Whether you’re a beginner deciphering your first logistics glossary or a pro streamlining your supply chain terminology, this guide combines clear explanations, real world examples, and pro tips to help you navigate global logistics with confidence.
Core Terms
1. Bill of Lading (B/L)
A legal contract issued by a carrier detailing the type, quantity, and destination of goods, serving as a receipt and proof of ownership. Example: A B/L for electronics from Shanghai to New York ensures customs clearance and ownership transfer. Tip: Verify all details before issuance to avoid port delays.
2. Waybill
A Waybill is a document issued by a carrier detailing the shipment’s contents, origin, destination, and transport terms. Unlike a Bill of Lading, it’s non-negotiable and doesn’t confer ownership, often used for simpler shipments. Example: A waybill tracks a domestic parcel from Shanghai to Beijing without ownership transfer. Tip: Use a waybill for straightforward shipments to reduce paperwork complexity.
3. Air Waybill (AWB)
The Air Waybill confirms an airline has your cargo and outlines air transport terms. Non-negotiable but trackable, it’s vital for urgent shipments. Example: A delayed AWB for electronics from Shanghai to London could halt a product launch. Tip: Double check AWB details before takeoff.
4. Freight Forwarder
A logistics provider organizing your shipment’s journey, from booking carriers to clearing customs. Example: A forwarder coordinates a textile shipment from Mumbai to Miami. Tip: Choose one with global expertise and strong carrier networks. Explore our blog on Questions Every Importer Should Ask Their Freight Forwarder for additional information.
5. Consignee
The recipient of your shipment, usually the buyer or their agent. Tip: Ensure the consignee’s details match across all paperwork to avoid delays.
6. Shipper
The sender (you or your supplier) preparing goods and paperwork. Example: A shipper exporting wine from Bordeaux ensures accurate paperwork for New York customs. Tip: Verify documents for accuracy to prevent clearance issues.
7. Carrier
The company transporting goods, like a shipping line, airline, or trucking firm. Example: Maersk, a carrier, moves containers globally. Tip: Compare carriers for cost, reliability, and transit times.
Money-Saving Terms
8. Customs Duty
Taxes imposed by governments on imports or exports, based on goods’ value or type. Example: Incorrect HS codes for electronics can increase duties. Tip: Use the World Customs Organization’s HS database (www.wcoomd.org) for accurate classification.
9. Demurrage
Fees for exceeding free time to unload cargo at a port. Tip: Check port-specific free time limits (often 3–7 days) and plan unloading to avoid penalties. Get more Tips to avoid it in our blog Avoiding Demurrage Charges
10. Detention
Fees for keeping a container too long outside the port. Example: Holding a container in a warehouse past free time adds costs. Tip: Return containers promptly and coordinate with your forwarder.
11. Wharfage
Fees charged by ports for using docks to load or unload. Example: Wharfage at Long Beach port may vary by cargo type. Tip: Factor wharfage into budgets and verify rates with port authorities or your freight forwarder.
12. Freight Rate
The cost to transport goods, based on weight, distance, or mode. Example: Ocean freight rates fluctuate due to fuel costs or demand. Tip: Negotiate rates with carriers and monitor market trends. Learn more in our blog about the Factors that Influence Ocean Freight Rates.
13. Freight All Kinds (FAK)
A pricing strategy for mixed cargo types at a flat rate. Example: Simplifies costs for varied shipments. Tip: Negotiate FAK rates for savings.
Containers and Cargo
14. FCL (Full Container Load)
Booking an entire container for one shipper, ideal for large shipments. Example: Shipping 10,000 kg of textiles from Mumbai to Miami. Tip: Compare FCL vs. LCL costs for savings. Explore these differences more in our guide to shipping costs.
15. LCL (Less than Container Load)
Combining smaller shipments to fill a container, saving costs. Example: Sharing a container for textiles from Mumbai to Miami reduces expenses. Tip: Use LCL for small, non-urgent loads but expect longer coordination times.
16. Reefer Container
A refrigerated container for perishables like fruit or pharmaceuticals. Example: Shipping avocados from Mexico to Europe requires precise temperature control. Tip: Verify reefer settings before loading.
17. Break Bulk
Non-containerized cargo like pallets or machinery, loaded individually. Example: Shipping wind turbine blades often uses break bulk. Tip: Use proper dunnage to protect cargo.
18. TEU (Twenty-Foot Equivalent Unit)
A standard measure for containers, based on a 20-foot unit. Example: A 40-footer equals two TEUs. Tip: Check if charges are per TEU or container for cost planning.
Trade Rules
19. Incoterms
Incoterms (International Commercial Terms) define buyer-seller responsibilities in trade. Example: FOB means the seller covers costs to the port; CIF includes insurance and freight. Tip: Review the ICC’s Incoterms rules (www.iccwbo.org). Dive deeper into incoterms with our Incoterms guide and Incoterms table.
20. Certificate of Origin
This proves where your goods were made, key for trade agreements. Example: A certificate for Chilean wine ensures tariff breaks in some countries. Tip: Verify country specific requirements with your trade authority.
21. Commercial Invoice
The seller’s bill, listing goods, value, and terms. Example: A vague invoice can delay customs clearance. Tip: Include detailed descriptions for smooth processing.
22. Export License
A permit for shipping restricted goods or to certain countries. Example: Tech exports to embargoed nations need licenses. Tip: Check with your government’s trade authority.
23. Customs Broker
A licensed agent managing customs clearance. Example: A broker speeds up a toy shipment clearance in Los Angeles. Tip: Hire an experienced broker for compliance.
24. Customs Clearance
The process of getting goods through customs. Example: Missing documents delayed a shipment in Rotterdam. Tip: Prepare all paperwork in advance.
Transport Tactics
25. Intermodal Transport
Using multiple transport modes (e.g., truck, rail, ship) under one contract, often with different operators. Example: Goods from Shanghai to Chicago via ship and rail. Tip: Ensure operator coordination for efficiency.
26. Multimodal Transport
Using multiple modes with separate contracts, coordinated by one operator. Example: Separate trucking and shipping contracts for flexibility. Tip: Multimodal suits complex routes.
27. Drayage
Short haul transport, like port to warehouse. Example: Moving containers from Long Beach to a nearby depot. Tip: Optimize drayage to cut delays.
28. Transshipment
Transferring cargo between vessels mid journey. Example: Goods from Vietnam to Europe may switch ships in Singapore. Tip: Track transshipment points to avoid mix ups.
29. On-Carriage
Inland transport from port to final destination. Example: Trucking goods from Rotterdam to Berlin. Tip: Coordinate with drayage for seamless delivery.
Documentation
30. Packing List
Details your shipment’s contents, weights, and dimensions. Example: A missing packing list can delay a furniture shipment in Dubai. Tip: Cross-check with the commercial invoice.
31. Pro Forma Invoice
A preliminary quote before shipping. Example: Used to secure a letter of credit. Tip: Clarify terms to avoid disputes.
32. Warehouse Receipt
Proof goods are stored in a warehouse. Example: Confirms electronics are stored before sale. Tip: Verify inventory before release.
33. Letter of Credit (L/C)
A bank’s payment guarantee if conditions are met. Example: Ensures payment for electronics from China. Tip: Verify L/C terms with your bank.
34. Cargo Manifest
A carrier issued list of goods on a vessel. Example: Used by customs to verify a ship’s cargo. Tip: Ensure accuracy to avoid inspections.
35. Insurance Certificate
Proof of active cargo insurance. Example: Covers damage to a shipment during a storm. Tip: Confirm coverage before shipping.
Weights and Measures
36. Gross Weight
Total weight of cargo including packaging and container. Example: Overstating gross weight can hike costs. Tip: Weigh accurately to optimize shipping. Learn more about container dimensions and specifications.
37. Tare Weight
Empty container weight, marked on the container’s door. Example: Subtract tare to calculate cargo weight. Tip: Check container markings for accuracy. Learn more about container dimensions and specifications.
38. Volumetric Weight
Calculated weight based on shipment volume. Example: Bulky pillows may cost more than their actual weight. Tip: Compress cargo to lower volumetric weight.
39. Overage
Receiving more goods than listed. Example: Extra units require paperwork updates. Tip: Report overages promptly.
40. Shortage
Receiving less than listed. Example: Missing boxes trigger claims. Tip: Inspect shipments upon arrival.
Specialized Services
41. Bonded Warehouse
Stores dutiable goods without immediate customs duties. Example: Storing electronics tax-free until sold. Tip: Use for cash flow flexibility.
42. Container Freight Station (CFS)
Where LCL shipments are packed/unpacked for cost efficiency. Example: Textiles consolidated in a Mumbai CFS. Tip: Choose a reliable CFS to avoid delays
43. Dangerous Goods (DG)
Risky items like chemicals requiring special handling. Example: Batteries require DG certification. Tip: Follow IATA guidelines.
44. Non-Vessel Operating Common Carrier (NVOCC)
A carrier booking ship space without owning vessels. Example: An NVOCC books space for small shippers. Tip: NVOCCs offer flexibility on smaller shipments.
Ports and Places
45. Port of Loading
Where cargo boards the ship. Example: Shanghai for Asian exports. Tip: Confirm port capacity before booking.
46. Port of Discharge
Where cargo unloads. Example: Rotterdam for European imports. Tip: Check port schedules for efficiency.
47. Bonded Carrier
Transports goods under a customs bond. Example: Moves goods duty-free to a warehouse. Tip: Use for deferred duties.
Emerging Trends
48. Carbon Footprint
The environmental impact of shipping, measured in CO2 emissions. Example: Choosing a low-emission carrier for a shipment from China to Europe reduces your footprint. Tip: Use carbon calculators to comply with EU emissions regulations.
49. Electronic Bill of Lading (eB/L)
A digital version of the B/L, stored on platforms like blockchain for secure processing. Example: An eB/L for a shipment from Singapore to Los Angeles cuts document transfer time. Tip: Use secured platforms to issue eB/L and save time and money
50. Smart Container
A container with IoT sensors for real-time tracking of location or temperature. Example: A smart reefer ensures pharmaceuticals stay at 2–8°C. Tip: Invest in smart containers for high-value cargo.
FAQs: Your Top Shipping Questions Answered
1. What’s the difference between FCL and LCL?
FCL (Full Container Load) books an entire container for one shipper, ideal for large, urgent shipments. LCL (Less than Container Load) combines smaller shipments, saving costs but adding coordination time. Pro Tip: Choose FCL for speed, LCL for savings on small loads. Explore the Benefits of Consolidated Shipping for Small Businesses.
2. How do Incoterms affect my shipping costs?
Incoterms like FOB (seller covers costs to port) or CIF (seller includes insurance and freight) define who pays for shipping, insurance, and duties. Pro Tip: Review the ICC’s Incoterms rules (www.iccwbo.org) to select cost effective terms. Additional information can be found also in our blog How to Choose the Right Incoterms for Your Shipments and in the Incoterms table.
3. Why is a Bill of Lading critical for shipping?
A Bill of Lading is your contract, receipt, and ownership proof. Without it, customs may hold your cargo, delaying delivery by days or weeks. Pro Tip: Always have a backup copy and verify details before shipping.
4. What documents are needed for customs clearance?
You’ll need a Commercial Invoice, Packing List, Bill of Lading or Air Waybill, Certificate of Origin, and sometimes an Export License or Phytosanitary Certificate. Pro Tip: Work with an experienced customs broker to ensure compliance and avoid delays.
5. How can I avoid demurrage and detention fees?
Plan unloading schedules, coordinate with your freight forwarder, and return containers within free time limits (usually 3–7 days, varying by port). Pro Tip: Use real-time tracking to monitor port and container yard timelines, as explained in our Managing Shipping Delays: A Comprehensive Guide.
6. What’s the difference between freight collect and freight prepaid?
Freight Collect means the consignee pays shipping costs on delivery, while Freight Prepaid means the shipper pays upfront. Pro Tip: Use prepaid to build buyer trust, but confirm collect terms with reliable buyers to avoid payment disputes.
7. How do I handle dangerous goods (DG) safely?
Dangerous Goods like chemicals or batteries require special handling, labeling, and documentation per IATA or IMO guidelines. Pro Tip: Consult your forwarder and certify DG shipments to avoid fines or safety risks.
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Further Reading
All Forward Freight Dictionary
