Terms of Sale, or INCOTERMS
Obsolete, albeit heavily used, term of sale meaning "cargo
and freight" whereby Seller pays for cost of goods and
freight charges up to destination port. In July, 1990 the
International Chamber of Commerce replaced C&F with CFR.
Water transportation term applicable to shipments between
ports of a nation; commonly refers to coast-wise or inter-coastal
navigation or trade. Many nations, including the United States,
have cabotage laws which require national flag vessels to
provide domestic interport service.
Abbreviation for "Currency Adjustment Factor." A
charge, expressed as a percentage of a base rate, that is
applied to compensate ocean carriers of currency fluctuations.
A Customs document permitting the holder to temporarily carry
or send merchandise into certain foreign countries (for display,
demonstration or similar purposes) without paying duties or
posting bonds. Any of various Customs documents required for
crossing some international borders.
A document prepared by the captain of a vessel on arriving
at port; shows conditions encountered during voyage, generally
for the purpose of relieving ship owner of any loss to cargo
and shifting responsibility for reimbursement to the insurance
A barge equipped with tracks on which up to about 12 railroad
cars are moved in harbors or inland waterways.
Use of individual carrier/rail equipment through a central
agency for the benefit of carriers and shippers.
Metal strip and lead fastener used for locking freight car
or truck doors. Seals are numbered for record purposes.
Freight loaded into a ship.
A manifest that lists all cargo carried on a specific vessel
Cargo Not Otherwise Specified. Usually the rate entry in a
tariff that can apply to commodities not covered under a specific
item or subitem in the applicable tariff.
Cargo reserved by a Nation's laws for transportation only
on vessels registered in that Nation. Typically the cargo
is moving due to a direct or indirect support or activity
of the Government.
Most ocean freight is billed on the basis of weight or measurement
tons (W/M). Weight tons can be expressed in short tons of
2000 pounds, long tons of 2240 pounds or metric tons of 1000
kilos (2204.62 pounds). Measurement tons are usually expressed
as cargo measurement of 40 cubic feet (1.12 meters) or cubic
meters (35.3 cubic feet.)
A rate applicable to a carload of goods.
Any person or entity who, in a contract of carriage, undertakes
to perform or to procure the performance of carriage by rail,
road, sea, air, inland waterway or by a combination of such
A certificate required by U.S. Customs to release cargo properly
to the correct party.
Usually refers to intracity hauling on drays or trucks.
Customs form permitting in bond cargo to be moved from one
location to another under Customs control, within the same
Customs district. Usually in motor carrier's possession while
Against Documents (CAD)
Method of payment for goods in which documents transferring
title are given the buyer upon payment of cash to an intermediary
acting for the seller, usually a commission house.
in Advance (CIA)
A method of payment for goods in which the buyer pays the
seller in advance of the shipment of goods. Usually employed
when the goods, such as specialized machinery, are built to
With Order (CWO)
A method of payment for goods in which cash is paid at the
time of order and the transaction becomes binding on both
buyer and seller.
Abbreviation for "Cubic Meter."
Abbreviation for "Consumption Entry." The process
of declaring the importation of foreignmade goods for use
in the United States.
The construction system employed in container vessels; permits
ship containers to be stowed in a vertical line with each
container supporting the one above it.
The point of equilibrium of the total weight of a containership,
truck, train or a piece of cargo.
- A document certifying that merchandise (such as of Inspection
perishable goods) was in good condition immediately prior
to its shipment.
- The document issued by the U.S. Coast Guard certifying an
American flag vessel's compliance with applicable laws and
A certified document showing the origin of goods; used in
Abbreviation for "Container Freight Station." A
shipping dock where cargo is loaded ("stuffed")
into or unloaded ("stripped") from containers. Generally,
this involves less than containerload shipments, although
small shipments destined to same consignee are often consolidated.
Container reloading from/to rail or motor carrier equipment
is a typical activity.
A written contract between the owner of a vessel and the person
desiring to employ the vessel (charterer); sets forth the
terms of the arrangement such as duration of agreement, freight
rate and ports involved in the trip.
A frame with wheels and container locking devices in order
to secure the container for movement.
A piece of wood or other material placed at the side of cargo
to prevent rolling or moving sideways.
Abbreviation for "Cost and Insurance." A price that
includes the cost of the goods, the marine insurance and all
transportation charges except the ocean freight to the named
point of destination.
Abbreviation for "Cost, Insurance, Freight." (Named
Port) Same as C&F or CFR except seller also provides insurance
to named destination.
Price includes commission as well as CIF.
Abbreviation for "Cost, Insurance, Freight And Exchange."
Abbreviation for "Cost, Insurance, Freight, Collection
Cost, Insurance, Freight, Interest and Exchange.
Abbreviation for "Completely Knocked Down." Parts
and subassemblies being transported to an assembly plant.
Abbreviation for "Carload" and "Containerload".
A demand made upon a transportation line for payment on account
of a loss sustained through its alleged negligence.
A publication,such as Uniform Freight Classification (railroad)
or the National Motor Freight Classification (motor carrier),
that assigns ratings to various articles and provides bill
of lading descriptions and rules.
The designation provided in a classification by which a class
rate is determined.
A railroad yard with many tracks used for assembling freight
An anti trust act of the U.S. Congress making price discrimination
Bill of Lading
A receipt for goods issued by a carrier with an indication
that the goods were received in "apparent good order
and condition," without damage or other irregularities.
If no notation or exception is made, the B/L is assumed to
The stopping of articles, such as peanuts, etc., for cleaning
at a point between the point of origin and destination.
The size beyond which cars or loads cannot use Limits bridges,
A strip of wood or metal used to afford additional strength,
to prevent warping, or to hold in place.
Refrigeration equipment attachable to an insulated container
that does not have its own refrigeration unit.
Abbreviation for "Cubic Meter" (capital letters).
Abbreviation for "centimeter."
Water transportation along the coast.
- Collect (cash) on Delivery.
- Carried on Docket (pricing).
Abbreviation for the Railway Service "Container On Flat
Carriage of Goods by Sea Act. U.S. federal codification passed
in 1936 which standardizes carrier's liability under carrier's
bill of lading. U.S. enactment of The Hague Rules.
A bank that acts as an agent to the seller's bank (the presenting
bank). The collecting bank assumes no responsibility for either
the documents or the merchandise.
A draft drawn on the buyer, usually accompanied by documents,
with complete instructions concerning processing for payment
A firm that acts as an export sales agent for more than one
A rate made up of two or more factors, separately published.
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 about the shipment.
Article shipped. For dangerous and hazardous cargo, the correct
commodity identification is critical.
A rate published to apply to a specific article or articles.
A transportation company which provides service to the general
public at published rates.
Law that derives its force and authority from precedent, custom
and usage rather than from statutes, particularly with reference
to the laws of England and the United States.
Damage that is not evident from viewing the unopened package.
An association of ship owners operating in the same trade
route who operate under collective conditions and agree on
Letter of Credit
A letter of credit, issued by a foreign bank, whose validity
has been confirmed by a domestic bank. An exporter with a
confirmed letter of credit is assured of payment even if the
foreign buyer or the foreign bank defaults.
The bank that adds its confirmation to another bank's (the
issuing bank's) letter of credit and promises to pay the beneficiary
upon presentation of documents specified in the letter of
A carrier which has a direct physical connection with, or
forms a link between two or more carriers.
A person or company to whom commodities are shipped.
A symbol placed on packages for identification purposes; generally
a triangle,square, circle, etc. with letters and/or numbers
and port of discharge.
(1) A stock of merchandise advanced to a dealer and located
at his place of business, but with title remaining in the
source of supply.
(2) A shipment of goods to a consignee.
A person or company shown on the bill of lading as the shipper.
Cargo containing shipments of two or more shippers or suppliers.
Containerload shipments may be consolidated for one or more
A person or firm performing a consolidation service for others.
The consolidator takes advantage of lower full carload (FCL)
rates, and savings are passed on to shippers.
A program whereby the U.S. government attempted to offset
the higher shipbuilding cost in the U.S. by paying up to 50%
of the difference between cost of U.S. and nonU.S. construction.
The difference went to the U.S. shipyard. It is unfunded since
A government official residing in a foreign country who represents
the interests of her or his country and its nationals.
A formal statement describing goods to be shipped; filed with
and approved by the consul of the country of destination prior
A document, certified by a consular official, is required
by some countries to describe a shipment. Used by Customs
of the foreign country, to verify the value, quantity and
nature of the cargo.
An official signature or seal affixed to certain documents
by the consul of the country of destination.
The process of declaring the importation of foreign-made goods
into the United States for use in the United States.
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. Containers may be ventilated, insulated, refrigerated,
flat rack, vehicle rack, open top, bulk liquid or equipped
with interior devices. A container may be 20 feet, 40 feet,
45 feet, 48 feet or 53 feet in length, 8'0" or 8'6"
in width, and 8'6" or 9'6" in height.
Arrangements with a steamship line to transport containerized
Document showing contents and loading sequence of a container.
An agreement between parties that allows the efficient use
and supply of containers. A common supply of containers available
to the shipper as required.
An area designated for the stowage of cargoes in container;
usually accessible by truck, railroad and marine transportation.
Here containers are picked up, dropped off, maintained and
handling/storage facility used for completely unitized loads
in containers and/or empty containers. Commonly referred to
Cargo that will fit into a container and result in an economical
Stowage of general or special cargoes in a container for transport
in the various modes.
A load sufficient in size to fill a container either by cubic
measurement or by weight.
Cargo that is prohibited.
A legally binding agreement between two or more persons/organizations
to carry out reciprocal obligations or value.
Any person not a common carrier who, under special and individual
contracts or agreements, transports passengers or property
Sophisticated, computer controlled systems that manage the
mixtures of gases within a container throughout an intermodal
journey reducing decay.
Vertical frame components fitted at the corners of the container,
integral to the corner fittings and connecting the roof and
floor structures. Containers are lifted and secured in a stack
using the castings at the ends.
A bank that, in its own country, handles the business of a
Insurance and Freight (CIF)
Cost of goods, marine insurance and all transportation (freight)
charges are paid to the foreign point of delivery by the seller.
An additional duty imposed to offset export grants, bounties
or subsidies paid to foreign suppliers in certain countries
by the government of that country for the purpose of promoting
Transverse members fitted to the bottom side rails of a container,
which support the floor.
An abbreviation for "Cubic." A unit of volume measurement.
When a container or vessel has reached its volumetric capacity
before its permitted weight limit.
1,728 cubic inches. A volume contained in a space measuring
one foot high, one foot wide and one foot long.
A government office where duties are paid, import documents
filed, etc., on foreign shipments.
A person or firm, licensed by the treasury department of their
country when required, engaged in entering and clearing goods
through Customs for a client (importer).
Government agency charged with enforcing the rules passed
to protect the country's import and export revenues.
A warehouse authorized by Customs to receive duty-free merchandise.
All countries require that the importer make a declaration
on incoming foreign goods. The importer then normally pays
a duty on the imported merchandise. The importer's statement
is compared against the carrier's vessel manifest to ensure
that all foreign goods are properly declared.
A form requiring all data in a commercial invoice along with
a certificate of value and/or a certificate of origin. Required
in a few countries (usually former British territories) and
usually serves as a seller's commercial invoice.
of the Port
often included in charter parties and freight contracts referring
to local rules and practices which may impact upon the costs
borne by the various parties.
The latest time cargo may be delivered to a terminal for loading
to a scheduled train or ship.
Hundred weight (United States, 100 pounds: U.K.,112)
- Abbreviation for Container Yard.
- The designation for full container receipt/delivery.
in this glossary have been carefully selected from the myriad
of terms one can encounter in the shipping business. We hope
you will find it useful.
information is disseminated under the sponsorship of the Department
of Transportation in the interest of information exchange.