Shipping terms,
explained plainly.
63 terms that forwarders, shippers and importers use every day — from bill of lading to TEU — each with a short definition and a fuller explanation.
Shipping documents
Bills of lading, waybills and the papers that move cargo.
Air waybill AWB
An air waybill is the non-negotiable transport document for air cargo, issued in IATA format, that serves as the receipt for the goods and the contract of carriage.
Arrival notice
An arrival notice is the message a carrier or forwarder sends to the consignee and notify party before cargo arrives, with the ETA, shipment details and charges due.
Bill of lading B/L
A bill of lading is the document a carrier issues for sea cargo: a receipt for the goods, evidence of the carriage contract and, when negotiable, a document of title.
Certificate of origin CO
A certificate of origin is a document stating the country where goods were produced, which customs uses to apply tariffs, trade preferences and import restrictions.
CMR consignment note CMR
A CMR consignment note is the transport document for international road freight under the 1956 CMR Convention, evidencing the contract of carriage and receipt of goods.
Commercial invoice
A commercial invoice is the seller's bill to the buyer for goods sold across borders, and the main document customs uses to assess the value, duties and taxes.
Delivery order D/O
A delivery order is the document a carrier or its agent issues at destination authorizing the terminal or warehouse to release cargo to the consignee or its trucker.
House bill of lading HBL
A house bill of lading is the bill of lading a freight forwarder or NVOCC issues to its own customer, the actual shipper, for cargo it has booked with an ocean carrier.
Master bill of lading MBL
A master bill of lading is the bill of lading an ocean carrier issues to a freight forwarder or NVOCC, covering the cargo the forwarder has booked on the vessel.
Packing list
A packing list is a shipping document that itemizes the contents of each package in a shipment with quantities, dimensions and weights, usually without prices.
Sea waybill SWB
A sea waybill is a non-negotiable transport document for ocean cargo that lets the named consignee collect the goods without presenting an original bill of lading.
Telex release
A telex release is a carrier's instruction to release cargo at destination without original bills of lading, because the originals were surrendered at origin.
Verified gross mass VGM
Verified gross mass is the total weight of a packed container, including cargo, packing, dunnage and tare, which SOLAS requires before the container is loaded on a ship.
Pricing and charges
How freight is measured, priced and billed.
Accessorial charges
Accessorial charges are fees added to the base freight rate for services beyond standard dock-to-dock pickup and delivery, such as liftgate use or waiting time.
All-in rate
An all-in rate is a single freight price that combines the base rate with the main surcharges and fees, so the customer sees one figure instead of a list.
Bunker adjustment factor BAF
The bunker adjustment factor (BAF) is a fuel surcharge ocean carriers add to the base freight rate to reflect changes in the price of ship fuel, known as bunkers.
Chargeable weight
Chargeable weight is the weight a carrier bills on: the greater of the cargo's actual gross weight and its volumetric weight calculated from its dimensions.
Cubic meter CBM
CBM (cubic meter) is the standard unit of cargo volume in freight: length × width × height of each piece in meters, multiplied by the number of pieces.
Demurrage
Demurrage is the charge a shipping line makes when a full container stays in the port or terminal longer than the free time allowed before it is picked up.
Detention
Detention is the charge a shipping line makes when its container is kept outside the port beyond the free time, until the empty box is returned to the depot.
Free time
Free time is the number of days a carrier or terminal lets a container be stored or used without charge before demurrage, detention or storage fees begin.
Freight class
Freight class is a rating from 50 to 500 in the US National Motor Freight Classification (NMFC) that sets LTL prices, based mainly on the density of the cargo.
General rate increase GRI
A general rate increase (GRI) is an across-the-board rise in base freight rates that a carrier announces for a trade lane, taking effect from a set date.
Loading meter LDM
A loading meter (LDM) is one meter of trailer floor length across the trailer's full width, used in European road freight to measure and price part loads.
Terminal handling charge THC
A terminal handling charge (THC) is the fee for handling a container at a port terminal, such as lifting it on or off the vessel and moving it through the yard.
Volumetric weight
Volumetric weight, also called dimensional weight, is a notional weight calculated from a shipment's length, width and height to reflect the space it occupies.
Weight or measure W/M
Weight or measure (W/M) is the sea freight rule that bills LCL cargo on whichever is greater: its weight in metric tons or its volume in cubic meters.
Modes and equipment
Containers, trucks and the ways cargo travels.
Break-bulk cargo
Break-bulk cargo is freight loaded onto a ship as individual pieces, such as crates, bales, steel or machinery, rather than packed in containers or poured in bulk.
Consolidation
Consolidation is combining several shippers' smaller shipments into one container, truck or air shipment so they travel together at a lower cost per shipment.
Drayage
Drayage is the short-distance trucking of containers between a port or rail terminal and a nearby warehouse, depot or other terminal, as one leg of a longer move.
Full container load FCL
FCL (full container load) is an ocean shipment in which one shipper books and uses a whole container, paying per container however much of it the cargo fills.
Full truckload FTL
FTL (full truckload) is a road shipment in which one shipper books a whole truck or trailer, which runs directly from pickup to delivery without other cargo.
High cube container HC
A high cube container is a shipping container 9 ft 6 in tall, one foot taller than a standard box, giving extra internal height and volume for light, bulky cargo.
Less than container load LCL
LCL (less than container load) is an ocean shipment too small to fill a container, so it shares one with other shippers' cargo and is charged by volume or weight.
Less than truckload LTL
LTL (less than truckload) is road freight for shipments too small to fill a truck, carried with other shippers' cargo and priced on the space or weight they use.
Multimodal transport
Multimodal transport is the carriage of goods by at least two modes, such as sea and road, under one contract with one operator responsible for the whole journey.
Out-of-gauge cargo OOG
Out-of-gauge (OOG) cargo is freight too high, wide or long to fit within a standard container's outline, so it ships on flat racks or in open-top containers.
Reefer container
A reefer container is a refrigerated shipping container with a built-in cooling unit that keeps perishable or temperature-sensitive cargo at a set temperature.
Transshipment
Transshipment is the transfer of cargo from one vessel or vehicle to another at an intermediate port or hub on its way to the final destination.
Twenty-foot equivalent unit TEU
A TEU (twenty-foot equivalent unit) is the standard unit for counting containers: one 20-foot container is one TEU, and a 40-foot container is two.
People and companies
Who is who in a shipment.
Co-loader
A co-loader is a consolidator that carries other forwarders' LCL or air cargo in its own consolidations, so they can ship without filling a whole container themselves.
Consignee
A consignee is the party named on a transport document to receive the goods at destination, usually the buyer or importer, or a bank or agent acting for them.
Customs broker
A customs broker is a licensed or authorized agent that prepares and files customs declarations for importers and exporters and handles their duties and taxes.
Freight forwarder
A freight forwarder is a company that arranges the transport of goods for shippers: booking carriers, preparing documents and coordinating every leg of the journey.
Notify party
A notify party is the person or company named on a bill of lading or air waybill to be told when cargo arrives; that role alone gives no right to collect the goods.
NVOCC
An NVOCC, or non-vessel operating common carrier, is a company that acts as an ocean carrier to its customers and issues its own bills of lading but operates no ships.
Overseas agent
An overseas agent is a freight forwarder in another country that handles the far end of shipments for a partner forwarder, usually under a reciprocal agency agreement.
Shipper
A shipper is the party that sends goods and contracts for their carriage, usually the seller or exporter, and that is named as shipper on the transport document.
Third-party logistics 3PL
Third-party logistics (3PL) is the outsourcing of logistics work such as warehousing, order fulfillment, transport management and distribution to an outside provider.
Customs and operations
Trade terms, customs and the daily work of a shipment.
Booking confirmation
A booking confirmation is the carrier's written acceptance of a cargo booking, stating the booking number, vessel or flight, schedule, equipment and cut-off times.
Cargo cut-off
A cargo cut-off is the last date and time a container or shipment can be delivered to the terminal or carrier and still be loaded on the booked sailing or flight.
Cargo insurance
Cargo insurance is a policy that pays the owner of goods for physical loss or damage in transit, beyond the limited amount a carrier is legally liable for.
Customs clearance
Customs clearance is the process of declaring goods to customs, paying any duties and taxes, and obtaining the official release so they can be exported or imported.
Dangerous goods DG
Dangerous goods (DG) are substances and articles that can harm people, property or the environment in transport, such as flammable liquids, gases or lithium batteries.
ETA and ETD
ETA (estimated time of arrival) and ETD (estimated time of departure) are the planned times a vessel, flight or truck is expected to arrive at or leave a location.
Freight forwarding software
Freight forwarding software is a business system that runs a forwarder's work in one place, from quotes and bookings to shipping documents, tracking and invoicing.
General average GA
General average (GA) is the maritime rule under which all interests in a sea voyage share, in proportion to their value, a loss deliberately made to save ship and cargo.
HS code
An HS code is a product's number in the World Customs Organization's Harmonized System; its first six digits classify the goods the same way in every country using it.
Incoterms
Incoterms are trade terms published by the International Chamber of Commerce that set where a seller delivers goods and how risk, costs and customs duties are split.
Port of loading and port of discharge POL / POD
The port of loading (POL) is where cargo is loaded onto the ocean vessel; the port of discharge (POD) is where it is finally unloaded at the end of the sea leg.
Proof of delivery POD
A proof of delivery (POD) is the signed record that a shipment reached the consignee, showing who received it, when, and whether anything was damaged or missing.
Request for quote RFQ
A request for quote (RFQ) is a request for a freight price for a defined shipment or lane, giving the cargo, route, mode and service details needed to price it.
Transport management system TMS
A transport management system (TMS) is software for planning, executing and controlling freight movements: carrier selection, load and route planning, and freight audit.
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