Key Terms & Phrases


Ad Valorem
Levying of tax or customs duties in proportion to the estimated value of cargo or the transaction concerned.

An independent entity, usually in a foreign market, attempting to sell cargo for an overseas shipper (e.g., seller) and earns a commission on successful sales. Agents are not normally involved in delivery or servicing of product.


Bunker Adjustment Factor (BAF)
An adjustment to an estimated freight rate assigned to a shipper to accommodate change in the cost of fuel oil (bunkers) to operate a carriers ships.

Bill of Lading
A document used to facilitate transport by sea. The Bill of Lading serves as a contract between the shipper and carrier, defines the terms of shipment/transport, facilitates transfer of ownership (or title) from the shipping line or a freight forwarder. The bill of lading is issued as a set of three signed copies, one of which must be presented to claim the cargo. After claim, the other two bills of lading become void. There are multiple types of bills of lading, to include:

Combined Transport Bill of Lading – This combines land trucking for a door pick-up to transfer cargo to a POL prior to loading on a ship for ocean transportation.

Congen Bill of Lading – A standard form of bill of lading used in shipments by chartered ship.

Clean Bill of Lading – Indicates that the cargo was received by the carrier in good order and condition, without any clauses declaring a defective condition in the goods and/or their packing.

Dirty or Foul Bill of Lading – A bill of lading with any clauses declaring a defective condition in the cargo itself, or in the packing of the cargo.

On Board Bill of Lading – A bill of lading evidencing that the cargo was not only received by the carrier but was actually loaded on board in good order and condition.

Shipped On Board Bill of Lading – A bill of lading evidencing that cargo was both on board a vessel and that the ship departed the POL.

Order Bill of Lading – A negotiable bill of lading when cargo is consigned to a particular party. This is often the shipper themselves, in which case the consignee is mostly shown listed on the bill of lading as “to order.”

Straight Bill of Lading – A non-negotiable Bill of Lading in which the cargo is consigned directly to a named consignee.

Non-containerised cargo.


Currency Adjustment Factor - CAF
An adjustment to an estimated freight rate assigned to a shipper to accommodate fluctuations in currency exchange rates.

A general term for any document issued by the seller or another party, certifying to some action having taken place or some fact about cargo in question.

Certificate of Origin
A certificate stating the country of origin of the cargo. Depending on the importing country’s requirements, this can be 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.

The party shown on the bill of lading to whom the shipment is consigned. Need not always be the buyer, and in some countries will be the buyer’s bank.


Dangerous Goods (DG)
Also known as hazardous materials (HAZMAT), DG are materials that can be hazardous to passengers, to crew, to aircraft or other cargo in the aircraft, and to the environment because of their chemical and/or physical qualities.

Demurrage and Detention
Demurrage is charged for a full container load associated with a delay in picking up products at the POD. Detention is a fee applied for delays associated with returning a container after products are picked up at the POD. Demurrage and Detention Fees are a typical charge that a shipper is bound to pay legally.

Destination and Terminal Handling Charges (DTHC)
Charges collected by shipping lines to recover from the shippers the cost of paying the container terminals for the loading or unloading of containers (and other related costs borne by the shipping lines) at the port of destination/debarkation.

Destination Fees
Fees charged by the Port of Debarkation/Destination (not the Carrier) to process containers through their facilities.


Exchange Rate
The price of one currency in the terms of another.

To send goods from a country to an overseas destination.


Free Carrier (named place)
The Seller fulfills his obligation to deliver when he has handed over the goods, cleared for export, into the charge of a carrier, or another person, named by the buyer at the named place or point. This term may be used for any mode of transport, including multi-modal transport.

Freight All Kinds (FAK)
A general description of the cargo on a bill of lading covered under the one freight rate regardless of the nature of the individual goods.

Free Alongside Ship (FAS)
The seller fulfils his obligation to deliver when the cargo is placed alongside the vessel at the named POL. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point.

Full Container Load (FCL)
Full Container Load, generally but not always indicating that goods in the container are from one seller who packed the container, going to one buyer who will unpack the container.

Free On Board (FOB)
The seller fulfils his obligation to deliver when the goods have passed over the ship’s rail at the named POL. This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that point.

Force Majeure
A clause in a contract which protects both parties in the event that part of the contract cannot be complied with due to causes outside the control of the parties and could not have been avoided by exercising due care. For example, floods, earthquakes, civil unrest and so on.

Freight Forwarder
A person or corporation who arranges transport of goods on behalf of either the seller or buyer. In many cases the freight 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


Gross Weight
The total weight of a shipment of goods, including their packaging such as crates, pallets etc.

see Consolidation


Hazardous Materials
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 hazardous or dangerous cargo are extremely high.


To bring goods from overseas into one’s country.

A set of rules for the interpretation of the most commonly used trade terms in foreign trade, recognised throughout the world, issued by the International Chamber of Commerce.


Landed Cost
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 (LCL)
A small amount of cargo insufficient to on its own be economically shipped as FCL.


A list of the various shipments being carried on a ship or aircraft.


Net Weight
The weight, or mass, of the goods themselves without any packaging.

Notify Party
The person or company to be advised by the carrier upon arrival of the Cargo at the POD.


Open Account
The seller allows the buyer to send payment at some future time (ie 60 days).

Out of Gauge (OOG)
Cargo that is oversized and exceeds the internal dimensions of a container by length, width or height. Depending on its. dimensions, OOG cargo is loaded on an open top or flat rack container.


Port of Loading (POL)
The defined port by which cargo is delivered, either directly or via a combined transport bill of lading, to be loaded onto a carrier’s vessel for shipment to a POD.

Port of Destination/Debarkation
The defined port by which cargo is shipped to for collection by a defined agent or consignee.

Packing List
A document which details the contents, and often dimensions and weight, of each package or container.

Port Charges
see DTHC


Colloquial term used for the shipment of a refrigerated container

Refrigerated Cargo
Also known as “Reefer”, refrigerated cargo is a shipment requiring a controlled-temperature environment.


Sight Draft
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.


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.