Shipping has its own language! As Team NYSHEX grows, those of us who have been in shipping for a long time have begun to realize that when we get blank stares, it's because of all the three and four letter acronyms that don't transfer across industries.
We put together this glossary of shipping terms (and a few financial terms) to help our new hires and partners decode our discussions. Maybe someone on your team can benefit from the list too!
We put together this glossary of shipping terms (and a few financial terms) to help our new hires and partners decode our discussions. Maybe someone on your team can benefit from the list too!
- AES – Automated Export System
- The system U.S. exporters use to electronically declare their international exports, known as Electronic Export Information (EEI), to the Census Bureau to help compile U.S. export and trade statistics.
- AMS – Automated Manifest System
- An electronic information transmission system operated by U.S. Customs and Border Protection (CBP). Air and ocean shipments into the U.S. require an AMS filing with detailed information about the cargo, as a security measure.
- Back-haul
- Cargo carried on a return journey. It applies in situations when there is a lesser volume of traffic in one direction.
- BAF – Bunker Adjustment Factor
- An additional charge levied on the shippers to compensate for fluctuations in the price of the ship's fuel. Also referred to as bunker surcharge, it is tied to the price of Brent crude oil, a major benchmark for worldwide oil prices.
- Bill of Lading (BL or BoL)
- A legal document issued by a carrier to a shipper that details the type, quantity and destination of the goods being carried. A bill of lading also serves as a shipment receipt when the carrier delivers the goods at a predetermined destination.
- Blanked Sailings
- A blank sailing (a void sailing) is a sailing that has been canceled by the carrier. A blank sailing could mean a vessel is skipping one port, or that the entire string is canceled.
- Block Deals
- A block deal, or block trade, is the sale or purchase of a large number of securities. A block trade involves a significantly large number of equities or bonds being traded at an arranged price between two parties. Block trades are sometimes done outside of the open markets to lessen the impact on the security's price.
- Bulk Cargo
- A term for items that are shipped loosely and unpackaged as opposed to being shipped in packages or containers. An item may be classified as bulk cargo if it is not containerized and easily secured on a vessel. Items such as oil, grain, or coal are often moved as bulk cargo.
- Compound Annual Growth Rate (CAGR)
- Rate of return that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each year of the investment's lifespan.
- Carrier Rollings/Rolled Cargo
- When cargo is not loaded onto the vessel it was meant to sail on. This can happen as a result of the carrier having overbooked the vessel, a port omission, vessel weight or mechanical issues, or documentation issues related to particular cargo.
- Carrier Haulage
- The inland movement of a container under the control of a shipping line using a haulage contractor nominated by the carrier. The shipping line is responsible for claims, liabilities or damages that could happen, unless the damage was caused by false packaging or stowage. Carrier haulage is usually a part of a multimodal transport to move a container from port of discharge via rail or truck to the final destination as shown on the bill of lading.
- CBM (Cubic Meter)
- The freight volume of the shipment for domestic and international freight. This measurement is calculated by multiplying the width, height and length together of the shipment.
- CFS
- A shipping dock where a cargo is loaded into, or unloaded from containers. Generally, this involves less than containerload shipments, although small shipments destined to same consignee are often consolidated.
- Chassis
- A special trailer or undercarriage used to transport ocean containers over the road. A chassis will be necessary for a shipment traveling by truck and may incur a chassis fee.
- Chassis Pool
- A location where chassis are stored and available for rental.
- Chassis Split
- Occurs when the truck chassis is not located in the same place as the sea freight shipping container. Therefore, the trucking (or drayage) company may charge a chassis split charge for the costs of picking up or returning the chassis to a different terminal than the container.
- CIF (Cost, Insurance, and Freight)
- Purchasing cargo on these terms means the seller must cover the costs, insurance, and freight of a buyer's order while it is in transit. The goods are exported to a port named in the sales contract. Until the goods are fully loaded onto a transport ship, the seller bears the costs of any loss or damage to the product.
- Clean Truck Fee
- A clean truck fee is assessed by the ports of Los Angeles and Long Beach as part of the Clear Air Action Plan in an effort to reduce air pollution. Sometimes it’s included within the Pickup & Delivery fee, but, depending on the trucking company, you may see it as a separate line item. If applicable, a Clean Truck Fee will appear on the quote or invoice as a destination charge.
- Clearing House
- An intermediary between buyers and sellers of financial instruments. It is an agency or separate corporation of a futures exchange responsible for settling trading accounts, clearing trades, collecting and maintaining margin monies, regulating delivery, and reporting trading data.
- Co-Loader
- A third party who consolidates smaller (less than container load) shipments, often from different shippers, into a container before handing it over to an ocean carrier.
- Commercial Invoice
- A legal document issued between the buyer and seller in an international transaction of goods being sold, serves as a contract and proof of sale, summarizing quantity sold and total cost on buyer. This document is a crucial part in the customs process.
- Consignee
- A party who is financially responsible for the receipt of the shipment, typically the receiver of the shipment.
- CTPAT (Customs-Trade Partnership Against Terrorism)
- A voluntary public-private sector supply-chain security program led by U.S. Customs and Border Protection focused on improving security in private sector supply chains to prevent terrorism.
- Customs Broker
- A professional licensed to represent the importer or exporter in the customs process. The broker prepares files and documents abiding by regulations for clearing goods through customs.
- CY (Container Yard)
- A port designated for carriers where ocean containers are accepted for loading and delivering or receive back empty containers.
- Demurrage
- A charge raised when the full container is not moved out of the port/terminal for unpacking within the allowed free days offered by the shipping line. The charge is levied by the shipping line to the importer.
- Detention
- Also known as a per diem fee, is raised when the importer has picked up the container for unpacking, but the empty container has not returned to the nominated depot within the agreed free-time.
- Drayage
- The process of transporting goods over a short distance. Drayage is often part of a longer overall move, such as from a ship to a warehouse.
- Duty
- A government tax imposed on imported goods from another country.
- EBS (Emergency Bunker Surcharge)
- A last minute fee that occurs when the market fuel prices are higher than was originally anticipated by carriers.
- Export License
- A government issued document that grants permission to conduct an type of export transaction.
- Express Bill of Lading
- A bill in which the carrier is obligated to deliver the goods to the consignee (receiver) of goods and no original bills of lading (OBL) are issued at all.
- FAK (Freight All Kinds) Pricing
- Pricing rates applicable to all types of goods and not restricted to any particular commodity.
- FEU (Forty Equivalent Unit)
- A forty-foot equivalent unit (FEU) is a shipping container with internal dimensions measuring about 40 feet long, 8 feet wide, and 8 feet tall.
- FMC (Federal Maritime Commission)
- An independent U.S. agency responsible for regulating foreign and inter-coastal ocean commerce shipping via U.S. ports. The FMC regulates both VOCCs (Vessel Operating Common Carriers) and NVOCCs (Non-vessel Operating Common Carriers).
- FOB (Free on Board)
- Buying cargo on these terms means that the seller is responsible for clearing the goods for export and ensuring they are delivered to and loaded onto the vessel for transport at the named port of departure.
- Force Majeure
- A provision in many service contracts that describes the conditions under which either party can be relieved of liability for non-performance, based on events that are beyond their control.
- Free Time
- The period of time offered by the carrier to the shipper free of charge, covering both demurrage and detention.
- FSC (Fuel Surcharge)
- A fee assessed by a carrier to account for regional / seasonal variations in fuel costs. A fuel surcharge is most often seen in trucking, but an ocean or air carrier may also assess a fuel surcharge.
- GRI
- The amount by which ocean carriers increase their base rates across specific lines, generally as a result of increased demand.
- Head-haul
- Traffic moving along a route with greater than average volume. It applies in situations when there is a greater volume of traffic in one direction.
- HMF (Harbor Maintenance Fee)
- a fee assessed by U.S. Customs and Border Protection (CBP) on cargo imports arriving into the United States via the marine mode of transport. HMF is assessed on an ad valorem (according to value) basis at a rate of 0.125% of the entered value.
- Incoterms
- A set of 11 internationally recognized rules which define the responsibilities of sellers and buyers. Incoterms specify who is responsible for paying for and managing the shipment, insurance, documentation, customs clearance, and other logistics activities.
- ISF (Importer Security Filing)
- The importer or their agent (e.g., licensed customs broker), must electronically submit certain advance cargo information to CBP in the form of an Importer Security Filing.
- Jones Act
- A federal law that regulates maritime commerce in the United States. This acts requires goods shipped between U.S. ports to be transported on ships that are built, owned, and operated by United States citizens or permanent residents.
- Known Shipper
- A preferential shipper status determined by the Transportation Security Administration (TSA). This designation is required to transport cargo on passenger planes.
- LCL (Less than Container Load)
- Shipments which do not fill a shipping container. These are commonly grouped with other cargo into full container loads or transported by air.
- Last Free Day
- The last day of a period of free storage time in which the cargo can be picked up without paying demurrage charges.
- Merchant Haulage
- The movement of a container directly by the merchant/shipper using their own nominated haulage provider.
- MPF (Merchandise Processing Fee)
- A fee imposed by U.S. Customs and Border Protection (CBP) to offset the cost of salaries and other expenses incurred in the processing of imports and release of merchandise into the United States.
- No-Show
- When a shipper reserves space but neither uses nor cancels the reservation.
- Notify Party
- The contact person to be notified when the shipment arrives at destination.
- NVOCC (Non Vessel Owning Common Carrier)
- Licensed by the Federal Maritime Commission, NVOCC’s provide all services of an ocean carrier except without operating the vessels. They buy services from ocean carriers, and though issuance of their House Bill of Lading with appropriate rate filings, are able to mark-up freight costs as they resell these services to their clients.
- OGA (Other Government Agency)
- All imports are subject to the import requirements of US Customs, but some products face additional regulations from various other government agencies.
- OTIF (On Time In Full)
- Measures the percentage of orders that are shipped on time in full, meaning the customer gets everything they ordered, on the day they expected to receive it.
- Packing List
- A document used in international trade, that provides the exporter, the international freight forwarder, and the ultimate consignee with information about the shipment.
- Per Diem
- Also known as detention, is a charge raised when the importer has picked up the container for unpacking, but the empty container has not returned to the nominated depot within the agreed free-time.
- Pier Pass Fee
- A single flat fee charged for both daytime and nighttime container moves at the Ports of Los Angeles and Long Beach.
- POA (Power of Attorney)
- A legal document used in shipping to grant a customs broker the authority to process Customs clearance on your behalf. A signed POA is necessary in order to clear your goods through US Customs.
- Pre-Pull
- When the trucker pulls an full container load container from the port and stores it at the trucker's yard instead of immediately delivering it.
- PSS (Peak Season Surcharge)
- A variable surcharge that carriers may apply during times of peak demand.
- RFQs (Request for Quotation)
- A business process in which a company requests a quote from a supplier for the purchase of specific products or purchases.
- Rolled Cargo
- When cargo is not loaded onto the vessel it was meant to sail on. This can happen as a result of the carrier having overbooked the vessel, a port omission, vessel weight or mechanical issues, or documentation issues related to particular cargo.
- SLI (Shipper's Letter of Instruction)
- A document serving multiple purposes: to provide transportation and documentation instructions; to provide export control and reporting information; and to convey authorization to the forwarding agent to transmit Electronic Export Information (EEI) to the Automated Export System (AES).
- SO (Shipping Order)
- A document issued by the carrier that confirms a shipment's booking on a vessel.
- String
- The ordered set of ports at which a container vessel will call.
- TEUs (Twenty-foot equivalent)
- TEU stands for Twenty-Foot Equivalent Unit which can be used to measure a ship’s cargo carrying capacity. The dimensions of one TEU are equal to that of a standard 20′ shipping container. (20 feet long, 8 feet tall.)
- Transloading
- A shipping term that refers to the transfer of goods from one mode of transportation to another en route to their ultimate destination.
- TMS (Transportation Management System)
- A logistics platform that uses technology to help businesses plan, execute, and optimize the physical movement of goods, both incoming and outgoing, and making sure the shipment is compliant, proper documentation is available.
- VAT (Value-Added Tax)
- A consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale.
- Wharfage
- The fee charged by ocean carriers to cover the port authority's cost of using a wharf to unload cargo from a vessel.