Complete Logistics Glossary: Export, Import, Freight, Shipping and Incoterms

A comprehensive reference of logistics and international trade terminology covering freight forwarding, shipping lines, customs, Incoterms, container types, documentation and more. Use this glossary to navigate the language of global trade with confidence.

A

Advance Manifest (AMS / ENS) Electronic pre-arrival cargo declaration required by customs authorities (e.g. AMS for the USA, ENS for the EU) before cargo arrives at the destination port.

Ad Valorem A duty, tax or charge calculated as a percentage of the declared value of the goods, rather than a fixed amount per unit or weight.

Agent A company or individual acting on behalf of another party (e.g. a shipping agent acting on behalf of a vessel owner, or a customs agent acting for an importer).

Air Waybill (AWB) The transport document used in air freight. It is not a document of title (unlike a Bill of Lading) and is non-negotiable.

All-in Rate A freight quotation that includes all applicable surcharges — BAF, CAF, PSS, etc. — in a single total figure.

Arrival Notice A document sent by the carrier or agent to the consignee informing them that the shipment has arrived or is about to arrive at the destination port.

Average (General / Particular) A maritime insurance term. General Average means all parties in a maritime venture proportionally share losses from a voluntary sacrifice to save the ship. Particular Average refers to partial losses covered only by the owner of the damaged goods.

B

B/L (Bill of Lading) The fundamental document in ocean freight. Issued by the shipping line, it serves three purposes: (1) evidence of the contract of carriage, (2) receipt for the cargo, and (3) document of title. Types include Original B/L, Sea Waybill, Telex Release and Surrender B/L.

BAF (Bunker Adjustment Factor) A surcharge added to the base freight rate to compensate for fluctuations in fuel (bunker) costs.

Booking The reservation of space on a vessel for a specific cargo. A booking confirmation (booking number) is required before the container can be delivered to the terminal.

Breakbulk Cargo shipped without a container, loaded directly onto the vessel’s deck or holds. Typically used for heavy, oversized or project cargo that cannot fit in any container type.

Broker (Customs Broker / Freight Broker) A licensed intermediary who arranges customs clearance (customs broker) or freight transport (freight broker) on behalf of importers, exporters or carriers.

Bunker The fuel used to power a ship. Bunker costs are a major variable in freight pricing and are addressed through surcharges like BAF and LSS.

C

CAF (Currency Adjustment Factor) A surcharge applied to compensate for exchange rate fluctuations between the billing currency and the local currency at origin or destination.

Cargo Manifest A document listing all cargo aboard a vessel or aircraft, including shipper, consignee, description, weight and volume. Required by port and customs authorities.

Carrier The company responsible for transporting cargo. In ocean freight, the carrier is typically the shipping line. In air freight, the airline. The carrier issues the transport document (B/L or AWB).

CBM (Cubic Metre) The standard unit of volume in ocean freight. Used to calculate volumetric weight and chargeable weight in LCL shipments.

Certificate of Origin (CO) A document certifying the country where the goods were produced. Required by customs authorities in many countries to determine applicable duties and whether preferential trade agreements apply.

CFS (Container Freight Station) A warehouse where LCL (Less than Container Load) cargo is consolidated (stuffed) into containers for export, or deconsolidated (stripped) from containers at destination.

Chassis A wheeled trailer frame used to transport a container by road.

CIF (Cost, Insurance and Freight) An Incoterm — see Incoterms section.

COA (Contract of Affreightment) A long-term contract between a shipper and carrier for the transport of a defined quantity of cargo over a specified period, at agreed rates.

CoG (Centre of Gravity) The point at which the weight of an object is evenly distributed. In container stowage, the CoG must be kept low and centred to ensure safe transport. Some shipping lines require a CoG declaration for heavy or OOG cargo.

Commercial Invoice A document issued by the exporter to the importer detailing the goods, quantities, prices and trade terms. Required for customs clearance in most countries.

Commodity The type of goods being transported. Freight rates and surcharges can vary significantly depending on the commodity.

Consignee The party named on the transport document as the recipient of the cargo. The consignee has the right to claim the goods at destination.

Consignor / Shipper The party that sends the cargo — the exporter or seller who delivers the goods to the carrier.

Consolidation The grouping of multiple smaller shipments from different shippers into a single container (LCL) for transport.

Container A standardised metal box used for the intermodal transport of cargo. Standard sizes are 20ft and 40ft (also 40ft High Cube). Specialised types include Open Top, Flat Rack, Reefer and Tank.

Container Number A unique identifier printed on every container, consisting of a 4-letter owner code, a 6-digit serial number and a check digit (e.g. MSCU1234567).

COO (Country of Origin) The country where goods were manufactured or substantially transformed. Determines applicable customs duties and trade agreement eligibility.

CSC Plate (Container Safety Convention) A metal plate affixed to every container certifying that it meets structural safety standards. It shows the maximum gross weight, stacking capacity and test dates.

CTU (Cargo Transport Unit) Any container, swap body, vehicle or railway wagon used to transport cargo. The CTU Code governs the safe packing of CTUs.

Cut-off The deadline set by the terminal or shipping line by which the cargo, VGM and documentation must be submitted before vessel departure. Missing cut-off means the cargo is rolled to the next sailing.

Customs Clearance The official process of declaring goods to customs authorities and paying applicable duties and taxes, allowing the cargo to enter or leave a country legally.

Customs Duty A tariff or tax imposed by a government on imported goods, calculated as a percentage of the customs value (ad valorem) or per unit/weight.

D

D/O (Delivery Order) A document issued by the shipping line or agent authorising the release of cargo to the consignee at the destination terminal.

Dangerous Goods (DG) Substances or materials classified under the IMDG Code as presenting a risk to health, safety, property or the environment during transport.

DDP (Delivered Duty Paid) An Incoterm — see Incoterms section.

Dead Freight Freight charges paid for space booked but not used (i.e. when the shipper does not fill the reserved space).

Demurrage A charge imposed by the shipping line when a full container is not returned to the terminal within the agreed free time after delivery to the consignee.

Detention A charge imposed when a container is kept outside the terminal (at the shipper’s or consignee’s premises) beyond the agreed free time.

Devanning The process of unloading cargo from a container. Also called stripping or destuffing.

DG Declaration (Dangerous Goods Declaration) A mandatory document required when shipping dangerous goods. The shipper must declare the cargo class, UN number, proper shipping name, packing group and emergency contact.

Dispatch A bonus or credit given to the shipper when a vessel is loaded or unloaded faster than scheduled — the opposite of demurrage.

Documentation Cut-off The deadline for submitting all shipping documents (SI, VGM, DGD, etc.) to the shipping line. Usually earlier than the cargo cut-off.

Dunnage Material used inside a container to fill void spaces and protect cargo. Can be timber boards, airbags, foam, paper or bubble wrap.

Duties Taxes levied by customs authorities on imports or exports, typically calculated as a percentage of the goods’ value (ad valorem) or per unit.

E

ETA (Estimated Time of Arrival) The expected date and time a vessel or truck will arrive at its destination.

ETD (Estimated Time of Departure) The expected date and time a vessel or truck will depart from its origin.

ETS (Estimated Time of Sailing) See ETD. Used specifically for vessels.

Ex Works (EXW) An Incoterm — see Incoterms section.

Export Customs Declaration A declaration filed with the customs authority of the exporting country, providing details of the goods, their value, origin and destination. Required before cargo can leave the country.

Export Licence An official government document required to export certain controlled goods (e.g. weapons, strategic technology, certain chemicals).

F

FAK (Freight All Kinds) A single freight rate applied regardless of the commodity type — the opposite of commodity-specific rates.

FCL (Full Container Load) A shipment where one shipper books and fills an entire container. The shipper has exclusive use of the container.

FEU (Forty-foot Equivalent Unit) A unit of container capacity equal to one 40ft container. One FEU = two TEUs.

Feeder Vessel A smaller vessel that collects cargo from smaller ports and transports it to a main hub port for loading onto a larger ocean vessel.

FOB (Free on Board) An Incoterm — see Incoterms section.

Forwarder (Freight Forwarder) A company that arranges the transport of cargo on behalf of shippers. Freight forwarders coordinate carriers, customs brokers, insurance and documentation. They do not typically own ships or trucks — they are intermediaries.

Free Time The number of days allowed by the shipping line or terminal for the use of the container at no extra charge, before demurrage or detention begins.

Freight (1) The goods being transported. (2) The charge paid for transporting those goods.

Freight Collect A payment arrangement where the freight charges are paid by the consignee at the destination.

Freight Prepaid A payment arrangement where the freight charges are paid by the shipper at the origin.

FTL (Full Truck Load) A road transport shipment where one shipper books an entire truck. The equivalent of FCL in road freight.

G

General Average A maritime law principle requiring all parties in a sea voyage to proportionally share the losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole. Requires marine insurance.

Groupage See LCL / Consolidation.

GRI (General Rate Increase) An announced increase in freight rates by shipping lines, typically applied at specific times of year or in response to market conditions.

H

Hague-Visby Rules An international convention governing the liability of carriers in ocean transport under a Bill of Lading. Sets limits on carrier liability for cargo loss or damage.

Hamburg Rules A 1978 UN convention on the carriage of goods by sea, replacing the Hague-Visby Rules in countries that have ratified it. Generally more favourable to shippers.

Harmonised System (HS Code) An internationally standardised system of names and numbers for classifying traded products. Used by customs authorities worldwide to determine duties and trade statistics.

Haulage The inland transport of containers by road or rail, between the port/terminal and the shipper’s or consignee’s premises.

Hazmat Abbreviation for hazardous materials. See Dangerous Goods.

House Bill of Lading (HBL) A Bill of Lading issued by a freight forwarder to the shipper. The forwarder holds a Master Bill of Lading from the ocean carrier. The HBL is used in LCL / consolidation shipments.

HS Code See Harmonised System.

I

IATA (International Air Transport Association) The trade association for the world’s airlines, setting standards for air cargo transport, documentation and safety.

IMDG Code (International Maritime Dangerous Goods Code) The international standard for the safe transport of dangerous goods by sea, published by the IMO.

IMO (International Maritime Organization) The United Nations agency responsible for the safety and security of shipping and the prevention of marine and atmospheric pollution by ships.

Import Customs Declaration A declaration filed with the customs authority of the importing country, providing details of the goods, their value, origin and applicable duties.

Incoterms See dedicated Incoterms section below.

Inland Container Depot (ICD) A dry port or inland terminal where containers can be stuffed, stripped, stored and handled away from a seaport.

Insurance (Marine / Cargo) Financial protection against loss or damage to cargo during transport. Marine cargo insurance can cover all risks or named perils, depending on the policy.

J

Joint Venture A business arrangement between two or more parties, often used in international trade to share resources, risks and markets.

L

L/C (Letter of Credit) A financial instrument issued by a bank guaranteeing that a seller will receive payment once certain conditions (typically documentary) are met. Widely used in international trade to manage payment risk.

Lashing The use of straps, chains, wires or ropes to secure cargo to the container floor rings or vessel fixtures to prevent movement during transport.

LCL (Less than Container Load) A shipment that does not fill an entire container. Multiple LCL shipments from different shippers are consolidated into a single container at a CFS.

Lead Time The total time from placing an order to receiving the goods at the buyer’s location, including production, packing, shipping and customs clearance.

LOI (Letter of Indemnity) A document in which one party agrees to compensate another for any loss or damage arising from a specific action, such as releasing cargo without an original Bill of Lading.

LSS (Low Sulphur Surcharge) A surcharge applied to offset the cost of using low-sulphur fuel, required under IMO 2020 regulations.

M

Master Bill of Lading (MBL) A Bill of Lading issued by the ocean carrier to the freight forwarder, covering the consolidated shipment. The forwarder then issues House Bills of Lading to individual shippers.

Multimodal Transport The movement of cargo using two or more modes of transport (e.g. sea + road, sea + rail) under a single contract.

MTO (Multimodal Transport Operator) A company that issues a single transport document and takes responsibility for the entire multimodal journey.

N

NOR (Notice of Readiness) A formal notification from the master of a vessel to the charterer stating that the ship has arrived and is ready to load or discharge.

NVO (Non-Vessel Operating Carrier) A freight forwarder or logistics company that issues Bills of Lading and acts as a carrier without owning ships.

NVOCC (Non-Vessel Operating Common Carrier) Similar to NVO, but regulated as a common carrier in some jurisdictions (notably the USA).

O

Ocean Carrier A shipping line that owns or operates vessels for the transport of cargo by sea.

OOG (Out of Gauge) Cargo that exceeds the internal or external dimensions of a standard container in height, width or length.

Open Top Container A container without a rigid roof, covered by a tarpaulin, used for cargo that is overheight or must be loaded from above.

Origin Charges Fees applied at the port or location of origin, such as documentation fees, THC, port fees and customs charges.

P

Packing List A document prepared by the shipper listing all items in a shipment, including descriptions, quantities, weights and dimensions. Accompanies the commercial invoice and is required for customs clearance.

Pallet A flat structure (usually wood or plastic) on which goods are stacked and secured for handling and transport.

PCS (Port Congestion Surcharge) A surcharge applied when a port is congested, to cover the additional costs incurred by vessels waiting to berth.

Peak Season Surcharge (PSS) A surcharge applied during periods of high demand (typically Q3–Q4) to reflect tighter capacity and higher freight rates.

POD (Port of Discharge) The port where cargo is unloaded from the vessel.

POL (Port of Loading) The port where cargo is loaded onto the vessel.

Port of Entry The designated port through which goods enter a country for customs clearance.

Pre-carriage The inland transport of cargo from the shipper’s premises to the port of loading.

Proforma Invoice A preliminary invoice issued before the actual commercial transaction, used for customs purposes, Letter of Credit applications and price confirmation.

R

Reefer (Refrigerated Container) A temperature-controlled container used for perishable goods such as food, pharmaceuticals and chemicals.

Release (Telex Release / Surrender) A process by which the shipper instructs the shipping line to release the cargo to the consignee at destination without requiring the original Bill of Lading. Used to speed up cargo release.

Ro-Ro (Roll-on/Roll-off) A type of vessel or terminal designed to handle wheeled cargo (vehicles, trailers) that can be driven on and off the ship.

Rotterdam Rules A 2008 UN convention on the carriage of goods by sea, not yet widely ratified but intended to modernise the Hague-Visby and Hamburg Rules.

S

Sea Waybill A non-negotiable transport document used instead of a Bill of Lading when the shipper and consignee are known parties with a high level of trust. Cargo can be released without presenting the original document.

Shipper The party that sends the cargo — the exporter or seller who delivers the goods to the carrier.

Shipping Instruction (SI) A document sent by the shipper or freight forwarder to the shipping line with all the details needed to issue the Bill of Lading: shipper, consignee, notify party, commodity, weight, volume, etc.

SOLAS (Safety of Life at Sea) The international maritime convention establishing minimum safety standards for ships and cargo. Includes the VGM requirement for containers.

SOC (Shipper Owned Container) A container owned by the shipper rather than leased from the shipping line.

Spot Rate A freight rate quoted for a single shipment at current market prices, as opposed to a contract rate agreed over a longer period.

Stuffing The process of loading cargo into a container. Also called packing or vanning.

Surcharge An additional charge added to the base freight rate to cover specific costs such as fuel, currency fluctuations, port congestion or peak season demand.

T

T1 / T2 Document European customs transit documents used to control the movement of goods between EU Member States and third countries (T1) or between EU Member States (T2).

Tank Container A container designed to carry liquid or gaseous bulk cargo, consisting of a tank mounted in an ISO frame.

Tariff (1) A schedule of freight rates and charges published by a carrier. (2) A customs duty imposed on imports.

TEU (Twenty-foot Equivalent Unit) The standard unit of measurement for container capacity, equal to one 20ft container. A 40ft container = 2 TEUs.

THC (Terminal Handling Charge) A fee charged by the terminal for the handling of cargo and containers at the port — loading, unloading and movement within the terminal.

Through Bill of Lading A single Bill of Lading covering the entire journey of cargo from origin to final destination, even when multiple carriers and modes of transport are involved.

Transit Time The total time a shipment spends in transit, from the departure port to the arrival port, excluding inland haulage.

Transshipment The transfer of cargo from one vessel to another at an intermediate port, before continuing to the final destination.

U

UN Number A four-digit number assigned by the United Nations to identify hazardous substances in international transport (e.g. UN 1203 = Petrol/Gasoline).

UNCITRAL The United Nations Commission on International Trade Law — the core legal body of the UN in international trade law.

V

VGM (Verified Gross Mass) The verified total weight of a packed container, including cargo, packing materials and dunnage but excluding the tare weight of the container. Mandatory under SOLAS since July 2016.

Vanning See Stuffing.

Vessel A ship or ocean-going craft used to transport cargo.

Volume Weight (Volumetric Weight) A calculated weight based on the dimensions of a shipment, used in air freight and some LCL ocean freight pricing. Formula: length × width × height (cm) ÷ 6,000 = volumetric weight (kg).

W

Waybill A transport document used in road, rail and air freight. Unlike a Bill of Lading, it is not a document of title and is non-negotiable. See also Sea Waybill.

Weight Break A point in a freight rate scale at which the per-unit charge decreases as weight or volume increases.

Z

Zero-Duty Rate A customs duty rate of 0%, applicable to certain goods under free trade agreements or preferential tariff schemes.

Incoterms 2020 — Complete Reference

Incoterms (International Commercial Terms) are a set of 11 internationally recognised rules published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers in international trade transactions. They specify who pays for transport and insurance, where the risk transfers and who handles customs clearance.

Incoterms 2020 — Quick Reference Table

EXW — Ex Works

The seller makes the goods available at their premises (factory, warehouse). The buyer bears all costs and risks from that point, including loading, inland haulage, export customs, ocean freight and import duties.

Seller’s obligations: Make goods available, provide commercial invoice and packing list. Buyer’s obligations: Everything else — loading, export customs, freight, insurance, import duties.

Best used when: The buyer has strong logistics capabilities and wants full control of the supply chain.

FCA — Free Carrier

The seller delivers the goods to a named place (the seller’s premises, a terminal or another point) and clears them for export. Risk transfers to the buyer when the goods are handed over to the buyer’s carrier.

Key 2020 update: When the named place is the seller’s premises, the seller is responsible for loading onto the buyer’s vehicle.

Best used when: The buyer arranges the main carriage and wants a clean risk transfer point.

CPT — Carriage Paid To

The seller pays for the main carriage to the named destination. Risk transfers to the buyer when the goods are handed to the first carrier. The seller does not need to arrange insurance.

Best used when: The seller arranges the main freight but the buyer takes over risk early.

CIP — Carriage and Insurance Paid To

Like CPT, but the seller must also provide cargo insurance (minimum All Risks under Institute Cargo Clauses (A) under Incoterms 2020 — upgraded from the previous minimum).

Best used when: The seller arranges freight and insurance; popular in air freight and multimodal transport.

DAP — Delivered at Place

The seller delivers the goods to a named place at the destination (e.g. the buyer’s warehouse). The buyer unloads and handles import customs and duties. Risk transfers when the goods are ready for unloading at destination.

Best used when: The seller wants to deliver door-to-door but not pay import duties.

DPU — Delivered at Place Unloaded

The seller delivers and unloads the goods at a named place at destination. Risk transfers after unloading. This is the only Incoterm where the seller is responsible for unloading at destination.

Note: DPU replaced DAT (Delivered at Terminal) in Incoterms 2020.

DDP — Delivered Duty Paid

Maximum obligation for the seller. The seller delivers the goods cleared for import, duties paid, to the named destination. The buyer only needs to unload.

Best used when: The buyer wants a door-to-door, all-inclusive service and places maximum responsibility on the seller.

FAS — Free Alongside Ship

The seller delivers the goods alongside the named vessel at the port of loading. Risk and costs transfer to the buyer from that point. The buyer handles loading, ocean freight, insurance and import.

Only for: Sea or inland waterway transport. Not recommended for containerised cargo — use FCA instead.

FOB — Free on Board

The seller delivers the goods on board the vessel at the port of loading, cleared for export. Risk and costs transfer to the buyer once the goods are on board.

Only for: Sea or inland waterway transport. The most widely used Incoterm in ocean freight.

Important: For containerised cargo, FCA is technically more appropriate than FOB, because risk should transfer when the container is handed to the carrier at the terminal (before loading), not when it is actually placed on board.

CFR — Cost and Freight

The seller pays for the main ocean freight to the port of destination. Risk transfers to the buyer when the goods are on board at the port of loading. The seller does not arrange insurance.

Only for: Sea or inland waterway transport.

CIF — Cost, Insurance and Freight

Like CFR, but the seller must also provide minimum cargo insurance (Institute Cargo Clauses (C) — basic coverage). Risk still transfers to the buyer at the port of loading.

Only for: Sea or inland waterway transport. Very common in bulk and commodity trade.

Surcharges Reference Guide

Understanding surcharges is essential for accurate freight cost calculation.

This glossary is for educational and reference purposes. Regulations, trade terms and carrier practices change frequently — always verify with your freight forwarder, customs broker or legal adviser before making trade decisions.