FAQs and Literature

Shipping Terms

Advising Bank

An advising bank is a bank that receives a letter of credit from an issuing bank, verifies its authenticity, and forwards it to the exporter. The advising bank need not be obliged to pay the credit.

Air Freight Forwarder

An air freight forwarder specializes in air cargo. He is licensed by the CAB (Civil Aeronautics Board) and has the status of an indirect air carrier. An air freight forwarder consolidates the air shipments of various exporters and issues his own air waybills (See also Air Cargo Agent, Forwarder, Freight Forwarder, and Foreign Freight Forwarder).

Air WayBill

An air waybill is a bill of landing that covers flights transporting goods to a specified destination. This is a non-negotiable document of air transport that serves as a receipt for the shipper, indicating that the carrier has accepted the goods listed and is obligated to carry the consignment to the destination according to specified conditions.

All Risk Insurance

All Risk Insurance is a clause included in marine insurance policies to cover loss and damage due to external causes such as fire, collision, pilferage, etc. However it does not cover losses due to innate flaws in the goods, faulty packaging, fluctuating markets, wars, strikes, riots and civil commotions.

Bill of Lading

A bill of lading is a document that establishes the terms of contract between a shipper and a transportation company. It lists out the conditions under which freight is to be moved between specified points for a specified charge. Usually prepared by the shipper on forms issued by the carrier, it serves as a document of title, contract of carriage, and a receipt for goods. (Also see Air Waybill and Ocean Bill of Lading).

Bonded Warehouse

A bonded warehouse is a warehouse storage area or manufacturing facility in which imported goods may be stored or processed without payment of customs duties.

C & I

C & I is a quoted price that includes the cost of goods and insurance.

C & F

C & F is a quoted price that includes the cost of goods and freight.


C.I.F is a quoted price that includes the cost of goods, insurance and freight. The seller is responsible for inland freight, ocean/air freight, and marine/air insurance up to the port of final entry in the buyer's country. The buyer is responsible for inland transportation to his or her location.


Cabotage refers to the transport of goods between two destinations in the same country. Because the cargo is carried on a domestic flight, it is not subject to international rates. Cabotage rates are negotiable between the shipper and the airlines.

Carrier(s) Containers or Shipper(s) Containers

The terms 'carrier(s)' 'container(s)' or 'shipper(s) container(s)' refers to containers over which the carrier or the shipper has control. Control arises either through their genuine ownership or through their acquisition under lease or rental from container suppliers. Carriers are prohibited from purchasing, leasing or renting shipper owned containers.

Certificate of Analysis

A certificate of analysis is a document required by some countries as proof of the quality and composition of food products or pharmaceuticals. The required analysis may be made by a private or government health agency. The certificate must be legalized by a foreign counsel of the country concerned.

Certificate of Inspection

A certificate of inspection is a document certifying that the goods were in apparent good condition immediately prior to shipment.

Certificate of Origin

A certificate of origin is a statement signed by the exporter and attested by a local Chamber of Commerce, indicating that the goods being shipped were produced in the exporter's country.

CFS Receiving Service

CFS Receiving Services refer to the services performed at the loading port. They involve receiving and packing cargo into containers from CFS to CY or shipside.

  • Moving empty containers from CY to CFS
  • Drayage of loaded containers from CFS to CY and/or ship's tackle
  • Tallying
  • Issuing dock receipt/shipping order
  • Physical movement of cargo into, out of and within CFS
  • Stuffing, sealing and marking containers
  • Storage
  • Ordinary sorting and stacking
  • Preparing the carrier's internal container load plan

A consignee is the individual or the company to whom a seller sends merchandise. Upon presentation of the necessary documents, the consignee is recognized as merchandise owner for the purpose of declaring and paying customs duties.


Consignment refers to the physical transfer of goods from a seller (consignor) with whom the title remains, to another legal entity (consignee).

Containers (Air Cargo)

There are many types of air cargo containers. The containers are designed in various sizes and shapes to conform to the inside dimensions of a specific aircraft.

Containers (Ocean)

An ocean container is designed to be moved inland on its own chassis, and can be loaded at the shipper's plant for shipment overseas. The basic types of containers are dry van, open top, half high, hi cube, flat rock, tank container, refrigerated container, insulated container, and tilting container. The average outer dimensions of a container are generally 20, 35, or 40 feet in length, 8 feet wide and 8 feet high.

Customs Bonded Warehouse

A customs bonded warehouse is a space where imported goods may be stored for a total of three years without the payment of duty or taxes.

Dead Freight

Dead freight refers to the freight charges paid by the charter of a vessel for contracted space which is left partially unoccupied.


A demurrage is a penalty for exceeding the free time allowed for loading or unloading goods at a pier or freight terminal. It also refers to the charge for undue detention of transportation equipment or carriers in a port while loading and unloading.

Dim Weight (weight by dimension)

Dim weight is determined by multiplying the length, width and height of the goods, and dividing the result by 167(Charged when actual weight is less than the dim weight).

Documents against Acceptance (D/A)

Documents against acceptance refer to the instructions given by a shipper to a bank indicating that documents transferring title goods should be delivered to the buyer (or drawee) only upon the buyer's acceptance of the attached draft.

Export License

An export license is a document secured from a government, authorizing an exporter to export a specific quantity of a commodity to a certain country. An export license is often required if a government has placed embargoes or other restrictions on exports.

FAS (Free alongside ship)

FAS refers to the seller's responsibility to bear freight costs until the goods are placed alongside the vessel/aircraft for loading. The buyer is responsible for loading costs, ocean/air freight and marine/air insurance.

Flag Carrier

A flag carrier is an airline of one national registry whose government gives it partial or total monopoly over international routes.

FOB (Free On Board)

FOB refers to the seller's responsibility to bear all costs until the cargo has been loaded on the vessel/aircraft. The buyer is responsible for ocean/air freight.

Forwarder, Freight Forwarder, Foreign Freight Forwarder

A freight forwarder is an independent business organization that dispatches shipment for a fee. The firm may use transport by land, air, rail or sea. Usually it handles all the services connected with shipment export - preparation of documents, booking cargo space, warehousing services, pier delivery and export clearance. The firm may also handle banking and insurance services on behalf of a client. The U.S. forwarder is licensed by the Federal Maritime Commission for ocean shipments.


A gateway is the port of entry into a country or region.


Husbanding is the term used by steamship lines, agents, or port captains who are appointed to assist the master of the vessel in obtaining fresh water, food and supplies, payroll for the crew, doctor's appointments, ship repair services, etc.

Import License

An import license is a certificate issued by countries that permits importation of the articles stated in the license. The issuance of such a permit is connected with the release of foreign exchange needed to pay for the shipment for which the import license has been requested.

Irrecoverable letter Of Credit

An irrecoverable letter of credit is a letter of credit with a fixed expiration date that carries the irrevocable obligation of the issuing bank to pay the exporter when all of the terms and conditions of the letter of credit have been met.


Jettison refers to the goods from a ship's cargo or parts of its equipment that have been thrown overboard to lighten the ship's load. This is usually done either in times of danger or to set a stranded ship adrift.

Just In Time (JIT)

JIT refers to the principle of production and inventory control by which goods arrive when needed for production or use.

LASH Vessel

The LASH system refers to the practice of loading barges aboard a larger ship. The trick is to quickly float the barges to the vessel (using tugs or ships wenches), load these barges through the rear of the vessel, and then set sail. Upon arrival at a foreign port, the reverse happens - Barges are quickly floated away from the vessel and another set of waiting barges are loaded. It is designed for quick turn around.

Letter of Credit

A letter of credit is a document issued by a bank at the buyer's request, honoring debt obligations to the seller upon receipt of the document.


The acronym means "lift-on, lift-off", denoting the method by which cargo is loaded onto and discharged from an ocean vessel, which in this case is by the use of a crane.


A manifest is a list of goods being transported by a carrier.

Phytosanitary Inspection Certificate

A phytosanitary inspection certificate is a document issued by the U.S. Department of Agriculture indicating that shipment has been inspected and is free of harmful pests and plant diseases.

Port of Discharge

A port of discharge is the port where the vessel is unloaded and cargo discharged.

Port of Entry

A port of entry is a port at which foreign goods are re-admitted into the receiving country.

Port of Loading

A port of loading is a port where cargo is loaded aboard the vessel lashed and stowed.

Power Of Attorney

Power of attorney refers to a document that authorizes a customs broker to sign all customs documents on behalf of an importer.

Prepaid Freight

Freight charges, both in ocean and air transport, may be either prepaid in the currency of the country of export or by the consignee in his local currency. However, on shipments to some countries, freight charges must be prepaid because of foreign exchange regulations of the country of import and/or rules of steamship companies or airlines.


When used with the title of a document, the term proforma refers to an informal document presented in advance of the required document in order to satisfy a customs requirement.

RORO (Roll On-Roll Off)

RORO refers to direct drive on/drive off wheeled vehicles on specially-designed ocean-going vessels.

Sanitary and Health Certificate

A sanitary and health certificate is a statement signed by a health organization official certifying the degree of purity and cleanliness of goods. It also certifies the health of live animals.

War Risk

A war risk is a possible aggressive action against a ship and its cargo by a belligerent government. This risk can be insured by a marine policy with a risk clause.

War Risk Insurance

War risk insurance refers to the insurance issued by marine underwriters against war-like operations specifically described in the policy. Previously, war risk insurance was given out only during a war. But currently, many exporters cover most of their shipments with war risk insurance as a protection against losses from derelict torpedoes and floating mines placed during former wars, and also as a safeguard against unforeseen warlike developments. In the United States, war risk insurance is written in a separate policy from ordinary marine insurance. It is desirable to take out both policies with the same underwriter in order to avoid the ill effects of a possible dispute between underwriters as to the cause (marine peril or war peril) of a given loss.

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