Freight Glossary

A

Ad Valorem

A charge or duty calculated as a percentage of the value of the goods rather than their weight or volume.

Air Waybill (AWB)

The transport document for air freight. Unlike a bill of lading it is not a document of title, so goods are released to the named consignee without surrendering an original.

All-In Rate

A quoted rate said to include freight and all surcharges. Always ask which charges at destination are excluded, because "all-in" rarely means all.

Arrival Notice

Notification from the carrier or agent that a shipment has arrived at destination and is available once charges are settled and clearance is complete.

B

BAF — Bunker Adjustment Factor

A surcharge on ocean freight reflecting movement in marine fuel prices. Sometimes shown as FAF, Fuel Adjustment Factor.

Bill of Lading (B/L)

The core ocean transport document. It serves three functions at once: receipt for the goods, evidence of the contract of carriage, and document of title. Whoever holds an original negotiable B/L controls the cargo.

Bonded Warehouse

A facility approved by customs where imported goods may be stored without duty being paid until they are released for home consumption or re-exported.

Break Bulk

Cargo loaded individually rather than in containers — bagged, crated, drummed or palletised goods handled piece by piece.

Bulk Cargo

Unpackaged homogeneous cargo loaded loose into a vessel hold, such as grain, coal, ore or cement.

C

CAF — Currency Adjustment Factor

A surcharge compensating the carrier for exchange rate movement between the tariff currency and its operating costs.

CBM — Cubic Metre

The standard measure of shipment volume: length × width × height in metres. The primary pricing basis for LCL sea freight. See our CBM calculator.

Certificate of Origin

A document certifying the country in which goods were produced. Required for preferential duty rates under trade agreements and for many letters of credit.

CFS — Container Freight Station

A facility where LCL cargo from multiple shippers is consolidated into containers for export, or destuffed from containers on import.

Chargeable Weight

The weight a carrier actually bills, being the greater of actual gross weight and volumetric weight. See our chargeable weight calculator.

Charter

Hiring an entire vessel or aircraft for a specific voyage or period, rather than buying space on a scheduled service.

Clean Bill of Lading

A bill of lading bearing no notation of damage or shortage in the goods or packaging at the time of loading. Letters of credit almost always require one.

Combined Transport

Carriage using more than one mode under a single contract and a single document. Also called multimodal or intermodal transport.

Commercial Invoice

The seller's invoice to the buyer. The primary document used by customs to establish the value of goods for duty assessment.

Consignee

The party named as the receiver of the goods on the transport document.

Consignor

The party sending the goods. Usually the same as the shipper.

Consolidation

Combining several small shipments into one container or one air waybill to obtain a better rate than each would achieve alone.

Container Yard (CY)

The terminal area where full containers are received, stored and delivered. CY-to-CY movements are full container loads handled without consolidation.

CTN — Cargo Tracking Note

An electronic pre-shipment document required by certain, mainly African, destinations. Failure to obtain one before departure results in heavy fines on arrival.

Customs Broker

A licensed agent authorised to prepare and lodge customs declarations on an importer or exporter's behalf.

Cut-Off

The deadline for delivering cargo or lodging documentation before a vessel sails or a flight departs. Missing it means waiting for the next departure.

D

Dangerous Goods (DG)

Cargo classified as hazardous under IMDG rules for sea or IATA DGR for air. Requires special declaration, packing, labelling and often a surcharge.

Deadweight Tonnage (DWT)

The total weight a vessel can carry, including cargo, fuel, water, stores and crew.

Delivery Order (D/O)

The document authorising release of cargo to the consignee at destination. Issuing it usually attracts a fee, frequently omitted from origin quotations.

Demurrage

A charge for keeping a container inside the terminal beyond the agreed free time. Accrues daily and escalates.

Detention

A charge for keeping a container outside the terminal — at your premises — beyond the free time allowed for unpacking and return.

Dimensional Weight

Another name for volumetric weight. See our volumetric weight calculator.

Drayage

Short-distance road haulage of a container, typically between port, depot and warehouse.

Dry Container

A standard general purpose container without temperature control. The most common equipment type in world trade.

Dunnage

Material such as timber, airbags or matting used inside a container to secure and separate cargo and prevent movement in transit.

E

ETA / ETD

Estimated Time of Arrival and Estimated Time of Departure. Both are estimates, and schedule reliability across the industry has historically been well short of complete.

F

FCL — Full Container Load

A shipment occupying an entire container, dedicated to one shipper, priced per container rather than by volume or weight.

FIATA

The International Federation of Freight Forwarders Associations, which publishes standard forwarding documents used worldwide.

Force Majeure

A contractual clause suspending obligations when performance is prevented by events outside a party's control, such as war, natural disaster or port closure.

Free Time

The period after arrival during which a container may be used or held without demurrage or detention charges. Negotiate it before booking, not after arrival.

Freight Forwarder

A company that arranges transport on behalf of shippers, contracting with carriers, handling documentation and customs, and taking responsibility for the movement end to end.

G

Gross Weight

The total weight of the goods including all packaging, pallets and dunnage.

Groupage

A European term for consolidation, usually of road freight.

H

Haulage

Road or rail carriage of cargo between an inland point and a port or terminal.

Hazmat

Hazardous materials. See Dangerous Goods.

High Cube

A container one foot taller than standard, giving about 30 cm more internal height and roughly 13% more volume. See our container size guide.

House Bill of Lading (HBL)

A bill of lading issued by a freight forwarder to its customer, as distinct from the Master B/L issued by the ocean carrier to the forwarder.

HS Code

Harmonized System code. An internationally standardised commodity classification number that determines the rate of duty. Getting it wrong is the most common cause of clearance delay and penalty.

I

IATA

The International Air Transport Association, which sets air cargo standards including the 6000 volumetric divisor and dangerous goods regulations.

IMDG Code

The International Maritime Dangerous Goods Code, governing carriage of hazardous cargo by sea.

Incoterms

ICC-published standard trade terms defining cost, risk and responsibility between buyer and seller. See our Incoterms 2020 guide.

Inland Container Depot (ICD)

An inland facility handling containers, allowing customs clearance and container interchange away from the seaport.

Intermodal

Transport using more than one mode, where the cargo remains in the same container throughout.

ISF — Importer Security Filing

A US requirement to file specified data at least 24 hours before loading. Also known as 10+2. Late filing carries substantial penalties.

ISPS Code

The International Ship and Port Facility Security Code. Compliance costs appear on invoices as an ISPS or security surcharge at both ends.

L

Laytime

The time allowed under a charter party for loading or discharging a vessel before demurrage becomes payable.

LCL — Less than Container Load

A shipment too small to justify a full container, consolidated with other shippers' cargo and billed in revenue tons.

Letter of Credit (L/C)

A bank undertaking to pay the seller against presentation of specified documents. Payment depends on documentary compliance, not on the goods themselves.

M

Manifest

The carrier's list of all cargo on board a vessel, aircraft or vehicle, lodged with customs at origin and destination.

Master Bill of Lading (MBL)

The bill of lading issued by the ocean carrier, typically to a freight forwarder or NVOCC rather than to the ultimate shipper.

N

Net Weight

The weight of the goods alone, excluding packaging and pallets.

NVOCC

Non-Vessel Operating Common Carrier. A carrier that issues its own bills of lading and takes carrier responsibility without owning ships, buying space from vessel operators.

O

Open Top Container

A container with a removable tarpaulin roof, allowing over-height cargo to be loaded by crane from above.

Out of Gauge (OOG)

Cargo exceeding the internal dimensions of a standard container, requiring flat racks, open tops or break bulk handling and attracting premium rates.

P

Packing List

A document itemising the contents, dimensions and weight of each package in a shipment. Used for customs, for load planning and for verification on arrival.

Pallet

A portable platform on which goods are stacked for handling by forklift. Euro pallets measure 1200 × 800 mm; standard pallets 1200 × 1000 mm.

Phytosanitary Certificate

An official certificate confirming plant products meet the importing country's health requirements. Required for timber, produce and many packing materials.

Port of Discharge (POD)

The port at which cargo is unloaded from the vessel. Not necessarily the final destination.

Port of Loading (POL)

The port at which cargo is loaded onto the vessel.

Pre-Carriage

The movement of cargo from the point of origin to the port or airport of loading.

R

Reefer

A refrigerated container with an integral cooling unit, used for temperature-controlled cargo. Requires a power supply throughout the journey.

Revenue Ton (W/M)

The chargeable unit for LCL sea freight: the greater of the shipment's volume in cubic metres and its weight in metric tons.

Ro-Ro

Roll-on / roll-off. A vessel designed for wheeled cargo that is driven on and off rather than lifted.

Rolled Cargo

Cargo that misses its booked sailing because the vessel is overbooked, and is carried on a later departure. A frequent cause of delay in peak season.

S

Seal Number

The unique number on the security seal fitted to a container's doors after loading. Recorded on the bill of lading and checked at destination to evidence that the container has not been opened.

Shipper

The party sending the goods, named as such on the transport document.

Shipping Mark

Identifying marks stencilled or labelled on the outside of packages so they can be matched to documents and routed correctly.

SOLAS

The Safety of Life at Sea convention. Its VGM amendment requires a verified container weight to be declared before loading.

Stevedore

A firm or worker engaged in loading and unloading vessels.

Stuffing

Loading cargo into a container. The reverse process is destuffing, devanning or unstuffing.

Surcharge

Any charge additional to base freight — fuel, currency, congestion, peak season, security, war risk. Collectively these often exceed the base rate itself.

T

Tare Weight

The weight of an empty container or vehicle. Gross weight minus tare gives the cargo payload.

Tariff

Either a carrier's published schedule of rates and charges, or a government schedule of customs duty rates. Context decides which is meant.

TEU

Twenty-foot Equivalent Unit. The standard measure of container capacity: a 20ft container is one TEU, a 40ft is two.

THC — Terminal Handling Charge

The charge for moving a container between quayside and yard. Applied at both origin and destination, often by different parties, and a frequent source of unexpected cost.

Through Bill of Lading

A single bill of lading covering the entire journey including more than one mode or more than one carrier.

Transhipment

Transferring cargo from one vessel to another at an intermediate port. It broadens routing options but introduces connection risk and adds transit time.

Transit Time

Elapsed time between two defined points. Always establish which two — port-to-port and door-to-door differ substantially. See our transit time calculator.

U

ULD — Unit Load Device

A pallet or container designed to fit an aircraft hold, allowing cargo to be handled as a single unit.

V

VGM — Verified Gross Mass

The certified total weight of a packed container and its contents, mandatory under SOLAS before loading. Without a VGM declaration the container will not be loaded.

Volumetric Weight

Volume converted to kilograms using a divisor, normally 6000 for air freight. See our volumetric weight calculator.

W

War Risk Surcharge

An additional charge applied to routings through areas of armed conflict or elevated security risk, reflecting the cost of specialist insurance cover.

Warehouse Receipt

A document acknowledging goods have been received into storage, sometimes negotiable and usable as security for financing.

Waybill

A non-negotiable transport document. Goods are released to the named consignee on identification, without surrender of an original, which speeds up release but removes the security of a negotiable B/L.

Weight Break

A threshold in a rate structure where the per-kilogram rate falls. Because of this, declaring a higher weight sometimes costs less than the actual weight.

W/M

Weight or Measurement. The convention of billing the greater of weight in metric tons and volume in cubic metres. See Revenue Ton.

Z

Zone Rate

A rate structure based on geographic zones rather than exact distance, common in courier and parcel pricing.