Freight & Logistics Glossary

A 20GP is the standard 20-foot shipping container used for general cargo. It typically holds around 33 CBM of cargo and has a maximum payload of roughly 28,000 kg, making it ideal for dense, heavy goods like machinery or raw materials.

A 3PL (Third-Party Logistics) provider is an outsourced service provider that manages some or all of a company's logistics operations including warehousing, order fulfilment, inventory management, and transportation. Using a 3PL allows businesses to scale their logistics without building their own warehouse infrastructure. E-commerce sellers using Amazon FBA are effectively using a form of 3PL, though dedicated 3PL providers offer more customisation and flexibility.

Related: Freight Broker vs Forwarder vs 3PL

A 40GP is the standard 40-foot shipping container used for general cargo. It offers double the volume of a 20GP (around 67 CBM) but roughly the same weight capacity, making it perfect for lighter, bulkier goods like furniture, textiles, or electronics.

A 40HC container has the same footprint as a 40GP but is one foot taller (9'6" instead of 8'6"). This extra height provides about 10-15% more interior volume (up to 76 CBM), making it the most popular container type for lightweight, voluminous retail goods.

A 4PL is an overarching logistics provider that manages an entire supply chain for a client, often acting as a strategic partner. Unlike a 3PL, a 4PL rarely owns physical assets like warehouses or trucks; instead, they coordinate multiple 3PLs and technology systems to optimize the whole network.

An air freight consolidator is a freight forwarder who groups multiple smaller air shipments from different customers into one large shipment to secure better rates from the airline. The consolidator issues House Air Waybills to the shippers and books the freight under one Master Air Waybill.

An Air Waybill is the shipping document that accompanies cargo sent by air freight, serving as the contract of carriage between the shipper and the airline. Unlike a Bill of Lading, it is non-negotiable meaning ownership of the goods cannot be transferred using the AWB itself. It also acts as the receipt of goods and carries all key shipment details including weight, dimensions, origin, destination, and declared value.

Related: Bill of Lading Guide

A Bill of Lading is the core shipping document in ocean freight it serves simultaneously as the contract of carriage between shipper and carrier, a receipt for the goods, and a document of title (meaning it can transfer ownership of the cargo). Without the original B/L, the consignee generally cannot collect the goods at destination. There are several types Original, Telex Release, and Sea Waybill each with different release mechanisms.

Related: Bill of Lading Explained Guide

Bonded cargo refers to imported goods moving through a country under customs control on which duties and taxes have not yet been paid. The cargo must remain bonded until it is either formally cleared for domestic consumption or exported.

A bonded warehouse is a secure facility authorized by customs where imported goods can be stored without paying duties and taxes. Duties are only paid when the goods are moved out of the warehouse for domestic consumption.

Break bulk refers to cargo that is shipped as individual pieces or units rather than inside a container such as machinery, steel coils, timber, or large project equipment. It is loaded directly into a ship's hold or on deck, and each piece is handled separately at loading and unloading. Break bulk is common for oversized or irregularly shaped cargo that physically cannot fit inside a standard shipping container.

The Bunker Adjustment Factor is a variable surcharge shipping lines add to ocean freight rates to account for fluctuations in fuel (bunker) costs. When global oil prices rise significantly, carriers apply BAF on top of the base freight rate to recover the increased fuel expense. It is expressed per container (TEU or FEU) and reviewed periodically sometimes monthly so your actual all-in rate can differ from the originally quoted base rate.

Related: Freight Cost Calculation Guide

A carrier is the company that physically transports the cargo from one location to another. Carriers can be shipping lines operating ocean vessels, airlines operating cargo planes, or trucking companies.

CBM stands for Cubic Meter and is the standard unit for measuring cargo volume in international shipping. It is calculated by multiplying the length, width, and height of a shipment in meters (L Ã- W Ã- H = CBM). Freight forwarders use CBM to determine how much space your cargo occupies in a container or LCL consolidation, and it directly affects the freight rate you are charged for sea shipments.

Related: CBM Calculator · What Is CBM in Shipping?

A Certificate of Origin (CO) is a trade document that certifies which country a product was manufactured or produced in. Customs authorities use it to determine whether preferential duty rates apply under a Free Trade Agreement, and to verify compliance with import regulations. There are two main types: non-preferential (for standard trade) and preferential (required when claiming FTA duty reductions).

Related: Customs Clearance Process Explained

CFR is an Incoterm where the seller pays ocean freight to the named port of destination, but does not arrange insurance that responsibility falls to the buyer. Like CIF, risk transfers to the buyer once the goods are loaded onto the ship at origin, even though the seller is still paying for the freight onwards. CFR is used exclusively for sea and inland waterway transport.

Related: Incoterms 2020 Explained

Chain of custody is the chronological documentation tracking the physical movement, handling, and ownership of cargo from origin to destination. It is especially critical for high-value goods, pharmaceuticals, or hazardous materials to ensure nothing was tampered with during transit.

Chargeable weight is the figure carriers actually bill you on whichever is higher between a shipment's actual weight and its volumetric (dimensional) weight. Airlines and couriers use it because bulky, lightweight cargo takes up valuable space even if it doesn't physically weigh much. A shipment weighing 40 kg but occupying a large box could still be billed at 80 kg if its volumetric weight is higher.

Related: Chargeable Weight Calculator · What Is Chargeable Weight?

CIF is an Incoterm where the seller is responsible for the cost of goods, marine insurance, and ocean freight to the named port of destination but risk transfers to the buyer as soon as the cargo is loaded onto the vessel at origin. The practical implication is that the seller arranges and pays for freight and insurance, but the buyer bears the risk if anything goes wrong after loading. CIF is common in commodity trading but can be misleading for buyers who assume "delivery" means more seller responsibility than it does.

Related: Incoterms 2020 Explained · Incoterms Comparison Tool

CIP is the multimodal equivalent of CIF the seller pays for carriage and insurance to a named destination, but risk transfers earlier than CIF: at the point the goods are handed over to the first carrier. Under Incoterms 2020, CIP requires the seller to provide a higher level of insurance coverage (Institute Cargo Clauses A) than under CIF. CIP works for all transport modes including air, road, and sea.

Related: Incoterms 2020 Explained

A commercial invoice is the primary document used for customs declaration that specifies the value, quantity, and nature of the goods being sold. It serves as a bill of sale from the seller to the buyer and is the main document customs authorities use to assess duties and taxes.

The consignee is the party named on a shipping document (Bill of Lading, Air Waybill, or delivery order) as the intended recipient of a shipment. In most commercial shipments, the consignee is the buyer or importer of record. The consignee is responsible for paying destination charges, clearing customs, and collecting the cargo at the port or warehouse of destination.

Related: Bill of Lading Explained

Consolidation is the process of combining multiple smaller shipments from different shippers into a single larger shipment or container (LCL to FCL). This allows shippers to benefit from the economies of scale and lower freight rates associated with full container loads.

A container yard is a dedicated facility within or adjacent to a port where full and empty shipping containers are stored before being loaded onto a vessel or after being discharged. CY-CY on a Bill of Lading indicates the carrier's responsibility starts and ends at these yards.

The country of origin is the country where goods were completely obtained, produced, or manufactured. It is a critical piece of information for customs authorities to determine admissibility, duty rates, and whether goods qualify for preferential trade agreements.

CPT is an Incoterm where the seller pays for carriage to a named destination, but does not arrange insurance the buyer must do so. Risk transfers to the buyer at the point of handover to the first carrier at origin, even though the seller is paying the freight bill. CPT is suitable for all transport modes and is the counterpart to CIP (which adds mandatory insurance coverage).

Related: Incoterms 2020 Explained

Cross-docking is a logistics practice where incoming cargo is transferred directly from inbound transport to outbound transport with minimal or no warehouse storage in between. Goods arrive at a distribution hub, are sorted, consolidated or deconsolidated, and immediately dispatched for the next leg. It reduces storage costs and speeds up transit times, and is widely used by retailers and e-commerce fulfilment operations.

The Currency Adjustment Factor is a surcharge shipping lines apply to compensate for currency exchange rate fluctuations. Because ocean freight is priced in US dollars but carriers have costs in local currencies, a weakening dollar can erode their revenues. CAF is typically applied as a percentage of the base freight rate and varies by trade lane.

A customs broker is a licensed professional or company that acts on behalf of importers and exporters to manage the customs clearance process. They prepare and submit customs declarations, classify goods under the correct HS codes, calculate applicable duties and taxes, and liaise with customs authorities to ensure compliant and timely release of cargo. Using a customs broker is often mandatory for commercial imports above certain value thresholds.

Related: Freight Forwarder vs Customs Broker · Customs Clearance Guide

A customs declaration is an official document submitted to customs authorities detailing the goods being imported or exported. It includes information on the value, weight, destination, and nature of the cargo to ensure regulatory compliance and correct duty assessment.

A Dangerous Goods Declaration is a vital document prepared by the shipper certifying that hazardous materials being transported are properly classified, packed, marked, and labeled according to international regulations (like IATA for air freight).

DAP is an Incoterm where the seller delivers goods to a named place at destination typically the buyer's warehouse or premises ready for unloading but without paying import duties or taxes. The seller bears all risks and costs up to the point of delivery, while the buyer handles import customs clearance and any applicable import duties. DAP is one of the most buyer-friendly Incoterms because it places maximum responsibility on the seller.

Related: Incoterms 2020 Explained · Incoterms Comparison Tool

DDP is the Incoterm with the highest obligation on the seller they are responsible for delivering goods to the buyer's named premises, paying all freight, insurance, import customs clearance, and applicable import duties and taxes. From the buyer's perspective, DDP is turnkey: one price, goods arrive at their door. For sellers, DDP requires deep knowledge of destination country customs regulations, and miscalculating duties can significantly erode margins.

Related: Incoterms 2020 Explained

De minimis is the threshold value below which imported goods are exempt from customs duties and/or taxes. Each country sets its own de minimis level for example, the US threshold was $800, while many EU countries use €150 for VAT purposes. E-commerce sellers and small importers should be aware that de minimis thresholds are being tightened in many markets as governments look to capture more tax revenue from low-value international parcels.

Related: Customs Clearance Guide

Deconsolidation is the process of breaking apart a consolidated shipment separating individual cargo pieces or parcels that were grouped together (consolidated) for transport and distributing them to their respective final destinations. It typically happens at a CFS (Container Freight Station) after an LCL container arrives at the destination port. The opposite process is consolidation.

Related: LCL vs FCL Explained

A delivery order is a document issued by a carrier or their agent authorizing the terminal operator or warehouse to release the cargo to the consignee. It is only issued after all freight charges have been paid and the original Bill of Lading (if applicable) has been surrendered.

Demurrage is a daily charge levied by the shipping line when a container remains at the port or terminal beyond the allowed free time after discharge from the vessel. Free time is typically 3–7 days depending on the trade lane and carrier; after that, demurrage accrues per container per day and can escalate quickly. It is one of the most common unexpected costs in ocean freight, and avoiding it requires close coordination between your customs broker and freight forwarder to ensure timely clearance.

Related: Demurrage & Detention Calculator

Detention is a daily charge from the shipping line when a container has been removed from the port but is not returned to the carrier's depot within the allowed free time. It is different from demurrage demurrage is charged while the container is still at the port; detention is charged once it has left. Importers holding containers at their warehouses for extended loading or unloading are common candidates for detention charges.

Related: Demurrage & Detention Calculator

Devanning is the process of unloading cargo from a shipping container. Also known as stripping or unstuffing, devanning typically occurs at a destination warehouse, distribution center, or deconsolidation facility.

Direct sailing means a vessel travels from the port of loading to the port of discharge without stopping at a transshipment hub to transfer the cargo to another ship. Direct sailings offer faster and more reliable transit times compared to transshipment routes.

A documentation fee is a charge levied by carriers or freight forwarders to cover the administrative costs of creating, processing, and submitting required shipping documents, such as the Bill of Lading or Delivery Order.

DPU is the only Incoterm that requires the seller to unload the goods at the named destination delivery is only complete once the cargo has been physically unloaded from the arriving transport. Previously called DAT (Delivered at Terminal) in Incoterms 2010, it was renamed and expanded in Incoterms 2020 to allow any destination, not just a terminal. The seller bears all costs and risks up to and including unloading; the buyer handles import clearance and duties.

Related: Incoterms 2020 Explained

Drayage is the short-distance trucking of cargo most commonly moving a container from a port or rail terminal to a nearby warehouse, distribution centre, or shipper's facility. It is typically the first or last leg in an intermodal freight journey. Drayage costs are quoted separately from ocean freight and can vary significantly based on distance, fuel surcharges, and chassis availability at the port.

A duty is a tax imposed by a government on imported (or occasionally exported) goods. Import duties are calculated as a percentage of the customs value of the goods, based on the product's HS Code classification and the country of origin. Duties are a key component of landed cost calculations and vary widely by product type, origin country, and any applicable free trade agreements.

Related: Landed Cost Calculator · HS Codes Explained

Duty drawback is the refund of customs duties, taxes, and fees paid on imported goods that are subsequently exported or destroyed. It is designed to help domestic manufacturers compete internationally by lowering their production costs on exported items.

An EORI (Economic Operators Registration and Identification) number is a unique identifier assigned to businesses and individuals that import or export goods to and from the European Union or the United Kingdom. Customs authorities use the EORI number to identify and track economic operators in trade. Without a valid EORI number, you cannot legally import or export commercial shipments in the EU or UK it is a mandatory registration requirement, not optional.

Related: UK Post-Brexit Customs Guide

ETA is the date and time a vessel, aircraft, or truck is expected to arrive at a destination port, airport, or terminal. ETAs in ocean freight are notoriously approximate vessel schedules can shift by days due to port congestion, weather, equipment delays, or carrier schedule changes. Freight forwarders track ETA updates from carrier systems and relay changes to importers so they can plan warehouse receiving, customs brokerage timings, and onward trucking.

ETD is the date and time a vessel or aircraft is scheduled to depart from the port or airport of loading. ETD matters to exporters and freight forwarders because it determines the cargo cut-off deadline the latest point by which cargo and documents must be ready for a specific sailing. Missing the ETD means rolling to the next available vessel, which can delay delivery by a week or more on many trade lanes.

EXW is the Incoterm with the minimum obligation for the seller they simply make the goods available at their premises (factory, warehouse, or named place), and the buyer takes on all responsibility for export clearance, loading, transport, insurance, and import clearance from that point onwards. It is the simplest arrangement for the seller but places the most burden on the buyer. EXW is often misused when buyers don't have the means or authority to handle export formalities in the seller's country.

Related: Incoterms 2020 Explained · Incoterms Comparison Tool

FAS is an Incoterm where the seller's obligation ends when the goods are placed alongside the named vessel at the port of loading for example, on the quay or in lighters. From that point, the buyer assumes all risk and cost, including loading the goods onto the ship. FAS is used exclusively for sea and inland waterway transport and is most common in bulk commodity and break bulk trades.

Related: Incoterms 2020 Explained

FCA is an Incoterm where the seller delivers goods to a named location and hands them over to the buyer's nominated carrier, at which point risk transfers to the buyer. Incoterms 2020 added an important update for FCA: parties can now agree in the contract that the buyer will instruct their nominated carrier to issue an on-board Bill of Lading to the seller after loading which matters for Letters of Credit. FCA is suitable for all transport modes and is often used as a safer alternative to EXW or FOB.

Related: Incoterms 2020 Explained

FCL means your cargo fills (or you are paying for) an entire shipping container it is not shared with other shippers. FCL is typically more cost-effective per CBM than LCL once your cargo volume exceeds roughly 15 CBM, and it carries less risk of cargo damage since your goods are not co-loaded with others. FCL can use 20GP, 40GP, 40HC, reefer, or specialised containers depending on the cargo type.

Related: LCL vs FCL Calculator · LCL vs FCL Explained

FEU is the unit of measure for a 40-foot standard shipping container. It is used in shipping statistics, port capacity figures, and carrier pricing to count and compare container volumes. One FEU equals two TEUs (Twenty-foot Equivalent Units). When you book a 40GP or 40HC container, you are booking one FEU.

Related: Container Sizes & Dimensions Guide

A flat rack is a shipping container with no side walls and no roof, consisting only of a flat bed and collapsible end walls. It is used for heavy, out-of-gauge (OOG) cargo that exceeds the dimensions of standard containers, such as large vehicles or construction equipment.

FOB is one of the most widely used Incoterms in ocean freight the seller is responsible for the goods up to and including loading them on board the vessel at the named port of origin. Once the cargo crosses the ship's rail, risk and responsibility transfer to the buyer. FOB is often the default term in China-to-US/EU trade, where the buyer arranges and pays for the ocean freight, insurance, and destination charges. One common mistake: using FOB for containerised cargo through a freight forwarder, where FCA is technically more appropriate.

Related: Incoterms 2020 Explained · Incoterms Comparison Tool

Force majeure is a contract clause that relieves parties from liability or obligation when an extraordinary, unforeseeable event beyond their control - such as a hurricane, war, or global pandemic - prevents them from fulfilling their duties.

Free time is the number of days a shipper or consignee is permitted to use a container at the port (for demurrage) or outside the port (for detention) without incurring additional charges. Once free time is exhausted, daily charges begin accruing. Free time allowances vary by shipping line, trade lane, and contract terms, and negotiating extended free time on high-volume contracts is common practice.

Related: Demurrage & Detention Calculator

A Free Trade Zone is a designated area within a country where goods can be imported, stored, handled, manufactured, or reconfigured without being subject to normal customs duties, as long as they remain within the zone. Goods only attract import duties when they leave the FTZ and enter the domestic market. FTZs are used by companies to defer duty payments, re-export goods without customs complications, or add value through manufacturing before final distribution.

Related: Customs Clearance Guide

Freight class is a US-specific classification system (NMFC National Motor Freight Classification) that assigns cargo to one of 18 classes from Class 50 to Class 500. The class is determined by four factors: density, stowability, handling difficulty, and liability. Higher freight classes (e.g., Class 300–500) are assigned to cargo that is bulky, fragile, or difficult to handle, and attract higher LTL freight rates. Getting the freight class wrong can result in reweigh charges or reclassification fees.

Related: Freight Class Calculator · What Is Freight Class?

A freight forwarder is an intermediary that organises the shipment of goods on behalf of exporters and importers booking cargo space with carriers, preparing shipping documentation, coordinating customs clearance, and managing the overall logistics chain. They do not typically own the ships, planes, or trucks themselves, but act as the orchestrator of the entire shipping process. Think of them as the travel agent of international freight.

Related: What Is a Freight Forwarder? · Freight Forwarder vs Customs Broker

A General Rate Increase is a periodic announcement by shipping lines of a planned increase to base ocean freight rates across a specific trade lane. Carriers announce GRIs typically one to four weeks in advance to recover costs or respond to market demand. Not all announced GRIs stick: if cargo volumes are low, carriers may not be able to enforce the full increase in the market. Monitoring GRI announcements helps importers time bookings to avoid rate spikes.

Related: Freight Cost Calculation Guide

The Harmonized System (HS) is the internationally standardised nomenclature for classifying traded goods, maintained by the World Customs Organization and used by over 200 countries. It organises all traded products into 21 sections and 99 chapters based on the nature of the goods. The HS provides the universal foundation for customs tariff schedules, trade statistics, and rules of origin calculations.

Related: HS Codes Explained

A House Air Waybill is issued by a freight forwarder to the actual shipper. In a consolidated shipment, there will be multiple HAWBs (one for each individual shipper's goods) riding under a single Master Air Waybill issued by the airline.

A House Bill of Lading is issued by a freight forwarder or NVOCC to the shipper and covers the movement of goods between the shipper and the ultimate consignee. It sits on top of the Master Bill of Lading which is issued by the actual ocean carrier to the freight forwarder. In an LCL shipment, the HBL covers one specific shipper's cargo within a consolidated container. The consignee at destination receives the HBL and uses it to take delivery.

Related: Bill of Lading Explained

An HS Code is a standardised international numerical code used to classify traded products for customs purposes. Maintained by the World Customs Organization, HS codes are 6 digits at the international level, with individual countries adding additional digits for further specificity (e.g., 8 or 10 digits). The HS code on your customs declaration determines the import duty rate, applicable trade restrictions, and eligibility for preferential tariff treatment under free trade agreements.

Related: HS Codes Explained for Beginners

IATA (International Air Transport Association) is the trade association representing the world's airlines and sets the standards, regulations, and procedures for international air transport including air cargo. In freight, IATA is best known for its volumetric weight divisor (usually 6,000 cm³ per kg for air freight) and its Dangerous Goods Regulations (IATA DGR), which govern how hazardous materials can be transported by air. Most air freight quotes reference IATA standards for chargeable weight calculation.

Related: Chargeable Weight Calculator · Air Freight vs Sea Freight

An import license is a government-issued authorisation required to import certain controlled or restricted categories of goods. Not all goods require an import license it typically applies to specific products such as agricultural commodities, pharmaceuticals, weapons, certain chemicals, and quota-restricted items. The requirement and process for obtaining an import license varies by country and product HS code. Attempting to import restricted goods without the required license can result in seizure and penalties.

Related: Customs Clearance Guide

The Importer of Record is the entity or individual legally responsible for ensuring imported goods comply with all local laws and regulations, filing the customs declaration, and paying any assessed import duties and taxes.

Incoterms (International Commercial Terms) are a set of globally recognised trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities, costs, and risk transfer between buyer and seller in international trade transactions. The current edition is Incoterms 2020, which contains 11 terms covering different transport modes and delivery points. Every international sales contract should specify the relevant Incoterm and named location to avoid disputes over who pays for which leg of the journey.

Related: Incoterms 2020 Explained · Incoterms Comparison Tool

ISF commonly called "10+2" is a US Customs and Border Protection requirement that mandates importers (or their agents) file specific shipment data at least 24 hours before cargo is loaded onto a vessel destined for the United States. The filing includes 10 data elements from the importer (such as shipper, consignee, and HS codes) plus 2 from the carrier. Failure to file or late filing can result in liquidated damage penalties of up to $5,000 per violation.

Related: Import Documentation Checklist

Landed cost is the total cost of a product at the point it reaches the buyer's facility or distribution centre including the purchase price, international freight, insurance, customs duties, port charges, brokerage fees, and any inland transport. It is the true all-in cost of an imported product and is essential for accurate pricing, profitability calculations, and comparing suppliers in different countries. Many importers underestimate landed cost by forgetting ancillary charges like THC or local delivery.

Related: Landed Cost Calculator

Last mile delivery refers to the final step of the delivery process moving goods from a transportation hub or warehouse to the end customer's location. Despite often being the shortest physical distance in the supply chain, it is typically the most expensive and complex leg due to low drop density, traffic, address complications, and failed delivery attempts. It is a major cost driver and service differentiator in e-commerce logistics.

LCL means your cargo shares a container with other shippers' goods it does not fill an entire container on its own. A freight forwarder or consolidator groups multiple LCL shipments together into a full container (FCL) for the ocean leg, then separates them at a CFS at destination. LCL is typically cost-effective for shipments under 12–15 CBM and provides flexibility for regular, smaller-volume importing without committing to full container quantities.

Related: LCL vs FCL Calculator · LCL vs FCL Explained

Lead time in logistics is the total time elapsed between placing an order and receiving the goods spanning production, packaging, export clearance, transit, import clearance, and local delivery. Understanding and accurately calculating lead time is critical for inventory planning, avoiding stockouts, and meeting customer commitments. International sea freight lead times from Asia to Europe or North America are typically 30–60 days end-to-end when all stages are included.

A Letter of Credit is a financial instrument issued by a buyer's bank that guarantees payment to the seller, provided the seller presents the correct shipping documents that comply precisely with the L/C terms and conditions. It is a common payment method in international trade where the buyer and seller do not have a strong established trust relationship. L/Cs are complex documents even minor discrepancies in the shipping documents (wrong date format, incorrect port name) can result in the bank refusing to pay.

Related: Bill of Lading Explained

A Master Air Waybill is issued by the actual airline to the air freight forwarder or consolidator. It covers the entire consolidated shipment on the aircraft and serves as the contract of carriage between the forwarder and the airline.

A Master Bill of Lading is issued by the ocean carrier to the freight forwarder or NVOCC who has booked space on the vessel. It covers the entire container or booking not the individual shippers within it. In an LCL shipment, the freight forwarder holds the MBL (showing themselves as shipper) and issues separate House Bills of Lading to each individual cargo owner. The MBL is used for carrier-level claim purposes and customs at some destinations.

Related: Bill of Lading Explained

MOQ is the lowest number of units a supplier is willing to manufacture or sell in a single order. MOQs are set by factories to ensure that production runs are profitable and cover the setup costs of manufacturing.

The notify party is a third party listed on a Bill of Lading or Air Waybill that the carrier's agent at destination is instructed to notify upon arrival of the shipment. In many cases this is the customs broker, freight forwarder, or the consignee themselves. The notify party is not necessarily the owner of the goods their role is simply to be informed of the cargo's arrival so they can initiate customs clearance and collection.

Related: Bill of Lading Explained

An NVOCC is a company that provides ocean freight services like a carrier issuing Bills of Lading and setting rates but does not own or operate the vessels it uses. Instead, NVOCCs buy space in bulk from shipping lines and sell it on to shippers, often at competitive rates. Most large freight forwarders operate as NVOCCs on key trade lanes. The distinction matters legally: as a common carrier, an NVOCC takes on carrier liability for the cargo.

An open top container has a removable tarpaulin roof instead of a solid steel roof. This allows oversized cargo, such as tall machinery or large pipes, to be loaded from the top using a crane.

A packing list is a detailed shipping document that itemises the contents of a shipment listing each box, pallet, or package with its contents, quantity, weight, and dimensions. Customs authorities and freight forwarders use it to verify that the goods match what is declared on the commercial invoice. Unlike the commercial invoice, the packing list shows the physical packaging details rather than the financial values, and both documents are typically required together for customs clearance.

Related: Import Documentation Checklist

A Peak Season Surcharge is an additional charge applied by shipping lines during periods of high cargo demand typically from July to October when retailers are building inventory ahead of Q4 and the holiday season. The PSS is applied per container on top of the base freight rate and is intended to reflect the market's supply-demand imbalance during peak periods. Importers with flexible timing sometimes advance their shipments to avoid peak season charges.

Related: Freight Cost Calculation Guide

Per diem is the daily rate charged by a container leasing company or shipping line for the use of a container, typically when it has been held beyond agreed-upon terms. The term is used interchangeably with detention in some markets. In trucking and rail, per diem can also refer to the daily allowance paid to drivers for travel expenses. In freight, always confirm whether "per diem" refers to a container holding charge or a driver allowance.

Related: Demurrage & Detention Calculator

The port of discharge (POD) is the port where cargo is unloaded from the ocean vessel. It is listed on the Bill of Lading and in the shipping contract. The port of discharge is not always the final destination of the goods cargo may be transshipped through an intermediate port (transshipment port) before reaching the final port of discharge. Import duties, port fees, and customs clearance all apply at the port of discharge unless the goods are moved under a bonded transit arrangement.

The port of loading (POL) is the port where cargo is physically loaded onto the ocean vessel for the international voyage. It is listed on the Bill of Lading. Export clearance and vessel cut-off deadlines are based on the port of loading cargo must arrive at the port and be customs-cleared before the vessel's cargo cut-off date to make a specific sailing.

A post-entry amendment is a correction made to a customs declaration after the goods have already been cleared and released. This is often necessary if an error was found in the declared value, HS code, or quantity, allowing the importer to pay any additional duties owed without penalty.

A proforma invoice is a preliminary invoice issued by a seller before the actual shipment takes place it outlines the goods, quantities, prices, and terms of sale so the buyer can arrange payment, apply for an import license, or open a Letter of Credit. It is not a demand for payment and has no accounting status, but it serves as a binding quotation and is often required by banks and customs authorities as a pre-shipment document.

Related: Import Documentation Checklist

A Proof of Delivery (POD) is the document or digital record confirming that cargo has been received at the destination by the consignee or an authorised representative. It typically includes the date and time of delivery, the receiver's signature, and sometimes a description of the condition of the goods at delivery. PODs are critical for resolving billing disputes, confirming shipment completion, and initiating claims for damaged or short-shipped cargo.

A reefer container (refrigerated container) is a temperature-controlled shipping container used to transport perishable goods that must be kept at a specific temperature range during transit such as food products, pharmaceuticals, or chemicals. Reefer containers have integrated refrigeration units and require electrical power connections at ports and on vessels. They are available in standard 20-foot and 40-foot sizes and carry a significant freight premium over dry containers.

Related: Container Sizes & Dimensions Guide

RoRo refers to vessels designed to carry wheeled cargo, such as cars, trucks, and heavy equipment, that are driven on and off the ship on their own wheels. This is in contrast to LoLo (Lift-on/Lift-off) vessels, which require cranes to load cargo.

Rules of origin are the criteria used to determine the national source of a product for customs and trade purposes. They are critical for establishing whether goods qualify for preferential tariff rates under a Free Trade Agreement, and for applying trade measures like anti-dumping duties correctly. Products that are sourced or substantially transformed in a qualifying country may attract significantly lower import duties than the same goods sourced from a non-qualifying country.

Related: HS Codes Explained

A Sea Waybill is a non-negotiable transport document that serves as evidence of the contract of carriage and receipt of goods but unlike an original Bill of Lading, it is not a document of title and cannot be used to transfer ownership of the cargo. The named consignee can collect the goods simply by proving their identity, without needing to present a physical document. Sea Waybills are faster and cheaper for release but are not suitable when the cargo needs to be traded or sold while in transit.

Related: Bill of Lading Explained

In international freight, the shipper is the party that initiates and sends a shipment typically the seller or exporter. The shipper is responsible for preparing the cargo for export, arranging export customs clearance (depending on the Incoterm), providing accurate shipping documents, and instructing the freight forwarder. The shipper's name and address appear on the Bill of Lading, Air Waybill, and commercial invoice as the party from whom the goods originate.

A Shipper's Letter of Instruction is a document issued by the exporter that authorises the freight forwarder to act on their behalf in arranging the shipment specifying the routing, services required, and providing the details needed to prepare the Bill of Lading or Air Waybill. It is essentially the exporter's detailed instructions to the forwarder and is critical for ensuring the shipping documents are prepared accurately and the correct export procedures are followed.

Related: Import Documentation Checklist

An SKU is a unique alphanumeric code assigned to a specific product variant to track inventory. Each combination of a product's size, color, or style gets a distinct SKU to help warehouses precisely manage stock levels and fulfill orders.

A supply chain is the entire network of entities, activities, resources, and technology involved in the creation and delivery of a product from the sourcing of raw materials, through manufacturing, warehousing, and transportation, to the end consumer. In international trade, managing the supply chain involves coordinating suppliers, freight forwarders, carriers, customs brokers, warehouses, and last-mile delivery providers. Supply chain visibility knowing where your goods are at every stage is increasingly a competitive advantage.

A tank container is a cylindrical vessel mounted within a standard ISO frame, used for transporting bulk liquids, chemicals, or food-grade fluids. They offer a safer, more efficient alternative to shipping liquids in drums inside standard containers.

A tariff is the schedule of import duties published by a government, specifying the duty rate applicable to each HS code category of goods. The term is also used colloquially to refer to the duty rate itself (e.g., "a 25% tariff on steel"). Tariff rates can be ad valorem (a percentage of the goods' value), specific (a fixed amount per unit or weight), or compound (a combination of both). Tariff rates are a key variable in supply chain decisions around sourcing country selection.

Related: HS Codes Explained · Landed Cost Calculator

A Terminal Handling Charge is a fee levied by the shipping line or terminal operator to cover the cost of handling a container at a port or terminal including loading, unloading, and moving containers within the terminal. THC is charged at both origin and destination and is separate from the base ocean freight rate. It is one of the most consistent "hidden" charges that surprises importers who only focus on the base freight rate when budgeting.

Related: Freight Cost Calculation Guide · Landed Cost Calculator

TEU is the standard unit used to measure shipping container volumes and port/vessel capacity. One TEU equals one 20-foot standard container. A 40-foot container counts as two TEUs (or one FEU). Port capacity, vessel capacity, and annual throughput statistics are all expressed in TEUs for example, "Shanghai port handles 50 million TEUs per year." When comparing container prices, rates are usually quoted per TEU or per FEU.

Related: Container Sizes Guide

Transit time is the number of days it takes for cargo to travel from the port of loading to the port of discharge. It typically refers to the sea leg only and does not include inland transport, customs clearance, or last-mile delivery. Quoted transit times by carriers are indicative actual transit time can be longer due to port congestion, weather, and schedule changes. When planning inventory, always add buffer time on top of the quoted transit time for a realistic end-to-end lead time.

Transshipment is the process of transferring cargo from one vessel to another at an intermediate port called a transshipment hub on its way to the final destination port. Many trade lanes do not have direct sailings, so cargo is transshipped through major hub ports such as Singapore, Rotterdam, or Algeciras. Transshipment adds time and introduces risk of delay or damage, but it enables carriers to offer wider geographic coverage without running unprofitable direct services to every port.

A transshipment port is an intermediate hub where cargo is unloaded from one vessel and loaded onto another to complete its journey. Major transshipment hubs like Singapore or Jebel Ali connect global mainline routes with smaller regional feeder vessels.

A Unit Load Device is a standardised pallet or container used in air freight to consolidate individual pieces of cargo into a single unit that fits into the aircraft's hold. ULDs come in various sizes and shapes to match the contour of specific aircraft fuselages. Airlines charge by the ULD on some services, or by chargeable weight within a ULD. Using ULDs speeds up aircraft loading and unloading and reduces cargo damage by keeping goods contained and secured.

Related: Air Freight vs Sea Freight

Vanning is the process of loading and securing cargo inside a shipping container. Also commonly referred to as stuffing, proper vanning requires careful weight distribution and lashing to prevent cargo damage during transit.

The vessel cut-off (or cargo cut-off) is the deadline by which cargo must be delivered to the port and customs-cleared for a specific vessel sailing. Cargo arriving after the cut-off will be rolled to the next available sailing. There are typically two cut-offs: the cargo receiving cut-off (physical delivery to the terminal) and the document cut-off (submission of shipping instructions and customs entries). Missing cut-offs is one of the most preventable causes of shipment delays.

Volumetric weight (also called dimensional weight) is a calculated weight based on the size of a package rather than its actual physical weight. It is used by airlines and couriers to price shipments that are bulky relative to their mass. For air freight, the standard IATA divisor is 6,000 cm³ per kg (length Ã- width Ã- height in cm ÷ 6,000). If the volumetric weight exceeds the actual weight, carriers charge on the volumetric weight.

Related: Volumetric Weight Calculator · What Is Volumetric Weight?