Ocean Freight FAQ

What is a Bill of Lading (B/L)?

"BILL OF LADING-B/L"

Document issued by a carrier (ship-owner or shipping line) to a shipper of goods. It is a receipt for goods, evidence of the carriage contract, and a document of title to the goods. The latter feature is something akin to the relationship a cheque has to money or another analogy is a cloakroom ticket. Without a ticket you don't get the coat.. Without a Bill of Lading (with the proper endorsement) no goods. The goods can be bought or sold merely by the passing of the B/L consigned "to order" provided that all the endorsements are in order.


What is the difference in a B/L and a B/L Straight?

"BILL OF LADING-STRAIGHT"

Under the Pomenere Act of 1916 (United States) a Bill of Lading need not to be surrendered for goods in the case of exports or interstate transactions if the Bill of Lading is consigned to a named party and marked "Not Negotiable". Such a document is referred to as a "Straight Bill".


What is chargeable weight?

"CHARGEABLE WEIGHT"

In airfreight the chargeable weight is the actual gross weight or volume weight whichever is higher apart from certain exceptions.


What is CFR?

"CFR"

Cost and freight...(named port of destination) means that the seller must pay the costs and freight charges necessary to bring the goods to the named port of destination. However it is important to note that the risk of loss or damage to the goods as well as any additional costs occurring after the time the goods have been delivered on board the vessel is transferred to the buyer when the goods pass the ships rail in the port of shipment.


What is CIF?

"CIF"

Cost, Insurance and Freight...(named port of destination) means that the seller must pay the costs and freight charges necessary to bring the goods to the named port of destination but with the addition that he has to procure marine insurance against the buyer's risk of loss or damage to the goods during the carriage. The buyer should note that the seller is only required to obtain insurance on minimum coverage.


What is CIP?

"CIP"

Carriage and Insurance paid to...(named place) means that the seller pays the freight to the named destination but with the addition that he has to procure cargo insurance against the buyer's risk of loss or damage to the goods during the carriage. The buyer should note that the seller is only required to obtain insurance on minimum coverage.


What does COD mean?

"COD"

(Cash On Delivery) is a method of payment where you can buy products/services and then make payment at the time of delivery. COD payments are to be made in cash to the delivery person.


What is completely knocked down?

"COMPLETELY KNOCKED DOWN"

Cargo shipped in pieces and cased to be assembled at destination-normally vehicles of all descriptions. The abbreviation c.k.d. Is a commonly used term.


What is a container vessel?

"CONTAINER VESSEL"

Ship specially designed to carry shipping containers. The vessel consists of cells into which containers are guided by uprights. Capacity of current new-buildings is in excess of 6000 TEUs.


What does the term CPT mean?

"CPT"

Carriage paid to (named place of destination) means that the seller pays the freight for the carriage of the goods to the named destination. The buyer should note that all risks for loss or damage to the goods transfer to him/her when goods are handed over into the custody of the carrier.


What is a Cubic Metre?

1 cubic metre = 1.308 cubic yard.

What do I need a Customs Clearance Agent to complete?

"CUSTOMS CLEARANCE AGENTS" For all consignments coming into or leaving the state from countries outside the EU customs formalities have to be attended to on behalf of the importer or exporter as the case may be. Freight forwarded or customs clearance agent (who specialises in customs clearance only) may perform the task and raise an appropriate fee for carrying out the job. In some cases the agent also guarantees and advances the duties to Customs. Also referred to as Customs Brokers since "free circulation" of goods within Europe came into being on January 1st 1993.


What goods are classed as dangerous goods?

Dangerous Goods (also referred to as hazardous materials or restricted articles), are described as articles or substances that are capable of posing a significant risk to health, safety or property when transported by air.

The following are some examples of dangerous goods that must be declared at time of booking:

  • Oil-based paint and thinners (flammable liquids)
  • Industrial solvents
  • Insecticides, garden chemicals (fertilizers, poisons)
  • Lithium Batteries (not in cameras)
  • Magnetized materials
  • Machinery (chain saws, outboard engines containing fuel)
  • Fuel for camp stoves, lanterns, torches or heating elements
  • Automobile batteries
  • Infectious substances
  • Any compound, liquid or gas that has toxic characteristics
  • Bleach
  • Flammable adhesives
  • Perfume
  • Alcohol

What does the term DDP mean?

"DDP"

Delivered duty paid (named place of destination) means that the seller fulfils his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the risks and costs including duties, taxes and other charges for delivering the goods to that point cleared for importation. If the seller is unable directly to obtain an import licence (if required) the term should not be used. Whilst the EXW term represents the minimum obligation for the seller DDP represents the maximum obligation.


What does the term DDU mean?

"DDU"

Delivered duty unpaid...(named place of destination) means that the seller fulfils his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the risks and costs of carrying out clearance through customs although the buyer has to pay any additional costs incurred by delays in clearance caused by him.


What does the term DES mean?

"DES"

Delivered ex ship (named port of destination) means that the seller fulfils his obligation to deliver when the goods have been made available to the buyer on board the ship uncleared for import at the named port of destination. The seller bears all the risks and costs involved in bringing the goods to the named port.


What is detention?

"DETENTION"

Charge raised for detaining container/trailer at Customer's premises for longer period than provided for in Tariff.

What does the term DEQ mean?

"DEQ"

Delivered ex quay (duty paid)(named port of destination) means that the seller fulfils his obligation to deliver when he has made the goods available to the buyer on the quay at the named port of destination, cleared for importation. The seller has to bear all risks and costs including duties, taxes and other charges of delivering the goods to there. It should be noted here that if the parties wish to exclude from the seller's obligations some of the costs payable on importation (such as VAT) this should be made clear by adding words to this effect e.g. Delivered ex quay VAT unpaid (n. port of destination).


What is demurrage?

"DEMURRAGE"

Amount of money payable for failing to load or discharge a vessel or aircraft in the time allowed in the charter party. In the case of containerised cargo it is also payable for delays to equipment such as containers caused by slow customs clearance for example.


What is documentary credit?

"DOCUMENTARY CREDIT"

The basis of international trade by means of which payment is made against surrender of specified documents. A letter addressed by a banker to an exporter (usually but not always) undertaking to make payment to him against documents relating to the dispatch of goods. The documents usually required are bill of lading or airwaybill, invoice and insurance documents and if these are in order and shipment has been made in as specified in the credit, the bank will pay for the consignment in exchange for the documents. It is important that the details of the credit are in accordance with the contract of sale between the exporter and importer and letters of credit should be checked carefully when first received by the exporter to ensure that he can comply with its conditions. An international code of practise called the Uniform Customs and Practice for Documentary Credits protects all parties in a documentary credit (See UPC 500).


What is drawback?

"DRAWBACK"

Repayment of duty upon re-exportation of goods previously imported.


What size is a euro-pallet?

"EURO-PALLET"

Size of pallet is 1200mm x 800mm. Height of pallet itself is approximately 185mm.


What does the term ETA mean?

"ETA"

Estimated time of arrival of vessel, flight, truck or train.


What does the term ETD mean?

"ETD"

Estimated time of departure.


Why do I need an export licence?

"EXPORT LICENCE"

A document issued by the Government authorising export of restricted goods.


What does the term Ex-works mean?

"EX WORKS"

Ex works...(named place) means that the seller fulfils his obligation to deliver when he has made the goods available to the buyer at his premises. He is not responsible under this term for loading the goods on the vehicle provided by the buyer or for clearing the goods through customs for export, unless otherwise agreed.


How is FAK calculated?

"FAK" System whereby freight is charged per container or unit, irrespective of the nature of the goods and not according to goods classification.


What is the term FAS?

"FAS"

Free alongside ship...(named port of destination) means that the seller fulfils his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment. The buyer has to bear all costs and risks of loss or damage to the goods from that moment.


What does the term FCA mean?

"FCA"

Free Carrier...(named place) means that the seller fulfils his obligation to deliver when he has handed over the goods cleared for export in the charge of the carrier named by the buyer at the named place.


What does the term FOB mean?

"FOB"

Free on board...(named port of shipment) means that the seller fulfils his obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. The buyer bears all costs and risk of loss or damage to goods from that point.


What is freight?

"FREIGHT"

The amount payable for the carriage of the goods. The word is also used to describe the goods themselves.


What is freight-ton?

"FREIGHT TON"

The tonnage on which freight is charged- e.g. it could be based on the greater weight or measurement of goods where a freight ton is either 1000kgs or 1 cubic metre. It might also have a conversion factor of 1000kgs = 3 cubic metres. (see also W/M).


What is a house waybill?

"HOUSE WAYBILL"

The consolidator issues his own House Waybill (HWB) for each shipment and each customer receives a copy to identify his consignment. The House Waybills are forwarded with the consol, in a sealed envelope attached to the Master Waybill accompanied by a manifest itemising all the shipments by House waybill number for identification purposes at destination. Cargo identification labels will show both Air Waybill numbers.


What is an IATA Number?

A number associated with a forwarder or broker who has been approved and is recognized by the International Air Transport Association (IATA) to receive cargo, issue air waybills and other documents for carriers and collect charges for air shipments.


What is a known shipper?

When a shipper is known, a unique shipper identification number is allocated.


How is a load meter calculated?

"LOADING METER"

This is the term used to describe the space taken by freight utilising one meter's length and the full internal width and height of a trailer.


What is a Shipper?

The person or company who is sending the shipment.


What size is a standard pallet?

"STANDARD PALLET" (metric pallet)

Size of standard pallet is 1200mm x 1000mm. Height is 185mm.


What is a tail lift?

A tail lift is fitted to the back of a trailer. A tail lift reduces labour handling costs considerably and increase loading speed.


Who is the Third Party?

THIRD PARTY

When the person/company paying shipping and related charges is neither the shipper nor the consignee.


What is a timed delivery?

When a person/company requires delivery within a specified time.


What is tracking?

The act of providing updates on the progress of a shipment as it transits form origin to destination.


When do I require a Trem Card?

"TREM CARD"

Transport Emergency Card used in the carriage of chemicals by road. The card must accompany the load at all times. They are prepared by CEFIC - the European Council of Chemicals Manufacturer's Federations of Zurich according to regulations of the ADR.


What is UCP 500?

"UCP 500"

Uniform Customs and Practice for Documentary Credits is a code of practice issued by the International Chamber of Commerce. The latest revision is in effect since January 1st 1994 and is entitled UCP 500. The marked increase in litigation connected with documentary credits and the fact that surveys indicated that up to 50% of documents are rejected when first presented to Banks led to the authorisation of the revision in November 1989 of UCP Publication No. 400 published in 1983. It was the first such revision for 10 years and it took into account international judicial decisions and technological innovations. First published in 1933, the new UCP 500 provides a comprehensive and practical working aid to bankers, lawyers, importers, exporters, transport executives and everyone involved in international trade. Available from the Dublin Chambers of Commerce in Clare Street, Dublin.


What is an unknown shipper?

A shipper that does not have a unique number and/or has not maintained the requirements as stated in the known shipper criteria.


What does the term warehouse-bonded mean?

"WAREHOUSE-BONDED"

Pending completion of customs formalities for Import or Export goods may be held in a bonded warehouse until such time as any relevant taxes or duties are paid. A bondholder gives the authorities the assurance that they will accept responsibility for the duty on any consignment lost while under their control. Similarly, certain goods are manufactured under government control and are kept in bond on the local market or export. Duties will be assessed on the goods before they can leave the bonded warehouse.


What is a Waybill?

"WAYBILL"

A document used in airfreight and surface freight for the transmission of all relevant shipment information along the transport chain. It contains all details regarding the consignment and charges connected with the transportation elements of the transaction. It is a receipt and evidence of a contract of carriage but it is not a document or title. In sea transport there are advantages to using the Waybill instead of a Bill of Lading by virtue of the fact that there is no need to send a document of title to destination to secure delivery and the possibility of a requirement for a Letter of Indemnity arising is nil. The costs of producing a Bill of Lading is avoided and the waybill can be a paper document or an electronic message thus helping the use of paperless trading (electronic commerce).


What is FCL?

FCL is full container load.

What is LCL?

LCL is part container load which is consolidated with other suppliers cargo. LCL is calculated either per 1000 kgs gross weight ot per cbm whichever is greater. The minimum is 1000 kgs or 1cmb.