| Understanding Shipping Term Terminology: For Reference Only: For a given term, "Yes" indicates that the seller has the responsibility to provide the service included in the price. "No" indicates it is the buyer's responsibility. If insurance is not included in the term (for example, CFR) then insurance for transport is the responsibility of the buyer or the seller depending on who owns the cargo at time of transport. In the case of CFR terms, it would be the buyer while in the case of CIF or CIP terms, it would be the seller. |
| EXW – Ex Works (named place) The seller makes the goods available at his premises. The buyer is responsible for all charges. This trade term places the greatest responsibility on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a seller has the goods ready for collection at his premises (Works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination FCA – Free Carrier (named places) The seller hands over the goods, cleared for export, into the custody of the first carrier (named by the buyer) at the named place. This term is suitable for all modes of transport, including carriage by air, rail, road, and containerised / multi-modal sea transport. This is the correct "freight collect" term to use for sea shipments in containers, whether LCL (less than container load) or FCL (full container load). FAS – Free Alongside Ship (named loading port) The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Suitable only for maritime transport only but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). This term is typically used for heavy-lift or bulk cargo. FOB – Free on board (named loading port) The seller must themself load the goods on board the ship nominated by the buyer, cost and risk being divided at ship's rail. The seller must clear the goods for export. Maritime transport only but NOT for multimodal sea transport in containers (see Incoterms 2010, ICC publication 715). The buyer must instruct the seller the details of the vessel and port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder. It does not include Air transport. This term has been greatly misused over the last three decades ever since Incoterms 1980 explained that FCA should be used for container shipments. CFR or CNF – Cost and Freight (named destination port) Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods have crossed the ship's rail. Maritime transport only and Insurance for the goods is NOT included. Insurance is at the Cost of the Buyer. CIF – Cost, Insurance and Freight (named destination port) Exactly the same as CFR except that the seller must in addition procure and pay for insurance for the buyer. Maritime transport only. CPT – Carriage Paid To (named place of destination) The general/containerised/multimodal equivalent of CFR. The seller pays for carriage to the named point of destination, but risk passes when the goods are handed over to the first carrier. CIP – Carriage and Insurance Paid (To) (named place of destination) The containerised transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier. CFR or CNF – Cost and Freight (named destination port) Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods have crossed the ship's rail. Maritime transport only and Insurance for the goods is NOT included. Insurance is at the Cost of the Buyer. CIF – Cost, Insurance and Freight (named destination port) Exactly the same as CFR except that the seller must in addition procure and pay for insurance for the buyer. Maritime transport only. CPT – Carriage Paid To (named place of destination) The general/containerised/multimodal equivalent of CFR. The seller pays for carriage to the named point of destination, but risk passes when the goods are handed over to the first carrier. CIP – Carriage and Insurance Paid (To) (named place of destination) The containerised transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier DAF – Delivered At Frontier (Deliveplace) This term can be used when the goods are transported by rail and road. The seller pays for transportation to the named place of delivery at the frontier. The buyer arranges for customs clearance and pays for transportation from the frontier to his factory. The passing of risk occurs at the frontier. DES – Delivered Ex Ship (named port) Where goods are delivered ex ship, the passing of risk does not occur until the ship has arrived at the named port of destination and the goods made available for unloading to the buyer. The seller pays the same freight and insurance costs as he would under a CIF arrangement. Unlike CFR and CIF terms, the seller has agreed to bear not just cost, but also Risk and Title up to the arrival of the vessel at the named port. Costs for unloading the goods and any duties, taxes, etc… are for the Buyer. A commonly used term in shipping bulk commodities, such as coal, grain, dry chemicals - - - and where the seller either owns or has chartered, their own vessel. DEQ – Delivered Ex Quay (named port) This is similar to DES, but the passing of risk does not occur until the goods have been unloaded at the port of destination. DDU – Delivered Duty Unpaid (named destination place) This term means that the seller delivers the goods to the buyer to the named place of destination in the contract of sale. The goods are not cleared for import or unloaded from any form of transport at the place of destination. The buyer is responsible for the costs and risks for the unloading, duty and any subsequent delivery beyond the place of destination. However, if the buyer wishes the seller to bear cost and risks associated with the import clearance, duty, unloading and subsequent delivery beyond the place of destination, then this all needs to be explicitly agreed upon in the contract of sale. DAP - Delivered At Place (named destination place) This term means that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. This is exactly what the old Incoterm DDU stipulated. DDP – Delivered Duty Paid (named destination place) This term means that the seller pays for all transportation costs and bears all risk until the goods have been delivered and pays the duty. Also used interchangeably with the term "Free Domicile". The most comprehensive term for the buyer. In most of the importing countries, taxes such as (but not limited to) VAT and excises should not be considered prepaid being handled as a "refundable" tax. Therefore VAT and excises usually are not representing a direct cost for the importer since they will be recovered against the sales on the local (domestic) market. New arrival incoterms have been discussed in the Incoterms 2010 brought out by the ICC and DAT and DAP have replaced DAF, DES,DEQ and DDU Given here is a small explanation provided by the ICC Two new Incoterms rules – DAT and DAP – have replaced the Incoterms 2000 rules DAF, DES, DEQ and DDU The number of Incoterms® rules has been reduced from 13 to 11. This has been achieved by substituting two new rules that may be used irrespective of the agreed mode of transport – DAT, Delivered at Terminal, and DAP, Delivered at Place – for the Incoterms® 2000 rules DAF, DES, DEQ and DDU. Under both new rules, delivery occurs at a named destination: in DAT, at the buyer’s disposal unloaded from the arriving vehicle (as under the former DEQ rule); in DAP, likewise at the buyer’s disposal, but ready for unloading (as under the former DAF, DES and DDU rules). The new rules make the Incoterms® 2000 rules DES and DEQ superfluous. The named terminal in DAT may well be in a port, and DAT can therefore safely be used in cases where the Incoterms® 2000 rule DEQ once was. Likewise, the arriving “vehicle” under DAP may well be a ship and the named place of destination may well be a port: consequently, DAP can safely be used in cases where the Incoterms® 2000 rule DES once was. These new rules, like their predecessors, are “delivered”, with the seller bearing all the costs (other than those related to import clearance, where applicable) and risks involved in bringing the goods to the named place of destination For More Details: http://en.wikipedia.org/wiki/Incoterm |
An intermodal container or freight container (commonly known as: shipping container or box) is a reusable transport and storage unit for moving products between locations or countries; the terms container or box may be used on their own within the context of shipping. Containers manufactured to ISO specifications may be referred to as ISO containers and the term high-cube container is used for units that are taller than normal. Measurement There are two common standard lengths used to ship wine, spirits and other select beverages, 20 ft and 40 ft standard containers. Container capacity is often expressed in twenty-foot equivalent units (TEU, or sometimes teu). An equivalent unit is a measure of containerized cargo capacity equal to one standard 20 ft (length) × 8 ft (width) container. As this is an approximate measure, the height of the box is not considered; for example, the 9 ft 6 in (2.9 m) high cube and the 4-foot-3-inch (1.3 m) half height 20-foot (6.1 m) containers are also called one TEU. Similarly, 45 ft (13.72 m) containers are also commonly designated as two TEU’s, although they are 45 and not 40 feet (12.19 m) long. Two TEU’s are equivalent to one forty-foot equivalent unit (FEU). Weight (Max Payload) The maximum gross mass for a 20 ft (6.1 m) dry cargo container is 24,000 kg, and for a 40-ft (including the 2.87 m (9 ft 6 in) high cube container), it is 30,480 kg. Allowing for the tare mass of the container, the maximum payload mass is therefore reduced to approximately 22,000 kg for 20 ft (6.1 m), and 27,000 kg for 40 ft (12 m) containers. *Over the road weight restrictions vary state to state so please confirm prior to loading. Loading Cases 20 ft container: 10 pallets (avg) / 34,000 lbs 40 ft container: 20 pallets (avg) / 44,000 lbs Each shipment is unique and depends on product weight, size and whether it is palletized or floor loaded. |
| 1. 3PL (3rd Party Logistics): A third party, who takes care of the logistics value chain. 2. BAF (Bunker Adjustment Factor): A kind of fuel surcharge added to the freigt rates. 3. Barge (A kind of small ship): Flat Bottomed cargo carrying boat. It is used for movement of small quantity cargo. Mainly used for coastal or river movements. 4. BL (Bill of Lading): BL is issued by the carrier (Shipping Line/NVOCC). This is the document which is presented to the shipping line at POD, and then only cargo can be cleared. 5. Break Bulk (Break Bulk Cargo): The cargo which can be counted (Other than Containers). It includes Steel coils, Vehicles etc. 6. Bulk Cargo (Bulk Cargo): The cargo like coal, limestone etc. These are loaded in the hatches of the ships with the help of cranes having grabs. 7. CAF (Currency Adjustment Factor): A kind of surcharge added to freight rates, to mitigate the currency risk. 8. CAN (Cargo Arrival Notice): A document issued by carrier/agent to the importer, notifying him about the arrival of cargo. 9. CBU (Completely Built Unit): Vehicles being shipped in fully built form. 10. CFS (Container Freight Station): CFS is a kind of customs bound warehouse, where stuffing and destuffing of containers are done. These are near to the ports. 11. CKD (Completely Knocked Down): Vehicles being shipped in parts. One vehicle is knocked down in many small small parts and these parts are shipped in containers. 12. CoC (Carrier Owned Container): The containers owned by the carriers. 13. CY (Container Yards): These are genaral purpose yards, where generally empty containers are stacked. 14. DBL (Draft Bill of Lading): The B/L issued by the Carrier to Freight Forwarder. This is just to check the actual format of the B/L as per LC. Master B/L is issued on the basis of DBL and after MBL is issued, this remains null and void. 15. DC (Dangerous Cargo): Cargos like petroleum, chemical etc. Special equipments are required to handle these. 16. Demurrage (Demurrage): The penalty paid by the charterar to the owner of the ship for delay in completing the voyage. 17. Dispatch (Dispatch): The money paid by the owner of the ship to the charterar for completing the voyage in advance. Genarally the rate will be half of demurrage rate. 18. DO (Delivery Order): A document issued by carrier/agent to the importer, giving him the authority to collect the cargo. This is issued after B/L is surrendered to the carrier/agent. 19. EGM (Export General Manifest): A document issued by carrier/agent to the port authorities stating that a container is going for export. 20. FAK (Freight of all Kind): Freight charged by linear operators. Quoted in terms of per TEU. 21. FCL (Full Container Load): When one container contains cargo for only one consignee. 22. Feeder (Feeder Service): A kind of shipping service in which ships ply between a distant port and some port having linear service. For Ex- service between Haldia and Colombo. In this case Haldia is a distant port whereas many linear routes pass through Colombo. 23. FEU (Forty Feet Equivalent Unit): A container of 40' length. One FEU is equal to 2 TEU. 24. FR (Flat Rack): A kind of container which has just the bottom, like a rack. Generally used for oversized cargo. Freight is more. 25. Freight (Freight): Money charged by shipping lines to take the cargo from one port to another. 26. HBL (House Bill of Lading): The B/L issued by Freight Forwarder to the Shipper. In this B/L the name of actual importer will reflect as consignee. 27. IATA (International Air Transport Organisation): An organisation of all the air transporters across the world. Any new air transporter needs an IATA license to operate. 28. ICD (Inland Container Depot): ICDs' are a kind of CFS only. The only difference is that ICDs' are far from the ports. These are generally called Dry Ports. 29. IGM (Import General Manifest): A document issued by carrier/agent to the port authorities stating that a container is coming for imports. 30. LC (Letter of Credit): LC is the master document. It is opened by the bank of consignee in favour of the shipper. All the terms & conditions of the trade are mentioned in this document. 31. LCL (Less than Container Load): When one container contains cargo for more than one consignee. 32. Lo-Lo (Lift On Lift Off): It is generally used to describe the kind of terminals where vehicles/containers or any cargo are lifted through lifts and put onto the ship. 33. Mate's Receipt (Mate's Receipt): A declaration given by the captain of the ship about the cargo. B/L is issued based on this. 34. MBL (Master Bill of Lading): The B/L issued by Carrier to the Freight Forwarder. In this B/L Freight Forwarder will be shown as consignee. This is done to hide the actual importers details from the Carrier. 35. MLO (Main Line Operator): The shipping lines, having linear services. 36. MTO (Multimodal Transport Operator): A Kind of license issued by DG-Shipping. It authorises carriers to issue multimodal B/L. 37. OT (Open Top): A kind of container which has no ceiling. Used for oversized cargo. Freight is more than general container. 38. POD (Port of Discharge): The port where cargo is to be discharged. 39. POL (Port of Loading): The port where cargo has been loaded on the ship. 40. Reefer (Refrigerated Container): The containers having refrigeration units. They have a battery to operate on and are connected to external power at ports and on ships. Used for shipping meats, fruits etc. 41. RMQ (Rail Mounted Quay) A kind of crane used at container terminals. 42. Ro-Ro (Roll On Roll Off): It is a kind of terminal used to ship the vehicles in CBU forms. Vehicles are just driven through the terminal and parked in the ship. 43. SKD (Semi Knocked Down): Vehicles being shipped in parts. One vehicle is knocked down into 4-5 major parts and these parts are shipped. 44. Slot (Slot): Money charged by shipping lines from NVOCC operators to take containers from one port to another. 45. SoC (Shipper Owned Container): The containers which have been arranged by the shipper/agent and not by the shipping line. 46. TAMP (Tariff Authority of Major Ports): A statutory body formed by GoI. It regulates the tariffs charged at all the 12 major ports in India. 47. TEU (Twenty Feet Equivalent Unit): Represents a unit for containers. One TEU is equal to one container of 20' length. 48. THC (Terminal Handling Charges): Charges to be paid to terminal operator (Most of the cases-Ports). It includes loading charges and charges paid to the stevedores. |
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