Freight quotes, booking confirmations and customs papers are full of abbreviations: FCL, THC, VGM, HBL, ISF. This glossary explains more than 60 shipping terms in plain English, grouped by topic, with links to our full guides where you need more detail.<\/p>\n
How to use this glossary<\/strong>
\u2022 Terms are grouped into seven topics: Incoterms, documents, sea freight, air and express, charges, customs, and cargo.
\u2022 Use “In this guide” above to jump to a topic, or search the page with Ctrl+F (Cmd+F on Mac).
\u2022 Can’t find a term from your quote? Ask us<\/a> and we will explain it.<\/p><\/blockquote>\nIncoterms (Trade Terms)<\/h2>\n
Incoterms<\/strong> \u2013 Standard trade terms published by the International Chamber of Commerce (ICC). They say who pays for and arranges each part of the transport, and where the risk passes from seller to buyer. The current version is Incoterms 2020. See Incoterms 2020 explained<\/a>.<\/p>\n
EXW (Ex Works)<\/strong> \u2013 The seller makes the goods available at its premises. The buyer handles everything else, including export clearance. See FOB vs EXW<\/a>.<\/p>\n
FCA (Free Carrier)<\/strong> \u2013 The seller delivers the goods, cleared for export, to the buyer’s carrier at a named place, such as a forwarder’s warehouse. Works for any transport. See FCA Incoterms<\/a>.<\/p>\n
FOB (Free On Board)<\/strong> \u2013 The seller delivers the goods on board the ship at the port of loading. Sea freight only. See FOB vs EXW<\/a>.<\/p>\n
CFR \/ CNF (Cost and Freight)<\/strong> \u2013 The seller pays the sea freight to the destination port, but the risk passes when the goods are loaded on board in the origin port. CNF and C&F are older names for CFR.<\/p>\n
CIF (Cost, Insurance and Freight)<\/strong> \u2013 Like CFR, but the seller also buys minimum cargo insurance for the buyer. See CIF meaning in shipping<\/a>.<\/p>\n
DAP (Delivered at Place)<\/strong> \u2013 The seller delivers to a named destination. The buyer pays import duties and taxes. See DDP vs DAP vs EXW<\/a>.<\/p>\n
DDP (Delivered Duty Paid)<\/strong> \u2013 The seller delivers to the destination and pays import duties and taxes. See DDP shipping<\/a>.<\/p>\n
DDU (Delivered Duty Unpaid)<\/strong> \u2013 An old term, removed in Incoterms 2010 and replaced by DAP. Some suppliers and couriers still use it.<\/p>\n
Shipping Documents<\/h2>\n
Bill of lading (B\/L or BOL)<\/strong> \u2013 The document issued by the carrier for sea freight. It is a receipt for the goods, evidence of the transport contract and, in its original form, a document of title. See bill of lading explained<\/a>.<\/p>\n
MBL (Master Bill of Lading)<\/strong> \u2013 The bill of lading issued by the shipping line to the forwarder.<\/p>\n
HBL (House Bill of Lading)<\/strong> \u2013 The bill of lading issued by the forwarder or NVOCC to the shipper. LCL shipments usually travel on an HBL.<\/p>\n
Original bill of lading<\/strong> \u2013 A paper B\/L, usually issued in a set of three. The consignee needs an original to collect the goods, unless the B\/L is released by telex.<\/p>\n
Telex release<\/strong> \u2013 The shipper surrenders the original B\/L at origin, and the carrier tells its destination office to release the goods without paper originals. Faster than couriering originals.<\/p>\n
Sea waybill<\/strong> \u2013 A non-negotiable transport document. The named consignee can collect the goods without presenting an original, so it is common between trusted parties.<\/p>\n
Air waybill (AWB)<\/strong> \u2013 The transport document for air freight. It is not a document of title. A master AWB (MAWB) is issued by the airline, and a house AWB (HAWB) by the forwarder.<\/p>\n
Commercial invoice<\/strong> \u2013 The seller’s invoice showing the goods, their value and the terms of sale. Customs uses it to calculate duty. See commercial invoice and packing list<\/a>.<\/p>\n
Packing list<\/strong> \u2013 A list of the cartons or packages, with their contents, weights and dimensions.<\/p>\n
Certificate of origin (CO)<\/strong> \u2013 A document showing where the goods were made. Some countries need it to apply preferential duty rates.<\/p>\n
Arrival notice<\/strong> \u2013 A notice from the carrier or forwarder that the shipment is about to arrive, with the charges due at destination.<\/p>\n
Sea Freight Terms<\/h2>\n
FCL (Full Container Load)<\/strong> \u2013 One shipper’s goods fill a whole container. See LCL vs FCL<\/a>.<\/p>\n
LCL (Less than Container Load)<\/strong> \u2013 Goods from several shippers share one container. You pay for the space you use, by CBM.<\/p>\n
TEU and FEU<\/strong> \u2013 Twenty-foot equivalent unit and forty-foot equivalent unit. Standard units for counting containers. A 40ft container is 2 TEU. See shipping container dimensions<\/a>.<\/p>\n
High cube (HQ or HC)<\/strong> \u2013 A container about one foot taller than standard, giving more volume for light cargo.<\/p>\n
CY (Container Yard)<\/strong> \u2013 The area at a port terminal where full containers are received and stored before loading.<\/p>\n
CFS (Container Freight Station)<\/strong> \u2013 A warehouse where LCL cargo is received, consolidated into containers, or unpacked at destination.<\/p>\n
Konsolidierung<\/strong> \u2013 Combining goods from several suppliers or shippers into one shipment or container.<\/p>\n
Devanning (stripping)<\/strong> \u2013 Unloading cargo from a container.<\/p>\n
VGM (Verified Gross Mass)<\/strong> \u2013 The verified total weight of a packed container. Under the SOLAS rules, the shipper must declare it before the container is loaded on a ship.<\/p>\n
Cut-off<\/strong> \u2013 The deadline for delivering cargo, documents or VGM before a sailing. Miss it and the cargo rolls to the next ship.<\/p>\n
ETD \/ ETA<\/strong> \u2013 Estimated time of departure and estimated time of arrival.<\/p>\n
Transshipment<\/strong> \u2013 Moving cargo from one ship to another at an intermediate port on the way to its destination.<\/p>\n
Rolled cargo<\/strong> \u2013 Cargo that was booked but not loaded on the planned ship, usually because of overbooking, and moved to a later sailing.<\/p>\n
NVOCC (Non-Vessel Operating Common Carrier)<\/strong> \u2013 A company that issues its own bills of lading and sells ocean transport but does not operate ships. Many freight forwarders are also NVOCCs.<\/p>\n
Air Freight and Express Terms<\/h2>\n
Chargeable weight<\/strong> \u2013 The weight you are billed for: the actual weight or the volumetric weight, whichever is higher. See chargeable weight calculator<\/a>.<\/p>\n
Volumetric weight (dimensional weight)<\/strong> \u2013 A weight calculated from the size of a package: length \u00d7 width \u00d7 height in cm, divided by 6,000 for air freight or 5,000 for express.<\/p>\n
Luftfracht<\/strong> \u2013 Cargo shipped on passenger or cargo planes, usually 5\u201310 days door to door from China. See air freight vs sea freight<\/a>.<\/p>\n
Express (courier)<\/strong> \u2013 Door-to-door service by companies such as DHL, UPS and FedEx, with customs clearance included. Best for small, urgent shipments.<\/p>\n
Freight Charges and Fees<\/h2>\n
Ocean freight (O\/F)<\/strong> \u2013 The base price charged by the shipping line to carry a container or LCL cargo from port to port.<\/p>\n
THC (Terminal Handling Charge)<\/strong> \u2013 A fee for handling containers at the port terminal. Charged at both origin and destination.<\/p>\n
BAF (Bunker Adjustment Factor)<\/strong> \u2013 A fuel surcharge that changes with the price of ship fuel.<\/p>\n
GRI (General Rate Increase)<\/strong> \u2013 An increase in freight rates announced by shipping lines, usually from a set date.<\/p>\n
PSS (Peak Season Surcharge)<\/strong> \u2013 An extra charge during busy periods, typically before Christmas and Chinese New Year.<\/p>\n
Demurrage<\/strong> \u2013 A charge for leaving a full container at the terminal beyond the free days. See demurrage and detention<\/a>.<\/p>\n
Detention<\/strong> \u2013 A charge for keeping the carrier’s container outside the terminal beyond the free days, for example at your warehouse.<\/p>\n
Freight prepaid \/ freight collect<\/strong> \u2013 Prepaid means the freight is paid at origin, usually by the shipper. Collect means it is paid at destination by the consignee.<\/p>\n
Origin charges \/ destination charges<\/strong> \u2013 Local fees at each end of the journey, such as THC, documentation and customs fees.<\/p>\n
W\/M (Weight or Measurement)<\/strong> \u2013 The basis for LCL rates: you pay per cubic metre or per 1,000 kg, whichever is greater.<\/p>\n
Customs and Compliance Terms<\/h2>\n
HS code<\/strong> \u2013 The Harmonized System number that classifies a product for customs. The first six digits are international; countries add more digits. See how to find an HS code<\/a>.<\/p>\n
Import duty (tariff)<\/strong> \u2013 A tax on imported goods, usually a percentage of their customs value. See US tariffs on Chinese goods<\/a>.<\/p>\n
Customs clearance<\/strong> \u2013 Declaring goods to customs, paying duties and taxes, and getting them released. See customs clearance and delivery<\/a>.<\/p>\n
Customs broker<\/strong> \u2013 A licensed company that files customs declarations for importers.<\/p>\n
Importer of record (IOR)<\/strong> \u2013 The party legally responsible for an import, including paying duties and following import rules.<\/p>\n
Customs bond<\/strong> \u2013 In the USA, a guarantee to US Customs that duties and penalties will be paid. Needed for most commercial imports. See ISF filing and customs bonds<\/a>.<\/p>\n
ISF (Importer Security Filing, 10+2)<\/strong> \u2013 An advance filing for ocean shipments to the USA, due 24 hours before loading.<\/p>\n
EORI number<\/strong> \u2013 The customs ID needed to import into the UK or the EU. See EORI number guide<\/a>.<\/p>\n
De minimis<\/strong> \u2013 A value below which imports enter free of duty or with simpler clearance. The thresholds and who can use them are changing in several countries, and the USA no longer applies de minimis to goods from China. See importing from China to the USA<\/a>.<\/p>\n
General average<\/strong> \u2013 A maritime rule where all cargo owners share the cost of saving a ship in an emergency, even if their goods are not damaged. See cargo insurance<\/a>.<\/p>\n
Cargo and Packing Terms<\/h2>\n
CBM (cubic metre)<\/strong> \u2013 The unit used to measure cargo volume: length \u00d7 width \u00d7 height in metres. See how to calculate CBM<\/a>.<\/p>\n
Gross weight \/ net weight<\/strong> \u2013 Gross weight includes packaging. Net weight is the goods alone.<\/p>\n
Pallet<\/strong> \u2013 A flat wooden or plastic base for stacking and moving cartons with a forklift. Wooden pallets must be heat-treated and marked under the ISPM 15 standard for most export markets.<\/p>\n
Shipping mark<\/strong> \u2013 The marks printed on each carton, such as the consignee, destination, carton number and handling symbols, so the cargo can be identified. See packing and labelling<\/a>.<\/p>\n
Cargo insurance<\/strong> \u2013 Insurance for goods in transit, usually at 110% of the CIF value. See cargo insurance for China shipments<\/a>.<\/p>\n
Intermodal transport<\/strong> \u2013 Moving goods in the same container by more than one mode, such as ship, rail and truck, without unpacking. See China\u2013Europe rail freight<\/a>.<\/p>\n
Out of gauge (OOG)<\/strong> \u2013 Cargo too large for a standard container, shipped on flat rack or open top containers, or as breakbulk.<\/p>\n
Breakbulk<\/strong> \u2013 Cargo loaded piece by piece onto a ship instead of in containers, such as machinery or steel.<\/p>\n
To see these terms in action, read how to track a shipment from China<\/a>, including what each tracking status means.<\/p>\n