Glossary
Shipping, customs and logistics terms in plain words. Each definition rests on a named source, quoted on the term's page.
33 of 613 approved terms published; new terms are added daily.
B
- Bill of lading (B/L)
- In ocean shipping, a bill of lading is a document of title to the goods and can be negotiable.
- Bunker adjustment factor (BAF)
- A bunker adjustment factor (BAF) is a supplemental charge for additional fuel cost caused by sudden increases in fuel prices.
C
- Carriage and Insurance Paid To (CIP)
- In the Incoterms 2020 rules, the seller must contract and pay for the carriage and the insurance of the goods up to the place of destination. The seller's obligation covers both transport and insurance to that destination.
- Carriage Paid To (CPT)
- Carriage Paid To (CPT) is a term under which the seller hands goods to a carrier it has selected and contracted, at the agreed place, and risk passes to the buyer at that handover.
- Claused bill of lading
- A claused bill of lading is one to which the carrier adds a clause when the goods are not in good condition at receipt. It is also called a foul bill of lading.
- Clean bill of lading
- A clean bill of lading states that goods were received in apparent good order and condition. An unclean bill indicates that goods were damaged or in poor condition.
- Common carrier
- A common carrier holds itself out to the general public to provide transportation by water of cargo.
- Container yard (CY)
- A container yard (CY) is a designated area within a port or terminal where containers are stored before they are loaded onto a ship.
- Cost and Freight (CFR)
- In the CFR Incoterms® rule, the seller must bear the cost and freight from the port of shipment to the port of destination. The seller's cost obligation ends at the port of destination named in the contract.
- Cost, Insurance and Freight (CIF)
- CIF (Cost, Insurance and Freight) requires the seller to arrange and pay for port-to-port carriage and insurance of the goods up to the port of destination. The insurance obligation is what separates it from Cost and Freight (CFR).
D
- Deconsolidation
- In Canada, cargo reporting treats deconsolidation as the separation of a combined shipment into separate shipments for different receivers.
- Delivered at Place (DAP)
- Delivered at Place (DAP) is a term under which the seller delivers goods, and transfers risk, once they are at the agreed destination and ready for unloading.
- Delivered at Place Unloaded (DPU)
- Delivered at Place Unloaded (DPU) is a term under which the seller delivers goods and transfers risk at the designated destination. The seller also unloads the goods from the arriving transport.
- Delivered Duty Paid (DDP)
- Delivered Duty Paid (DDP) is a term under which the seller delivers goods and transfers risk to the buyer at the agreed destination, often the buyer's premises, on a door-to-door basis.
E
- Ex Works (EXW)
- Ex Works (EXW) is a term under which the seller delivers goods at its own premises, such as a factory or warehouse. From that point on, the buyer bears all costs and risks.
F
- Forty-foot equivalent unit (FEU)
- The label FEU refers to a container with internal measures of about 40 feet long, 8 feet wide and 8 feet tall.
- Free Alongside Ship (FAS)
- Free Alongside Ship (FAS) is a term under which the seller delivers goods alongside the vessel at the port of shipment.
- Free Carrier (FCA)
- Free Carrier (FCA) is a term under which the seller hands goods over at an agreed location to the carrier or person the buyer designates, and risk passes to the buyer at that point.
- Free On Board (FOB)
- Free On Board (FOB) is a term under which the seller delivers goods on board the vessel at the named port of shipment, and risk passes to the buyer once the goods are loaded.
I
- Incoterms
- Incoterms are a set of standards used in contracts for delivering goods, whether the trade is international or domestic.
M
- Master bill of lading (MBL)
- A master bill of lading documents the agreement a forwarder reaches with the carrier. It is generated alongside a house bill for each international shipment.
N
- Named place
- Under Incoterms rules, a named place is the place of delivery that the parties write into a sale, which may be the seller's premises or another location. The parties may name only that place and leave the precise point within it unspecified.
- Negotiated rate arrangement (NRA)
- In the United States, a non-vessel-operating common carrier (NVOCC) may enter into a negotiated rate arrangement (NRA) when it is granted an exception from certain tariff rate publication requirements.
- Non-vessel-operating common carrier (NVOCC)
- Under Federal Maritime Commission rules, a non-vessel-operating common carrier provides ocean transportation without operating the vessels that carry the cargo.
O
- Ocean freight forwarder
- In the United States, an ocean freight forwarder is a person that dispatches shipments from the country via a common carrier.
- Ocean transportation intermediary (OTI)
- Under Federal Maritime Commission regulations, the category covers both ocean freight forwarders and non-vessel-operating common carriers.
- Order bill of lading
- An order bill of lading is negotiable and can be used to buy, sell, or trade goods while they are in transit on an ocean shipment.
S
- Sea waybill
- In ocean shipping, a sea waybill is a transport document that can be used as an alternative to the bill of lading.
- Service contract
- A service contract links a shipper with an ocean common carrier or with an ocean common carrier agreement.
- Straight bill of lading
- A straight bill of lading is non-negotiable, which distinguishes it from a negotiable shipper's order bill of lading for ocean shipments.
T
- Through bill of lading
- Under a through bill of lading, the shipowner takes charge of onward carriage of the goods, such as by road haulage.
- Transfer of risk
- Under the Incoterms 2020 rules, and generally in other contexts, the transfer of risk coincides with delivery. Transfer of risk is therefore tied to the point of delivery under each rule.
- Twenty-foot equivalent unit (TEU)
- TEU, the abbreviation for twenty-foot equivalent unit, measures volume in maritime and rail transport statistics. One TEU equals a 20-foot ISO container.