Freight Glossary

The contract of carriage for air freight. Unlike a negotiable bill of lading, an air waybill is not a document of title. Used with airline and freight forwarder air shipments.

A fuel surcharge applied to ocean freight rates to reflect changes in bunker (fuel) costs. Fluctuates with oil prices and is added to base ocean freight.

A legal transport document issued by a carrier acknowledging receipt of cargo for ocean shipment. It serves as a receipt, contract of carriage, and document of title (depending on type). Required for customs and bank documentation.

Insurance covering loss or damage to goods in transit. Carrier liability is limited by convention; shippers often buy all-risk cargo insurance separately from freight charges.

A unit of volume used to price LCL ocean freight and calculate chargeable weight. Calculated as length × width × height in metres.

A document certifying the country where goods were manufactured or obtained. May be required to claim preferential duty rates under free trade agreements.

An Incoterm where the seller pays costs and freight to bring goods to the named port of destination. Risk transfers when goods are on board at the port of shipment. Insurance is the buyer responsibility unless agreed otherwise.

The weight used to calculate air freight charges — the greater of actual gross weight or volumetric weight (volume ÷ dimensional factor, commonly 6000 for air).

An Incoterm where the seller pays for cost, insurance, and freight to the named port of destination. Risk transfers when goods are on board at the port of shipment. The seller must procure minimum marine insurance for the buyer.

A document stating the seller and buyer, description of goods, quantity, unit price, total value, currency, and Incoterm. Customs authorities use it to assess duties and verify shipment contents.

The party named in transport documents to receive the goods at destination. Often the buyer or importer responsible for import clearance unless terms state otherwise.

The party shipping the goods — typically the seller or exporter named as shipper on transport documents.

A shipment where seller and buyer are in different countries and cargo moves directly between two other countries without passing through the forwarder home country.

A licensed specialist who files customs entries and arranges clearance on behalf of importers and exporters. Freight forwarders often provide customs brokerage as part of their service.

The process of obtaining permission from customs authorities to import or export goods. Involves document submission, declaration, inspection if required, and payment of duties and taxes.

Cargo classified as hazardous under IMDG (sea) or IATA (air) regulations — including batteries, chemicals, aerosols, and flammable items. Requires special packaging, labelling, documentation, and carrier approval.

An Incoterm where the seller delivers when goods are placed at the buyer disposal at the named destination. The buyer handles import clearance and pays import duties unless contractually agreed otherwise.

An Incoterm where the seller delivers goods to the buyer at the named destination, cleared for import, with all duties and taxes paid. Maximum seller obligation; common when buyers want a door-to-door quoted price.

A penalty charge when a full container remains at the port or terminal beyond the agreed free time after arrival. Distinct from detention, which applies to equipment held outside the port.

A charge when a shipper or consignee holds a carrier container outside the port or depot beyond the allowed free days. Applies to equipment use, not port storage.

An Incoterm placing minimum obligation on the seller — goods are made available at the seller premises. The buyer bears all costs and risks from collection, including export clearance unless otherwise agreed.

An Incoterm where the seller delivers goods to the carrier or person nominated by the buyer at the named place. Suitable for all transport modes and often used instead of FOB for containerised cargo.

A container booked exclusively for one shipper cargo. Common sizes are 20ft and 40ft standard or high-cube. Cost-effective when cargo fills most of a container.

An Incoterm where the seller delivers goods on board the vessel at the named port of shipment. Risk and cost transfer to the buyer once the goods are loaded. The buyer typically arranges ocean freight and insurance from that point.

An intermediary that organises international shipments on behalf of shippers — booking carriers, preparing documentation, arranging customs, and coordinating door-to-door logistics without typically owning vessels or aircraft.

A bill of lading issued by a freight forwarder or NVOCC to the shipper. Used when cargo is consolidated or when the forwarder acts as intermediary between shipper and main carrier.

Harmonised System code used worldwide to classify goods for customs duties and trade statistics. The first six digits are harmonised globally; countries add further digits for national classification.

International Commercial Terms published by the ICC. Incoterms define who pays for transport, insurance, and customs, and when risk transfers from seller to buyer in international trade. The current rules are Incoterms 2020.

Cargo that does not fill a full container and shares space with other shippers cargo, consolidated at a container freight station. Priced per CBM or weight, whichever is higher.

The bill of lading issued by the ocean carrier (shipping line) for the entire shipment, often covering multiple house bills in LCL consolidations.

A party listed on the bill of lading to be informed when cargo arrives at destination. Often a broker, agent, or buyer representative; not necessarily the consignee.

Non-Vessel Operating Common Carrier — a freight forwarder that issues its own bills of lading and consolidates cargo like a carrier without owning ships. Common in ocean freight.

A document itemising the contents, dimensions, and weight of each package in a shipment. Must align with the commercial invoice for customs clearance.

The port where cargo is unloaded from the vessel. Not to be confused with proof of delivery in last-mile logistics — context determines meaning.

The port where cargo is loaded onto the vessel for ocean export. Named on the bill of lading and used in transit time and Incoterm calculations.

The party that tenders cargo to the carrier or forwarder for transport. On documents may be the exporter, manufacturer, or freight forwarder acting on their behalf.

An electronic release of cargo at destination without surrendering an original bill of lading. Speeds up delivery when originals are impractical, subject to carrier and payment terms.

A standard measure of container capacity. One 20ft container equals 1 TEU; a 40ft container equals 2 TEU. Used to describe port throughput and vessel capacity.

Fees charged by the port or terminal for loading, unloading, and handling containers or cargo. Applied at origin and/or destination and often listed separately from ocean freight.

The time from departure at origin to arrival at destination port or door. Port-to-port transit excludes customs, consolidation, and inland legs unless quoted door-to-door.

When cargo is unloaded at an intermediate port and reloaded onto another vessel to reach the final destination. Adds transit time but enables more routing options.

The certified total weight of a packed container required under SOLAS before loading on a vessel. Shippers must provide VGM to the carrier; inaccurate VGM can result in fines or loading refusal.