Shipping Lines & International Sea Container jargon buster
Click onto an international shipping line website and you’d be forgiven for thinking that you’d unwittingly landed in a foreign country. Seemingly half of each sentence has been distilled into acronyms and there’s such a wealth of new terminology that it can leave you all at sea (if you’ll pardon the pun).
Listed below are some technical terms associated with the shipping industry and a brief outline of their true meaning:
AAR – an abbreviation for a category of insurance coverage that entitles the shipper to protection “Against All Risks”. This is the most comprehensive type of insurance available.
Accessorial Charges – charges over and above the total amount quoted in a bid. Accessorial charges include customs and export clearance costs and additional warehouse storage costs.
All In – the total all inclusive cost of shipping goods from one destination to another. An all in quote should incorporate all additional costs and accessorial charges.
Base tariff – the basic rate charged to ship goods before accessorial charges have been added.
CFS – an abbreviation for “Container Freight Station.” These are the stations where goods are loaded into and unloaded from containers. A CFS should not be confused with a warehouse where goods are packaged and stored.
CIFCI – an abbreviation for a shipping price that includes the “ Cost of goods, Marine Insurance, Freight Charges, Collection Charges and any accrued Interest.”
DDC – An abbreviation for “Destination Delivery Charge.” This is an accessorial fee that is charged for any lifting, moving, transport or customs clearance that is necessary upon arrival at the destination port.
Demurrage – a penalty that is charged for exceeding free time during loading and as a result waylaying shipping company drivers and crew.
Exception – a note that is made when goods are damaged upon arrival at the CFS terminal. These exceptions are later added onto the Bill of Lading and prevent the customer from holding the ship’s captain liable for any damage to goods during transit.
False billing – a false representation of the true nature, size and weight of goods.
FCL –an abbreviation for a Full Container Load. This term is used to describe a container that is filled with one person’s goods and sealed as opposed to a shared container that is filled with a variety of goods belonging to various people.
FIO – an abbreviation for Free In and Out. This term indicates that all loading and unloading costs are covered by the charter company.
Groupage – the term used to describe a less than container load (LCL) shipment where goods from various different origins are placed together in a container and shipped to a single destination.
Heavy Lift Charge – an additional fee that is charged to lift containers that are excessively heavy.
Inland Carrier – a carrier that transports goods from an inland location to a coastal or river port from where they can be shipped.
JIT – the abbreviation for “Just In Time.” This is the term used to describe a situation whereby no warehousing is used and containers must arrive at loading points just in time to be loaded onto vessels.
Knocked Down – Goods that need to be disassembled to reduce there size or make them more convenient to ship.
Lading – the freight aboard a vessel that is due to be shipped to a new destination.
LCL – an abbreviation for “Less than Container Load.” This is the term used to describe loose freight from several origins that is packed into a container and shipped to a single destination.
Local Cargo – cargo that is shipped within the radius of a specific area and is classified as local. Local cargo shipping rates are usually far less expensive than long distance and international shipping rates.
Marine Insurance - insurance that covers the damage or loss of goods while they are at sea. Marine insurance clauses typically do not cover those losses which can be claimed from the carrier themselves.
Minimum Charge – the minimum fee that can be quoted for the shipment of goods from origin to a specified destination.
NES – an abbreviation for “Not Elsewhere Specified.” This phrase typically applies to additional fees that have not been indicated elsewhere on a quote sheet.
Net Weight – the weight of goods before they are packaged or placed in a container.
Ocean Bill of Lading – the term used to describe a contract between a shipper and a carrier that is used to show collection and the temporary ownership of cargo.
Open Insurance Policy – an insurance policy that is calculated to cover good over a specific period of time rather than goods on a particular shipment.
Origin – the term used to describe the place where goods are originally collected for shipment.
Per Diem – a fee that is calculated according to a set daily rate
POL – an abbreviation for Port of Loading. This is the port where goods are originally loaded onto a vessel for shipping.
Pro Rata – a term that denotes proportional costs. Costs may be calculated in proportion to weight, size etc.
Quota – a set quantity of goods that may be shipped without any limitation during a specific time frame.
RFQ – a request for an initial quotation.
S/D – abbreviation for Sea Damage. Sea damage is usually covered by marine insurance.
SHEX – an abbreviation for “Saturdays and Holidays Excluded.”
Ship’s Tackle – all equipment used by a ship to load and unload goods. Heavy goods that require additional loading equipment will cost more than those that can simply be loaded by the ship’s tackle.
Store-Door Pick-up Delivery – an all inclusive service offered by a carrier whereby goods are transported from a point of origin to a final destination. Professional packaging and loading are often included in this kind of service.
Through rate – the complete rate that is charged to ship goods from a point of origin to their final destination.
Unit Load – the term used to describe boxes or containers that have been joined together to form a single unit that can be handled as one piece of freight. Packing boxes into unit loads decreases the total amount of time that is needed to load a shipment onto a vessel.
Warehousing – the storage of goods before or after they are loaded onto a vessel.
WIPPON – an abbreviation for “Whether in Port or Not.”
Yard – an area where goods are sorted, stacked or repacked for further transport.