Glossary Terms
US Import Bond provides a concise list of terms used in the daily business operations in the freight forwarding and transportation industries. Just search the terms you want to find on the search field in the right.
| A.1. | First Class Condition |
| A.D. | After Date |
| ADD/CVD | Antidumping and Countervailing Duties - When Commerce determines goods are being imported at rates below the cost to manufacture and the importation is damaging, an AntiDumping/Countervailing Duty can be asserted. |
| Ad. val. | Ad Valorem - this is a latin term when translated means According to Value. |
| A.N. | Aft Hatch |
| A.S. | After Sight |
| A.R. | Against All Risks - this is an insurance term in the freight forwarding business. |
| ACCEPTANCE | An acceptance is a time draft that the drawee has either stamped or written the word accepted across the face of the draft and then signs the acceptance notation. If a bank is the drawee (the party that the draft is drawn on), a Banker’s Acceptance is created. If the drawee is an individual or company, it is referred to as a Trade Acceptance. |
| ACCESSORIAL CHARGE | A charge made by a carrier for other than basic ocean transportation FMC 514.2 "Accessorial means a particular service or condition other than the basic transportation, which is usually described in a commodity description, TLI, or Tariff Rule, and for which a charge may be added to the basic ocean freight rate." |
| ADVISED CREDIT | A letter of credit that has been authenticated by the advising bank, insuring that the issuing bank did indeed issue the letter of credit. The advising bank does not take on any responsibility to effect payment as they would if they had confirmed the letter of credit. However, they will most likely assist in facilitating payment. |
| ALL INCLUSIVE / "ALL-IN" | a term that states a shipping rate that includes all shipping and accessorial charges. |
| AMENDMENT | The account party may contact the issuing bank in writing requesting that a term or condition in the original letter of credit be changed or deleted, or that a new term or condition be added to the letter of credit. According to the Uniform Customs and Practices (UCP) 500, amendments must be accepted or rejected in their entirety. In other words, if the amendment contains more than one change, and you like one change but not the other, you have to either accept or reject the entire amendment. |
| ASSIGNMENT of PROCEEDS | The beneficiary of a letter of credit may instruct the negotiating bank, in writing, to pay all or a portion of the proceeds due them to a third party. The request to assign the proceeds should be accompanied by the original letter of credit and the fee that the negotiating bank may charge for this service. |
| BAF or FAF | Bunker or Fuel adjustment factor - An accessorial charge for fuel. In some instance it is called a fuel surcharge. |
| B.B. / Break Bulk | Cargo loaded in bulk inside a vessel as compared to containerized cargo. |
| BL / Bill of Lading | A contract of carriage, used by ocean, inland waterway, rail and truck common carriers, and contract carriers. Variety of B/Ls includes an Ocean B/L, a Multimodal B/L, a Uniform B/L, & a Uniform Short B/L. The former two can be negotiable, and would carry title to the goods. |
| B.O. / Bad Order | Rail term where the car is in need of repair. |
| BENEFICIARY | The party that the letter of credit is issued in favor of. The beneficiary may also be referred to as the seller, exporter, the supplier or the vendor. |
| C-TPAT / Customs | Trade Partnership Against Terrorism. In order to develop, enhance, and maintain effective security processes throughout the global supply chain, U.S. Customs and Border Protection (CBP) certifies entities who have satisfied the CBP requirements. |
| CAF | Currency adjustment factor - An accessorial charge to compensate for fluctuations in currencies. |
| C.E. | Consumption Entry |
| CFR or CNF Cost of Goods, and Freight | Shipper is responsible for paying the freight to destination. |
| CFS | Container Freight Station - a standard freight forwarding term as defined a location where the carrier controls the loading and / or unloading of containers. |
| CHB | Customs House Broker - A person or company who has passed all requirements and is licensed to do import business with US Customs. The exam requires a proficiency in CFR 19, NAFTA, and the Harmonized Tariff. |
| CIF | Cost of Goods, Insurance and Freight - a standard freight forwarder term, where seller is responsible for arranging & paying freight to destination and covering insurance to destination. |
| COD | Cash on Delivery |
| OFC Container | on Flat Car C- Intermodal container without chassis. |
| C.O. | Certificate of Origin - A document certifying that the goods described were from the area stated on the certificate. It usually is notarized and certified by the local Chamber of Commerce |
| C.P. | Charter Party - This is a common expression used in sea freight. The hiring of a vessel or ship is referred to as a ‘charter’. So, when a vessel is ‘chartered’, it means that the ship owner has hired it out to a second party (the ship itself would be referred to as being ‘on charter’ and so forth). The terms and conditions of the charter, that is to say the contractual terms and conditions of hire, are documented in a contract called a ‘charter party’. Note that the expression is sometimes written as one word (charter party). In times past, the terms and conditions of the arrangement would have been uniquely drawn up on a document (the French word for which is taken from the Latin expression ‘carta’). This document when signed by the ship owner and the hirer would then be torn in two, with each keeping one piece. The French expression for this being ‘a part’ (on the side). So, from carta a part, the expression developed into an Anglicised form charter party. These days, the underlying contracts are normally standard formats with established conditions for the trade, cargo type, trade route or vessel type employed. As the terms and conditions of carriage are recorded on a document (the charter party) separate from the transport document, the transport document looses one of its traditional attributes (that of being ‘evidence’ of the contract of carriage). So, if a documentary credit was involved, the bank may call for both the charter party and the transport document or at the very least require the transport document to make reference to the charter party. |
| C.R. | Carrier's risk |
| CY/CY | Container Yard to Container Yard - A container yard is a location where containers may be parked, picked up, or delivered full or empty. A CY may further be a place of loading (stuffing) or unloading and/or where ocean carrier accepts custody and control of cargo. |
| CARNET | A Customs document that permits the party holding the carnet to carry or send merchandise temporarily into certain countries without paying duties or posting bonds. Used frequently for trade shows. |
| CHASIS | Frame with wheels used to transport containers. |
| CONFERENCE | A group of carriers exempt from Anti-Trust laws because they can share services and establish rates. |
| CONFIRMATION | When the advising bank guarantees the obligation of the issuing bank, providing an extra layer of protection. Used most often when the credit worthiness of the issuing bank is in question, or the political or economic conditions of the issuing bank’s country are considered risky. |
| CONSIGNEE | The party appearing on a bill of lading to which the carrier has been instructed to deliver the goods. |
| D/D | Date Draft |
| D/S | Days After Sight |
| DDC | Destination Delivery Charge - An accessorial charge for the delivery of the cargo to deliver at destination, usually the buyer pays for these charges. |
| Dread Freight | This is an amount paid to the Shipping Line, for cargo withdrawn by the shipper or cancelled by the shipper (and so not loaded) that the Carrier was advised would be loaded under a contract of Carriage. The amount claimed by the Carrier is the full freight less any lifting charges either not included in the freight or accepted as not incurred (although this deduction if included in the original freight rate is at the discretion of the Carrier). Effectively, once the contract is in place (and this is at the very moment of the verbal offer and acceptance, regardless of if a tangible document has been issued), the cargo must be shipped. If the shipper fails to load or cancels the booking, the Carrier can demand the full freight anyway this is even true if they then rebook the space for use by another shipper. It is uncommon to come across this condition in a service which runs on a regular and frequent basis this does not mean to say that the Carrier in such a service does not have the right to claim Dead freight, but rather that they waive the right for commercial reasons. It is a more common risk and a regularly imposed penalty in less frequent or charter arrangements. |
| DGD | Dangerous Goods Declaration - Any substance that falls under one of 9 UN hazardous classifications as defined in the IMDGC. |
| DOT | Department of Transportation - U.S. cabinet level agency responsible for domestic transportation and US inland portions of international shipments. DOT is also the parent agency of the US Coast Guard. |
| DEMURRAGE | Freight charges caused by containers being stored at port or CY beyond specified free time. |
| DETENTION | Freight charges caused by containers being kept outside port or CY beyond specified free time. |
| Direct Service | A Direct Service in Airfreight can mean one of two things. Either, it is a request for or a reference to, the cargo being handed directly to the Air Carrier as opposed to the Consolidator or Forwarder. In this context then, a Direct Service is the opposite of a consolidated service (see definition 28). Note that this is frequently called Direct IATA (with IATA being the International body that controls air activity [refer to definition 157]). However, not all Air Carriers are IATA members, so Direct with the Carrier would be a more accurate statement. The second use of the expression Direct Service is in requesting the routing of the cargo using one aircraft only. Whether or not the cargo is entrusted directly to the Carrier or via a Consolidator or Forwarder is not the point. What is important in this usage of the expression is that the cargo flies from origin to destination on a single craft. This would be the opposite of the dogleg service (refer to definition 8). The caution is that in using the expression in the context of the second definition (i.e. one aircraft) a consolidator may take it to mean the first definition (i.e. directly with the Carrier). The consequence of such a misunderstanding could be severe as the Freight Rates charged by Carriers for ‘direct’ handling of cargoes is often many times greater than the rate offered by the Forwarder. |
| DRAFT (Bill of Exchange) | A formal demand for payment from the drawer to the drawee stipulating the amount and currency to be paid at a specified time to the order of a named party, also referred to as the payee. A sight draft is for immediate payment; a time draft allows for a financing period, usually not more than 180 days. |
| DRAWBACK | The ability to be reimbursed for some or all of the duties paid on imported merchandise at the time of re-exportation. |
| Dray | The trucking movement of a container. |
| Duty | Import Tax imposed by Customs - The Harmonized Tariff System (HTS) provides duty rates for virtually every item that exists. The HTS is a reference manual that is the size of an unabridged dictionary. Experts spend years learning how to properly classify an item in order to determine its correct duty rate. Duty can be imposed by ad valorem (a percentage of the value) and/or a flat charge per unit. |
| D.W. | Deadweight Ton - means 2,240 lbs. |
| E&O | Errors and Omissions - an insurance term. |
| EAON | Except as Otherwise Noted |
| EAR | Export Administration Regulations |
| EIN | Exporter’s identification number - (Federal ID No.). |
| FAA | Free of All Average - an insurance term. |
| FAS | Free Along Side - Goods to be delivered by seller to a location along side of vessel, loading and carriage charges are for the buyers account ( paid by the buyer ). |
| FEC | Foreign Exchange Contract or Forward Cover - This is a Banking facility devised to allow (normally) importers to cost goods using a fixed exchange rate. What this allows is for the importer to calculate the landed cost of the goods and to therefore sell goods at the first available moment, well in advance of the due date for the supplier to be paid. In this way the importer will avoid having to bear the risk of exchange rate fluctuation. The rate of exchange used by the bank is one that they anticipate will apply on the due date i.e. the date that the supplier is to be paid. For example: If cargo arrives on day one and is due to be paid for on day 90, the importer contacts the bank and enters into a contract with them, where the importer undertakes to buy the required foreign exchange on day 90. In recognition of this undertaking, the bank then fixes a rate of exchange, which will stand for that future purchase of currency by the importer. The importer uses this exchange rate in the costing calculations. When day 90 arrives, the importer buys the exchange at the agreed rate (and pays his supplier). If the local currency has deteriorated against the foreign one, the importer has no risk equally if it has improved, he has no gain. However, it gives stability in markets where the local currency is volatile. Exporters also have a use for these contracts especially when they give their prices to foreign buyers in a currency other than their local currency. The scenario is now reversed as the exporter obtains a fixed rate at which the Bank will buy the foreign currency from the supplier when the supplier is paid. The exporter effectively ‘fixes’ their profit in this manner, and again avoids any consequence of exchange rate fluctuation. |
| FEU | Forty foot Equivalent Unit - See TEU. |
| FIO | Free In and Out - Ocean Loading / Unloading term. -BEWARE the term free is a dangerous one. In this term, free means that the cost of loading and unloading are for the account of the shipper, and not the carrier. For example, if you shipped a container from Hong Kong to Los Angeles for US$1,000 FIO, you would have to pay the carrier US$1,000 for the ocean freight, AND you would have to pay the Port tariff charges to load the container in Hong Kong plus the Los Angeles port tariff charges to unload the container, which would about double your shipping cost. In other words, Free In and Out (FIO) means that the loading (in) charges, and unloading (out) charges are free as far as the carrier is concerned. |
| FMC | Federal Maritime Commission |
| FOB | Free on Board - Incoterm where seller is responsible for delivering goods to a specified port and the cost of loading goods onboard the vessel. This term must be clarified by stating a specific location and type of conveyance (i.e., FOB vessel, New Orleans, LA) |
| FTZ | Foreign Trade Zone or Free Trade Zone - An area where goods can enter the country duty free. The goods can be stored, used or sold while in the zone without incurring duties. Duties are only paid when the goods leave the Trade Zone FTZ as a FOREIGN Trade Zone. (see 19 USC 81a - The Foreign Trade Zone Act and 19 CFR part 146). |
| FORCE MAJEURE | a French term that means a natural disaster, riot terrorist act, or war which is totally beyond a party’s control, and prevents them from fulfilling obligations under a contract. |
| Fortnightly | 14 days (every other week). |
| Freight | This is an excellent example of how difficult it is to ‘crack the code’ of the freight vocabulary. The word Freight is used in many different ways to describe many loosely associated things. The following is not intended as a definitive list but should indicate the need to be careful with the words you use in trade, given also that the party you are communicating with is not necessarily accomplished in English. (The English word Freight being “Fret”, ”Fracht”, “Vracht”, “Vrag” and “Nolo” in French German Dutch Afrikaans and Italian respectively). 1. Freight as an expression used to indicate the actual cost of movement. This would be in the context of a ‘freight rate”, but you will be asked, “how much freight did you pay” which could actually be the total of all transport costs from A to B, whether called freight-rates or not. 2. Freight as the actual action of movement. This would be in the question “how do you want to freight this” e.g. air or sea or land. 3. Freight used to describe the actual cargo itself. As in “I’m sorry, but we cannot find your freight!” or in the expression Freight Forwarder. 4. (To) Freight is used to indicate that the charges are to be shown on a given document. For example, to freight a bill of lading is to endorse it with the prepaid and/or collect charges due. Interestingly and perhaps tellingly the word derives from the Latin ‘onus’ meaning a burden! |
| Gantry Crane | A big ass crane used to lift cargo from the pier to a vessel or vise versa. |
| GRI | General Rate Increase - An across the board rate increase by carriers, freightliners or a conference group. |
| GRI | General Rules of Interpretation - The universal rules governing the Harmonized Tariff System. |
| HMF | Harbor Maintenance Fee - Another accessorial charge, usually a percentage of the invoiced value of the cargo. Some have called this Harbor Port Tax. |
| Hague Rules | Ocean B/L terms covering carrier liability established 25 Aug. 1924. Incorporated into US law in 1936 through COGSA (Carriage of goods at sea act). Hague Visby amendments of 1968 are not included in COGSA. Read the fine print on the back of the B/L. Harmonized Tariff System - A comprehensive commodity classification system. Schedule B is the export classification system, and HTSUSA is the classification system used to classify cargo imported into the US, and assess duty thereon. |
| H.W.M. | High Water Mark |
| IMO | International Maritime Organization - Part of the UN which regulates international navigation and shipping safety through a framework of rules, treaties and regulations. |
| IPI | Inland Point Intermodal (Micro-bridge) - Cargo moving from an inland point, under control of the ocean carrier. FMC 514.2 "Intermodal transportation means continuous transportation involving more than one mode of service (e.g., ship rail motor and air), for pickup and/or delivery at a point beyond the area of the port at which the vessel calls." |
| Independent | A carrier who is not a member of a conference. |
| INCOTERMS | Standard set of definitions for delivery terms (terms of sale) established by the International Chamber of Commerce. |
| EXW | Ex Works (named place): any mode of transport; seller makes goods available to buyer at seller's premises or other location, not cleared for export and not loaded on a vehicle. The buyer bears all risks and costs involved in taking the goods from the seller's premises and thereafter. |
| FCA | Free Carrier (named place): any mode of transport; seller delivers goods, cleared for export, to the carrier named by the buyer at the specified place. If delivery occurs at the seller's premises, the seller is responsible for loading; if delivery occurs elsewhere, the seller must load the conveyance but is not responsible for unloading. |
| EXW | Ex Works (named place): FAS--Free Along Side Ship (named port of shipment): maritime and inland waterway only; seller delivers when the goods are placed alongside the vessel at the named port of shipment. The seller also clears the goods for export. |
| FOB | Free On Board (named port of shipment): maritime and inland waterway only; seller delivers when the goods are pass the ship's rail at the named port. The seller clears the goods for export. |
| CFR | Cost and Freight (named port of destination): maritime and inland waterway only; seller delivers when the goods pass the ship's rail at the port of export. The seller pays cost and freight for bringing the goods to the foreign port and clear the goods for export. |
| CIF | Cost, Insurance and Freight (named port of destination): maritime and inland waterway only; seller delivers when the goods pass the ship's rail at the port of export. The seller pays cost and freight for bringing the goods to the foreign port, obtains insurance against the buyer's risk of loss or damage, and clears the goods for export. |
| CIP | Carriage and Insurance Paid to (named place of destination): any mode of transport; seller delivers the goods to a carrier it nominates but also pays the cost of bringing the goods to the named destination. The seller also obtains insurance against the buyer's risk of loss or damage during carriage and clears the goods for export. |
| CPT | Carriage Paid To (named place of destination): any mode of transport; seller delivers goods to carrier it nominates and pays costs of bringing goods to the named destination. The seller also clears the goods for export. |
| DAF | Delivered At Frontier (named place): any mode of transport to a land frontier; seller delivers when goods are placed at the buyer's disposal on the "arriving means of transport" (not unloaded), cleared for export but not cleared for import before the customs border of the destination country. |
| DES | Delivered Ex Ship (named port of destination): maritime and inland waterway only; seller delivers when goods are at the buyer's disposal on board the ship not cleared for import. The buyer pays discharging costs. |
| DEQ | Delivered Ex Quay (named port of destination): maritime and inland waterway only; seller delivers when the goods are placed at the buyer's disposal, not cleared for import, on the dock (quay) at the named port of destination. The seller pays discharging costs, but the buyer pays for import clearance. |
| DDU | Delivered Duty Unpaid (named place of destination): any mode of transport; seller delivers the goods to the buyer not cleared for import and not unloaded from the arriving means of transport at the named destination, but the buyer is responsible for all import clearance formalities and costs. |
| DDP | Delivered Duty Paid (named place of destination): any mode of transport; seller delivers the goods to the buyer cleared for import (including import license, duties, and taxes) but not unloaded from the means of transport. |
| Inspection | Pre (or Post) - Shipment Inspection: A Pre-Shipment inspection involves the inspection of cargo prior to loading or shipment by either an independent third party or by a representative of the buyer. The inspection is called for to assess the quantity, quality, composition or condition (or all of these) of the cargo. Essentially, there are two types of inspection. An Inspection that is commercial in nature this is to say that the buyer or buyer and seller have agreed to the inspection or one that is mandated by law. When the inspection is legislated, it is normally a requirement of the government of the destination country. They will normally appoint an independent inspection service to act on their behalf in the various countries of origin and frequently, the clean report issued by the inspection service (or a certificate that the clean report has been issued) is the ‘trigger’ for payment. As such, the buyer cannot remit funds to the seller unless the fixed and quite specific, dependant on the nature of the goods. Equally, the goods and circumstances dictate where and when such inspections take place. They can range in extent from a simple ‘tally’, e.g. counting boxes and opening a random sample of these, right up to drawing samples and subjecting them to chemical analysis in a laboratory. With a ‘commercial’ inspection, the buyer normally appoints someone to be present at the loading, again checking quantities and random samples. This may be someone from the independent inspectorate field, or their own local agent etc. There are no guidelines for these informal commercial inspections but a common application is to check that the quality of goods ordered on the strength of a high-grade sample meet the standards of the sample goods. Post Shipment Inspections are uncommon but still have their place in freight. Clearly the cargo has already moved and if the inspection reveals problems, these are compounded in that the cargo is no longer with the seller. These are often voluntary inspections and should not be confused with inspections mandated through Customs and Excise, for example. |
| INSURANCE | here are some of the types of insurance offered: Ocean Marine, General Average, E&O - Errors & Omissions, OS&D - Over, Short, & Damage. |
| COGS | Carriage of Goods at Sea, Hague Visby - see Hague rules. |
| INSURANCE COVER | (Calculation) - In 1906, an Act of Parliament was passed in Britain governing the minimum requirements for maritime insurance. This Act (the Maritime Insurance Act of 1906) specified that, in the absence of instruction, the insuring party need only organize cover to the value plus 10% (i.e. the commercial invoice plus an additional 10%). Much has changed since 1906 and certainly the ratio of freight-costs to freight-value is substantially different. To simply add 10% to the invoice is perhaps underplaying the true cover required. The Seller’s Commercial Invoice will be for the goods and further, the invoice may include some, none or all of the cost of transport to get the goods onto the Buyer’s shelf from the Seller’s point of manufacture. It is therefore required that Cover is calculated by firstly determining the costs of moving the cargo onto the Buyer’s shelf from where the Seller’s freight charges included in the sales invoice, end. Dependent on the specifics of the transaction, this may embrace freight, transport, duties and all disbursements (although generally excluding recoverable taxes such as VAT), with the addition of margins for profit and exchange fluctuation in accordance with allowances made by the insurer. These additional costs over and above the Seller’s invoice are then totaled and expressed as a percentage of the Seller’s invoice. Roughly speaking, there is a sliding scale between value and freighting cost percentages. This is to say that the higher the value of the cargo, the lower the total movement costs as a percentage of that value (provided that the freight costs are not raised in relation to the value of the goods, a system that is uncommon but not impossible).Normally freight movement costs are related to the size of a product rather than the value of it. Small traffic of high value will normally result in the charges for the movement of the freight being a low percentage of the overall cargo value whereas bulky traffic of low value would have the reverse effect, with the freight percentage forming a substantial part of the landed costs. It should be emphasized that the 1906 standard of values plus 10% is still given as a guideline in the absence of instruction. The intention behind the Act was to allow Sellers to proceed even if they were unable to obtain direction from the Buyer, i.e. the Buyer’s failure to notify the Seller of the correct freight or other costs to be included in the calculation would not inhibit the movement of the cargo. However, Sellers have a vested interest in ensuring that the insurance cover they undertake is adequate as they are owners of the cargo until such time as they are paid and in the most extreme example should the Buyer fail (become insolvent) then the Seller would retain the insurable interest irrespective of the Commercial Terms employed. In an age of mass communication the modern Seller should have no need to default to the minimum cover of value plus 10% due to a lack of instruction or information. In many countries, in the absence of instruction, insurance brokers will normally offer insurance cover to the value calculated to be CFR plus 10% (Note. Do not confuse the use of the term CFR with the Incoterm CFR. These identical expressions have two different meanings one in the context of the Sales Contract, one in the context of the Insurance Contract). In the context of insurance, this term means the addition of the freight to the destination point of entry on to the cost or value of the commercial invoice. This calculation stems from the common formula used in insurance claims when determining values for General Average liabilities, the base figure used to calculate the percentage contribution being expressed as CFR plus 10%. |
| LASH | Lighter aboard Ship - A ship containing equipment to load/unload itself. |
| L/C | Letter of Credit - Bank contract for guarantee of payment. See UCP500 rules for boilerplate. |
| LIFO | Liner In, Free Out - This is a qualification to a freight rate and should not be confused with, or used as, a term of sale. The expression Liner In Free Out, means that the port to port freight rate offered by the Carrier is inclusive of the costs of loading on to the ship but excludes the costs for the discharge of the goods at the port of arrival. Terms such as these and there are many that you will come across are a throwback to the past in many respects. Frequently they are used with different definitions in different countries. In many cases the variation is subtle often differing in some slight detail between ports in the same country and you should exercise great caution when working with terms like this to the point where you might consider calling for an exact definition from the party you are in discussion with. This holds particularly true if that party is based in a foreign country. CAUTION: The word free can be very confusing in a trade context. For example: In the above expression the word ‘free’ means ‘free from inclusion of’. So, Free Out means that the freight rate given does NOT include the costs of discharge from the ship. However, in the sales term FOB (Free on Board) the expression "free" means inclusive of the costs to achieve the underlying condition, so the purchase price under FOB includes all of the charges to achieve a condition (in this case loading on board.) |
| LINER TERMS | or full liner terms - This is an ocean freight expression. Liner terms are the opposite of Free terms. When you ship liner terms, the carrier is responsible for the loading and unloading of the cargo. If you ship LINER-IN, FREE-OUT, then the carrier is responsible for loading, and the shipper is responsible for unloading. FREE-IN, LINER-OUT means the shipper pays for loading, and the carrier pays for the unloading. |
| MBL | Mini Land Bridge - The same as IPI except the origin is a port instead of an inland point. If the origin is New Orleans, but the vessel sails out of Los Angeles, the NOLA -> LA transport is MLB. Microbridge - FMC 514.2 "Intermodal transportation means continuous transportation involving more than one mode of service (e.g., ship, rail, motor, and air), for pickup and/or delivery at a point beyond the area of the port at which the vessel calls." |
| NDNC | No Deal, No Contract - The context is when the seller/agents/brokers have sealed a deal, prior to the final contract between buyer and seller. NDNC is a agreement contingent upon a contract between the seller and all agents in the deal. No Contract, No Deal. |
| NLR | No License Required - The code that replaced G-DEST on the SED. |
| NOS FOB | Not Otherwise Specified |
| NVOCC | Non-Vessel Operating Common Carrier -An indirect ocean carrier who does not operate vessels, but accomplishes carriage via sub-contract with vessel operating carriers. NVO or NVOCC (Non-Vessel Owning Common Carrier) - Although this is a common expression used by Sea freight Forwarders in many countries, the expression NVOCC has legal definition in the USA only. Sometimes, outside of the USA, they may be given as Non Vessel Owning Or Cargo Carrier rather than Common Carrier. As there is no formal definition outside of the USA, these variations abound. What the expression is trying to convey is the concept of the "Contractual Carrier" that is to say, someone who will issue a transport document as though they are the Carrier, although they themselves do not own or operate the vessel. Essentially, a Freight Forwarder (Ocean Transportation Intermediary) in all but name, Forwarders who choose to use the expression NVOCC to describe themselves outside of American operators who have legal obligation to do so in many circumstances are confusing the issue unnecessarily, and might be further attracting unwanted risks. For example, to use the variation Non Vessel Owning Common Carrier is rash. The last thing a nonAmerican Forwarder wants is to be held accountable as a Common Carrier etc in America, the legal status of the Common Carrier varies from other countries, where such status is vigorously to be avoided, because of the legal burden it places on the Carrier. The exact American legal definition NVOCC means a common Carrier that does not operate the vessel by which ocean transportation is provided, and is a shipper in its relationship with the Ocean Common Carrier. Note that the "Ocean Common Carrier" is the actual shipping line. |
| OCP | Overland Common Point - Similar to IPI, but the shipper is responsible for moving the container/cargo from the loading point to the port. |
| On Board | An ambiguous term on a B/L, On Board followed by a date usually means received for shipment, and not necessarily Laden On Board Vessel. The fine print on the back of the B/L should explain. |
| On Carriage | Transportation beyond the port of discharge. This can also be another accessorial charge. |
| OTI | Ocean Transportation Intermediary, this is a Freight Forwarder or an NVO according to the Shipping Act of 1998. Overweight Container Law - Since April 9, 1997 any container or trailer in intermodal commerce weighing over 29,000 lbs must provide all parties with: actual gross weight, reasonable description of the cargo, identity of the certifying party, the trailer or container no., and the date of certification. |
| P.D. | Per Diem - a Latin term that means Per day. |
| Phytosanitary Certificates | Phyto means plants. Under international (WTO) treaty, a competent government authority can issue a certificate based on inspection of goods confirming that a plant(s), seeds, or plant products are free of insects and disease which the destination country specifies. |
| Pro-Forma | Latin phrase meaning "in the form of". A pro-forma invoice based on a sales contract should be issued to help a buyer open a letter of credit. A pro-forma invoice is not a demand for payment of money, but a preliminary copy to aid documentation. |
| RORO | Roll On, Roll Off - Ships specially fitted so entire trucks can drive onboard. |
| S/D | Sight Draft |
| SED | Shipper's Export Declaration - A declaration required by Census, Customs, and the Department of Commerce, giving all the details of who shipped what to whom, and the value of the goods. SSF does this electronically. |
| SHinc | Sundays and Holidays included |
| SHex | Sundays and Holidays excepted ( not included ) |
| Short Shipped | (or Shut Out) - In Sea freight, this condition arises when the cargo is not taken on board the vessel. The Cargo is booked, documents are issued and the cargo is placed in the port, however it fails to be loaded. Traditionally, the main reason for this problem was over-booking. Such over-booking arose because of poor communication or rolled-over cargo rather than as a consequence of incompetence or greed (which was frequently the common and incorrect assumption). (Note that ‘Rolled Over cargo is cargo that was previously short-shipped from a prior vessel). In the modern era, short shipments usually come about because of scheduling or weather problems. Vessels have limited time under the lifting equipment in a modern port and need to maintain schedules. If a tidal action is needed to facilitate the departure of the vessel, it might have to sail at a given time regardless of what it has or has not taken onboard. The on-board stamp on a sea freight document details the actual vessel that the cargo was loaded on. It is therefore important to see if the on-board endorsement indicates a different vessel than that for which the document was issued. If cargo is found short-shipped from a vessel for which ‘on board’ bills have been issued, the merchant has every right to complain. |
| S.L.&C. / SL&C | Shipper's Load and Count |
| STC | Said To Contain - On the body of a Sea Freight Transport document, there will be a broad description of the cargo. The detail in this section will be prefixed STC, meaning Said To Contain i.e., the stated number and type of package in the previous columns are Said to Contain (followed by a description of the goods.) Under most laws, the Transport Document is a receipt for Packages, not a receipt for the cargo. This is to say that the law recognizes that if the Carrier is recording the receipt of cargo, the cargo condition (other than its outward appearance) quality, value and sometimes even mass and volume are unknown to the Carrier. The Carrier can tally that he has been given so many cartons, but he cannot see what is in those cartons. He relies on the Seller’s declaration as to what they are "said" to contain. This is particularly important when dealing with Full Containers when the document given is a receipt for One Package (the container). These issues are relevant to insurance claims and Carrier’s liabilities that are normally linked to the number of packages involved in the claim and not the total value of the claim itself. This matter is normally the province of the ruling convention applicable to the transport document. Some allow the Carrier the protection described above when working with Full Containers, whereas some do not. (You may care to look at the difference in this particular point between the Hague Visby and Hamburg Rules) |
| SWIFT | Society for Worldwide Interbank Financial Telecommunications - An agreement between banks on communications and standards primarily pertaining to Letters of Credit. |
| TEU | Twenty foot Equivalent Unit - A 20ft container. This is a US measurement term. A TEU is about six meters long. It is a standard box or container. One FEU = two TEUs. |
| Telex Release | In those countries where Waybill or Express Release documents are not readily acknowledged as customary to the trade, there is still the option to operate a ‘waybill’ transaction by the Seller’s surrender of one or more original Bills of Lading back to the Carrier. The Carrier then notifies their destination representative that the Buyer need not produce a further original to obtain release. Although most modern communication is by Email, or at least by Fax, Carriers generally still refer to this process of notification as being a "Telex Release". Every Bill of Lading is clause in such a manner that, on surrender of one original of the Document of Title, any and all other originals fall void. The Carrier issues more than one original as a necessity of trade, but obviously that Carrier must then protect themselves from the fact that several ‘original’ receipts have been issued. But, it is important to note that this surrender need not always be in the country of destination. For example cargo moving from the Country A to Country B involving a Document of Title may be released to the Buyer in Country B on presentation of one original of that Document of Title to any office in the world owned or operated or associated to the said Carrier. This could be in the countries of Origin or Destination, but equally it could be in any other third location. In certain countries where Waybills are not acknowledged (the Far East mainly) this is an equally easy system for removing the need to generate, transmit and produce Documents of Title, should they not be required by the Seller. (It should be noted that this type of release often requires all originals to be surrendered simultaneously i.e. 1, 2 or 3 dependent on how many were issued). |
| THC | Terminal Handling Charge - Another accessorial charge. |
| TOFC | Trailer on Flat Car - Intermodal trailer or container with wheels. |
| TWRA | Transpacific Westbound Rate Agreement - A Conference of several ocean carriers allowed to meet and establish rates and schedules. |
| Tariff | A published listing containing actual rates, classifications, charges, rules, etc. A tariff is the distinguishing feature of a common carrier consisting of its offer to the public to provide transportation between published points/routes of service based on a common set of rules, at specified costs. |
| Transshipment | When a shipment from point "A" to "C" must be handled through "B" or other intermediate points. UCP 500 - Uniform Customs and Practices for Documentary Credits, is a document published by the International Chamber of Commerce setting forth standard rules and conditions under which Documentary Letters of Credit are to be drafted, issued, notified, amended, negotiated, interpreted and paid by commercial banks. These rules reflect general consensus among banks worldwide, and provide a common basis on which to conduct business. |
| USDA | United States Department of Agriculture - US Government agency in charge of regulating agricultural plants & animals USDA oversees the import/export of agricultural products, and issues animal health certificates, (plant) phyto sanitary certificates, and (meat & dairy) sanitary certificates on products within its jurisdiction, as required by foreign governments for exports. This is done respectively, through the USDA veterinary service for live animals, the Animal Plant Health Inspection Service (APHIS) for non food animal products, plants, and plant products, and the Food Safety Inspection Service for meat & dairy products. Comprehensive & current information on destination country documentation requirements for agricultural products is maintained on the USDA sponsored EXCERT system. |
| U.S Customs | A division of the Department of Treasury is in charge of controlling the admissibility of goods into the country, and collecting duty and taxes thereon. Customs also enforces laws and regulations otherwise applicable to imported goods. |
| Waybill | This is a term for a non-negotiable "straight" bill of lading. It represents a contract for carriage. |
| Y/A | York/Antwerp Rules |
| OFF | Ocean Freight Forwarders arranging for shipments to and from the US must be licensed by the Federal Maritime Commission as Ocean Transportation Intermediaries. |
| Import Bond | A financial guarantee required by U.S. Customs and Border Protection (CBP) to ensure the payment of duties, taxes, and compliance with customs regulations for imported goods. |
| Continuous Bond | An import bond that covers multiple shipments within a one-year period. |
| Single Entry Bond | A bond that covers a single import shipment and is terminated after use. |
| Principal | The party responsible for obtaining and maintaining an import bond, typically the importer of record. |
| Surety | The company that issues the import bond and provides the financial guarantee to CBP. |
| CBP Form 301 | The application form for obtaining a U.S. import bond. |
| Customs Broker Bond | A bond required for customs brokers to ensure compliance with customs regulations. |
| Bond Amount | The specified monetary value of the import bond. |
| Liquidated Damages | Penalties assessed by CBP for bond violations, such as late ISF filings. |
| ISF Bond (Importer Security Filing Bond) | A bond specifically required for ISF filing compliance. |
| Bond Underwriting | The process of evaluating an applicant's eligibility for an import bond. |
| Bond Premium | The cost of obtaining and maintaining an import bond. |
| Continuous Transaction Bond (CTB) | A type of import bond that covers continuous customs transactions within a one-year period. |
| Single Transaction Bond (STB) | A bond that covers a single customs transaction and is terminated after use. |
| Bond Termination | The process of ending the validity of an import bond. |
| Joint and Several Liability | The responsibility shared by the principal and surety for bond obligations. |
| Importer of Record (IOR) | The party responsible for customs compliance and import bond obligations. |
| Non-Resident Importer Bond | A bond required for importers located outside the United States. |
| Customs Bond Rider | An amendment to an import bond specifying additional coverage. |
| Bond Rider Endorsement | Adding or modifying bond coverage with a rider. |
| Continuous Bond Rider | An amendment to a continuous import bond. |
| Customs Bond Rider Fee | The additional cost associated with a bond rider. |
| Bond Rider Effective Date | The date from which the rider's amendments take effect. |
| Customs Broker Bond Rider | An amendment to a customs broker's bond. |
| Bond Rider Termination | Ending the additional coverage provided by a bond rider. |
| Bond Rider Reinstatement | The process of restoring a bond rider after termination. |
| Single Entry Bond Rider | An amendment to a single entry bond. |
| Bond Rider Cancellation | The termination of a bond rider before its effective date. |
| ISF Bond Rider (Importer Security Filing Bond Rider) | An amendment to an ISF bond. |
| Customs Clearance | |
| Customs Clearance | The process of fulfilling customs requirements to allow goods to enter or leave a country. |
| Customs Broker | A licensed professional who assists with customs clearance procedures. |
| Customs Declaration | A formal statement detailing the goods, their value, origin, and other relevant information for customs clearance. |
| Customs Entry | The documentation and data submitted to CBP for customs clearance. |
| Customs Tariff | A list of duties or taxes imposed on imported or exported goods. |
| Harmonized System (HS) Code | A standardized system for classifying products used for customs and international trade. |
| Entry Summary | A document summarizing the details of a customs declaration. |
| Entry Number | A unique reference number assigned to each customs entry. |
| Country of Origin | The country where goods were manufactured or produced. |
| Duty Calculation | The process of calculating customs duties on imported goods. |
| Customs Valuation | The process of determining the customs value of goods for duty assessment. |
| Customs Clearance Agent | An individual or company that assists with customs clearance on behalf of importers or exporters. |
| Customs Declaration Form | A standardized form used to declare information about imported or exported goods. |
| Customs Declaration Software | Software used to prepare and submit customs declarations. |
| Customs Compliance Audit | A review by customs authorities to ensure compliance with regulations. |
| Inward Customs Processing | Customs procedures for goods entering a country. |
| Outward Customs Processing | Customs procedures for goods leaving a country. |
| Customs Declaration Penalties | Fines or sanctions imposed for non-compliance with customs regulations. |
| Customs Bond Liquidation | The process of settling and closing a customs bond. |
| Customs Entry Specialist | An expert in customs declarations and compliance. |
| Duty Exemption Certificate | A document providing evidence of exemption from customs duties. |
| Customs Brokerage Fees | The fees charged by customs brokers for their services. |
| Duty-Free Zone | An area where goods can be stored, displayed, or processed without customs duties. |
| Foreign Trade Zone (FTZ) | A designated area where goods are considered to be outside the country for customs purposes. |
| Customs Compliance Recordkeeping | The practice of maintaining records related to customs declarations and compliance. |
| Customs Compliance Audit Trail | A record of all activities related to customs declarations and compliance. |
| Customs Broker Licensing | The process of obtaining a license to act as a customs broker. |
| Customs Entry Reconciliation | A process to adjust entries when errors or discrepancies are discovered. |
| Customs Bonding Company | A company that provides customs bonds to importers and exporters. |
| Customs Valuation Auditing Tools | Tools used by customs authorities to audit declared values. |
| Drawback Verification | A process to confirm that drawback refunds are legitimate. |
| Customs Tariff Schedule | A comprehensive list of duty rates for all importable goods. |
| Customs Valuation Legislation | Laws and regulations governing the customs valuation of goods. |
| Customs Entry Accuracy Review | A thorough review of customs declarations for accuracy. |
| Customs Bond Amount | The specified amount of financial coverage provided by a customs bond. |
| Drawback Recovery | The retrieval of customs duties previously paid through the drawback process. |
| Customs Declaration Documentation | The paperwork required for customs declarations, including invoices, certificates, and permits. |
| Customs Valuation Adjustments | Changes made to the declared customs value to account for certain factors. |
| Customs Entry Compliance | Adherence to customs regulations when filing declarations. |
| Customs Valuation Certificate | A document issued by customs authorities certifying the value of goods. |
| Customs Entry Review Period | The time frame during which customs authorities review declarations. |
| Customs Valuation Review Process | The steps involved in reviewing the customs value of goods. |
| Customs Entry Document Verification | Checking the accuracy and completeness of customs documents. |
| Customs Bond Premium | The fee paid for a customs bond. |
| Customs Valuation Guidelines | Guidelines issued by customs authorities to assist in determining customs values. |
| Customs Entry Recordkeeping | Keeping records of all customs-related documents and transactions. |
| Drawback Eligibility Criteria | The conditions that must be met to be eligible for drawback refunds. |
| Customs Valuation Consultation | Seeking advice or guidance from customs authorities on valuation matters. |
| Customs Entry Software | Software used to prepare and submit customs declarations. |
| Customs Bond Coverage | The extent of financial protection provided by a customs bond. |
| Customs Valuation Dispute Resolution Mechanisms | Methods for resolving disputes related to customs values. |
| Customs Entry Processing Time | The time it takes for customs authorities to process declarations. |
| Customs Bond Types | Different types of customs bonds, including single entry and continuous bonds. |
| Customs Valuation Audits | Audits conducted to verify the correctness of customs values. |
| Customs Entry Amendments | Changes or corrections made to a customs declaration after submission. |
| Drawback Claim Rejection | When customs authorities reject drawback claims for various reasons. |
| Customs Valuation Review Criteria | The criteria used to assess the correctness of declared values. |
| Customs Entry Discrepancies | Differences or inconsistencies in customs declarations. |
| Customs Bond Claims Process | The process of making claims on a customs bond. |
| Customs Valuation Database | A database containing information on customs values. |
| Customs Entry Penalties | Fines or sanctions imposed for non-compliance with customs regulations. |
| Customs Bond Renewal | The process of renewing a customs bond when it expires. |
| Customs Valuation Appeal Process | The procedure for appealing customs valuation decisions. |
| Customs Entry Data Accuracy | Ensuring that the information on customs declarations is accurate. |
| Customs Valuation Audit Findings | Findings and results of customs valuation audits. |
| Customs Entry Error Correction | Correcting errors or discrepancies in customs declarations. |
| Customs Bond Claim Resolution | The resolution of claims made on a customs bond. |
| Customs Valuation Legislation Updates | Changes and updates to laws related to customs valuation. |
| Customs Entry Automation | The use of automated systems for customs declaration submissions. |
| Drawback Program Participation | Enrolling in programs that allow for drawback refunds. |
| Customs Valuation Review Process | The steps involved in the review of customs values. |
| Customs Entry Document Retention | The requirement to retain customs documents for a specified period. |
| Customs Bonding Agent | An agent or company that helps obtain and manage customs bonds. |
| Customs Valuation Errors | Mistakes or inaccuracies in the determination of customs values. |
| Customs Entry Record Inspection | Inspecting and verifying customs records. |
| Customs Bond Cancellation | The process of canceling a customs bond. |
| Customs Valuation Assessment | The assessment of customs values for duty calculation. |
| Customs Entry Document Submission | Submitting the necessary documents for customs declarations. |
| Customs Bond Renewal Requirements | The requirements for renewing a customs bond. |
| Customs Valuation Dispute Resolution | The process of resolving disputes related to the customs value of goods. |
| Customs Entry Software | Software used to calculate customs values and duties. |
| Customs Entry Record Retention Obligations | The legal obligation to retain customs records. |
| Customs Bonding Agent Services | Services provided by customs bonding agents. |
| Customs Valuation Appeals Board | A board that handles appeals related to customs valuation. |
| Customs Entry Review Process | The steps involved in the review and assessment of customs declarations. |
| Customs Bond Termination | Ending the validity of a customs bond. |
| Customs Valuation Errors Correction Process | Correcting errors and inaccuracies in customs valuation. |
| Customs Entry Review Cycle Frequency | How often customs declarations are reviewed. |
| Customs Bond Cost Determination | Calculating the cost of obtaining and maintaining a customs bond. |
| Customs Valuation Expert Opinions | Opinions and advice provided by customs valuation experts. |
| Customs Entry Supporting Documents Verification | The verification of documents that support customs declarations. |
| Customs Bond Liability Period Duration | The period during which an importer or exporter is liable under the bond. |
| Customs Valuation Errors Identification | Identifying and addressing errors in customs valuation. |
| Customs Entry Error Correction Process | The process of correcting errors in customs declarations. |
| Customs Bond Claims Resolution Timeframes | The specified timeframes for resolving bond claims. |
| Customs Valuation Review Procedures | Procedures for reviewing customs values. |
| Customs Entry Data Accuracy Checklists | Checklists for ensuring the accuracy of customs data. |
| Customs Bond Renewal Requirements Fulfillment | Fulfilling the requirements for renewing a customs bond. |
| Customs Valuation Dispute Resolution Mediation Benefits | Understanding the benefits of using mediation to resolve customs valuation disputes. |
| Customs Entry Review Cycle Frequency Compliance | Ensuring compliance with the frequency of customs declaration reviews. |
| Customs Bond Cost Determination Accuracy | Accurately determining the cost of obtaining and maintaining a customs bond. |
| Customs Valuation Expert Opinions Integration | Integrating opinions and advice provided by customs valuation experts. |
| Customs Entry Supporting Documents Verification Efficiency | Increasing the efficiency of verifying documents that support customs declarations. |
| Customs Bond Liability Period Duration Adherence | Adhering to the duration for which an importer or exporter is liable under the bond. |
| Customs Valuation Errors Identification Best Practices | Implementing best practices for identifying and addressing errors in customs valuation. |
| Customs Entry Error Correction Process Optimization | Optimizing the process of correcting errors in customs declarations. |
| Customs Bond Claim Review Process Efficiency | Increasing the efficiency of reviewing and resolving bond claims. |
| Customs Valuation Compliance Audits Procedures Effectiveness | Enhancing the effectiveness of procedures for conducting compliance audits. |
| Customs Entry Review Cycle Timeframes Adherence | Adhering to the specified timeframes for customs declaration reviews. |
| Customs Bond Cost Components Management | Managing the various components that contribute to the cost of customs bonds. |
| Customs Valuation Compliance Assessment Criteria Adherence | Adhering to the criteria used to assess compliance with customs valuation. |
| Customs Entry Discrepancies Resolution Best Practices | Implementing best practices for resolving discrepancies or inconsistencies in customs declarations. |
| Customs Bond Liquidation Process Efficiency | Increasing the efficiency of settling and closing a customs bond. |
| Customs Valuation Assessment Methods Utilization | Making use of methods to assess customs values. |
| Customs Entry Document Retention Obligations Compliance | Ensuring compliance with legal obligations related to retaining customs documents. |
| Customs Bond Expiry Implications Understanding | Understanding the implications of a customs bond's expiration. |
| Customs Valuation Ruling Request Process Efficiency | Increasing the efficiency of the process of requesting a customs valuation ruling. |
| Customs Entry Data Accuracy Verification Effectiveness | Enhancing the effectiveness of procedures for verifying the accuracy of customs data. |
| Customs Valuation Auditing Tools Utilization Benefits | Understanding the benefits of using tools to conduct customs valuation audits. |
| Customs Entry Document Submission Requirements Adherence | Adhering to the requirements for submitting customs documents. |
Hassle-Free Bond Application
Experiencing Hassle-Free Bond Application
If you want a hassle-free experience, let U.S. Import Bond manage your bond applications. It is your duty as an importer to:
- Complete the Special Power of Attorney form to authorize us to post a bond in your name.
- Pay the duty, taxes, and fees
- Give us the pertinent information and documentation required to submit a bond.
- Verifying that all of the documents submitted are accurate to prevent penalties.
Let U.S Import Bond do the paperwork for you.
Bond Applications
Importers can apply any bond by calling us, emailing us ([email protected]) or by online forms listed below.