Glossary Of Trade Terms

An Air waybill (AWB) is a document that accompanies goods shipped by an international air courier to provide detailed information about the shipment and allow it to be tracked. The bill has multiple copies so that each party involved in the shipment can document it. An air waybill (AWB), also known as an air consignment note, is a type of bill of lading. However, an AWB serves a similar function to ocean bills of lading, but an AWB is issued in non-negotiable form, meaning there’s less protection with an AWB versus bills of lading.

A bill of entry is a legal document that is filed by Importers or Customs House Agents on or before the arrival of imported goods. It’s submitted to the Customs department as a part of the Customs clearance procedure. It is the prime document needed for initiating the import customs clearance process. The importer or his agents has to specify all the details in the Bill of Entry related to the type, quantity, and quality of goods that he has imported. The bill of entry can be issued for either home consumption or bond clearance. When it is issued for bond clearance, the bond number and date of issuance need to be included.

A Bill of Lading (BL or BoL) is a legal document issued by a carrier to a shipper that details the type, quantity and destination of the goods being carried. A bill of lading also serves as a shipment receipt when the carrier delivers the goods at a predetermined destination. This document must accompany the shipped products, no matter the form of transportation, and must be signed by an authorized representative from the carrier, shipper and receiver.

A Bill of Materials (BOM) is a centralized source of information containing a list of items used to manufacture a product and the instructions on how to do so. Often shown in a hierarchical way, a bill of materials (BOM) lists the finished product at the top, down to individual components and materials.

Carriage and Insurance Paid To (CIP) means that the seller delivers the goods to the carrier or to another person specified by the seller at an agreed location (if that location is agreed between the parties) and that the seller is obliged to conclude the carriage contract and pay the freight costs incurred for the delivery of the goods.

Carriage Paid To (CPT) is an international trade term that means the seller delivers the goods at their expense to a carrier or another person nominated by the seller. The seller assumes all risks, including loss, until the goods are in the care of the nominated party.

A Certificate of Conformity (CoC) is issued by an authorized party (sometimes the manufacturer, sometimes an independent laboratory) and states that the product meets the required standards or specification

A certificate of origin (often abbreviated to C/O or CoO) is a document used in international trade. In a printed form or as an electronic document, it is completed by the exporter and certified by a recognized issuing body, attesting that the goods in a particular export shipment have been produced, manufactured or processed in a particular country.

The commercial invoice is a legal document between the supplier and the customer that clearly describes’ the sold goods, and the amount due on the customer. The commercial invoice is one of the main documents used by customs in determining customs duties.

Cost and freight is a legal term used in contracts for international trade that specifies that the seller of the goods is required to arrange for the carriage of goods by sea to a port of destination and provide the buyer with the documents necessary to obtain the items from the carrier. Risk transfers to buyer when the goods have been loaded on board the vessel in the country of export.

This refers to an Incoterm meaning the buyer assumes all risk once the goods are onboard the vessel for the main carriage but does not assume costs until the freight arrives at the named port of destination. CIF applies to ocean or inland waterway transport only. It is commonly used for bulk cargo, oversized or overweight shipments.

A Customs Declaration is a form that lists and gives the details of goods that are being imported or exported when a citizen or visitor enters a customs territory. In legal terms, a customs declaration is the act whereby a person indicates the wish to place goods under a given customs procedure

The Dangerous Goods Note (DGN) is a transport document that gives details about the contents of a consignment to carriers, receiving authorities and forwarders describing any goods that may be considered hazardous.

Dangerous Goods Regulations (DGR) The IATA Dangerous Goods Regulations (DGR) is the trusted source to help you prepare and document dangerous shipments. Recognized by the world’s airlines for almost 60 years, the DGR is the most complete, up-to-date, and user-friendly reference in the industry.

Delivered At Terminal refers to the seller delivering the goods, once unloaded from the arriving means of transport. Goods are placed at the disposal of the buyer at the named terminal, at the named port or place of destination. DAT can be used for any transport mode, or where there is more than one transport mode. The seller is responsible for arranging carriage and for delivering the goods

Delivered Duty Paid means that the seller fulfils his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller must bear the risks and costs, including duties, taxes and other charges of delivering the goods thereto, cleared for importation.

Delivery at Place (DAP) means the seller is responsible for the costs of packing goods as well as for arranging the delivery of the goods to the named place agreed with the buyer. It can be used for any transport mode, or where there is more than one transport mode. The seller is responsible for arranging carriage.

Delivery Order (DO) also known as Shipping order. A document from a shipping carrier instructing a terminal operator or shipping agent to release cargo or freight to the agent or consignee designated on the Bill of Lading.

Demurrage is a charge levied by the shipping line to the importer in cases where they have not taken delivery of the full container and move it out of the port/terminal area for unpacking within the allowed free days

It is a service where the freight forwarder guarantees that the goods will be picked up from and delivered to the locations decided by the end customer. freight forwarder handles customs clearance in the port of export and the port of destination.

Ex works (EXW) is an international trade term that describes when a seller makes a product available at a designated location, and the buyer of the product must cover the transport costs. This term places the maximum obligation on the buyer and minimum obligations on the seller.

Foreign Trade Regulations is any act that prohibits or restricts, or empowers the President or any executive agency of a country to prohibit or restrict, exports to or financial transactions with any foreign country or foreign national.

Definition of Foreign Trade Zone: an isolated policed area adjacent to a port of entry (as a seaport or airport) where foreign goods may be unloaded for immediate trans-shipment or stored, repacked, sorted, mixed, or otherwise manipulated without being subject to import duties.

Free Alongside Ship – The Seller delivers the goods to the origin port. From that point, the Buyer bears all costs and risks of loss or damage.

Free Carrier (named place of origin) The seller delivers the goods, cleared for export, at a named place (possibly including the seller’s own premises). The goods can be delivered to a carrier nominated by the buyer, or to another party nominated by the buyer.

Free on Board (FOB) is a shipment term used to indicate whether the seller or the buyer is liable for goods that are damaged or destroyed during shipping. “FOB shipping point” or “FOB origin” means the buyer is at risk and takes ownership of goods once the seller ships the product.

Free Trade Agreement is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

A Freight Forwarder, Forwarder, or Forwarding Agent, is a person or company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution. Forwarders contract with a carrier or often multiple carriers to move the goods.

Full load container (FLC) refers to shipments for which all goods in a container are owned by one party, while Less than Container Load (LCL) involves multiple shippers’ goods packed together. Full Container Load (FCL) shipping is a useful option in many cases, especially when you need to deliver a large volume of product.

The Harmonized System is a standardized numerical method of classifying traded products. It is used by customs authorities around the world to identify products when assessing duties and taxes and for gathering statistics.

A Letter of credit, also known as a documentary credit, bankers commercial credit, is a payment mechanism used in international trade to perform the same economic function as a guarantee, by allocating risk undertaken by contracting parties.

Manifest – A manifest is a compilation of information about the goods carried on a means of transport (ship, airplane, truck, rail wagon and barge), together with the information about the means of transport, such as its identification, characteristics and route. Typically, a cargo manifest would list all the bills of ladings along with the above details and the total number of goods being transported shown per bill of lading.

A packing list is a document that includes details about the contents of a package. The packing list is intended to let transport agencies, government authorities, and customers know the contents of the package. These details help each of these parties handle the package accordingly.

A power of attorney (POA) or letter of attorney is a written authorization to represent or act on another’s behalf in private affairs, business, or some other legal matter. The person authorizing the other to act is the principal, grantor, or donor (of the power). The one authorized to act is the agent or, in some common law jurisdictions, the attorney-in-fact.

When part or all of a consignment, which has been completely shipped, has not arrived at destination. It may have a different meaning to the term “short shipment”.