Know all the Sea Logistics abbreviations Show This glossary is intended to help you find your way through the maze of terms and abbreviations used in international sea freight transport.AAbandonmentThis may be (a) an act refusing delivery of a shipment, which is badly damaged in transit that it is worthless, (b) a severe damage to a vessel that is considered as a constructive loss and (c) giving up the proprietary rights in insured property to the underwriter in exchange for payment of such a constructive total loss. AbsorptionAcceptance by the carrier of a portion of a joint rate or charge which is less than the amount which it would receive for the service in the absence of such joint rate or charge (air cargo). Advanced Manifest Information (ACI)Electronically transmitted shipment data/details to Canadian Customs prior to vessel loading. Advanced Filing Rules (AFR)Electronically transmitted shipment data/details to Japanese Customs prior to vessel loading. Advanced Manifest System (AMS)Electronically transmitted shipment data/details to U.S. Customs prior to vessel loading. Acceptance of GoodsReceiving a consignment from a shipper, usually against the issue of a receipt. As from this moment on and at this place the carrier's responsibility for the consignment begins and the common carrier liability ends. Actual Time Arrival (ATA)A date that a shipment arrived at the Port of Arrival. Actual Voyage NumberCode for identification purposes of the voyage of a vessel, especially the shipment route of transported goods. Ad ValoremMeans literally according to value and is a freight rate set at a certain percentage of the declared value. As such freight and customs duties are based on shipment value. Ad Valorem DutyA tax imposed on merchandise based on its value. Advance against DocumentsDown payment in exchange for original shipping documents. Advance FreightAdvice NoticeWritten shipment information about the status of the goods especially that the goods ordered are dispatched, shipped or delivered. Advice of FateA statement given by the collecting bank to the remitting bank as to payment, acceptance, non-payment, or non-acceptance of a draft presented at the remitting bank's request. As such, the advice of fate informs the remitting bank whether or not the bill of lading was honored and paid as demanded. Advising BankBank that handles Letters of Credit (L/C) for a foreign bank by notifying the seller that the buyer has opened a L/C in their favor. The advising bank fully informs the seller of the conditions of the Letter of Credit. AffreightmentThis may be (a) a contract - usually Bill of Lading’s and WayBill’s - which sets forth the obligations of both shipper and carrier concerning transportation and (b) the hiring or chartering of all or part of a vessel for the transport of goods. Agency FeeFee payable by shipowner or ship operator to the port agent. AgentA company (or person) which does business on behalf of and represents another company based on a contractual agreement All Risk InsuranceMost extensive form of insurance cover, providing protection against all risks of physical loss or damage from any external cause, but usually subject to itemized exclusions. The all risk insurance policy usually contains the exclusion of special risks such as war, strikes and the perishing of goods and usually does not cover loss or damage due to delay, pre-shipment condition, inadequate packaging or loss of market. ApparelThis may be (a) a vessel's outfit, such as rigging, anchor and life boats and (b) a garment in case of distribution/transport of clothing for a single piece of clothing. Approved Continuous Examination Program (ACEP)This is an approved container safety examination scheme allowed under the International Convention for Safe Containers (1972) and its amendments and are addressed by the IMO Sub-Committee on the Carriage of Cargo and Container (CCC), under authority of the Maritime Safety Committee (MSC). Approved VesselThis is a vessel which the underwriters deem adequate to carry the insured cargo, at the agreed rate of premium. When the vessel is not approved, the risk is usually still covered but may be subject to a reasonable additional premium. ArbitrageThe simultaneous buying and selling (or even borrowing and lending) of foreign exchange, securities, or commodities in one market into another market in order to take advantage of price differentials. Arrival NoticeNotice sent by a carrier or freight forwarder to notify party alerting the arrival of a shipment. AssignmentTransfer of the rights, duties, responsibilities and/or benefits of an agreement, contract, or financial instrument to a third party. Assignment of ProceedsArrangement within a Letter of Credit in which some or all of the proceeds are assigned from the original beneficiary to one or more additional beneficiaries. Assured PartyAny person or legal entity that is legally entitled to receive insurance payments after an insurance event, in particular a loss or damage, occurs. Auto ContainerContainer for the transportation of vehicles. Average AdjustersIn general average adjusters are assigned with the task of determination of the loss and expenditure over the parties interested in the goods on board of the vessel. They also decide which expenses are to be regarded as average or general average. Average ClauseClause in marine policy which stipulates the insurance cover provided in the event of partial loss. BBack LetterThis means (a) a letter drawn up in addition to a contract in order to lay down rights and/or obligations between the contracting parties, which, for various reasons, cannot be included in the original contract and (b) a letter of indemnity provided by a shipper to a carrier to provide either a clean transport document or replacing document for a lost transport document. BalespaceThe cargo capacity spaces under the deck of a vessel (including hatchways but excluding void spaces behind cargo battens and beams) measured in cubic meters or cubic feet. BallastMaterials, especially ballast water, carried to improve the trim and the stability of the vessel. Bank DraftA bank draft is a payment by check on behalf of a payer that is guaranteed by the issuing bank against a security. Bank GuaranteeUnilateral contract by a bank to effect payment of a sum of money in the event of non-performance by the party on whose behalf the guarantee is issued. Bank ReleaseA document issued by a bank to release the goods to the parties mentioned in the draft, usually to the importer of merchandise. Bareboat CharterAn arrangement for the chartering or hiring of a ship or boat, whereby no crew or provisions are included as part of the agreement; instead, the people who rent the vessel from the owner are responsible for taking care of such things. BargeFlat-bottomed cargo transport vessel designed for canals, rivers and shallow waters with or without its own propulsion and for the use to carry dry or liquid bulk cargoes or heavy loads, in particular on inland waterways. BayVertical separation of a container vessel from stem to stern. This separation is for the identification of stowage places for containers. The numbers run from stem to stern; odd numbers indicate a 20-foot position, even numbers indicate a 40-foot position. Bay PlanStowage plan for container ships or bay plan is the plan and method by which different types of container vessels are loaded with containers of specific standard sizes. The plans are used to maximize the economy of shipping and safety on board. BerthPlace in a port where a vessel can be moored to a wharf, pier or quay. Often marked by a code or name. Bill of Lading (B/L)Transport document that establishes the terms of a contract between a shipper and a carrier under which freight is to be moved between specified points for a specified charge. It serves as a document of title, a contract of carriage and as evidence for receipt of goods. Blank SailingIs a cancelled sailing at scheduled port of call. Blue Anchor Line (BAL)Blue Anchor Line is a Non Vessel Operating Common Carrier (NVOCC) and is a division of Transpac container systems Ltd., Hong Kong, China. Blue Anchor America Line (BAAL)Blue Anchor America Line is a Non Vessel Operating Common Carrier (NVOCC) doing business as of Kuehne + Nagel Inc., Jersey City, USA. Bonded ShipmentsShipments which has not been cleared by customs, but are permitted to transport to inland destinations before customs clearance. BookingAn act of reserving an accommodation, for example a space reservation and is also part of the conclusion of contract of carriage. Booking Reference NumberNumber assigned to a certain booking by the carrier or its agent. Break BulkPhysical discharge of unitized cargo. Break Bulk CargoConventional but uncontainerized cargo stowed in units or packages. BrokerPerson who acts as an agent or intermediary in negotiating contracts, especially contracts of carriage and insurance contracts Bulk CargoUniform and loose cargo loaded directly into the vessel's holds, such as ores, coal, scrap iron, grain, rice, vegetable oil, tallow, fuel oil, fertilizers and similar commodities. Bulk CarrierSingle-deck vessel designed to carry homogeneous unpacked dry cargo such as grain, iron ore and coal. Bulk ContainerAn ocean or freight container designed for the carriage of dry cargo, which are loaded through hatchways in the roof of the container and discharged through hatchways at one end of the container. Bull RingsRings for lashing the cargo in containers. BunkerSpaces on board a vessel to store fuel. Bunker Adjustment Factor (BAF)Adjustment applied by shipping lines or liner conferences to offset the effect of fluctuations in the cost of bunkers. Bunker Charges (BUC)Bunker Charges (compensation factor for changing fuel costs) Buyers Consolidation (BC)Container loaded at the Container Freight Station (CFS) with cargo from various suppliers for one consignee. CC.O.G.S.A.Carriage of Goods by Sea Act (e. g. United Kingdom or United States of America) CBMContainer Freight Station (CFS)Station or a warehouse where various goods, usually belonging to a number of different customers (e. g. LCL shipments), are received and stored for loading/unloading onto or from a container or truck. Currency Charge (CCH)Compensation factor for various currencies. Currency Adjustment Factor (CAF)A freight surcharge or adjustment factor imposed by carriers to offset foreign currency fluctuations. In some cases carrier also imposes a so called Emergency Currency Adjustment Factor (ECAF), when a charge or rate has been originally published in a currency that is experiencing sustained or rapid decline. CallThis can either mean (a) a demand of payment on a loan or (b) the announcement of a visit of a vessel to a port. Cargo HandlingPhysical handling of a shipment and goods. Cargo Restriction CodeA code or shipment classification that designates the use of a certain or specific container to particular restricted cargo. Carnet ATACustoms document permitting the tax-free and duty-free temporary export and import of goods into certain foreign countries (for display, demonstration or similar purposes) without completing normal customs formalities. “ATA” is an acronym of the French and English words “Admission Temporaire/Temporary Admission”. Sometimes this document is referred to “Passport of Goods” or “Merchandising Passports”. CarrierAn individual or legal entity that carries the cargo, e.g. shipping line, airlines, truck company, railroad companies, etc. Carrier HaulageInland transport service performed by the sea-carrier under the terms and conditions of the relevant transport mean and document. Carriers' LienRight to retain the property as security for the payment of services, material, or money expended on that property. Cash Against Documents (CAD)A payment method which implies transfer of title at time pf payment and by handing over title documents for a shipment. Cash on Delivery (COD)Payment method which implies payment of goods at the time of physical transfer. Certificate of ClassificationCertificate, issued by a classification society, stating the class under which a vessel is registered. Certificate of InsuranceA document issued by the insurance company or insured stating the type and amount of insurance coverage and as evidence that insurance is in effect. Certificate of ManufactureDocument (often notarized) in which a producer of goods certifies that manufacture has been completed and that the goods are now at the disposal of the buyer. Certificate of OriginA Certificate of Origin Declaration of Origin (often abbreviated to C/O or CO or DOO) is a document widely used in international trade transactions which attests that the product listed therein has met certain criteria to be considered as originating in a particular country. This document is signed by the exporter, or its agent, and attested by a local Chamber of Commerce, indicating that the goods being shipped, or a major percentage of them, originated and were produced in the exporter's country. CFR (... Named Port of Destination)Cost and Freight (... Named Port of Destination) Incoterm. Charter PartyLease or rental agreement between the owner of a vessel and a charterer who rents use of the vessel or a part of it for the transport of goods. ChartererPerson who has signed a charter party with the owner of a vessel and thus hires or leases the same vessel or a part of the capacity thereof. CIF (Named Port of Destination)Cost, Insurance and Freight (... Named Port of Destination) Incoterm. CIMConvention Internationale Concernant le Transport des Marchandises par Chemin de Fer. CIP (…Named Place of Destination)Carriage and Insurance Paid to (... Named Place of Destination) Incoterm. Classification SocietiesOrganizations, whose function is to carry out surveys and to classify vessels during its construction and operation. Its main purpose is being to set and maintain standards of construction and upkeep for vessels, their engines and their safety equipment as well as containers. Clean Bill of LadingReceipt for goods issued by a shipping line that indicates that the goods were received in "apparent good order and condition", without damage or other irregularities Collecting BankThe bank that acts as agent for the seller and seller’s bank in collecting payment. Collection PapersDocuments (invoices, bills of lading, etc.) submitted to a buyer for the purpose of receiving payment for a shipment. Commercial InvoiceDocument issued by the seller to the buyer, which gives details such as invoice number, goods, services, shipping date, delivery and payment terms, units being shipped. CTDAbbreviation for Combined Transport Document Confirmed Letter of CreditLetter of Credit, issued by a foreign or second bank, with validity confirmed by a bank of origin. In this case the seller or exporter get a payment guarantee from a second bank, the so called confirming bank. Consolidated ContainerContainer filled with several shipments from different shippers for delivery to one or more consignees. ContainerItem of equipment as defined by the International Organization for Standardization (ISO) for transport purposes. It is a single rigid, sealed, reusable metal box in which merchandise is shipped by a vessel or rail. It must be of: a) a permanent character and accordingly strong enough to be suitable for repeated use; b) specially designed to facilitate the carriage of goods, by one or more modes of transport without intermediate reloading; c) fitted with devices permitting its ready handling, particularly from one mode of transport to another; d) so designed as to be easy to fill and empty; e) having an internal volume of 1 m³ or more. The term container includes neither vehicles nor conventional packing. Container Freight Station (CFS)A facility for carriers for the (a) receiving of LCL cargo to be loaded into containers (export shipments) and (b) unloading of LCL containers (import shipments) by the carrier. Container NumberIdentification number of a container consisting of prefix and serial number and check digit (e.g. KNLU 123456-7). Container Yard (CY)Facility at which containers are received from or delivered to the merchant by or on behalf of the carrier. Contractual CarrierThe contractual carrier (called NVO, Non Vessel Operator or NVOCC, Non Vessel Operating Common Carrier) is a party which contracts carriage of goods for the account of the Merchants and fulfills its commitment by using the services of a carrier (sometimes referred to as the "actual" carrier). Correspondent BankBank that, in its own country, handles the business of a foreign bank, especially for a Letter of Credit. CFR (... Named Port of Destination)Cost and Freight (... Named Port of Destination) Incoterm CIF (... Named Port of Destination)Cost, Insurance and Freight (…Named Place of Destination) Incoterm CPT (…Named Port of Destination)Incoterm for "Carriage Paid to (... Named Place of Destination)" Incoterm CIP (... Named Place of Destination)Carriage and Insurance Paid to (... Named Place of Destination) Incoterm. Currency Adjustment Factor (CAF)A surcharge or adjustment factor imposed by shipping lines or liner conferences on freight rates to offset foreign currency fluctuations. Customs-Trade Partnership against Terrorism (C-TPAT)C-TPAT is a voluntary public-private sector partnership program which recognizes that U.S. Customs and Border Protection’s (CBP) can provide the highest level of cargo security only through close cooperation with the principle stakeholders of the international supply chain such as importers, carriers, consolidators, licensed customs brokers, and manufacturers. DDangerous Goods (DG)Dangerous good (also known as hazardous material or hazmat) is any substance or material that is capable of posing an unreasonable risk to health, safety, and property when transported in commerce. Dangerous Goods DeclarationDocument prepared by a consignor or shipper in accordance with applicable dangerous good conventions or regulations to certify that the dangerous goods being transported have been packaged, labeled, and declared in accordance with the standard international shipping regulations. DDP (…Named Place of Destination)Delivered Duty Paid (... named place of destination)" Incoterm. DDU (…Named Place of Destination Unpaid)"Delivered Duty Unpaid (... named place of destination)" Incoterm. Declared Value for CarriageValue of the goods declared to the carrier by the shipper for the purpose of determining charges or of establishing the limit of the carrier's liability for loss, damage or delay. DeconsolidationSeparating a consolidated shipment, such as Less Container Load (LCL) shipments, into its original constituent shipments for delivery to their respective consignees. Demurrage ChargesDemurrage means either (a) the detention of a ship by the shipper beyond time permitted, the latter usually defined as grace period, for loading and unloading or (b) surcharges a shipper pays for detaining a ship beyond time permitted for loading and unloading. Demurrage charges apply for cargo only. Detention ChargesSurcharges demanded by a carrier against the shipper or consignee for holding a container or trailer beyond an agreed period. Detention apply for equipment only. DevanningIs the unloading of cargo from a container. Documentary CreditDeadweight (DWT)The total and maximum carrying capacity of a vessel, including equipment, bunkers, provisions, water, stores and spare parts expressed in tons. Delivery OrderDelivery order means a document either (a) from the consignee, shipper or owner of a vessel ordering a terminal operator or carrier to deliver freight to another party or (b) from carrier authorizing the release of specified cargo identified thereon and manifested under a single Bill of Lading. Delivery ReceiptDocument evidencing the delivery of shipment to a consignee. Delivery TimeThe time between the receipt of an order until the delivery of the goods. Drop-off ChargeCharge made by terminal operators for delivery of a container into depot stock. The drop-off charge may be a combination of actual handling and storage charges with surcharges. Dry Bulk ContainerA dry-bulk container is a shipping container transporting raw materials (such as grain, powder or sand) in large, unpackaged parcels. Dry Cargo ContainerShipping container which is designed for the carriage of goods other than liquids. Duty Free ZoneArea where goods or cargo can be stored without paying import customs duties awaiting further transport or manufacturing. Double Blind ShipmentA double blind shipment is when the shipper is unaware of where a shipment will be delivered to and the consignee is unaware of where the shipment is coming from. In this case the identity of the shipper and consignee is hidden from each other. DrayageDrayage is the haulage of goods or containers on a short distance to, from or within a port. DropDrop is the placing of an unloaded or full container at a facility for loading or unloading. Drop FeeA drop - or also bobtail - fee is charged for the drop. EEORIAbbreviation for Economic Operator Registration and Identification Number. ECTAbbreviation for Europe Combined Terminals (Rotterdam). Electronic Data Interchange (EDI)EDI is the transfer of structured data, by agreed message standards, from one computer system to another without human intervention, as such purely by electronic means. Electronic Data Interchange for Administration, Commerce and Transport (EDIFACT)ISO application level syntax rules for the structuring of user data and of the associated service data in the interchange of messages in an open environment. Emergency Bunker Surcharge (EBS)EBS is a last minute or emergency fee that occurs when the actual fuel prices are higher than originally anticipated by the carriers. EndorsementTransfer of the right to obtain delivery of the goods of the carrier by means of the consignee's signature on the reverse side of a Bill of Lading. Entry Summery Declaration (ENS)The entry summary declaration contains advance cargo information about consignments entering the European Union (EU). It must be lodged at the first customs office of entry to the EU by the carrier of the goods (by the carrier of the goods, although in some cases it can be done by the importer-consignee, or a representative of the carrier or importer) - even if the goods are not going to be imported in the EU. The deadline for lodging the ENS depends on the mode of transport carrying the goods:
The Entry Summary Declaration requires information included in documents originating with the exporter (bill of lading, commercial invoices, etc). Estimated Time of Arrival (ETA)Expected date and time of arrival of a vessel in a port. Estimated Time of Departure (ETD)Expected date and time of departure of a vessel from a port. Export Control Classification Number (ECCN)An Export Control Classification Number (ECCN) is a five-character alpha-numeric designations used on the Commerce Control List (CCL) to identify dual-use items for U.S. export control purposes. Export DeclarationAn export declaration is a document submitted at the time of export at the export port. Express Bill of LadingAn express bill of lading is not a bill of lading, rather than a variation of a Sea Waybill (SWB). The carrier is obliged to deliver the goods or shipment even if no bill of lading is issued. Export LicenseAn export license grants someone the right to conduct an export transaction. EXW (... Named Place)Ex Works (…Named Place) Incoterm FFALAbbreviation for Facilitation Committee of the IMO FC & SFree of Capture & Seizure. Clause excluding war risks from the Marine Policy. War risks can be covered by issuing a separate War Policy with an additional premium being charged. FIFull Interests Admitted (FIA)FIA means the agreement in a policy of marine insurance that the named insured's ownership or right to collect the proceeds of the insurance is agreed to at the inception of risk without further proof of an insurable interest at time of loss. Free In and Out (FIO)FIO means that the shipper or consignee must load (In) the cargo and put it in the ship's hold, as well as discharge it (Out) from the hold, free of risk, responsibility and cost to the carrier. Free Out (FO)Free Out (FO) means that the consignee is responsible for the cost of unloading cargo from the vessel at the port of destination. Free In Out Stowed (FIOS):It is the freight that includes the transport and the expenses that originates the stowage on board: what means that the user, in addition to embarking the load and putting it in the warehouse of the ship and withdrawing it from the warehouse and unloading it, must stow it and reject it in the warehouse of the vessel, free of risk, responsibility and cost to the carrier. Free In Out Stowed and Trimmed (FIOST)It is the freight equal to the FIOS but adding the expenses for the movement of merchandise in the warehouse in order to achieve the necessary balance for transportation. Free In / Liner Out (FILO)It is possible to assign the user only in cost of boarding or boarding / stowing or boarding / stowing / securing (F.I.L.O. or Free In / Linero out). FOD ABSAbbreviation for Free of Damage Absolutely. FAS (…Named Port)Free Alongside Ship (…Named Port) Incoterm. FCA (…Named Port)Free Carrier (…Named Port) Incoterm. Federal Maritime Commission (FMC)Abbreviation for Federal Maritime Commission (USA). International Federation of Freight Forwarders Associations (FIATA)Representing body of the freight forwarding industry by many other governmental organizations, governmental authorities, private international organizations in the field of transport such as the International Chamber of Commerce (ICC), the International Air Transport Association (IATA), the International Union of Railways (UIC), the International Road Transport Union (IRU), the World Customs Organization (WCO), the World Trade Organization (WTO), etc. FIATA Model RulesModel rules created and maintained by FIATA for freight forwarding services. FOB (…Named Port / Vessel)Free on Board (…Named Port / Vessel). Forty-foot Equivalent Unit (FEU)Unit of measurement equivalent to one forty-feet shipping container. Foul Bill of LadingReceipt for goods issued by a carrier with an indication that the goods were damaged when received. Free Trade Zone (FTZ)Area (or warehouse) where goods can be stored or manipulated without payment of taxes and duties which will only become due when cargo officially enters the country of consumption. Freight All Kinds (FAK)Tariff structure which is applied irrespective of the commodity. Freight CollectFreight which is payable to the carrier when the merchandise arrives at the port of discharge named in the Bill of Lading. Freight PrepaidFreight and charges to be paid in advance. Full Container LoadA FCL container is one person's shipment that takes up a full container. The opposite is Less Container Load (LCL). GGeneral Average (G/A)Sacrifices and expenditure reasonably made and/or incurred, in extraordinary circumstances, for the purpose of saving a vessel and its cargo from a common peril are general average. General Average Act (York-Antwerp Rules)There is a general average act when, and only when any extraordinary sacrifice or expenditure is intentionally and reasonably made or incurred for the common safety for the purpose of preserving from peril the property involved in a common maritime adventure. Loss or damage sustained by the ship or cargo through delay, whether on the voyage or subsequently, such as demurrage, and any indirect loss whatsoever, such as loss of market, shall not be admitted as general average. General Average BondDocument required of cargo owners, after a G/A loss, obtaining their agreement to pay any contribution that may become due. General Average Contribution
In case of a General Average, losses or expenditures are contributed to by all the interests at risk on the basis of their respective values. General Average SecurityDocuments the cargo owner presents to the General Average Adjuster to replace the vessel owner's maritime lien on cargo for its share of General Average and to obtain release of the goods by the carrier. General Average Security can consists of a General Average Bond and either a cash deposit or an underwriter's guarantee. General Average StatementA document which shows in detail all general average costs and expenses and the contribution of each interest in the General Average in proportion to its value. General CargoCargo, consisting of goods, unpacked or packed, for example in cartons, crates, bags or bales, often palletized. General Rate Increase (GRI)A GRI is a general rate increase that carriers can apply to their sea freight rates. HHague RulesInternational convention for the unification of certain rules, relating to Bills of Lading (1924). These Rules include the description of responsibilities of commercial carriers of goods by sea (Formally: “International Convention for the Unification of Certain Rules of Law relating to Bills of Lading, and Protocol of Signature).” Hague-Visby RulesSet of international of rules, published in 1968, amending the Hague Rules. Hamburg RulesUnited Nations Convention on the Carriage of Goods by Sea (The Hamburg Rules) of 1978 adopted in 1992. High Cube Container (HC)A HC container is a one feet (30,48 cm) taller than a standard container and can fit more cargo. Harbor Maintenance Fee (HMF)The Harbor Maintenance Fee (HMF) is a fee imposed by U.S. Customs and Order Protection (CBP) for U.S. imports and is calculated at 0.125% of the cargo value, as declared on the commercial invoice. Hatch CoverWatertight means of closing the hatchway of a vessel. HatchwayOpening in the deck of a vessel through which cargo is loaded into, or discharged from the hold and which is closed by means of a hatch cover. Hazardous Materials (Hazmat)Dangerous good (also known as hazardous material or hazmat) is any substance or material that is capable of posing an unreasonable risk to health, safety, and property when transported in commerce. Heavy-Lift VesselVessels specially designed and equipped for the carriage of heavy cargo. Home PortPort of registration of a vessel. IInstitute Cargo Clause (ICC)ICC are clauses issued by the International Underwriting Association of London. Theses clauses may be embedded in a marine insurance policy which covers cargo in transit. There are three basic sets of these clauses (A, B and C). The "A" clauses cover all risks, subject to itemized exclusions. The "B" and "C" clauses cover specified risks, subject to itemized exclusions. International Convention for Safe Containers (CSC)The International Convention for Safe Containers (CSC) determines common international safety requirements for the structural design and ongoing inspection and maintenance of cargo containers. It has two objectives:
IMF/IWFInternational Monetary Fund International Maritime Organization (IMO)The International Maritime Organization (IMO) is a specialized agency of the United Nations that is responsible for measures to improve the safety and security of international shipping and to prevent marine pollution from ships. The IMO sets standards for the safety and security of international shipping. It oversees every aspect of worldwide shipping regulations, including legal issues and shipping efficiency. Import LicenseDocument required and issued by some national governments authorizing the import of goods. ImporterParty responsible for the import of goods. For customs purposes it is the party that makes, or on whose behalf a third party makes, an import declaration. Importer Security Filing (ISF / 10+2)The ISF is required by U.S. Customs and Border Patrol (CBP) in case of importing goods into the U.S. It requires containerized cargo information, for security purposes, to be transmitted to the agency at least 24 hours before goods are loaded onto an ocean vessel headed to the U.S. (i.e. mother vessel, not feeder vessel) for shipment into the U.S. In particular, importers to provide 10 data elements to CBP, as well as 2 more data documents (container status messages and the vessel's stow plan) from the carrier. For that reason this filing is called more commonly 10+2. IncotermsIn 1936, the International Chamber of Commerce first published a set of international rules for the interpretation of trade terms. These rules became known as Incoterms. Amendments and additions have occurred in 1953, 1967, 1976, 1980, 1990, 2000, 2010 and 2020. Inherent ViceInherent vice is a defect or inherent characteristic in the nature of the product. It is a liability exclusion end excluded from insurance coverage. Inland Clearance Depot (ICD)Inland location where cargo, particularly containerized, may be cleared by customs. Inland Waterways Bill of LadingTransport document for inland waterway transportation made out to a named person, to order or to bearer, signed by the carrier and handed to the sender after receipt of the goods. Insulated ContainerThermal container without cooling and/or heating units. International Association of Classification Societies (IACS)IACS is a not for profit membership organisation of classification societies that establish minimum technical standards and requirements that address maritime safety and environmental protection and ensures their consistent application. It carries out this responsibility through its panels, expert groups and project teams and provides a Quality System Certification Scheme (QSCS) that its members comply with, as an assurance of professional integrity and maintenance of high professional standards. IACS is recognized as the principal technical advisor of IMO. International Chamber of Shipping (ICS)The International Chamber of Shipping (ICS) is the principal international trade association for the shipping industry, representing shipowners and operators in all sectors and trades. ICS membership comprises national shipowners' associations in Asia, Europe and the Americas whose member shipping companies operate over 80% of the world's merchant tonnage. Its objective is the promotion of the interests of its members, primarily in the technical and legal fields of shipping operations. International Maritime Dangerous Goods Code (IMDG Code)Code, representing the classification of dangerous goods as defined by the International Maritime Organization (IMO) in compliance with international legal requirements. International Organization for Standardization (ISO)International Standards Organization or International Organization for Standardization is the worldwide federation of national standards member bodies. It consists of technical committees made up of governmental and non-governmental international organizations. International Ship and Port Facility Security Code (ISPS Code)The International Ship and Port Facility Security (ISPS) Code is an amendment to the Safety of Life at Sea (SOLAS) Convention (1974/1988) on Maritime security including 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 preventive measures against security incidents affecting ships or port facilities used in international trade. Irrevocable Letter of CreditAn irrevocable letter of credit is a financial instrument used by banks to guarantee a buyer's obligations to a seller. It is irrevocable because the letter of credit cannot be modified unless all parties agree to the modifications. JJettisonTerm for throwing the cargo or ship's property overboard to save other property from a common danger. JurisdictionJurisdiction is the practical authority granted to a legal body to administer justice, as defined by the kind of case, and the location of the issue (its situs). In federations like the United States, areas of jurisdiction apply to local, state, and federal levels. KKeelThis is the long piece of wood or metal along the bottom of a boat that forms part of its structure and helps to keep the boat balanced in the water. KnotUnit of measurement for the speed (of a vessel) equal to a nautical mile (= 1852 meters) per hour. LLast Free DayThe last free day is the last day of free storage time. Less than Container Load (LCL)Less-than-container load (LCL) is a shipment that is not large enough to fill a standard cargo container. As such it is also used as a general reference for identifying cargo in any quantity intended for carriage in a container, where the carrier is responsible for packing and/or unpacking the container. For operational purposes a LCL container is considered a container in which multiple consignments or parts thereof are shipped. Letter of Credit (L/C)A letter of credit provides an irrevocable guarantee to the exporter that, provided the goods and/or services are delivered to the importer according to contractual terms and with the compliant documents, it will be paid by the bank that issued that letter of credit (the bank of the importer). It also provides assurances to the importer that the goods and/or services ordered will be received, in line with the compliant documentation and under any contractual terms set out in the purchase agreement. The obligation of the issuing bank to pay the beneficiary of the letter of credit, most generally the exporter, therefore depends on the exporter delivering the merchandise as detailed in the letter of credit, but also in accordance with all the other requirements specified in the documented credit. Letter of Indemnity (LOI)A Letter of Indemnity (LOI) is a document provided by the shipper stating that the shipper will take responsibility for any harm or loss caused by a breach of contract. LighterOpen or covered barge towed by a tugboat and used mainly in harbors and inland waterways. Liner ConferenceGroup of two or more shipping lines, which provides international liner services for the carriage of cargo on a particular trade route and which has an agreement or arrangement to operate under uniform or common freight rates and any other agreed conditions (e.g. FEFC = Far Eastern Freight Conference). Liner in Free out (LIFO)A freight rate qualification that indicates that the offered port-to-port rate includes charges for loading of cargo on the vessel at the port of origin but not for its offloading at the port of destination. Liner ServiceConnection by vessels between ports within a particular trade. Liner Shipping CompanyCompany transporting cargo in a regular service by seagoing vessels. Liner TermsLiner terms are the conditions for carriage of goods by sea. Lloyd's Register of Shipping (LR)LR is a technical and business services organization and a maritime classification society, wholly owned by the Lloyd’s Register Foundation, a UK charity dedicated to research and education in science and engineering. LongitudeLongitude is a geographic coordinate that specifies the east-west position of a point on the earth's surface, or the surface of a celestial body. Lump-SumAgreed sum of money, which is paid in full settlement at one time. This term is often used in connection with charter parties. MMotor Vessel (M.V.)Abbreviation for Motor Vessel. MAFI TrailerA German brand name. It supplies industrial and heavy-duty trailers, cargo/roll trailers and container chassis for internal transport applications in ports, industry and distribution. ManifestA manifest, customs manifest or cargo document is a document listing the cargo, passengers, and crew of a ship for the use of customs and other officials. Marine Insurance PolicyInsurance policy protecting the insured against loss or damage to goods which occurred during transportation. Mate's ReceiptDeclaration signed by a chief officer of a vessel in the name of a shipping document acknowledging the receipt of a certain consignment on board of that vessel. This document in not a document of title, but may contain conditions or references in regards to the goods. It is often used as an interim document until the bill of lading is issued. Merchandise Processing Fee (MPF)The MPF is a U.S. Customs charge, applies for formal entries and is an ad valorem fee of 0.3464 percent. The fee is based on the value of the merchandise being imported, not including duty, freight, and insurance charges. The maximum amount of the fee shall not exceed $508.70 and shall not be less than $26.22 assessed for most imports into the United States. MerchantMerchant means any trader or persons (e.g. shipper, consignee), including anyone acting on their behalf, which own or are entitled to possess the goods. Merchant HaulageInland transport of cargo from or to a port arranged by the merchant. Material Safety Data Sheet (MSDS)This is a safety data sheet according to COMMISSION REGULATION (EU) 2015/830 of 28 May 2015 amending Regulation (EC) No 1907/2006 of the European Parliament and of the Council on the Registration, Evaluation, Authorization and Restriction of Chemicals (REACH). It is required for all (potential) dangerous goods and shipments. Minimum Quantity Commitment (MQC)MQC is a commitment between the shipper and the carrier about a certain volume of containers to be shipped during a specific time period. Multi-Purpose VesselVessel designed for the carriage of different types of cargo: general, bulk, heavy and/or containerized cargo. NNegotiated Rate Arrangement (NRA)A Negotiated Rate Arrangement (NRA) is a document regulated by the Federal Maritime Commission (FMC). NRAs are written and binding arrangements between a shipper and a licensed NVOCC to provide specific transportation service for a stated cargo quantity, from origin to destination, on and after a stated date or within a defined time frame. If an NVOCC uses NRAs and meets the required conditions, it need not publish that rate in the tariff it makes available to the public. Net TonnageMeans the measure of the useful capacity of a ship determined in accordance with the provisions of the International Convention on Tonnage Measurement of Ships (1969). Net WeightWeight of the goods, excluding all packing, especially without the container. Non Vessel Operating Common Carrier (NVOCC)Party that undertakes to carry goods and issues in its own name a Bill of Lading or Sea Waybill for such carriage, without having own means of transport. Notice of AbandonmentFormal notice of relinquishment or unconditional surrender of all rights to a property, cargo, or ship by its insured owner to the insurer in the event of a constructive total loss. By this notice the insured party declares its intention to treat the loss as actual total loss. Notify AddressAddress of the party other than the consignee to be advised of the arrival of the goods as stated on a Bill of Lading or Sea Waybill. Notify PartyParty to be notified of arrival of goods. OOcean Bill of LadingBill of Lading (B/L) issued by the actual shipping line for the carriage of goods by sea. Oil Bulk Ore Vessel (OBO)Vessel, designed for the carriage of either dry or liquid bulk cargo. On Board Bill of LadingBill of Lading confirming the receipt of merchandise and the fact that it was loaded on board the vessel. On Deck Bill of LadingBill of Lading which states that the cargo has been stowed on deck. On carriageCarriage of goods (containers) by any mode of transport to the place of delivery after discharge from the vessel (main means of transport) at the port (place) of discharge. Open-Top ContainerOpen top containers have an open top covered by a tarpaulin instead of a solid roof. This enables oversized cargo such as timber and scrap metal to be loaded from the top. Open top containers normally have end doors to give flexibility to loading and discharging operations. OrderRequest to deliver specified quantities of goods or to render specific services Order Bill of LadingNegotiable Bill of Lading made out to the order of a named party PPanamax SizeMaximum measurements and dimensions of a vessel capable of passing the Panama Canal. Peak Season Surcharge (PSS)PSS is a fluctuating surcharge that carriers may apply during times of high demand. Perils of the SeaCauses of loss resulting from fortuitous accidents, unusual actions or casualties, peculiar to transportation on a navigable water, such as stranding, sinking, collision of the vessel, striking a submerged object or encountering heavy weather or other unusual forces of nature. PerishablesFreight or products subject to decay or deterioration (such as fruits, fish, meat, flowers). Per Diem ChargeLatin term for “per day”. In shipping this term us used for detention of a container for each day after the free day allowance in a port. Place of DeliveryLocation or place where a consignment (shipment) is delivered to the consignee. Place of ReceiptLocation or place where a consignment (shipment) is received by the carrier from the shipper. PortPort means either (a) a harbor with facilities for vessels to moor and load or discharge or (b) the left side of a vessel when facing towards the front or bow. Port of DischargePort where the cargo is discharged from the sea going vessel. Port of LoadingPort where the cargo is loaded on board the sea going vessel. Port LogRecord of a vessel's actual arrival and departure time, used tugs, draft, deadweight, quantity of discharged and loaded goods/containers and any other important particulars. Power of Attorney (POA)A (POA) or letter of attorney is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matters. Pre-CarriageCarriage of goods (containers) by any mode of transport from the place of receipt to the port of loading on a vessel. Pre-CarrierCarrier by which the goods are moved prior to the main transport. Pre-Shipment Inspection (PSI)PSI is undertaken as part of supply chain management and an important quality control method for checking the quality of goods bought from overseas suppliers. The PSI is usually performed by independent surveyors prior loading the container. Prepaid FreightFreight paid by the shipper to the carrier when merchandise is accepted for shipment. Not refundable even if the merchandise does not arrive at the intended destination. PrincipalPerson or entity for whom another acts as agent. Protection and Indemnity Club (P & I Club)A P&I club is a mutual insurance association that provides risk pooling, information and representation for its members. It provides cover for open-ended risks that traditional insurers are reluctant to insure. QQuayThat part of a wharf which is intended for the mooring of vessels. QuotationFree offer to sell goods at a stated price and under specified conditions. Quotation Expiration DateDate from which a quotation price is no longer valid. RReceived for Shipment Bill of LadingBill of Lading issued by the carrier evidencing actual receipt of merchandise for shipment. Also referred to as a Dock Receipt. Receiving CarrierCarrier receiving a consignment or shipment on behalf of a carrier, agent or shipper for onward carriage. Red Clause Letter of CreditAlso known as anticipatory credits. A letter of credit which contains a clause (traditionally printed in red) authorizing the nominated bank to make advances to the seller before shipment/presentation of documents. It is generally of value to middlemen and dealers in areas of commerce that require a form of pre-financing and where the buyer would be willing to make special concessions of this nature. Reefer CargoCargo requiring temperature control. Reefer ContainerThermal container with refrigerating appliances (mechanical compressor unit, absorption unit, etc.) to control the temperature of cargo. Register TonAlso referred as gross register tonnage (GRT). This is measurement for the capacity of a vessel as its basis for volume whereby one register ton equals 100 cubic feet (2.83 cubic meters). Remitting BankBank that sends the draft to the overseas bank for collection. Revocable Letter of CreditLetter of Credit that can be cancelled or altered by the drawee (buyer) after it has been issued by the drawee's bank. SSaid to Contain (STC)Clauses in transport documents which exclude liability of the carrier for the consistency of the description of the goods. SalvageSalvage means either (a) saving or rescue of a vessel and cargo from a vessel and (b) compensation paid for the rescue of a vessel, its cargo and passengers Sea Waybill (SWB)Transport document which is not a document of title or negotiable document. The SWB acts as a receipt for on board loading of the goods. For the receipt of the goods, the SWB is not required and can increase the speed of the delivery process at port of discharge Segregation
Distance between the various commodities of dangerous and/or bulk cargoes required by the rules of IMDG. ShipperPerson by whom, in whose name or on whose behalf transports the goods to the consignee. Shipper's Load and Count (SLC)Clause or notation indicating that the contents of a container were loaded and counted by the shipper and not checked or verified by the carrier. Shipping DocumentsDocuments required for the carriage of goods. These documents are also referred as transport documents. Shipping InstructionsInformation and instructions, from either the seller/shipper or the buyer/consignee to a freight forwarder, carrier or their agents, or other provider of a service, providing detailed instructions pertaining to the shipment (shipper, consignee, notify party, commodity, pieces etc.). Storage space on a container vessel.Storage space on a container vessel. Special Drawing Rights (SDR)SDR are account units from the International Monetary Fund (IMF), in shipping used to express the amount of the limitations of a carrier's liability per kg. StackIdentifiable amount of containers stowed in an orderly way in one specified place on an terminal, container freight station, container yard or depot. StackingTo pile boxes, bags, containers, etc. on top of each other. StackweightTotal weight of the containers and cargo in a certain row. StarboardRight side of a vessel when facing towards the front or forward end. StemForemost part of a vessel. SternAftermost part of a vessel. StevedoreCompany which executes the loading, stowing and discharging of vessels. Straight Bill of LadingNon-negotiable Bill of Lading in which the goods are consigned directly to a named consignee. SurchargeAdditional charge added to the usual or customary freight. SweeperIs an unscheduled vessel sailing arranged by carrier(s) to reduce backlog of containers at specific port(s). TTallymanPerson who records the number of cargo items together with the condition thereof at the time it is loaded into or discharged from a vessel or container. Tank ContainerTank, surrounded by a framework with the overall dimensions of a container for the transport of liquids, gasses and powders as bulk cargo. TankerVessel designed for the carriage of liquids, gasses and powders in bulk cargo. Tare WeightWeight of a container or packing materials without the weight of the goods it contains. Tare Weight of ContainerWeight of an empty container including all fittings and appliances associated with that particular type of container in its normal operating condition. TariffSchedule of rates, charges and related transport conditions. Through Bill of LadingSingle Bill of Lading that provides transshipment by using two or more of transportation Time CharterTime charter is the hiring of a vessel for a specific period of time. The owner still manages the vessel but the charterer selects the ports and directs the vessel. The charterer pays for all fuel the vessel consumes, port charges, commissions, and a daily or monthly hire to the owner of the vessel. TradeOften referred as a trade route, is a broad definition of a geographical are of commercial and shipping activity. Tramp VesselVessel not operating under a regular schedule. Transferable Letter of CreditVessel not operating under a regular schedule.Letter of Credit that allows all or a portion of the proceeds to be transferred from the original beneficiary to one or more additional beneficiaries. TransshipmentThe transfer from one vessel or conveyance to another for further transit. Twenty-foot Equivalent Unit (TEU)
A TEU is a measurement of shipment volume. It is based on the volume of a 20-foot-long (6.1 m) intermodal container, a standard-sized metal box which can be easily transferred between different modes of transportation, such as ships, trains and trucks. UUltimate ConsigneeAn ultimate consignee is the final recipient of a shipment. Uniform Customs and Practice for Documentary Credits (UCP)The Uniform Customs and Practice for Documentary Credits (UCP) is a set of rules on the issuance and use of letters of credit. These rules are governed by the International Chamber of Commerce (ICC). VValue Added Tax Number (VAT Number)A VAT number is a tax identification number and is used in the European Union (EU) to identify a company or entity which is liable for VAT. It is mandatory required to import into the EU. Value SurchargeSurcharge for the carriage of cargo having a value in excess of a specified amount per kilogram. Value-Added ServicesThese are services offered by a company as an extension of its core services. Value-Added Tax (VAT)VAT is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. Valued Bill of LadingBill of Lading issued by the carrier which indicates the amount which the shipper has declared as the value of the merchandise. The carrier will be liable for this amount in the event it is found responsible for loss or damage to the merchandise. Vessel UtilizationPercentage of laden containers shipped in relation to the nominal vessel carrying capacity, e.g. nominal capacity 10,000 TEU, 90% utilization = 9,000 TEU shipped. VoyageJourney by sea from one port or country to another or, in case of a round trip, to the same port. Voyage CharterA voyage charter is the hiring of a vessel and crew for a voyage between a load port and a discharge port. Voyage NumberReference number assigned by the carrier or its agent to the voyage of the vessel. WWharfPlace for berthing vessels to facilitate loading and discharging of cargo. YYork / Antwerp RulesInternational rules governing General Average.
Other topics that might interest you:What is the allowance method required by?The allowance method is required by companies that comply with generally accepted accounting principles. The method is used to estimate and accrue to the general ledger the financial risk of customer accounts that are unlikely to be paid in the future and will result in a business loss.
What is the allowance method formula?Example of allowance method
Historically, 0.4% of business credit transactions have gone unpaid. To calculate its debt allowance, the business calculates 0.4% of $500,000—January's credit transactions: 0.4% x $500,000= $2,000.
What is the allowance method quizlet?Allowance Method. - attempts to match bad debt expense in the period with related revenue. - requires that an estimate of bad debts be made and recorded at the end of each period. Advantages of allowance method. 1) adheres to the matching principle b/c bad debt expense recorded in the period of sale.
Why is the allowance method required by GAAP?The allowance method is preferred over the direct write-off method because: The income statement will report the bad debts expense closer to the time of the sale or service, and. The balance sheet will report a more realistic net amount of accounts receivable that will actually be turning to cash.
|