Freight Terminology

Find all Freight, Logistics and Supply Chain Terminology and Definition’s easy with UK Haulier. All major Terms below from Demurrage, Cabotage, BAF’s, CAF’s, Bill of Lading, EDI, FEU, Intermodal, Terminal Charge and many more. Simply search below to to view a breakdown of the logistics, freight and shipping terminology and phrases you may encounter when dealing with Shipping lines, Freight Forwarders and Haulage Companies.



AAR Abbreviation for Against All Risks (insurance clause)
Abandon A proceeding wherein a shipper/consignee seeks authority to abandon all or parts of their cargo
Act of God An act beyond human control, such as lightning, flood or earthquake
Ad Valorem A term from Latin meaning, “according to value
Advice of Shipment A notice sent to a local or foreign buyer advising that shipment has gone forward and containing details of packing, routing, etc. A copy of the invoice is often enclosed and, if desired, a copy of the bill of lading
Advising Bank A bank operating in the seller’s country, that handles letters of credit in behalf of a foreign bank
Advising Bank A bank operating in the seller’s country, that handles letters of credit in behalf of a foreign bank
Affreightment Contract of an agreement by an ocean carrier to provide cargo space on a vessel at a specified time and for a specified price to accommodate an exporter or importer.
Agent (Agt.) A person authorized to transact business for and in the name of another person or company. Types of agent are:(1) brokers, (2) commission merchants, (3) resident buyers, (4) sales agents, (5) manufacturer’s representatives.
Air Waybill The forwarding agreement or carrying agreement between shipper and air carrier and is issued only in nonnegotiable form.
Alongside A phrase referring to the side of a ship. Goods delivered “alongside” are to be placed on the dock or barge within reach of the transport ship’s tackle so that they can be loaded.
Ambient Temperature The temperature of a surrounding body. The ambient temperature of a container is the atmospheric temperature to which it is exposed.
AMS The U.S. Customs’ “Automated Manifest System.”
Anti-Dumping Duty A tariff imposed to discourage sale of foreign goods, subsidized to sell at low prices detrimental to local manufacturers.
Arrival Notice A notification by carrier of ship’s arrival to the consignee, the “Notify Party,” and – when applicable – the “Also Notify Party.” These parties in interest are listed in blocks 3, 4 and 10, respectively, of the Bill of Lading.
B/L Abbreviation for “Bill of Lading.”
BAF Abbreviation for “Bunker Adjustment Factor.” Used to compensate steamship lines for fluctuating fuel costs. Sometimes called “Fuel Adjustment Factor” or FAF.
Bank Guarantee Guarantee issued by a bank to a carrier to be used in lieu of lost or misplaced original negotiable bill of lading.
Barratry An act committed by the master or mariners of a vessel, for some unlawful or fraudulent purpose, contrary to their duty to the owners, whereby the latter sustain injury. It may include negligence, if so gross as to evidence fraud.
Base Rate A tariff term referring to ocean rate less accessorial charges, or simply the base tariff rate.
Beneficiary – Entity to whom money is payable.

– The entity for whom a letter of credit is issued.

– The seller and the drawer of a draft.
BIFA British International Freight Association.
Bilateral A contract term meaning both parties agree to provide something for the other.
Bill of Exchange In the United States, commonly known as a “Draft.” However, bill of exchange is the correct term.
Bill of Lading Port of Discharge Port where cargo is discharged from means of transport.
Bill of Sale Confirms the transfer of ownership of certain goods to another person in return for money paid or loaned.
Cabotage Water transportation term applicable to shipments between ports of a nation; commonly refers to coast-wise or inter-coastal navigation or trade. Many nations, including the United States, have cabotage laws which require national flag vessels to provide domestic interport service.
CAF Abbreviation for “Currency Adjustment Factor.” A charge, expressed as a percentage of a base rate, that is applied to compensate ocean carriers of currency fluctuations.
Cargo Manifest A manifest that lists all cargo carried on a specific vessel voyage.
Carnet A Customs document permitting the holder to temporarily carry or send merchandise into certain foreign countries (for display, demonstration or similar purposes) without paying duties or posting bonds. Any of various Customs documents required for crossing some international borders.
Carrier Any person or entity who, in a contract of carriage, undertakes to perform or to procure the performance of carriage by rail, road, sea, air, inland waterway or by a combination of such modes.
Carrier’s Certificate A certificate required by U.S. Customs to release cargo properly to the correct party.
Cartage Usually refers to intra city hauling on drays or trucks.
Cash Against Documents (CAD) Method of payment for goods in which documents transferring title are given the buyer upon payment of cash to an intermediary acting for the seller, usually a commission house.
Certification of Origin A certified document showing the origin of goods; used in international commerce.
CFS Abbreviation for “Container Freight Station.” A shipping dock where cargo is loaded (“stuffed”) into or unloaded (“stripped”) from containers. Generally, this involves less than containerload shipments, although small shipments destined to same consignee are often consolidated. Container reloading from/to rail or motor carrier equipment is a typical activity.
Claim A demand made upon a transportation line for payment on account of a loss sustained through its alleged negligence.
Clean Bill of Lading A receipt for goods issued by a carrier with an indication that the goods were received in “apparent good order and condition,” without damage or other irregularities. If no notation or exception is made, the B/L is assumed to be “cleaned.”
CLECAT European Association for Forwarding, Transport, Logistics and Customs Services.
COGSA Carriage of Goods by Sea Act. U.S. federal codification passed in 1936 which standardizes carrier’s liability under carrier’s bill of lading. U.S. enactment of The Hague Rules.
Commercial Invoice Represents a complete record of the transaction between exporter and importer with regard to the goods sold. Also reports the content of the shipment and serves as the basis for all other documents about the shipment.
Commodity Article shipped. For dangerous and hazardous cargo, the correct commodity identification is critical.
Common Carrier A transportation company which provides service to the general public at published rates.
Common Law Law that derives its force and authority from precedent, custom and usage rather than from statutes, particularly with reference to the laws of England and the United States.
Customs Government agency charged with enforcing the rules passed to protect the country’s import and export revenues.
Customs Bonded Warehouse A warehouse authorized by Customs to receive duty-free merchandise.
Customs Entry All countries require that the importer make a declaration on incoming foreign goods. The importer then normally pays a duty on the imported merchandise. The importer’s statement is compared against the carrier’s vessel manifest to ensure that all foreign goods are properly declared.
Customs Invoice A form requiring all data in a commercial invoice along with a certificate of value and/or a certificate of origin. Required in a few countries (usually former British territories) and usually serves as a seller’s commercial invoice.
Demurrage A penalty charge against shippers or consignees for delaying the carrier’s equipment beyond the allowed free time. The free time and demurrage charges are set forth in the charter party or freight tariff. – See also Detention and Per Diem.
Density The weight of cargo per cubic foot or other unit.
Detention A penalty charge against shippers or consignees for delaying carrier’s equipment beyond allowed time. Demurrage applies to cargo; detention applies to equipment. See Per Diem.
Devanning The unloading of a container or cargo van.
DGSA Dangerous Goods Safety Advisor.
Discrepancy Letter of Credit When documents presented do not conform to the requirements of the letter of credit (L/C), it is referred to as a “discrepancy.” Banks will not process L/C’s which have discrepancies. They will refer the situation back to the buyer and/or seller and await further instructions.
Dock Receipt A form used to acknowledge receipt of cargo and often serves as basis for preparation of the ocean bill of lading.
Documents Against Acceptance (D/A) Instructions given by a shipper to a bank indicating that documents transferring title to goods should be delivered to the buyer only upon the buyer’s acceptance of the attached draft.
Documents Against Payment (D/P) An indication on a draft that the documents attached are to be released to the drawee only on payment.
Door-to-Door Through transportation of a container and its contents from consignor to consignee. Also known as House to House. Not necessarily a through rate.
Draft, Bank An order issued by a seller against a purchaser; directs payment, usually through an intermediary bank. Typical bank drafts are negotiable instruments and are similar in many ways to checks on checking accounts in a bank.
Draft, Clean A draft to which no documents are attached.
Draft, Date A draft that matures on a fixed date, regardless of the time of acceptance.
Draft, Discounted A time draft under a letter of credit that has been accepted and purchased by a bank at a discount.
Draft, Sight A draft payable on demand upon presentation.
Draft, Time A draft that matures at a fixed or determinable time after presentation or acceptance.
Drawback A partial refund of an import fee. Refund usually results because goods are re-exported from the country that collected the fee.
Drawee The individual or firm that issues a draft and thus stands to receive payment.
Drayage Charge made for local hauling by dray or truck. Same as Cartage.
EDI Abbreviation for “Electronic Data Interface.” Generic term for transmission of transactional data between computer systems. EDI is typically via a batched transmission, usually conforming to consistent standards.
Entry Customs documents required to clear an import shipment for entry into the general commerce of a country.
Ex – “Form” When used in pricing terms such as “Ex Factory” or “Ex Dock,” it signifies that the price quoted applies only at the point of origin indicated.
Exception Notations made when the cargo is received at the carrier’s terminal or loaded aboard a vessel. They show any irregularities in packaging or actual or suspected damage to the cargo. Exceptions are then noted on the bill of lading.
Expiry Date Issued in connection with documents such as letters of credit, tariffs etc. to advise that stated provisions will expire at a certain time.
Export Declaration A government document declaring designated goods to be shipped out of the country. To be completed by the exporter and filed with the U.S. Government.
Export License A government document which permits the “Licensee” to engage in the export of designated goods to certain destinations.
F.D.A. Food and Drug Administration.
FCL Abbreviation for “Full Container Load.”
Feeder Service Cargo to/from regional ports are transferred to/from a central hub port for a long-haul ocean voyage.
Feeder Vessel A short-sea vessel which transfers cargo between a central “hub” port and smaller “spoke” ports.
FEU Abbreviation for “Forty-Foot Equivalent Units.” Refers to container size standard of forty feet. Two twenty-foot containers or TEU’s equal one FEU.
FIATA International Federation of Freight Forwarders Associations
Force Majeure A short-sea vessel which transfers cargo between a central “hub” port and smaller “spoke” ports.
Foul Bill of Lading A receipt for goods issued by a carrier with an indication that the goods were damaged when received. Compare Clean Bill of Lading.
Free Astray An astray shipment (a lost shipment that is found) sent to its proper destination without additional charge.
Free Time That amount of time that a carrier’s equipment may be used without incurring additional charges. (See Storage, Demurrage or Per Diem.)
Freight Bill A document issued by the carrier based on the bill of lading and other information; used to account for a shipment operationally, statistically, and financially. An Invoice.
Freight Forwarder A person whose business is to act as an agent on behalf of the shipper. A freight forwarder frequently makes the booking reservation.
Gateway Industry-related: A point at which freight moving from one territory to another is interchanged between transportation lines.
General Average Expenses and damages incurred as the result of damage to a ship and its cargo and/or of taking direct action to prevent initial or further damage to the ship and its cargo. These expenses and damages are paid by those with an interest in the ship and its cargo in proportion to their values exposed to the common danger.
GRI Abbreviation for “General Rate Increase.” Used to describe an across-the-board tariff rate increase implemented by conference members and applied to base rates.
Groupage A consolidation service, putting small shipments into containers for shipment.
Harmonized System of Codes (HS) An international goods classification system for describing cargo in international trade under a single commodity-coding scheme. Developed under the auspices of the Customs Cooperations Council (CCC), an international Customs organization in Brussels, this code is a hierarchically structured product nomenclature containing approximately 5,000 headings and subheadings. It is organized into 99 chapters arranged in 22 sections. Sections encompass an industry (e.g., Section XI, Textiles and Textile Articles); chapters encompass the various materials and products of the industry (e.g., Chapter 50, Silk; Chapter 55, Manmade Staple Fibers; Chapter 57, Carpets). The basic code contains four-digit headings and six-digit subheadings. Many countries add digits for Customs tariff and statistical purposes. In the United States, duty rates will be the eight-digit level; statistical suffixes will be at the ten-digit level. The Harmonized System (HS) is the current U.S. tariff schedule (TSUSA) for imports and is the basis for the ten-digit Schedule B export code.
House-to-Pier Cargo loaded into a container by the shipper under shipper’s supervision. When the cargo is exported, it is unloaded at the foreign pier destination.
I.M.C.O International Maritime Consultative Organization. A forum in which most major maritime nations participate and through which recommendations for the carriage of dangerous goods, bulk commodities, and maritime regulations become internationally acceptable.
I.M.D.G Code International Maritime Dangerous Goods Code. The regulations published by the IMO for transporting hazardous materials internationally.
IATA International Air Transport Association
ICC Abbreviation for (1) International Chamber of Commerce.
IIFA Irish International Freight Association
Import To receive goods from a foreign country.
Import License A document required and issued by some national governments authorizing the importation of goods.
In Bond Cargo moving under Customs control where duty has not yet been paid.
Indemnity Bond An agreement to hold a carrier harmless with regard to a liability.
Inherent Vice An insurance term referring to any defect or other characteristic of a product that could result in damage to the product without external cause (for example, instability in a chemical that could cause it to explode spontaneously). Insurance policies may exclude inherent vice losses.
Inspection Certificate A certificate issued by an independent agent or firm attesting to the quality and/or quantity of the merchandise being shipped. Such a certificate is usually required in a letter of credit for commodity shipments.
Insurance with Average-clause This type of clause covers merchandise if the damage amounts to three percent or more of the insured value of the package or cargo. If the vessel burns, sinks, collides, or sinks, all losses are fully covered. In marine insurance, the word average describes partial damage or partial loss.
Insurance, All-risk This type of insurance offers the shipper the broadest coverage available, covering against all losses that may occur in transit.
Insurance, General-Average In water transportation, the deliberate sacrifice of cargo to make the vessel safe for the remaining cargo. Those sharing in the spared cargo proportionately cover the loss.
Insurance, Particular Average A Marine insurance term to refer to partial loss on an individual shipment from one of the perils insured against, regardless of the balance of the cargo. Particular average insurance can usually be obtained, but the loss must be in excess of a certain percentage of the insured value of the shipment, usually three to five percent, before a claim will be allowed by the company.
Intermodal Used to denote movements of cargo containers interchangeably between transport modes, i.e., motor, water, and air carriers, and where the equipment is compatible within the multiple systems.
Irrevocable Letter of Credit Letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee and which cannot be revoked without joint agreement of both the buyer and the seller.
Issuing Bank Bank that opens a straight or negotiable letter of credit and assumes the obligation to pay the bank or beneficiary if the documents presented are in accordance with the terms of the letter of credit.
Issuing Carrier The carrier issuing transportation documents or publishing a tariff.
Landbridge Movement of cargo by water from one country through the port of another country, thence, using rail or truck, to an inland point in that country or to a third country. As example, a through movement of Asian cargo to Europe across North America.
Landed Cost The total cost of a good to a buyer, including the cost of transportation.
Landing Certificate Certificate issued by consular officials of some importing countries at the point or place of export when the subject goods are exported under bond.
LCL Abbreviation for “Less than Container Load.” The quantity of freight which is less than that required for the application of a container load rate. Loose Freight.
Less Than Truckload Also known as LTL or LCL.
Letter of Indemnity In order to obtain the clean bill of lading, the shipper signs a letter of indemnity to the carrier on the basis of which may be obtained the clean bill of lading, although the dock or mate’s receipt showed that the shipment was damaged or in bad condition.
Licenses – Some governments require certain commodities to be licensed prior to exportation or importation. Clauses attesting to compliance are often required on the B/L.

– Various types issued for export (general, validated) and import as mandated by government(s).
Lien A legal claim upon goods for the satisfaction of some debt or duty.
Marine Insurance Broadly, insurance covering loss or damage of goods at sea. Marine insurance typically compensates the owner of merchandise for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier.
Mini Landbridge An intermodal system for transporting containers by ocean and then by rail or motor to a port previously served as an all water move (e.g., Hong Kong to New York over Seattle).
Minimum Charge The lowest charge that can be assessed to transport a shipment.
Multimodal Synonymous for all practical purposes with “Intermodal.”
Terminal Charge A charge made for a service performed in a carrier’s terminal area.
TEU Abbreviation for “Twenty foot Equivalent Unit.”
TIR “Transport International par la Route.” Road transport operating agreement among European governments and the United States for the international movement of cargo by road. Display of the TIR carnet allows sealed containerloads to cross national frontiers without inspection.
Transship To transfer goods from one transportation line to another, or from one ship to another.
UCP Abbreviation for the “Uniform Customs and Practice for Documentary Credits,” published by the International Chamber of Commerce. This is the most frequently used standard for making payments in international trade; e.g., paying on a Letter of Credit. It is most frequently referred to by its shorthand title: UCP No. 500. A revised publication reflecting recent changes in the transportation and banking industries, such as electronic transfer of funds. UCP No. 600 will be introduced in July 2007.
UN/EDIFACT United Nations EDI for Administration, Commerce and Transport. EDI Standards are developed and supported by the UN for electronic message (data) interchange on an international level.
Uniform Customs and Practices for Documentary Credits (UCP) Rules for letters of credit drawn up by the Commission on Banking Technique and Practices of the International Chamber of Commerce in consultation with the banking associations of many countries. See Terms of Payment.
W.M. (W/M) Abbreviation for “Weight or Measurement;” the basis for assessing freight charges. Also known as “worm.” The rate charged under W/M will be whichever produces the highest revenue between the weight of the shipment and the measure of the shipment. York-Antwerp Rules of 1974 Established the standard basis for adjusting general average and stated the rules for adjusting claims.
War Risk Insurance coverage for loss of goods resulting from any act of war.
Waybill (WB) A document prepared by a transportation line at the point of a shipment; shows the point of the origin, destination, route, consignor, consignee, description of shipment and amount charged for the transportation service. It is forwarded with the shipment or sent by mail to the agent at the transfer point or waybill destination. Abbreviation is WB. Unlike a bill of lading, a waybill is NOT a document of title.
Without Recourse A phrase preceding the signature of a drawer or endorser of a negotiable instrument; signifies that the instrument is passed onto subsequent holders without any liability to the endorser in the event of nonpayment or nondelivery.

This content gives general guidance only and should not be regarded as a complete or authoritative statement of the law. The guidance will be updated to reflect any developments in new legislation or case law.