Freight and shipping glossary

B

• Bill of lading (B/L)The carrier’s document acknowledging receipt of cargo. It is a receipt, evidence of the contract of carriage, and — when issued as an original negotiable set — a document of title. Whoever holds the original controls the cargo.
• Bonded warehouseA customs-licensed facility where imported goods can be stored before duty is paid. Duty falls due when the goods are cleared for home consumption, not when they arrive.
• BookingThe confirmed reservation of space on a named vessel and voyage. A rate quotation is not a booking, and space is not held by a rate.

C

• CBMCubic metre. Length × width × height in metres. The unit that most sea LCL pricing is built on.
• CFSContainer Freight Station. Where LCL cargo is consolidated into and deconsolidated out of containers.
• Chargeable weightWhichever is greater, actual gross weight or volumetric weight. For air, volume in cm³ divided by 6000. For sea LCL, one cubic metre or one tonne, whichever is more.
• CHACustoms House Agent, now formally a Customs Broker — licensed to file customs entries on an importer’s or exporter’s behalf.

D

• DemurrageCharged by the carrier for a container left inside the terminal beyond its free days.
• DetentionCharged by the carrier for a container held outside the terminal beyond its free days. Demurrage and detention are two different clocks and are frequently confused.
• DrawbackRefund of customs duty paid on inputs that are subsequently exported.

F

• FCLFull Container Load. One shipper’s cargo filling a container booked end to end.
• Free daysThe days a container may sit before demurrage or detention begins. Negotiable at booking, expensive afterwards.

H

• HS codeThe Harmonised System commodity classification. Six digits are international; countries add their own further digits. The code decides duty, restrictions and often which agency must certify the shipment.
• House bill of ladingA bill issued by a freight forwarder to its customer, sitting beneath the carrier’s master bill.

I

• IncotermsICC rules defining where the seller’s responsibility ends and the buyer’s begins. Incoterms 2020 is the current edition. They do not transfer title and they are not a payment term.
• IMDGInternational Maritime Dangerous Goods code. Governs the classification, packing, marking and stowage of hazardous cargo at sea.

L

• LCLLess than Container Load. Cargo consolidated with other shippers’ goods into a shared container.
• Let export orderThe customs authorisation, issued after assessment and any examination, that permits goods to be loaded for export.

M

• Master bill of ladingThe bill issued by the ocean carrier to the freight forwarder.
• MSDS / SDSMaterial or Safety Data Sheet. Required for hazardous cargo and often requested by carriers for chemical shipments that are not formally classified as dangerous.

T

• TransshipmentMoving cargo from one vessel to another en route. It usually adds transit days and one more handling at which something can go wrong.

V

• VGMVerified Gross Mass. The certified total weight of a packed container, which the shipper is legally required to declare under SOLAS before loading.