GLOSSARY OF SHIPPING TERMS
Like every other industry, the shipping and freight business is full with jargon.
To clarify and assist you with some of the most common shipping and freight terms, please refer to our Glossary of Shipping Terms below. Simply click the down arrow to reveal the explanation.
If you still are unsure of any terms, please feel free to call us, we will be happy to assist.
Air Freight
Goods transported by aircraft. Usually the quickest method of shipping internationally.
AWB (Airway bill)
Air Waybill or Consignment Note is the document airlines issue on receipt of cargo for shipment and as evidence for the contract of carriage, but it is not a document of title to the goods. The air waybill is non-negotiable. It includes an 11-digit Air Waybill number you can use to track your goods in transit.
ATR1
A customs document that allows goods moving between an EU country and Turkey to benefit from cheaper rates of duty.
The document that shipping companies issue on receipt of cargo for shipment and as evidence for the contract of carriage. As well as setting out all the details for each shipment, it includes a Bill of Lading Number you can use to use to track your goods in transit.
BAF (Bunker Adjustment Factor)
The Bunker Adjustment Factor, or BAF, as it is more commonly known, is one of the charges levied on goods transported via Sea Freight. This particular charge represents the fluctuating costs to the shipping, as an example varying global oil prices.
BIFA (British International Freight Association)
BIFA is a trade association for UK registered companies engaged in international movement of freight by all modes of transport, air, road, rail and sea. All Business undertaken by RJJ Freight Ltd of whatever nature is subject to the Standard Trading Conditions of BIFA 2005A edition.
Bill of Lading (B/L or BOL)
Official shipping document containing details about the shipment. The release of this document to the intended recipient of goods is representative of transfer of ownership, so it is often held until final payment is complete. The original paper B/L or electronic release (see Telex Release) is required for the delivery of goods.
Bonded Warehouse
A building or other secure area in which dutiable goods can be stored, manipulated or undergo manufacturing operations without payment of Vat and Duty. See also under ERTS
C of O (Certificate of Origin)
An official document that, when stamped by the relevant authorities, provide the Country of Origin of the goods in transit. This is often required when shipping textiles.
CAF (Currency Adjustment Factor)
The Currency Adjustment Factor is a component of the cost of shipping goods, by air or by sea. It reflects changes in foreign exchange rates
Cargo
Goods for transportation by air, sea or road.
CBM (Cubic Metre – M3)
Cubic Metre. Unit usually used to calculate volume. One cubic metre is equal to 100cm x 100cm x 100cm.
CFS (Container Freight Station)
Carrier facility/warehouse (usually located in or close to Port) where LCL (Less Than Container Load) shipments are loaded or unloaded.
Commercial Invoice
A document containing information about the goods, typically including type, quantity, price of each product and terms of sale. Also, shows the buyer and seller details. Used to declare goods to Customs and to calculate the payable duties and taxes. Completion and submission is the responsibility of the signatory (sender of the goods).
Commodity Codes
Commodity codes are used to classify goods for import and export, to ensure the right amounts of tax, VAT and duty are paid. You can find commodity codes using the online Trade Tariff at GOV.UK.
Consignee (Cnee)
Usually the buyer. The person or company responsible for receiving the goods.
Consignment
The shipment. A batch of goods being delivered from consignor (usually the seller) to consignee (the receiver of goods, usually the buyer.)
Consignor (also Consigner)
Usually the seller. The person or company that retains original ownership of goods until transferred to the consignee (usually the buyer).
Container Demurrage
If a container is used for longer than it was booked or agreed free time, the excess time is referred to as demurrage.
Customs Cleared
A cargo becomes customs cleared once it has been declared to the local customs authorities and all applicable taxes and duties have been paid. Once cleared, goods are ready for onward shipment.
Customs Commodity Code
A six, eight or 10 digit code that tells customs authorities exactly what the cargo is.
Customs Duty
Goods sent from outside of the EU to the UK may be subject to Customs Duty, except in case where the value is below £135, or the actual duty payable is less than £7. This may change when the UK is no longer an EU member.
Deferment
A deferment account is a bank account held with Customs to pay the relevant duties and VAT. An importer can apply to set up their own deferment account with HMRC or use the deferment account of an import agent/customs broker (usually for a charge).
Demurrage
A charge applied by the carrier for having to hold a freight vehicle or container for longer than arranged. Can sometimes occur when a full container takes longer than the allotted three hours to unload.
DDU (Delivered Duty Unpaid)
A term indicating that the consignee must pay local duties and taxes at the agreed delivery point.
DDP (Delivered Duty Paid)
A term indicating that the shipper/consignor is responsible for paying all duties and taxes at the agreed delivery point.
Devanning (also Unstuffing, Unloading or Unpacking)
The process of removing the cargo from a container.
Duty
A tax applied to imported and exported goods by the Customs authority of a country. If you are importing or exporting within the EU, there’s no duty payable. When importing and exporting to and from non-EU countries, you may be able to claim some or all of the amount payable back through a duty relief scheme.
Duties and Taxes
Customs duties and taxes may be payable when importing and exporting goods, and vary from country to country.
EORI (Economic Operator Registration and Identification number)
Used by UK Customs to keep a record of imported and exported goods, and required by all businesses within the EU when importing or exporting commercial cargo (not goods for private use) from or to a destination outside of the EU. This number is required for a commercial invoice, when submitting an electronic export declaration, and when using the CHIEF system. If you are using a courier or freight forwarder, they will need the EORI number. It is easy to apply for an EORI number online and usually, takes three working days to receive.
ETA (Estimated Time of Arrival)
Used to indicate what time and date the ship is expected to arrive at its destination port. Usually seen on shipping schedules.
ETD (Estimated Time of Departure)
Used to indicate what time and date the ship is expected to leave port. Usually seen on shipping schedules and arrival reports.
Export Licence
Some items require a government-issued export licence before they are shipped internationally. Whether you need an export licence depends on the country you are exporting from, the destination, the type of goods and the end use. In the case of exporting from the UK, most goods do not require a licence, but it is the exporter’s responsibility to ensure this is in place if needed.
FCL (Full Container Load)
A shipment made in a dedicated 20- or 40- foot container
FEU (Forty-Foot Equivalent Unit)
The inexact method of measuring a ship’s capacity for carrying cargo and the handling capacity of container ports. Refers to the size of a standard 40ft container unit.
FIATA (International Federation of Freight Forwarding Associations)
International Federation of Freight Forwarders Associations, a non-governmental organisation, representing some 40,000 forwarding and logistics companies in 150 countries
Freight
Goods that are transported, usually in bulk, from one place to another. Freight can be carried by land, sea or air.
Freight Forwarder
A freight forwarder is an independent company that will take care of the shipping process on your behalf. They will typically manage all aspects of shipping, including ensuring the correct documentation is completed. They may also offer a variety of wraparound services, including product sourcing, packing, unpacking, warehouse storage and end-point delivery.
Fumigation
The process during which a container is filled with gases or pesticides to kill vermin or insects or other infestations that may have crept inside the container during loading before any cargo is devanned.
General Cargo
Any cargo that isn’t packed into a standard container for shipment. This might be bulk cargo - grain or fertilisers, for example. Alternatively, it could be an item on a pallet or something that’s too big to fit into a container.
Kerbside Delivery
The standard delivery terms for a shipment, unless agreed otherwise. The delivery truck will be parked at the premises of the recipient, and the recipient is responsible for unloading.
Groupage
The process of combining smaller shipments from separate shippers into a container to make it easier and cheaper to ship to a common destination.
Haulage
The process of moving goods to or from a port.
Haulier
Person or company responsible for moving goods to or from a port, typically using a van or truck.
HAWB (House Airway Bill)
Freight Forwarders offering a consolidated service – to combine goods from several different shippers into a single unit prior to shipment – issue a house air waybill to describe the unit’s content.
HMRC (Her Majesty Revenue & Customs)
Her Majesty’s Revenue and Customs or HM Revenue & Customs is a non-ministerial department of the UK Government responsible for the collection of taxes in the UK.
HiAb
Standard used in the trade to describe a lorry or tuck that comes with a small crane attached. The name comes from the original manufacturer of the device – the Swedish firm, Hydraliska Industri AB.
HS Code (Harmonised Code/Tariff Heading)
A six digit coding scheme used to describe goods being shipped. Developed by the World Customs Organisation, it is understood around the world.
Import Duty
A tax collected on imports by the Customs authorities of a country. This is typically calculated based on the value of the goods.
Import Licence
Some items require a government-issued import licence before they are brought into the country. In the case of importing into the UK, most goods do not need a licence, but it is the importer’s responsibility to ensure this is in place if needed.
INCO Terms ( International Commercial Terms)
The Inco terms rules or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC). They are widely used in International commercial transactions or procurement processes. A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods.
Insurance - Marine Cargo Insurance
Marine Cargo Insurance cover loss or damage to goods in transit, subject to the Institute Cargo Clauses. These clauses provide standard comprehensive marine insurance cover. The term "All Risks" broadly speaking means any accidental event which is external to the cargo. War and Strikes (including Terrorism) subject to the application of the appropriate Institute Clauses providing for War and Strikes risks. General Average contributions and salvage cover.
IPR (Inward Processing Relief)
A relief from duty and VAT on goods being imported from outside the EU only to be process. When the process is completed the goods will be exported to countries outside the EU.
IVA (Individual Vehicle Approval)
Previously known as Single Vehicle Approval (SVA). A legal requirement which is designed to ensure a vehicle complies with the current UK regulations for the use on British roads. All cars and vehicles manufactured within the preceding 10 years are required to undergo this process and in some cases modifications of the car or vehicle is required.
LC (Letter of Credit)
A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.
LCL (Less than a Container Load)
A shipment too small to require a container of its own. The shipment will be grouped with other shipments to the same destination and loaded in a shared 20- or 40-foot container.
Local charges
The charges payable to a terminal, local tax authority and/or government, when importing or exporting goods. It is important to know what local charges you are responsible for when calculating the cost of shipping goods
LO-LO (Load-On, Load-Off)
This term is usually describing the charge made for loading and or discharging a container from or onto a truck.
MAWB (Master Airway Bill)
Master airway bill is issued by main carrier of goods on receipt of goods from a freight forwarder to deliver at destination as per agreed terms.
MSDS (Material Safety Data Sheet)
A form containing information regarding hazardous cargo, including guidance on how it needs to be handled during shipping.
Moffitt Truck
Lorry or truck that comes with a fork-lift attached.
Notify Party
The person or company that is indicated on the Bill of Lading for notification of the ship’s landing at its destination. Usually the Consignee.
NOVA (Notice of Vehicle Arrival)
All vehicles arriving into the UK require notification to HM Revenue & Customs within 14 days. For private individuals RJJ can assist with the NOVA formalities. A vehicle cannot be registered or licenses with the DVLA without a NOVA declaration.
Original Bill of Lading
The bill of lading is given to the shipper as receipt of goods. Shipping lines may require this document to be surrendered to them prior to the release of the goods at destination port.
Packing List
A packing list contains information on the contents of a consignment. It details the contents of each package or container, often including dimensions and weight. It is completed by the shipper/seller of the goods and used by the receiver to verify the items sent. It may also be used by other agencies and parties involved with shipping.
Port
A harbour or dock where ships can load and unload cargo. Also used to describe a town or city with a harbour i.e. the Port of Felixstowe.
POD (Port of Discharge)
The port at which goods are off-loaded from the ship and discharged for collection or further onward transportation. May or may not be the final Destination Port.
Port Handling Charge (also Terminal Handling Charge)
Payable to the shipping carriers to cover the handling of containers. In the UK these charges are payable per container for both import and export shipments.
POL (Port of Loading or Port of Origin)
The port at which the goods are loaded onto the ship to be transported.
Pre-Lodged
The act of registering goods with HM Revenue & Customs prior to their arrival at port.
Road Haulage / Trucking
Goods transported by road, usually by truck.
RoRo (Roll on/Roll off)
A description of cargo such as a car, bus, truck or trailer that can make its own way onto and off a ship via its loading ramp.
Sea Freight
Goods transported by ship. Usually the most cost efficient method of shipping internationally.
Sea Waybill
The document shipping lines issue on receipt of cargo for shipment.
Shipment
The quantity of goods shipped together, often on a single bill of lading or air waybill.
Shipper
The sender of the goods. Often the Consignor.
Shipping Marks and Numbers
Shipping marks and numbers are used on the cartons within a container for identification purposes. They are especially important in the case of shared containers (LCL shipments). They include the size and weight of the carton, the recipient and the number of the carton (i.e. 1 of 4). They sometimes also include a shape.
Short-Shipped
The term used to describe goods or containers that are recorded but have not arrived as expected, because they were not loaded on board a vessel or aircraft.
Shunt
The movement of a container over a short distance – typically from the quayside to a warehouse in a port or from place to place within a dockyard
SSN (Standard Shipping Note)
A standard shipping note is a form that contains information about the goods and the companies involved in sending, shipping and receiving goods overseas.
SWB (Sea Way Bill)
A transport document for maritime shipment which serves as evidence of the contract of carriage and as a receipt for the goods, but is not a document of title. The sea waybill indicates the on board loading of the goods and can be used in cases where no ocean bill of lading and no other document of title is required.
Tail Lift Delivery
Goods are delivered in a truck with a tail lift on the back to enable the driver to lower them to the ground. Essential if you are expecting a delivery of heavy goods and don’t have access to a forklift to get them off the vehicle.
Tariff Code (also Commodity Code)
A code allocated to products for the purpose of clearing through UK customs. The code determines the percentage of duty that’s payable on the product. Look up the relevant code at www.gov.uk/trade-tariff.
Telex Release
A term referring to the electronic handover of the Bill of Lading. Telex Release is an instant method which makes it preferable over the paper method, which involves the shipper posting the Original B/L to the Consignee for forwarding before the goods can be released.
TEU (Twenty-Foot Equivalent Unit)
The inexact method of measuring a ship’s capacity for carrying cargo and the handling capacity of container ports. Refers to the size of a standard 20ft container unit.
THC (Terminal Handling Charge)
Also known as Port Handling Charge. Payable to the shipping carriers to cover the handling of containers. In the UK these charges are payable per container for both import and export shipments.
Tranship
The transfer of cargo from one ship, or other modes of transport, to another.
Transit Time
The amount of time it takes for the vessel to travel between the Port of Loading and the Port of Discharge.
UCR (Unique Consignment Reference)
The number that will uniquely identify a shipment as it moves around the world. It is used by everyone in the shipping process – the shipping lines, ports and customs authorities.
VAT (Value Added Tax)
A tax levied based on the value of goods or services. The rate varies according to the type of goods or service involved. Unless exempt, VAT is levied on goods as they are imported into the UK
VAT Registration Number
Individuals and organisations are required to register for VAT if they have to levy VAT on goods or services. The VAT registration number is issued by HM Revenue & Customs.
Vessel
A ship or large boat. Used in shipping to transport sea freight.
VGM (Verified Gross Mass)
The SOLAS (Safety of Life at Sea) regulation allows for two methods to verify the gross mass of packed containers which is now mandatory to provide to the shipping line’s before a container is loaded onto a vessel.
Method 1. Weighing the packed container using calibrated and certified equipment; or
Method 2: Weighing all packages and cargo items, including the mass of pallets, dunnage and other securing material to be packed in the container and adding the tare mass of the container to the sum of the single masses, using a certified method approved by the competent authority of the State in which packing of the container was completed.