Shipping terminology

• Act of God - An act beyond human control such as lightning flood or earthquake.

• Advising Bank - A bank operating in the sellers country that handles letters of credit on behalf of a foreign bank.

• Agency Tariff - A tariff published by an agent on behalf of several carriers.

• Air Waybill (AWB) - Specifies the terms under which the air carrier is agreeing to transport the goods and contains limitations of liability, a contract between shipper and carrier.

• Amended B/L-B/L requiring updates that do not change financial status, this is slightly different from corrected B/L.

• BAF Bunker Adjustment Factor - Used to compensate steamship lines for fluctuating fuel costs. Sometimes called fuel Adjustment Factor or FAF.

• Bank Guarantee - Guarantee issued by a bank to a carrier to be used in lieu of lost or misplaced original negotiable bill of lading.

• Beneficiary - Entity to whom money is payable. The entity for whom a letter of credit is issued. The seller and the drawer of a draft.

• Bill of Lading - A contract between the owner of the goods and the carrier. A straight bill of lading is nonnegotiable. A negotiable or shippers order bill of lading can be bought, sold or traded while goods are in transit.

• Bill of Lading (B/L) - A document that establishes the terms of a contract between a shipper and a transportation company. It serves as a document of title contract of carriage and a receipt for goods.

• Bonded Warehouse - A warehouse for storage or manufacture of goods on which payment of duties deferred until the goods enter the Customs Territory. The goods are not subject to duties if reshipped to foreign points.

• Booking - Arrangements with a carrier for the acceptance and carriage of freight, i.e. a space reservation.

• Booking Number - Reservation number used to secure equipment and act as a control number prior to completion of a B/L.

• Broker - A person who arranges for transportation of loads for a percentage of the revenue from the load.

• Brokerage - Freight forwarder/broker compensation as specified by ocean tariff or contract.

• Bunker Charge - An extra charge sometimes added to steamship freight rates, justified by higher fuel costs. Also known as Fuel Adjustment Factor or FAF.

• Bunkers - A maritime term referring to fuel used aboard the ship. In the past fuel coal stowage areas aboard a vessel were in bins or bunkers.

• Bureau Veritas - A French classification society which certifies seagoing vessels for compliance to standardized rules regarding construction and maintenance.

• CAF - Currency Adjustment Factor. A charge expressed as a percentage of a base rate that is applied to compensate ocean carriers of currency fluctuations.

• Cancelled B/L - B/L status, used to cancel a processed B/L, usually per shippers request, different from voided B/L.

• Cargo - Freight loaded into a ship.

• Certificate of Inspection - A document certifying that merchandise was in good condition immediately prior to its shipment.

• Certificate of Origin - A document that certifies the country where the product was made (i.e. its origin). A Certificate of Origin is needed when exporting to many foreign markets. It may be required in order to obtain preferential tariff treatment under several Free Trade Agreements (i.e. NAFTA APTA DR_CAFTA etc.)

• CIF (Named Port) Cost Insurance Freight.

• Claim - A demand made upon a transportation line for payment on account of a loss sustained through its alleged negligence.

• Commercial Invoice - Represents a complete record of the transaction between exporter and importer with regard to the goods sold. Also reports the content of the shipment and serves as the basis for all other documents relating to the shipment.

• Confirmed Letter of Credit - A letter of credit issued by a foreign bank whose validity has been confirmed by a domestic bank.

• Consignee - A person or company to whom commodities are shipped.

• Container - A truck trailer body that can be detached from the chassis for loading into a vessel a rail car or stacked in a container depot. A container may be 20 feet, 40 feet, 45 feet. 48 feet or 53 feet in length; 80 or 86 in width and 86 or 96 in height.

• Correspondent Bank - A bank that handles the business of a foreign bank.

• Demurrage - A penalty charge against shippers or consignees for delaying the carrier's vessel beyond the allowed free time.

• Free on Board (FOB) - The goods are placed on board the vessel by the seller at the port of shipment specified in the sales contract. The risk of loss or damage is transferred to the buyer when the goods pass the ship's rail.

• Freight - Refers to either the cargo carried or the charges assessed for carriage of the cargo.

• Freight Forwarder - A person whose business is to act as an agent on behalf of the shipper. A freight forwarder frequently makes the booking reservation.

• Import License - A document required and issued by some national governments authorizing the importation of goods.

• INCOTERMS - International Chamber of Commerce Terms of Sale.

• Inland Carrier - A transportation line that hauls export or import traffic between ports and inland points.

• Irrevocable Letter of Credit - Letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee and which cannot be revoked without joint agreement of both the buyer and the seller.

• Issuing Bank - Bank that opens a straight or negotiable letter of credit and assumes the obligation to pay the bank or beneficiary if the documents presented are in accordance with the terms of the letter of credit.

• Prepaid (Ppd.) - Freight charges paid by the consignee (the shipper) prior to the release of the bills of lading by the carrier.

• Remittance - Funds sent by one person to another as payment.

• Terms of Sale - The point at which sellers have fulfilled their obligations so the goods in a legal sense could be said to have been delivered to the buyer. They are shorthand expressions that set out the rights and obligations of each party when it comes to transporting the goods.

• Vanning - A term for stowing cargo in a container.