A Comprehensive List of Shipping Terms

If you are involved in the shipping industry, it is important to have a sound knowledge of shipping terminology. It can be incredibly confusing and overwhelming initially, but with a little effort, you can easily navigate the complex world of shipping. In this comprehensive guide, we will cover all the major shipping terms that you need to know.

Understanding Basic Shipping Terminology

Before we delve into the complex terminology, it is crucial to have a basic understanding of shipping concepts. The first term that you should be familiar with is the shipping carrier. A shipping carrier is an entity that transports goods from one location to another. This can be a freight forwarding company, a courier, or a shipping line.

Next, let’s discuss the different modes of transport. There are four primary modes of transport: air, sea, road, and rail. Each mode of transport has its own set of advantages and disadvantages depending on your shipping requirements. Air freight is the quickest mode of transportation, but also the most expensive. Sea freight, on the other hand, is slower but more cost-effective.

It is important to note that when shipping internationally, there are additional factors to consider such as customs regulations and documentation requirements. Customs regulations vary by country and can impact the speed and cost of your shipment. It is important to research and understand the customs regulations of the countries you are shipping to and from. Additionally, proper documentation such as commercial invoices and bills of lading are required for international shipments. Failure to provide the correct documentation can result in delays or even the seizure of your shipment by customs officials.

Common Shipping Abbreviations You Need to Know

As with any industry, there are numerous shipping abbreviations that are used frequently. Understanding these abbreviations is crucial to communicating effectively with customers, suppliers, and shipping carriers. Here are some common shipping abbreviations:

• FOB: Free On Board
• CIF: Cost, Insurance, and Freight
• DDP: Delivered Duty Paid
• CBM: Cubic Meters
• TEU: Twenty-Foot Equivalent Unit

It’s important to note that some shipping abbreviations may vary depending on the country or region. For example, in Europe, the abbreviation FCA (Free Carrier) is commonly used instead of FOB. It’s essential to be aware of these differences to avoid any confusion or misunderstandings.

Additionally, some shipping abbreviations may have multiple meanings depending on the context. For instance, the abbreviation LCL can stand for Less than Container Load or Loose Container Load, depending on the situation. It’s crucial to clarify the meaning of the abbreviation to ensure accurate communication.

Cargo and Freight Terminology Explained

Cargo and freight are often used interchangeably, but they do have different meanings. Cargo refers to the goods being transported, whereas freight refers to the cost of transportation. Here are some other important cargo and freight terminology:

• LCL: Less than Container Load
• FCL: Full Container Load
• Gross Weight: The weight of the cargo plus the weight of the container
• Net Weight: The weight of the cargo minus the weight of the container
• Tare Weight: The weight of the empty container

Another important term to know is demurrage. This refers to the charges incurred when a container is not returned to the shipping company within the agreed-upon time frame. It is important to be aware of demurrage fees, as they can add significant costs to your shipment.

Additionally, it is important to understand the difference between air freight and sea freight. Air freight is typically faster and more expensive, while sea freight is slower but more cost-effective for larger shipments. Understanding the pros and cons of each option can help you make the best decision for your cargo transportation needs.

Ocean Shipping Terms You Should Be Familiar With

Ocean shipping has its own set of terminology that can be difficult to understand. Here are some essential ocean shipping terms:

• B/L: Bill of Lading
• Container Yard (CY): The location where containers are stacked and stored before being loaded onto a ship
• Shipping Agent: An intermediary between the shipping line and the customer
• Port of Discharge: The port where the cargo is unloaded

Aside from the terms mentioned above, there are other important terms that you should know when it comes to ocean shipping. One of these is the Free on Board (FOB) term, which refers to the point at which the seller’s responsibility for the goods ends and the buyer’s responsibility begins. Another term is the Demurrage fee, which is charged when the cargo is not picked up from the port within the agreed-upon time frame.

It’s also important to note that ocean shipping has different types of containers that are used to transport goods. These containers come in different sizes and are designed to accommodate different types of cargo. Some of the most common container types include dry containers, refrigerated containers, and open-top containers.

Airfreight Terminology: What You Need to Know

Airfreight is known for its speed and efficiency. Here are some important airfreight terms you should be aware of:

• Air WayBill (AWB): The document that accompanies the cargo during air transportation
• IATA: International Air Transport Association
• Maximum Gross Weight: The maximum weight allowed for a shipment on an aircraft
• Volume Weight: Calculated by multiplying the length, width, and height of the package and dividing it by a volumetric factor

Aside from the terms mentioned above, there are other important airfreight terminologies that you should know. One of which is the Freight Forwarder. A freight forwarder is a company that arranges the transportation of goods on behalf of a shipper. They are responsible for coordinating with carriers, preparing necessary documents, and ensuring that the shipment arrives at its destination on time and in good condition.

Another important term is the Customs Broker. A customs broker is a licensed professional who helps importers and exporters comply with customs regulations. They are responsible for preparing and submitting necessary documents, paying duties and taxes, and ensuring that the shipment clears customs without any issues.

Understanding Customs and Duties Terminology

Customs and duties are an essential part of international shipping. Here are some important customs and duties terminology:

• Commercial Invoice: The document that lists all the products being shipped and their value
• Customs Broker: A third-party agent that assists with customs clearance
• HS Code: Harmonized System Code, a standardized system of numbers and names used to classify traded products
• Import Duty: A tax levied on imported goods that vary from country to country

It is important to note that customs and duties can significantly impact the cost and timeline of international shipping. In addition to import duties, there may also be additional fees such as handling charges, storage fees, and inspection fees. It is important to work with a reputable customs broker who can help navigate these complexities and ensure compliance with all regulations. Failure to properly declare goods or pay the appropriate fees can result in delays, fines, and even seizure of the shipment.

Packaging and Labeling Terms for Shipping

Packaging and labeling play a critical role in ensuring your shipment reaches its destination safely and securely. Here are some important packaging and labeling terms:

• UN Number: A four-digit number assigned to hazardous materials for identification purposes
• NMFC: National Motor Freight Classification, a system used to classify goods based on their density, stowability, and handling requirements
• Handling Label: A label that indicates how the package should be handled during transportation
• Export Packing List: A detailed packing list that includes information about the contents of each package

Logistics Terminology: Key Concepts to Know

The logistics industry is complex and multifaceted. Here are some key logistics terminology:

• Third-Party Logistics (3PL): A company that provides logistics services such as warehousing, transportation, and distribution
• Lead Time: The time between placing an order and receiving it
• Reverse Logistics: The process of managing returns, repairs, and product recalls
• Supply Chain: The network of companies and resources involved in the production, manufacturing, and delivery of a product

International Trade Terms: A Guide for Importers and Exporters

International trade is a complex field that requires a sound understanding of the unique terminology. Here are some essential international trade terms:

• Export License: A government permit that allows businesses to export controlled goods
• Letter of Credit: A financial instrument that guarantees payment to the exporter if the importer fails to pay on time
• Incoterms: A set of standardized trade terms that define the responsibilities of the buyer and seller during transportation
• FOB Origin: The point at which the buyer assumes ownership and responsibility for the goods

Incoterms: Understanding the Rules of International Trade

Incoterms are a set of internationally recognized trade terms that define the responsibilities of the buyer and seller during transportation. Here are the most commonly used incoterms:

• EXW: Ex Works
• FOB: Free on Board
• CIF: Cost, Insurance, and Freight
• DDP: Delivered Duty Paid

Bill of Lading: What It Is and Why It Matters

The Bill of Lading (B/L) is a crucial document in the shipping industry. Here is everything you need to know about the B/L:

• It is a legal document that serves as evidence of the contract between the shipper and carrier.
• It contains information about the goods being transported, including the quantity, weight, and dimensions.
• It serves as a receipt of shipment and proof of ownership over the cargo.

Freight Forwarding Terms Explained

Freight forwarding companies play a crucial role in the transportation of goods. Here are some important freight forwarding terms:

• NVOCC: Non-Vessel Operating Common Carrier, a company that provides transportation services without owning any ships
• Master Bill of Lading: The B/L issued by the shipping line to the freight forwarder
• House Bill of Lading: The B/L issued by the freight forwarder to the shipper or consignee
• Freight Consolidation: The process of combining multiple smaller shipments into one consolidated shipment

Warehousing and Distribution Terminology: An Overview

Warehousing and distribution are critical components of the supply chain. Here are some important warehousing and distribution terms:

• Inventory Management: The process of managing and controlling stock levels
• Pick and Pack: The process of picking items from inventory and packing them for shipment
• Cross Docking: The process of transferring goods from one inbound truck to another outbound truck without storing them in a warehouse
• Reverse Logistics: The process of managing returns, repairs, and product recalls

Supply Chain Management Terms You Need to Know

Supply chain management is the coordination and management of activities involved in the production and delivery of products. Here are some important supply chain management terms:

• Supplier Relationship Management: The process of managing relationships with suppliers
• Just-in-Time (JIT) Inventory: A system that aims to minimize inventory levels and reduce waste
• Transportation Management System (TMS): A software system for managing transportation operations
• Key Performance Indicators (KPIs): Metrics used to measure the performance of the supply chain

Now that you have a comprehensive understanding of shipping terminology, you can confidently navigate the complex world of shipping.