Import Terms Explained
A plain-English guide to the key terms used in international freight, customs clearance, and shipping.
Incoterms
International Commercial Terms — a set of standardised trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers in international transactions. They specify who pays for freight, insurance, and customs clearance, and where risk transfers from seller to buyer.
EXW – Ex Works
The seller makes goods available at their premises (factory, warehouse, etc.). The buyer is responsible for all costs and risks from that point — including export clearance, freight, and import customs. Gives the buyer maximum control but maximum responsibility.
FCA – Free Carrier
The seller delivers goods to a named carrier at a specified location. Risk passes to the buyer once handed to the carrier. Export clearance is the seller’s responsibility. Suitable for all modes of transport including containerised sea freight.
FOB – Free On Board
The seller is responsible for loading goods onto the vessel at the named port of shipment. Risk and cost transfer to the buyer once on board. FOB is commonly used in China trade — the buyer arranges and pays for ocean freight, insurance, and UK import customs.
CIF – Cost, Insurance & Freight
The seller pays for the cost of goods, freight, and insurance to the named destination port. However, risk transfers to the buyer once goods are on board the vessel at origin. The buyer handles import customs at destination.
DAP – Delivered at Place
The seller is responsible for delivering goods to a named destination, ready for unloading. The seller covers all freight costs and risks up to the destination. The buyer handles import customs clearance and any import duties.
DDP – Delivered Duty Paid
The seller takes maximum responsibility — delivering goods to the buyer’s named location with all costs paid, including import duty and VAT. The buyer has minimal obligation. Used when sellers want to offer a fully landed price.
Bill of Lading (B/L)
A legal document issued by a carrier (shipping line) that serves three purposes: a receipt for goods loaded onto a vessel, a contract of carriage between shipper and carrier, and a document of title that can be used to claim goods at the destination port. Original B/Ls are required to release cargo.
Air Waybill (AWB)
The transport document for air freight, equivalent to a Bill of Lading for sea freight. Unlike a B/L, an AWB is non-negotiable — it cannot transfer ownership of goods. It serves as a receipt, a contract of carriage, and a customs declaration document.
Commercial Invoice
A document issued by the seller detailing the goods being sold, their value, quantity, and the parties involved. Used by customs authorities to assess import duty and VAT. Must accurately reflect the true transaction value — under-declaration is illegal.
Packing List
A detailed document accompanying a shipment that lists every item in each box or pallet, including weights and dimensions. Used by customs, carriers, and recipients to verify the contents of a shipment. Should match the commercial invoice exactly.
Certificate of Origin (COO)
A document certifying the country in which goods were manufactured. Used to determine applicable import duty rates under preferential trade agreements. For China-origin goods, a Form E COO can qualify shipments for preferential ASEAN rates where applicable.
HS Code (Harmonised System Code)
A standardised international system for classifying traded goods, developed by the World Customs Organisation. Each product is assigned a numeric code used by customs authorities worldwide to determine applicable duty rates, restrictions, and statistics. UK import declarations require a 10-digit commodity code.
EORI Number
Economic Operators Registration and Identification number — a unique ID required for all businesses importing or exporting goods to/from the UK. Assigned by HMRC, UK EORI numbers begin with “GB”. Free to apply for via the HMRC website; typically takes 3–5 working days.
Import Duty
A tax levied by HMRC on goods imported into the UK, calculated as a percentage of the customs value (usually the transaction value plus freight and insurance costs). Rates vary by commodity code and country of origin. Some goods qualify for zero or reduced duty under trade agreements.
Import VAT
Value Added Tax charged at the point of import into the UK, currently 20% on most goods. VAT-registered businesses can reclaim import VAT through their VAT return using Postponed VAT Accounting (PVA). Non-VAT registered importers must pay import VAT and cannot recover it.
Postponed VAT Accounting (PVA)
A UK government scheme allowing VAT-registered importers to account for import VAT on their VAT return rather than paying at the border. This significantly improves cash flow by deferring the VAT payment by up to 90 days. Available to all VAT-registered UK businesses.
Customs Entry / Import Declaration
A formal declaration submitted to HMRC electronically detailing the goods being imported, their value, origin, and applicable HS codes. Required for all commercial imports into the UK. Usually submitted by a licensed customs broker on behalf of the importer.
FCL – Full Container Load
A shipping arrangement where a single shipper books an entire container exclusively for their goods. Available in 20ft (approx. 25 CBM) and 40ft (approx. 55–67 CBM) sizes. More cost-effective than LCL for larger volumes and reduces the risk of damage from handling.
LCL – Less than Container Load
A shipping arrangement where multiple shippers share space in a single container. Cargo is consolidated at a Container Freight Station (CFS) at origin and deconsolidated at destination. Charged per CBM or per tonne (whichever is greater). Cost-effective for shipments under approximately 15 CBM.
CBM – Cubic Metre
The standard unit of measurement for sea freight volume. Calculated as Length (m) × Width (m) × Height (m). LCL freight rates are quoted per CBM. If the volumetric weight exceeds the actual weight, the higher figure is used for billing.
Demurrage
A charge levied by the shipping line when an importer fails to collect their container from the port within the agreed free days (typically 5–7 days). Demurrage accumulates daily and can become very expensive if customs clearance is delayed.
Detention
Similar to demurrage but charged when a container has been collected from the port but not returned to the shipping line’s depot within the agreed free time. Applies after the container has left the port terminal.
ETD / ETA
Estimated Time of Departure (ETD) is the scheduled date a vessel or aircraft is expected to leave the origin port or airport. Estimated Time of Arrival (ETA) is the expected date of arrival at the destination. Both are estimates and can change due to weather, port congestion, or operational issues.
Freight Forwarder
A company that organises shipments on behalf of importers and exporters, coordinating carriers, documentation, customs clearance, and delivery. Freight forwarders do not typically own aircraft or vessels but have relationships with carriers to book space. ASA Logistics acts as a freight forwarder for all international shipments.
Customs Broker
A licensed professional or company authorised to submit customs declarations to HMRC on behalf of importers and exporters. Customs brokers ensure goods are correctly classified, duties are accurately calculated, and all required documentation is in order. ASA Logistics provides customs brokerage at all major UK ports and airports.
Incoterms
International Commercial Terms — a set of standardised trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers in international transactions. They specify who pays for freight, insurance, and customs clearance, and where risk transfers from seller to buyer.
EXW – Ex Works
The seller makes goods available at their premises (factory, warehouse, etc.). The buyer is responsible for all costs and risks from that point — including export clearance, freight, and import customs. Gives the buyer maximum control but maximum responsibility.
FCA – Free Carrier
The seller delivers goods to a named carrier at a specified location. Risk passes to the buyer once handed to the carrier. Export clearance is the seller’s responsibility. Suitable for all modes of transport including containerised sea freight.
FOB – Free On Board
The seller is responsible for loading goods onto the vessel at the named port of shipment. Risk and cost transfer to the buyer once on board. FOB is commonly used in China trade — the buyer arranges and pays for ocean freight, insurance, and UK import customs.
CIF – Cost, Insurance & Freight
The seller pays for the cost of goods, freight, and insurance to the named destination port. However, risk transfers to the buyer once goods are on board the vessel at origin. The buyer handles import customs at destination.
DAP – Delivered at Place
The seller is responsible for delivering goods to a named destination, ready for unloading. The seller covers all freight costs and risks up to the destination. The buyer handles import customs clearance and any import duties.
DDP – Delivered Duty Paid
The seller takes maximum responsibility — delivering goods to the buyer’s named location with all costs paid, including import duty and VAT. The buyer has minimal obligation. Used when sellers want to offer a fully landed price.
Bill of Lading (B/L)
A legal document issued by a carrier (shipping line) that serves three purposes: a receipt for goods loaded onto a vessel, a contract of carriage between shipper and carrier, and a document of title that can be used to claim goods at the destination port. Original B/Ls are required to release cargo.
Air Waybill (AWB)
The transport document for air freight, equivalent to a Bill of Lading for sea freight. Unlike a B/L, an AWB is non-negotiable — it cannot transfer ownership of goods. It serves as a receipt, a contract of carriage, and a customs declaration document.
Commercial Invoice
A document issued by the seller detailing the goods being sold, their value, quantity, and the parties involved. Used by customs authorities to assess import duty and VAT. Must accurately reflect the true transaction value — under-declaration is illegal.
Packing List
A detailed document accompanying a shipment that lists every item in each box or pallet, including weights and dimensions. Used by customs, carriers, and recipients to verify the contents of a shipment. Should match the commercial invoice exactly.
Certificate of Origin (COO)
A document certifying the country in which goods were manufactured. Used to determine applicable import duty rates under preferential trade agreements. For China-origin goods, a Form E COO can qualify shipments for preferential ASEAN rates where applicable.
HS Code (Harmonised System Code)
A standardised international system for classifying traded goods, developed by the World Customs Organisation. Each product is assigned a numeric code used by customs authorities worldwide to determine applicable duty rates, restrictions, and statistics. UK import declarations require a 10-digit commodity code.
EORI Number
Economic Operators Registration and Identification number — a unique ID required for all businesses importing or exporting goods to/from the UK. Assigned by HMRC, UK EORI numbers begin with “GB”. Free to apply for via the HMRC website; typically takes 3–5 working days.
Import Duty
A tax levied by HMRC on goods imported into the UK, calculated as a percentage of the customs value (usually the transaction value plus freight and insurance costs). Rates vary by commodity code and country of origin. Some goods qualify for zero or reduced duty under trade agreements.
Import VAT
Value Added Tax charged at the point of import into the UK, currently 20% on most goods. VAT-registered businesses can reclaim import VAT through their VAT return using Postponed VAT Accounting (PVA). Non-VAT registered importers must pay import VAT and cannot recover it.
Postponed VAT Accounting (PVA)
A UK government scheme allowing VAT-registered importers to account for import VAT on their VAT return rather than paying at the border. This significantly improves cash flow by deferring the VAT payment by up to 90 days. Available to all VAT-registered UK businesses.
Customs Entry / Import Declaration
A formal declaration submitted to HMRC electronically detailing the goods being imported, their value, origin, and applicable HS codes. Required for all commercial imports into the UK. Usually submitted by a licensed customs broker on behalf of the importer.
FCL – Full Container Load
A shipping arrangement where a single shipper books an entire container exclusively for their goods. Available in 20ft (approx. 25 CBM) and 40ft (approx. 55–67 CBM) sizes. More cost-effective than LCL for larger volumes and reduces the risk of damage from handling.
LCL – Less than Container Load
A shipping arrangement where multiple shippers share space in a single container. Cargo is consolidated at a Container Freight Station (CFS) at origin and deconsolidated at destination. Charged per CBM or per tonne (whichever is greater). Cost-effective for shipments under approximately 15 CBM.
CBM – Cubic Metre
The standard unit of measurement for sea freight volume. Calculated as Length (m) × Width (m) × Height (m). LCL freight rates are quoted per CBM. If the volumetric weight exceeds the actual weight, the higher figure is used for billing.
Demurrage
A charge levied by the shipping line when an importer fails to collect their container from the port within the agreed free days (typically 5–7 days). Demurrage accumulates daily and can become very expensive if customs clearance is delayed.
Demurrage
A charge levied by the shipping line when an importer fails to collect their container from the port within the agreed free days (typically 5–7 days). Demurrage accumulates daily and can become very expensive if customs clearance is delayed.
Detention
Similar to demurrage but charged when a container has been collected from the port but not returned to the shipping line’s depot within the agreed free time. Applies after the container has left the port terminal.
ETD / ETA
Estimated Time of Departure (ETD) is the scheduled date a vessel or aircraft is expected to leave the origin port or airport. Estimated Time of Arrival (ETA) is the expected date of arrival at the destination. Both are estimates and can change due to weather, port congestion, or operational issues.
Freight Forwarder
A company that organises shipments on behalf of importers and exporters, coordinating carriers, documentation, customs clearance, and delivery. Freight forwarders do not typically own aircraft or vessels but have relationships with carriers to book space. ASA Logistics acts as a freight forwarder for all international shipments.
Customs Broker
A licensed professional or company authorised to submit customs declarations to HMRC on behalf of importers and exporters. Customs brokers ensure goods are correctly classified, duties are accurately calculated, and all required documentation is in order. ASA Logistics provides customs brokerage at all major UK ports and airports.
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