Shipping Terms Explained
A comprehensive A–Z reference guide to freight, customs, and logistics terminology — from Incoterms to HS codes, bill of lading to volumetric weight.
A
AWB (Air Waybill)
A non-negotiable transport document issued by an airline or freight forwarder for air cargo. It serves as a contract of carriage between the shipper and carrier and contains details about the shipment including origin, destination, and declared value.
ATA Carnet
An international customs document that allows the temporary import and export of goods without paying customs duties or VAT. Commonly used for trade fairs, exhibitions, and professional equipment.
Ad Valorem
A Latin term meaning “according to value.” Used to describe tariffs or duties calculated as a percentage of the declared value of the goods being imported or exported.
Agent (Freight Agent)
A company or individual that arranges freight transport on behalf of a shipper. Agents do not typically own the means of transport but coordinate bookings with carriers.
B
Bill of Lading (B/L)
A legal document issued by a carrier to a shipper acknowledging receipt of cargo. It acts as a contract of carriage, a receipt of goods, and a document of title. Essential for sea freight shipments.
Bonded Warehouse
A secured facility approved by customs authorities where dutiable goods can be stored, manipulated, or undergo manufacturing operations without payment of duty until goods are released into the market.
Breakbulk
Cargo that is too large or heavy to fit in standard shipping containers and must be loaded individually onto a vessel. Common for machinery, steel, and project cargo.
C
CBM (Cubic Metre)
The standard unit of measurement for cargo volume. One CBM equals one metre in length, width, and height (1m x 1m x 1m). Used to calculate sea freight charges for LCL shipments.
CFS (Container Freight Station)
A facility where LCL (Less than Container Load) cargo is consolidated into full containers for export, or de-consolidated after import. Also known as a groupage depot.
CIF (Cost, Insurance & Freight)
An Incoterm where the seller is responsible for the cost of goods, marine insurance, and freight charges to the named port of destination. Risk transfers to the buyer when goods are loaded on the vessel.
CMR
A consignment note used in international road freight transport. The CMR convention governs contracts for the carriage of goods by road across international borders in Europe and beyond.
Consolidation
The grouping of smaller shipments from multiple consignors into one full container or vehicle to reduce costs. Also called groupage or LCL (Less than Container Load).
Consignee
The recipient or buyer of a shipment — the party to whom goods are addressed and delivered. Named on the bill of lading or airway bill.
Consignor
The sender or seller of a shipment — the party who ships the goods. Also referred to as the shipper.
Cross-Docking
A logistics process where inbound goods are transferred directly from receiving docks to outbound transport with minimal or no storage time. Reduces warehousing costs and speeds up delivery.
Customs Entry
A formal declaration made to customs authorities when goods are imported or exported. It includes details of the goods, their value, origin, and HS code, and is used to calculate duties and taxes.
D
DAP (Delivered at Place)
An Incoterm where the seller is responsible for delivering goods to a named destination, bearing all risks and costs up to that point. The buyer is responsible for import customs clearance and duties.
DDP (Delivered Duty Paid)
An Incoterm representing the maximum obligation for the seller, who must deliver goods to the buyer’s named place of destination, cleared for import, with all duties and taxes paid.
Demurrage
A charge levied when a shipping container is kept at a port or terminal beyond the agreed free period without being unpacked or returned. Demurrage accrues daily and can be costly.
Detention
A charge applied when a shipping container is retained by the shipper or consignee beyond the agreed free time outside of the port or terminal (e.g., at a warehouse or factory).
Door-to-Door
A full logistics service where the freight forwarder manages collection from the shipper’s premises and delivery to the final recipient, including all documentation, customs, and transport stages.
E
ETA (Estimated Time of Arrival)
The predicted date and time when a vessel, aircraft, or vehicle is expected to arrive at its destination port or delivery point.
ETD (Estimated Time of Departure)
The predicted date and time when a vessel or aircraft is scheduled to depart from its port or airport of origin.
EORI Number
Economic Operators Registration and Identification number. A unique identifier assigned to businesses and individuals that import or export goods within or from the European Union. Required for all UK customs declarations post-Brexit.
Ex Works (EXW)
An Incoterm representing the minimum obligation for the seller. The seller makes the goods available at their premises and the buyer is responsible for all transport, export clearance, and costs from that point onwards.
F
FCL (Full Container Load)
A shipment where a single shipper’s goods fill an entire shipping container. Typically 20ft or 40ft containers. More cost-effective than LCL for larger volumes.
FCA (Free Carrier)
An Incoterm where the seller delivers the goods to a named carrier or another nominated party at a specified location. Risk transfers to the buyer at this point.
FOB (Free on Board)
An Incoterm where the seller delivers goods on board the vessel nominated by the buyer at the named port of shipment. Risk and cost transfer to the buyer once goods are on board.
Freight Forwarder
A company that organises shipments for individuals or corporations to get goods from a manufacturer or producer to a market, customer, or final destination. They act as intermediaries between shippers and carriers.
Free Trade Agreement (FTA)
A pact between two or more countries to reduce or eliminate trade barriers such as tariffs and import quotas on goods traded between them.
G
General Average
A maritime law principle where all parties in a sea voyage proportionally share losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency.
Gross Weight
The total weight of a shipment including the goods themselves, packaging, and any container or pallet. Used in freight calculations alongside chargeable weight.
Groupage
The consolidation of multiple smaller shipments from different shippers into a single container or vehicle for transport. Also known as LCL or consolidation.
H
Haulage
The road transport of goods, typically by lorry or truck, between ports, warehouses, and final delivery points. Can be port haulage (between port and inland depot) or road haulage (longer distance).
HS Code
Harmonised System code — a standardised international nomenclature developed by the World Customs Organisation to classify traded products. Used to determine tariff rates and trade statistics.
I
Incoterms
International Commercial Terms — a set of internationally recognised rules published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers in international trade transactions.
Import Duty
A tax levied by a government on goods imported from abroad. The rate depends on the commodity code (HS code) of the goods and any applicable trade agreements between the exporting and importing countries.
Import VAT
Value Added Tax charged on imported goods at the point of entry into a country. In the UK, import VAT is typically 20% of the customs value (goods value + freight + insurance).
L
LCL (Less than Container Load)
A shipping arrangement where multiple shippers’ goods share space in a single container. Ideal for smaller consignments that don’t fill an entire container. Goods are consolidated at a CFS and de-consolidated at the destination.
Letter of Credit (L/C)
A financial instrument issued by a bank guaranteeing a buyer’s payment to a seller. Widely used in international trade to reduce payment risk, with payment released when compliant shipping documents are presented.
M
Manifest
A comprehensive document listing all cargo aboard a vessel, aircraft, or vehicle. Required by customs authorities and includes details of each consignment, shipper, consignee, and goods description.
MBL (Master Bill of Lading)
A bill of lading issued by the actual carrier (shipping line) to the freight forwarder. The freight forwarder then issues House Bills of Lading to individual shippers.
Multimodal Transport
The movement of goods using at least two different modes of transport (e.g., sea and road, air and rail) under a single contract of carriage. Also referred to as combined transport.
N
Net Weight
The weight of the actual goods only, excluding all packaging materials, pallets, or containers. Declared separately from gross weight on shipping and customs documents.
Non-Vessel Operating Common Carrier (NVOCC)
A freight carrier that issues bills of lading but does not own or operate the actual vessels. They purchase space from shipping lines and re-sell it to shippers.
O
Origin Certificate
A document certifying the country of origin of goods. Required for customs clearance and to qualify for preferential duty rates under trade agreements. Issued by chambers of commerce or government bodies.
P
Packing List
A detailed document accompanying a shipment that lists all items included, with quantities, weights, and dimensions of each package. Required for customs clearance and cargo verification.
POD (Proof of Delivery)
A document or electronic record confirming that a shipment has been delivered to the recipient. Typically includes the recipient’s signature, date, and time of delivery.
Port of Discharge (POD)
The port where cargo is unloaded from the vessel. Also referred to as the destination port.
Port of Loading (POL)
The port where cargo is loaded onto the vessel for the main leg of its journey. Also referred to as the origin port.
R
Reefer Container
A refrigerated shipping container used to transport temperature-sensitive cargo such as food, pharmaceuticals, and chemicals. Maintains controlled temperatures throughout the journey.
Ro-Ro (Roll-on/Roll-off)
A type of vessel designed to carry wheeled cargo such as cars, trucks, and trailers that are driven on and off the ship. Common for vehicle transportation and certain types of heavy machinery.
S
Shipper
The party who sends or exports goods — the consignor. Named on the bill of lading or airway bill as the sender of the cargo.
Surcharge
Additional charges applied on top of the base freight rate. Common surcharges include BAF (Bunker Adjustment Factor), CAF (Currency Adjustment Factor), PSS (Peak Season Surcharge), and port surcharges.
SWB (Sea Waybill)
A non-negotiable transport document used in sea freight. Unlike a bill of lading, the original does not need to be presented to release goods, making it faster and more convenient for trusted trade relationships.
T
TEU (Twenty-foot Equivalent Unit)
The standard unit of measurement for shipping container capacity. One TEU represents one standard 20-foot shipping container. A 40-foot container equals 2 TEUs.
THC (Terminal Handling Charge)
A charge levied by port terminals for handling containers at the port of loading and discharge. Covers operations such as loading/unloading from vessels and movement within the terminal.
Transhipment
The transfer of cargo from one vessel or transport mode to another at an intermediate point during its journey from origin to final destination. Common on routes without direct services.
V
Volumetric Weight
Also known as dimensional weight — a calculation used in air freight and courier services to price low-density shipments. Calculated as (Length x Width x Height in cm) ÷ 5000. The higher of actual weight and volumetric weight is used as the chargeable weight.
W
Waybill
A document issued by a carrier to the shipper as a receipt of goods and a contract of carriage. Unlike a bill of lading, a waybill is non-negotiable and the named consignee can collect without producing the original document.
A
AWB (Air Waybill)
A non-negotiable transport document issued by an airline or freight forwarder for air cargo. It serves as a contract of carriage between the shipper and carrier and contains details about the shipment including origin, destination, and declared value.
ATA Carnet
An international customs document that allows the temporary import and export of goods without paying customs duties or VAT. Commonly used for trade fairs, exhibitions, and professional equipment.
Ad Valorem
A Latin term meaning “according to value.” Used to describe tariffs or duties calculated as a percentage of the declared value of the goods being imported or exported.
Agent (Freight Agent)
A company or individual that arranges freight transport on behalf of a shipper. Agents do not typically own the means of transport but coordinate bookings with carriers.
B
Bill of Lading (B/L)
A legal document issued by a carrier to a shipper acknowledging receipt of cargo. It acts as a contract of carriage, a receipt of goods, and a document of title. Essential for sea freight shipments.
Bonded Warehouse
A secured facility approved by customs authorities where dutiable goods can be stored, manipulated, or undergo manufacturing operations without payment of duty until goods are released into the market.
Breakbulk
Cargo that is too large or heavy to fit in standard shipping containers and must be loaded individually onto a vessel. Common for machinery, steel, and project cargo.
C
CBM (Cubic Metre)
The standard unit of measurement for cargo volume. One CBM equals one metre in length, width, and height (1m x 1m x 1m). Used to calculate sea freight charges for LCL shipments.
CFS (Container Freight Station)
A facility where LCL (Less than Container Load) cargo is consolidated into full containers for export, or de-consolidated after import. Also known as a groupage depot.
CIF (Cost, Insurance & Freight)
An Incoterm where the seller is responsible for the cost of goods, marine insurance, and freight charges to the named port of destination. Risk transfers to the buyer when goods are loaded on the vessel.
CMR
A consignment note used in international road freight transport. The CMR convention governs contracts for the carriage of goods by road across international borders in Europe and beyond.
Consolidation
The grouping of smaller shipments from multiple consignors into one full container or vehicle to reduce costs. Also called groupage or LCL (Less than Container Load).
Consignee
The recipient or buyer of a shipment — the party to whom goods are addressed and delivered. Named on the bill of lading or airway bill.
Consignor
The sender or seller of a shipment — the party who ships the goods. Also referred to as the shipper.
Cross-Docking
A logistics process where inbound goods are transferred directly from receiving docks to outbound transport with minimal or no storage time. Reduces warehousing costs and speeds up delivery.
Customs Entry
A formal declaration made to customs authorities when goods are imported or exported. It includes details of the goods, their value, origin, and HS code, and is used to calculate duties and taxes.
D
DAP (Delivered at Place)
An Incoterm where the seller is responsible for delivering goods to a named destination, bearing all risks and costs up to that point. The buyer is responsible for import customs clearance and duties.
DDP (Delivered Duty Paid)
An Incoterm representing the maximum obligation for the seller, who must deliver goods to the buyer’s named place of destination, cleared for import, with all duties and taxes paid.
Demurrage
A charge levied when a shipping container is kept at a port or terminal beyond the agreed free period without being unpacked or returned. Demurrage accrues daily and can be costly.
Detention
A charge applied when a shipping container is retained by the shipper or consignee beyond the agreed free time outside of the port or terminal (e.g., at a warehouse or factory).
Door-to-Door
A full logistics service where the freight forwarder manages collection from the shipper’s premises and delivery to the final recipient, including all documentation, customs, and transport stages.
E
ETA (Estimated Time of Arrival)
The predicted date and time when a vessel, aircraft, or vehicle is expected to arrive at its destination port or delivery point.
ETD (Estimated Time of Departure)
The predicted date and time when a vessel or aircraft is scheduled to depart from its port or airport of origin.
EORI Number
Economic Operators Registration and Identification number. A unique identifier assigned to businesses and individuals that import or export goods within or from the European Union. Required for all UK customs declarations post-Brexit.
Ex Works (EXW)
An Incoterm representing the minimum obligation for the seller. The seller makes the goods available at their premises and the buyer is responsible for all transport, export clearance, and costs from that point onwards.
F
FCL (Full Container Load)
A shipment where a single shipper’s goods fill an entire shipping container. Typically 20ft or 40ft containers. More cost-effective than LCL for larger volumes.
FCA (Free Carrier)
An Incoterm where the seller delivers the goods to a named carrier or another nominated party at a specified location. Risk transfers to the buyer at this point.
FOB (Free on Board)
An Incoterm where the seller delivers goods on board the vessel nominated by the buyer at the named port of shipment. Risk and cost transfer to the buyer once goods are on board.
Freight Forwarder
A company that organises shipments for individuals or corporations to get goods from a manufacturer or producer to a market, customer, or final destination. They act as intermediaries between shippers and carriers.
Free Trade Agreement (FTA)
A pact between two or more countries to reduce or eliminate trade barriers such as tariffs and import quotas on goods traded between them.
G
General Average
A maritime law principle where all parties in a sea voyage proportionally share losses resulting from a voluntary sacrifice of part of the ship or cargo to save the whole in an emergency.
Gross Weight
The total weight of a shipment including the goods themselves, packaging, and any container or pallet. Used in freight calculations alongside chargeable weight.
Groupage
The consolidation of multiple smaller shipments from different shippers into a single container or vehicle for transport. Also known as LCL or consolidation.
H
Haulage
The road transport of goods, typically by lorry or truck, between ports, warehouses, and final delivery points. Can be port haulage (between port and inland depot) or road haulage (longer distance).
HS Code
Harmonised System code — a standardised international nomenclature developed by the World Customs Organisation to classify traded products. Used to determine tariff rates and trade statistics.
I
Incoterms
International Commercial Terms — a set of internationally recognised rules published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers in international trade transactions.
Import Duty
A tax levied by a government on goods imported from abroad. The rate depends on the commodity code (HS code) of the goods and any applicable trade agreements between the exporting and importing countries.
Import VAT
Value Added Tax charged on imported goods at the point of entry into a country. In the UK, import VAT is typically 20% of the customs value (goods value + freight + insurance).
L
LCL (Less than Container Load)
A shipping arrangement where multiple shippers’ goods share space in a single container. Ideal for smaller consignments that don’t fill an entire container. Goods are consolidated at a CFS and de-consolidated at the destination.
Letter of Credit (L/C)
A financial instrument issued by a bank guaranteeing a buyer’s payment to a seller. Widely used in international trade to reduce payment risk, with payment released when compliant shipping documents are presented.
M
Manifest
A comprehensive document listing all cargo aboard a vessel, aircraft, or vehicle. Required by customs authorities and includes details of each consignment, shipper, consignee, and goods description.
MBL (Master Bill of Lading)
A bill of lading issued by the actual carrier (shipping line) to the freight forwarder. The freight forwarder then issues House Bills of Lading to individual shippers.
Multimodal Transport
The movement of goods using at least two different modes of transport (e.g., sea and road, air and rail) under a single contract of carriage. Also referred to as combined transport.
N
Net Weight
The weight of the actual goods only, excluding all packaging materials, pallets, or containers. Declared separately from gross weight on shipping and customs documents.
Non-Vessel Operating Common Carrier (NVOCC)
A freight carrier that issues bills of lading but does not own or operate the actual vessels. They purchase space from shipping lines and re-sell it to shippers.
O
Origin Certificate
A document certifying the country of origin of goods. Required for customs clearance and to qualify for preferential duty rates under trade agreements. Issued by chambers of commerce or government bodies.
P
Packing List
A detailed document accompanying a shipment that lists all items included, with quantities, weights, and dimensions of each package. Required for customs clearance and cargo verification.
POD (Proof of Delivery)
A document or electronic record confirming that a shipment has been delivered to the recipient. Typically includes the recipient’s signature, date, and time of delivery.
Port of Discharge (POD)
The port where cargo is unloaded from the vessel. Also referred to as the destination port.
Port of Loading (POL)
The port where cargo is loaded onto the vessel for the main leg of its journey. Also referred to as the origin port.
R
Reefer Container
A refrigerated shipping container used to transport temperature-sensitive cargo such as food, pharmaceuticals, and chemicals. Maintains controlled temperatures throughout the journey.
Ro-Ro (Roll-on/Roll-off)
A type of vessel designed to carry wheeled cargo such as cars, trucks, and trailers that are driven on and off the ship. Common for vehicle transportation and certain types of heavy machinery.
S
Shipper
The party who sends or exports goods — the consignor. Named on the bill of lading or airway bill as the sender of the cargo.
Surcharge
Additional charges applied on top of the base freight rate. Common surcharges include BAF (Bunker Adjustment Factor), CAF (Currency Adjustment Factor), PSS (Peak Season Surcharge), and port surcharges.
SWB (Sea Waybill)
A non-negotiable transport document used in sea freight. Unlike a bill of lading, the original does not need to be presented to release goods, making it faster and more convenient for trusted trade relationships.
T
TEU (Twenty-foot Equivalent Unit)
The standard unit of measurement for shipping container capacity. One TEU represents one standard 20-foot shipping container. A 40-foot container equals 2 TEUs.
THC (Terminal Handling Charge)
A charge levied by port terminals for handling containers at the port of loading and discharge. Covers operations such as loading/unloading from vessels and movement within the terminal.
Transhipment
The transfer of cargo from one vessel or transport mode to another at an intermediate point during its journey from origin to final destination. Common on routes without direct services.
V
Volumetric Weight
Also known as dimensional weight — a calculation used in air freight and courier services to price low-density shipments. Calculated as (Length x Width x Height in cm) ÷ 5000. The higher of actual weight and volumetric weight is used as the chargeable weight.
W
Waybill
A document issued by a carrier to the shipper as a receipt of goods and a contract of carriage. Unlike a bill of lading, a waybill is non-negotiable and the named consignee can collect without producing the original document.
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