Freight Terminology

International Abbreviations for Airfreight and Oceanfreight

Dimensions

CBM or M³ = Cubic Metres
To work out the cbm / M³ please calculate the Height × Width × Length to work out the cubic metre of a shipment

R/T = Revenue tonnes (this is the same as per W/M below)
All freight when billed is calculated on a per unit basis.

W/M = Weight or Measure
This conversion factor is the same as R/T and is usually used in reference to billing or showing a cost.

• KG = Kilograms

Standard Documents

HAWB or AWB = Air Waybill / House Air Waybill
A waybill is a document issued by a forwarder or airline giving details and instructions on how the goods will move for that specific shipment.

B/L or BOL = Bill of Lading
This Document is issued by the carrier or forwarder as a contract of carriage. It must be presented at destination for the goods to be released and entitles the consignee to collect the goods

D/O = Delivery Order
This form which is issued by the carrier or forwarder releases the freight to another party and does not supersede any document controlling the title of the goods.

L/C = Letter of Credit
This document is issue by the Bank to another bank which serves as a guarantee for payments made to specific company / person under specific conditions.

MSDS = Material Safety Data Sheet
When moving Dangerous Goods the Material Safety Data Sheet will confirm how to move the dangerous goods safely. It will also show what can be loaded with this cargo or other dangerous goods.

SLI = Shippers Letter of Instruction
This document is completed by the shipper and helps them go through the requirements for shipping , including weight, dimensions, shipping terms, description of goods and if the goods are of a general cargo nature or dangerous goods. It is great prompt for checking all requirements for exporting and putting down any special requirements that is required for the forwarder.

See: Shippers Letter of Instruction

Other Terms and abbreviations

ATF = Approved Transitional Facility
The site is approved & has accredited personnel for Biosecurity which is under MPI (MPI = Ministry of Primary industries) to received and inspect import containers.

AQIS = Australian Quarantine Inspection Service
They control the border Biosecurity in Australia

CFS = Container Freight Station
Container freight handling depot where cargo is received and despatched

CNOR/CNEE = Consignor/Consignee
Consignor is the Seller and consignee is the Buyer

CY = Container Yard
This usually refers to the shipping lines container storage yards which are commonly inland ports as well.

IATA = International Air transport Association
An international organisation of airlines that regulate conditions of operational handling, safety, and pricing for international air transport.

NVOCC = Non-Vessel Operating Common Carrier
Promotes itself like a shipping line but doesn’t own its own vessels

• ETD = Estimated time of Departure
• ETA = Estimated Time of Arrival
• ATD = Actual Time of Departure
• ATA = Actual Time of Arrival
• POL = Port of Loading
• POD = Port of Discharge

Surcharges

AMS = American Maritime Security

USA border security laws and procedures that attract a transaction fee

BAF = Bunker Adjustment Factor
Fuel Surcharge on a shipping vessel

CAF – Currency Adjustment Factor
Charged to cover currency fluctuation

FAF = Fuel Adjustment Factor
Fuel charges on road transport or fuel on airfreight

GRI = General Rate Increase
Shipping lines on a specific trade route may apply a General Rate Increase

ISPS = International Ship & Port Facility Security
To cover security handling at the origin and destination ports/depots

SCA = Sea Cargo Automation Fee
Australian Customs apply this charge for the computer system that controls the reporting and delivery of import sea-cargo in Australia

• CABAF – CAF and BAF charges combined

Transport Modes

RF/Reefer = Refrigerated Container
For further information on shipping containers please click here………

B/B, B/Bulk = Break-Bulk
This is when a shipment is usually too big for sending via conventional container shipping and would instead be loaded directly in to the hold of a vessel or on craned onto the deck of a vessel.

DG = Dangerous Goods
Shipments that are classified as harmful to people and the environment and may require special handling

FAK = Freight All Kind
Full container load with a combination of freight from different shippers

FCL = Full Container Load
Usually for cargo that is over 12 to14 cbm and will be cheaper to move via a full 20ft container or 40ft container.

LCL = Less than Container Load
This is for shipments that are not cost effective to send via a full container load. Minimum shipment size is 1 cubic metre (CBM/M³) to 1 tonne

LO LO = Lift on Lift off
Carriers use this term when shipping containers are lifted off the vessel or forwarders truck or onto the forwarders truck and/or vessel

GP = General Purpose Container
Usually known as a standard 20ft container

OOG = Out Of Gauge
This generally refers to cargo that is larger than the dimensions of a container

RO RO = Roll On Roll Off
Equipment, Vehicles, Trucks etc. that can be driven or towed on and off a vessel

SOC = Shipper Owned Container
Shipping container owned by the shipper rather than the shipping line

U.L.D = Unit Load Device
Airline containers or pallet bases used to load cargo onto or in for fast efficient loading into aircraft

Delivery

POD = Proof of Delivery
This is used as proof that the shipment has been delivered in full and with a clean receipt (without any damage). The POD is signed by the driver when the goods are picked up from the depot and then signed by the consignee when the goods are delivered

• 20FT, 20′, TEU = Standard 20 foot shipping container
• 40FT, 20′, FEU = Standard 40 foot shipping container
• FR = Flat Racks
• HC = High Cube container
• OT = Open top container
• LSE = Loose Airfreight

Insurance

• DV = Declared Value
• LCR = Limited Carriers Risk
• OR = Owners Risk

Icoterms

What are Incoterms and why do I need to know about them?

Incoterms® are international commercial terms – terms of sale that are set by the International Chamber of Commerce, and internationally accepted in the assignment of costs and responsibilities between buyers and sellers. It’s important that you understand the details of every Incoterm that may be used, and your responsibilities under each one.

The table illustrates the cost responsibilities for each party.

The Incoterm used depends entirely on the situation between you and the buyer. Some buyers will have a strong preference for how they buy from overseas, and some Incoterms result in less effort for the customer – but more effort from the exporter’s end. This could be anything from just getting goods picked up from the factory (Ex Works) right through to paying for cost, insurance and freight (CIF).

Here are the most common Incoterms 2010 rules:

FCA: Free Carrier (to a named place of destination)
The exporter clears the goods for export and then hands them over to a carrier named by the buyer either at the exporter’s premises or at an agreed place. If the buyer asks the exporter to help contract a carrier, then the exporter is acting at the buyer’s risk.

EXW: (Ex Works)
EXW places the most responsibility on the buyer. The buyer is responsible for organising the collection of the goods from the exporter’s premises.

This means the exporter has no legal liability for anything that occurs to the goods after the buyer or a carrier has collected them from the factory or warehouse. This leaves the buyer responsible for ensuring that all the relevant paperwork is completed prior to the goods leaving the country. The buyer is also responsible for organising transport to the port, and insurance between the exporter and the port.

CPT: Carriage Paid (to a named place of destination)
Under CPT, the exporter must clear the goods for export and pay the freight cost to the buyer’s destination. However, the risk of loss or damage is the buyer’s, as well as any costs arising after the exporter has delivered the goods to the carrier.

CIP: Carriage and Insurance Paid (to a named place of destination)
Similar to CPT, but the exporter also has to purchase insurance against the risk of loss or damage to the goods during carriage. The exporter is only required to obtain insurance for minimum coverage.

DAT: Delivered at Terminal (at a port or place of destination)
The exporter clears the goods for export and bears the risks of getting the goods to the agreed terminal and unloading them. However, the buyer is required to clear the goods for import, pay import duty and carry out import Customs formalities.

DDP: Delivered Duty Paid (to a named place of destination)
The exporter must complete all the paperwork and pay all costs to get the goods delivered to the buyer’s destination. This term places the most responsibility on the exporter and the minimum responsibility on the buyer. Care should be taken to make sure the place of destination is clearly agreed.

DAP: Delivered at Place (to a named place of destination)
Similar to DDP, but the buyer is required to clear the goods for import, pay import duty and complete import Customs formalities.

FAS: Free Alongside Ship (to a named port of shipment)
The exporter is responsible for the goods until they are deposited alongside the vessel, not onboard. After this point the buyer is responsible for the risk. This term is not appropriate unless the buyer is prepared to be directly involved in carrying out the export formalities. Note that FAS does not typically apply for goods in containers, which are usually delivered to a terminal (the FCA rule should be used in this instance).

FOB: Free on Board (to a named port of shipment)
Under the ICC’s Incoterms, FOB is usually from the named port of loading for non-containerised sea freight (containers are typically delivered to the carrier first at a terminal). The exporter clears the goods for export, but the buyer takes over the responsibility for insurance and other costs such as freight, import duty etc. from the time the goods arrive on board the ship at the port of shipment. Modern usage and the growth in e-commerce has seen FOB origin or FOB destination used more frequently. Some countries, notably North America, have a different meaning of FOB. Care should be taking to ensure all parties agree and understand the terms clearly.

CFR: Cost and Freight (to a named port of destination)
The quoted price includes the cost of the goods plus freight charges. The exporter must clear the goods for export and is responsible for all freight charges necessary to get the goods to the named port of destination. But it is the buyer’s responsibility to insure the goods from the time the goods arrive on board the ship at the port of departure. The exporter is considered to have delivered the goods when they are on board the vessel at the port of shipment, not when the goods arrive at the destination.

CIF: Cost, Insurance and Freight (to a named port of destination)
Similar to CFR, however the exporter must also obtain and pay for the marine insurance against the buyer’s risk of loss or damage to the goods during carriage. Note that the exporter is only required to obtain insurance for minimum coverage.