with any clauses declaring a defective
condition in the goods and/or their packing. Almost
acceptable to banks for presentation under L/Cs
and almost always not acceptable to the buyer.
(See also Clean Bill of Lading).
* House B/L
A bill of lading issued by a freight forwarder acting as a
carrier. The terms and conditions of the contract may well
different to the terms and conditions contained on the
shipping company's B/L, which can in extraordinary
lead to legal complications should a dispute
* Master B/L
The term used for the B/L issued by a shipping company to a
freight forwarder for all of the goods covered by
one or more
House B/Ls on the one ship going from one loading
port to one destination port.
* Ocean B/L
A B/L covering port-to-port shipment. Typically banks
continue to use this term on L/Cs even though the majority
international shipments are containerized
* On Board/ Shipped On Board B/L
A B/L evidencing that the goods were not only received by
the carrier but were actually loaded on board in good
condition. "Shipped" indicates that not only were the
goods on board, but that the ship has departed
* Order B/L
A negotiable B/L, in which the goods are consigned "to order
of" a particular party, often the shipper in which
consignee is mostly shown simply as "to order".
* Straight B/L
A non-negotiable B/L in which the goods are consigned
directly to a named consignee.
Colloquial term for a shipping container.
the charge levied by
shipping companies to importers for LCL cargo,
transport to an unpacking depot (see CFS)
subsequent sorting and storage of the goods and
finally loading onto a vehicle
collecting the goods for delivery
to the buyer
Currency Adjustment Factor - an adjustment to shipping
companies' freight rates to take into account the effect
over time of
fluctuations in currency exchange rates.
A document, normally issued by a Chamber of Commerce which
is a member of the International Chamber of
to enable the holder to temporarily take
merchandise into certain countries, as samples or for
display purposes, without the
need to pay import duty or pay a
bond for the duty. The issuer will require the
holder to give them security by way of a bank
Cash against Documents (CAD)
An arrangement whereby the buyer pays for goods as soon as
the buyer receives the seller's documents.
There is normally
an intermediary involved, ie a bank or an
agent acting on behalf of the seller, to ensure that
the transaction takes place
A general term for any document issued by the seller or
another party, certifying to some action having taken
place or some
fact about the goods.
Certificate of Origin
A certificate stating the country of origin of the goods.
Depending on the importing country's requirements,
this can be as
simple as being issued by the seller or the
manufacturer. In most cases however, it is required
to be issued by a Chamber of
Commerce in the country of origin.
Container Freight Station - place or depot where individual
LCL cargo is loaded into, and unloaded from,
A written contract between a ship-owner and a charterer who
rents use of the ship or part of its freight capacity. A voyage
charterparty is a contract covering transport of goods
from one or more ports to one or more ports
and will detail the costs
and responsibilities involved.
A document issued by the seller, addressed to the buyer,
giving details of the individual transaction, including
description of the goods, prices, currency, delivery
and payment terms and so on. This is generally
used by the Customs
authorities in the importing country to
assess customs duties payable.
A group of shipping companies who have associated to offer
regular services on specific routes at published
referred to as liner shipping. Non conference
shipping lines are sometimes referred to as
The party shown on the bill of lading or air waybill to whom
the shipment is consigned. Need not always be the
buyer, and in
some countries will be the buyer's bank. See also
Bill of Lading - Order B/L and Notify Party.
Where a freight forwarder groups, or consolidates, one or
more shipments for one or more shippers to the one
one overall shipment. (See also House B/L and
The seller's commercial invoice certified, for a fee, in the
exporting country by the consular representative of
country. Now required only by a handful of
Ship designed to take ISO (International Standards
Organization) containers in vertical cells within the ship's
holds as wellas
on the deck. These ships generally rely on
infrastructure on the wharf to load and unload the
Ship designed with holds which can load almost any type of
loose cargo, such as drums, sacks, crates,
are designed with their own derricks
for loading and unloading.
A person or corporation licensed by the Australian Customs
Service to handle on behalf of importers the process
goods through customs.
A tax, duty or tariff levied at the time of import upon
goods entering a country. Usually based on the value of the
(ad valorem), on the physical nature of the goods such as
quantity or weight, or on a combination of the
value and other
Container Yard - place or depot where individual containers
are held prior to loading on board a ship and after
the ship. Can be inland or at the dock-side.
A method whereby the seller
uses the services of his bank to ensure that the buyer only
receives the shipping
under conditions specified by the seller, ie upon
payment, or upon acceptance, of the seller's bill of
exchange. (see also Bill of
Exchange, Cash Against Documents
The officially correct term for Letter of Credit. The UCP500
only mentions "Documentary Credit" not
"Letter of Credit".
(See also Letter of Credit and UCP500).
Extra charges paid to a carrier when loading and/or
unloading has not been completed within the specified time.
Documents against Acceptance (D/A)
see Documentary Collection
Documents against Payment (D/P)
see Documentary Collection
see Bill of Exchange
see Bill of Exchange
see Bill of Exchange
The practice of selling goods in a foreign market at a price
lower than which they would be sold at in the home
a competitive advantage over other suppliers. If
this is shown to be injurious to locally-based
suppliers in the foreign
the government of that country
may impose remedies by way of anti-dumping
If goods which have been imported, and upon which customs
duty has been paid, are exported or have been
used in the
manufacture of goods which have been exported, then
the exporter may be entitled to a refund of
the original import duty
The price of one currency in the terms of
To send goods from a country to an overseas destination.
In the international ocean freight
terminology the word “Free” means “Not included”. I.e. if FI,
then the shipper
for the coast of loading goods onto a vessel for
the international shipping overseas.
FO (Free Out)
FO is the international shipping term in ocean freight that
indicates that the consignee (recipient) is responsible
for the cost
of unloading cargo from the vessel at the
FIO (Free In and OUT)
The international shipping term used in the ocean freight
industry means that the carrier is NOT responsible for
the cost of
loading and unloading gods onto/from the vessel.
A device which is designed for cargos which will not fit
into containers to be shipped on container ships.
Consists of a base
and two ends of the same dimensions as an ISO
A clause in a contract which protects both parties in the
event that part of the contract cannot be complied with
outside the control of the parties and could not
have been avoided by exercising due care.
For example, floods,
civil unrest and so on.
A person or corporation who arranges transport of goods on
behalf of either the seller or buyer. In many cases
forwarder will also consolidate several small
shipments into one larger one to take advantage of
better freight rates. In most
cases the freight forwarder will
assume the legal liabilities of acting as a carrier
The total weight of a shipment of goods,
including their packaging such as crates, pallets etc.
Certain cargoes, as prescribed by the UN, such as explosive,
radioactive, poisonous and flammable goods etc,
which must be
declared to the carrier before being loaded onto
ships or aircraft.
The penalties for mis-declaring
or failing to declare
or dangerous cargo are extremely
To bring goods from
overseas into one's country.
Incoterms 2010 (New)
A set of rules for the interpretation of the most commonly
used trade terms in foreign trade, recognized
throughout the world,
issued by the International Chamber of
A process whereby someone with a risk of something happening
to their financial detriment (the assured) pays
(an underwriter) a fee (premium) to bear that risk
on their behalf.
A certificate issued by the insurance underwriter giving
details of a particular transaction which is held insured
Contract of insurance
The total cost which
an importer pays to have goods delivered into their premises.
This typically includes the
costs of the
goods, international transport, insurance premium,
port charges, customs duties, delivery charges,
bank charges etc.
Less than Container Load, a small amount of cargo
insufficient to on its own be economically shipped as FCL.
It will be
combined with other LCL cargo from other shippers
going to the same destination port, into an
See also Consolidation.
Letter of Credit
A conditional order in writing, issued by a buyer's bank,
guaranteeing to pay the seller upon presentation of
documents, strictly in accordance with the credit. It
is strongly recommended that every exporter
and importer has a copy
of the "Uniform Customs and Practice for
Documentary Credits", International
Chamber of Commerce publication 500.
These are available from
most major Chambers of Commerce, or from
us at AUD 20.00 including postage, handling and
Australian addresses only.
Letter of Credit - Confirmed
A letter of credit which has been further guaranteed by a
local bank generally in the exporter's country.
Letter of Credit - Irrevocable
A credit which cannot be revoked, cancelled or amended
unless the beneficiary agrees. Virtually all L/Cs issued
Letter of Credit - Discrepancy
Where a document does not comply strictly with the terms and
conditions of an L/C.
Letter of Credit - Under Reserve
Where documents with discrepancy/ies are nevertheless
negotiated against an L/C, and the negotiating bank
right to take back the funds from the exporter if
the discrepancy is not acceptable to either the
buyer or the L/C issuing bank.
Freight rates which include loading/unloading charges,
generally with a regular shipping lines.
A list of the various shipments being
carried on a ship or aircraft.
The weight, or mass,
of the goods themselves without any packaging.
The person or company to be advised by the carrier upon
arrival of the goods at the destination port.
On Board / Shipped On Board
A notation on a bill of lading, indicating that not only did
the carrier receive the goods in good order and
condition, but they
were also placed on board the ship.
The seller allows the buyer to send payment at some future
time (ie 60 days).
document which details the contents, and often dimensions and
weight, of each package or container.
see Bill of Exchange
A document issued by the Department of Agriculture,
Fisheries and Forestry, for exports from Australia of plants
see APCA, BSRA and PSC
The buyer pays the seller for the goods prior to shipment.
Pro Forma Invoice
A sample invoice issued by the exporter before shipment,
which the importer may require to arrange import
apply for a letter of credit. It can also be used
as an offer to sell goods.
Port Service Charge, similar to APCA.
Colloquial for a refrigerated container
A "roll-on/roll-off" ship, where loaded transport vehicles
are driven onto it, such as a car ferry, or where containerized and
other cargo is loaded into it by forklifts or similar. Shipping Marks. Specific markings on
packages to identify them apart from
other packages and to
identify them on the relevant documents.
A bill of exchange drawn "at sight" meaning that as soon as
the drawee accepts the bill it falls due for payment.
See also Bill of Exchange.
Said to contain, often placed before the description of
goods on a bill of lading because the carrier does not
nature or quantity of goods actually placed in the
packages or the containers.
Society for Worldwide Inter-bank Financial
Telecommunications, whereby banks can electronically transfer
Telegraphic transfer, an electronic means of transferring
funds between banks, generally using SWIFT.
The weight of packaging or a container without the goods.
The period of time before a bill of exchange falls due for
A bill of exchange drawn for a period other than at sight or
Twenty-foot equivalent unit, the means of describing the
carrying capacity of a train or ship. For example,
a 40 foot
container takes up the space of two TEUs.
Terminal handling charge, levied by CY and CFS operators for
goods passing through their operations.
see Bill of Lading, Order B/L.
Goods are transferred from one ship to another at an
intermediate port. Can also refer to goods being
transferred from one
method of transport to another.
Uniform Customs and Practice for Documentary Credits,
International Chamber of Commerce publication 500,
which lays out
guidelines for banks to follow when dealing with
L/Cs. (See also Letter of Credit).
Uniform Rules for Collections, International Chamber of
Commerce publication 522, which lays out guidelines for
follow when handling Collections.
Value for Duty
The value of an import declared to the customs upon which
customs duty will be calculated. In Australia, the
value of the
goods at the time of export from the exporting
country, thus generally the FOB value and using
the exchange rate at the
of export. Many other countries
use the CIF value at the time or declaration
in the importing country.
A notional or calculated weight for bulky goods sent by air.
Generally stated as 6000cm3 = 1 kg, meaning
in cubic centimetres is divided by 6000 to
give an equivalent weight in kgs. The airline
or forwarder will charge
whichever is the
greater of the actual
weight and volumetric weight. Also shown
sometimes as 167 kg = 1 cbm
BSRA and PSC