Glossary
Accessorial charges
These charges are for services outside of the normal pickup and delivery of goods. A few examples of additional charges you might find on your bill include wait time, bunkers, storage, and packing.
Accessorial charges
Anti dumping is an additional duty applied to foreign goods that are imported and priced below fair market value.
Accessorial charges
This is a document that a carrier issues to whoever is shipping the goods. It simultaneously serves as a receipt, a contract, and a title of ownership.
Blind Shipment
During a blind shipment, one or more of the parties involved are unaware of the others identity.
Bonded Warehouse
These warehouses are controlled by customs and allow imported goods to be stored until any duties owed are paid.
Break Bulk
Bulk cargo, or project cargo, refers to those goods which by their nature, dimensions or size cannot be transported in a standard container. Examples of such items are construction equipment, yachts or wind energy material.
Bunker Adjustment Factor (BAF)
This term refers to the portion of sea freight charges that are adjustable based on the fluctuating cost of oil. Previously, Carrier Conferences determined BAF charges for certain periods of time and on certain trade routes, but individual shipping lines now set their own rates.
Cargoes
Cartage refers to the movement of goods within a small geographic area. These services are commonly used to move or combine goods from multiple warehouses.
Cash on delivery (COD)
Cash On Delivery is a term that refers to a specific type of transaction. In such a transaction, payment for goods is made at the time of delivery. If the person receiving the goods does not pay the necessary costs, the goods must be sent back to the seller.
Chassis
A chassis is simply a frame with wheels and container locking devices used to pickup and transport containers.
Consolidation
Consolidation refers to the combining of shipments from multiple suppliers to be packaged and shipped in the same container.
Container Freight Station (CFS)
A container freight station is a location where cargo shipments can be consolidated, deconsolidated or repacked at various points along the transport route. These locations are usually close to ports or airports.
Container Yard (C/Y)
A facility located at the port where containers wait to be loaded onto ships, or where containers are taken after being off-loaded.
Cost Insurance and Freight (CIF)
This is a term that refers to the need of a seller to arrange for goods to be transported to the destination port, as well as to provide the buyer with whatever documents he or she needs to obtain the goods.
Cubic Feet (CBF/CF/CFT)
This term essentially serves the same function as a cubic meter, the primary difference is that in a cubic foot, the “cube” is characterized by foot-long edges as opposed to meter-long ones.
Cubic Meter (CBM/CM)
This is a unit of volume that describes a cube where each edge is one meter long. It is often used to describe what size shipment can fit on a carrier vessel.
Delivery Order (D/O)
Delivery Order is a term that refers to the document from a shipper or freight owner that permits cargo to be transported to another place, such as a warehouse.
Demurrage (DEM)
A demurrage occurs when a vessel is detained by a cargo agent in port beyond the time necessary to load or unload the vessel. This term can also refer to the resulting charge that occurs when a vessel is detained.
Destination Delivery Charge (DDC)
This is a fee that is charged based on container size and is applied to cargo. This charge is “accessorial” and is added to whatever the base price is for freight. This charge covers the costs to lift the cargo off the vessel, the cost of drayage within the terminal, and the cost of gate fees.
Retention
Detention fees apply when a container is held outside of a port longer than the agreed upon “free time” and are typically charged by the hour.
Documentation Fee (DOC)
One of the fees that a shipper must pay to have goods transported either domestically or internationally.
Drawback
A refund of certain fees that were paid during the import process. Once goods are reexported these duties and taxes are able to be returned.
Drayage
Similar to cartage, drayage refers to the local pickup or delivery from a port.
Emergency Bunker Surcharge (EBS)
An emergency bunker surcharge is similar to a BAF and is a charge added to shipping costs in order to cover the price of fuel.
Position Surcharge (EPS)
The charge associated with the cost of positioning a container to accommodate exports.
Forty Foot Equivalent Unit (FEU)
This ocean freight term refers to containerized cargo that is equivalent to either one forty foot container or two twenty foot containers. One FEU equals 25 metric tons or 72 cubic meters.
Free Trade Zone (FTZ)
A Free Trade Zone is a specific type of economic zone or geographic area where incoming and outgoing goods can be handled, manufactured, and/or reconfigured without customs authorities intervening. The shipments are not subject to customs duties until they are sent to customers within the country.
Freight on Board (FOB)
This acronym, along with the designation “origin” or “destination”, determines who is responsible for covering freight costs. This is an example of an “incoterm,” or a trade term established by the International Chamber of Commerce.
Freight Prepaid (FPP)
This is a term often used on a Bill of Lading (B/L) to communicate that the shipment cost has already been paid. Although this is a nice way of allowing the receiver to avoid paying shipment costs, it also means the freight cost is nonrefundable.
Fuel Adjustment Factor (FAF)
This is an extra charge included to recover increased costs of fuel. It is often calculated based on the average price of fuel from the month prior to the shipping date.
Full Container Load (FCL)
This term refers to a container that a shipper has paid to use exclusively – it does not necessarily mean that the container is filled entirely. It is the standard form of freight shipping for those who need to transport a large amount of goods.
Full Truckload Shipping (FTL)
This term refers to a shipping method where an entire trailer-load is contracted out to a single customer. Cargo remains with a single, dedicated trailer over the course of the shipment and is not handled en route. It is a very time- and cost-efficient way of shipping goods for shippers who need to move large amounts of cargo.
General Order (GO)
This term refers to the status given to imported goods that are either missing the documentation they need or are not quickly cleared through customs. Goods could be held under a “GO” for a number of reasons, such as because there are taxes owed on them or because paperwork still needs to be filled out.
General Rate Increase (GRI)
A General Rate Increase (GRI) is the average amount a carrier’s tariff rates increase annually. This increase is then applied to general shipping rates.
HAZMAT
HAZMAT is an abbreviation for “Hazardous Materials.” These types of goods range from explosives to corrosives and must be communicated to the carrier before transport.
High Cube (HC)
High Cube is a term that describes a specific type of shipping container. These containers are of similar structure to standard containers (often forty feet long) but are somewhat taller – usually 9’6” tall instead of 8’6” tall.
Incoterms 2020
These are rules developed by the International Chamber of Commerce to specify which services the seller and buyer are responsible for.
Intermodal
This term refers to shipments that involve two or more modes of transportation.
Landed Cost
This term refers to the total cost of a product, including transportation costs and any additional fees.
Less Than Container Load (LCL)
This is a term for cargo that does not meet either certain weight or certain quantity requirements to qualify for freight rates applied to a standard shipping container of goods.
Less Than Truckload (LTL)
Less Than Truckload is a term that describes a method of shipment where multiple customers’ goods are mixed on a single trailer. Freight on these trailers are often handled at various points along the shipping route.
Letter of Credit (L/C)
This is a document that serves as a set of instructions from an importer’s bank to an overseas bank letting the latter know that it should pay the exporting company in advance. It serves as a guarantee of payment and can help facilitate trust between two business partners who don’t know each other very well.
Lift On, Lift Off (LO/LO)
Lift On/Lift Off is an acronym used to describe a specific type of carrier vessel. When these ships are used in transport, freight must be lifted on and off of the vessels using cranes.
Multimodal
When using several types of transport (sea, air, land or rail)
Non-vessel operating common carrier (NVOCC)
A non-vessel operating common carrier is a freight forwarder who doesn’t own a vessel. Instead, the freight forwarder acts as a carrier by taking certain responsibilities for shipments, including issuing bills of lading.
Ocean freight (O/F)
This term refers to a class of ships designated to carry wheeled cargo, such as automobiles, trucks, farm/construction equipment, and railroad cars. These ships have built-in ramps that allow wheeled cargo to be moved on and off of the vessel with ease.
Ocean freight forwarder (FF/OFF)
An ocean freight forwarder is an individual or company that is responsible for organizing shipments on behalf of shippers. They book the transport and arrange space on the carriers, among others
Packing List
This a detailed list that describes all items in a shipment, letting each party know how the goods should be handled.
Panama Canal Charge (PCC)
A Panama Canal Charge is the fee applied to shipments moving through the Panama Canal. This charge is set by the Panama Canal Authority and is set in terms of a price per TEU.
Peak Season Surcharge (PSS)
The peak season surcharge is a tariff that applies when there are high volumes of cargoes that hauliers have to transport. It usually occurs between summer and November each year. During this time carriers can negotiate rates.
Piracy Risk Surcharge (PRS)
This is a charge that carriers often add to their prices in order to mitigate the threat of piracy when shipping goods via ocean liner.
Port Congestion Surcharge Or Pieces (PCS)
This is a charge rendered to shippers in the instance that there is some sort of disturbance or other delay at the port when the shipment arrives. This could include a strike, lockout, work slowdown or stoppage, or another labor-related disruption.
Port Security Fee (PSF)
A port security fee is a charge that North American port authorities are entitled to issue to carriers to recover the costs of any security-related expenses in and around the port.
Roll On, Roll Off (RO/RO)
This term refers to any goods or shipments that are transported via boat across body of water. Many carriers and freight forwarders provide a number of services specific to ocean freight.
Said to Contain (STC)
This is a term often used on a bill of lading where the carrier acknowledges receiving a certain quantity of packages but is unaware of the exact nature or value of the contents. This helps to limit the carrier’s liability in the instance of an insurance claim.
Terminal Handling Charge (THC)
This term refers to the charges collected by authorities at the ports to cover the costs of handling equipment and performing maintenance. The exact costs vary from port to port based on the amount of handling and maintenance done at each one.
Transshipment
During a shuttle goods are moved from one vessel to another before continuing their trip.
Twenty Foot Equivalent Unit (TEU)
A measure to describe the cargo capacity of a general cargo container.
UN number refers to dangerous cargoes
These 4-digit numbers are used to classify different hazardous materials when shipping goods internationally.
Value added tax (VAT)
A value added tax is levied on goods whenever value is added to the product through a production stage or at the final sale. A manufacturer may pay VAT on all supplies it purchases for use in the final product, and this tax is often passed on to the consumer.
Vehicle and Cargo Inspection System (VACIS)
Also known as Customs Examination, this is the most common type of inspection performed at a port, usually in shipping. It is essentially the scanning of an entire shipment or container and is usually carried out at the first port of entry.
Vessel operating common carrier (VOCC)
This is basically the opposite of an NVOCC, or a freight forwarder who does own vessels used in the transport of goods.
Weight or Measure (W/M)
This is a term that refers to the weight or volume of cargo that is used to determine the freight rate on export goods.
Incoterms 2020
Incoterm, or “International Commercial Terms” is a set of rules, which is international recognition to help in the global transport of goods. Each term has well-defined rules and regulations which both parties need to comply. The International Chamber of commerce publishes these rules. With Incoterm, language is never a barrier.
Incoterms and their definition
Free on board (FOB)
This term defines even split of price and responsibilities between buyer and seller.
EX Works (EXW)
This term puts the whole responsibility on the shoulder of the buyer, and the only responsibility that rests with the seller is that of making the goods available for pickup.
Costs and freights (CFR)
Under these terms, the seller must bear all costs up to the port of destination, for which the buyer is responsible.
Costs, insurances and freights (CIFR)
The terms are like those mentioned in CIF with the only difference that the buyer must include the costs incurred for insurance.
Free carrier (FCA)
Under this shipping term, the seller must deliver the goods to a location where the carrier operates along with clearing the goods for export from the country of origin. The costs and the sole risk of liability are borne by the buyer in accordance with this Incoterm.
Free alongside ship (FAS)
This term states it is the responsibility of the buyer to get the goods ready for loading alongside the ship besides customs, clearing it for export.
Delivered at terminal (DAT)
Under this term, the seller must bear all the responsibility including unloading the goods at the named terminal at the destination port. The buyer bears all the other costs incurred such as Customs clearance, import duties, taxes, and delivery costs.
Delivered duty paid (DDP)
This term states the seller must bear all the risks and costs such as duties, taxes and other charges of delivering the goods along with clearance for import. The maximum obligation rests with the seller under this term.
What are dangerous goods?
The Business Dictionary defines dangerous goods as “articles or materials capable of posing a significant risk to persons, health, property or the environment when transported in large quantities”. It also notes that dangerous goods is the “international standard term for goods covered by the United Nations Recommendations on the Transport of Dangerous Goods”. Dangerous goods are also referred to as hazardous material or dangerous cargo.
Dangerous goods can exist in solid, liquid, and gaseous form. They can be colorless or colored, hot, or cold, odorless or pungent. They can be corrosive chemicals, explosives, batteries, or even daily-use items such as hair spray, perfume, aftershave, liquor, and cigarette lighters.
Classes of dangerous goods
The UN Committee of Experts on the Transport of Dangerous Goods classifies dangerous goods on the basis of the hazard they pose. Under this system, each substance is assigned a class. There are nine classes in total.
Some are split into divisions.
UN Class | Goods | Division | Examples |
---|---|---|---|
Class 1 | Explosives | Gunpowder, TNT | |
Class 2 | Gases | 2.1 Flammable gases 2.2 Non-flammable, non-toxic gases 2.3 Toxic gases |
Acetylene, aerosols Helium, oxygen Chlorine |
Class 3 | Flammable liquids | Kerosene, acetone | |
Class 4 | Flammable solids | 4.1 Flammable solids 4.2 Spontaneously combustible substances 4.3 Substances that emit flammable gases when in contact with water |
Red phosphorus Phosphorus Sodium |
Class 5 | Oxidising substances | 5.1 Oxidising agents 5.2 Organic peroxides |
Ammonium dichromate Ethyl methyl ketone peroxide |
Class 6 | Toxic subtances | 6.1 Toxic substances 6.2 Infectious substances |
Cyanide and arsenic vaccines |
Class 7 | Radioactive material | Uranium oxide | |
Class 8 | Corrosive substances | Hydrochloric acid, batteries with acid | |
Class 9 | Various dangerous goods | Dry ice, asbestos |
Sometimes a substance meets the criteria of more than one hazard class. The class with the highest hazard level is the primary hazard class, while the class with the lowest hazard level is the secondary hazard class. A substance may have more than one secondary class
How to ship dangerous goods?
Before offering a dangerous good to an air carrier for shipment, the Hazardous Materials Regulations require the shipper to properly classify, package, mark and label the package to identify the hazard.
When shipping dangerous goods (e.g. lithium batteries or battery-powered devices, aerosols, oxygen cylinders) or flammable liquids (e.g. perfumery products or alcoholic beverages), follow these steps to ensure that your package is properly packed and marked. Some air carriers may have additional carrier-specific requirements so always check with your carrier before tendering your dangerous goods shipment.
Step 1: The Safety Data Sheet (SDS) is a good starting point to determine if an item you are shipping may be hazardous. Generally you can obtain an SDS from the manufacturer of the products you plan to ship by air and refer to the shipping information section. Pay particular attention to the specific information that pertains to shipments by air.
Step 2: If you determine that an item is hazardous, the FAA recommends that you conduct a needs assessment analysis to determine which employees in your company will perform a hazardous materials function and identify the level of training that is required by the regulations.
Step 3: For most employees, training will include general and safety knowledge for their duties. Under 49 CFR, a hazardous materials employee is required to receive periodic training every three years.
- Loads, unloads, or handles hazardous materials or dangerous goods;
- Designs, manufactures, inspects, tests, reconditions, repairs, modifies or marks qualified packaging for use in the transport of hazardous materials or dangerous goods.
- Prepares hazardous materials or dangerous goods for transportation;
Is responsible for safety of transporting hazardous materials or dangerous goods; or - Operates a vehicle used to transport hazardous materials or dangerous goods.
Paso 4: Ask a trained employee to look up the material in the hazardous materials Table or ICAO TI, as necessary, to determine the quantities permitted to be shipped. The labels required, and the packaging permitted under 49 CFR Part 173 or the appropriate ICAO TI packing instruction.
Step 5: Determine the quantities and corresponding packaging requirements for your shipments. Depending on the group assigned to the hazardous material, UN-specification packaging may be required.
- X – For packaging meeting packing group I, II and III test. (Packing Group I – Great Danger)
- Y – For packaging meeting Packing Group II and III test. (Packing Group II – Medium Danger)
- Z – For packaging meeting packing group III test. (Packing Group III – Minor Danger)
Step 6: If UN specification packaging is required, read the package sealing instructions carefully and obtain all materials listed in the instructions such as tape, ties, polythene bags ect. Be sure to follow the information instructions. Also review the additional requirements under 49 CFR Part 173.27(c)(3)(ii) if shipping liquids in individual packages by air.
Packages meeting UN specifications are tested with the materials listed in the closure instructions. Any variation from the manufacturer’s instructions could compromise the integrity of the package and may be considered a violation of the Hazardous Material Regulations (HMR).
Step 7 : f UN specification packaging is required, read the package sealing instructions carefully and obtain all materials listed in the instructions such as tape, ties or polyethylene bags. Be sure to follow the information instructions. Also review the additional requirements under 49 CFR Part 173.27(c)(3)(ii) if shipping liquids in individual packages by air.
Step 8: Mark and label the package.
Step 9: If you are using a combined package, place the material in its inner packaging according to the sealing instructions. Then place the inner packaging in its approved outer packaging and seal the package according to the instructions.
Step 10: Fill in the shipping paper and affix it to the outside of the package in an unobstructed area.
Step 11: Your package is ready to be shipped.
Step 12: Keep the shipper’s declaration on file for a period of two years
Customs documentation services
Alonso Logistics India has years of experience in handling customs clearance in India. We have documents related to import and export regulations as well as the formalities to be followed for approval by the customs authorities. Your cargo handling is always very safe with us.
Customs clearance procedure in India
The import and export of goods in and out of a country must undergo a customs clearance process. The importer and exporter of the goods must submit valid documents to clear this process. In this article we examine some of the main steps and processes for customs clearance in India.
Calling of vessels
Once the vessels carrying the goods reaches the country, the person who carried the vessels should make sure that the calling of vessels is done at the customs port. For instance, if goods are imported via aircraft, the pilot is responsible for call of the vessels at the customs airport. There is no requirement for the importer to get involved in this process and will be done by the airline or shipping line.
Presentation of the General Import Manifest (IGM)
The person in charge of the vehicle should file an Import General Manifest electronically before the goods arrive. This file would include the details of all the goods imported by the vessel.
Post verification operations
On review of the Import General Manifest and post verification of documents, the customs authorities will grant entry inwards to the vessel, assign an IGM number to the manifest and permit the master of the vessel to land and unload the cargo.
Custody of custodian
On arrival of the vessel, the goods would remain in the custody of the Custodian until it clears the customs process. A custodian may be a person approved by Principal Commissioner or Commissioner of Customs for this purpose. Imported goods can be unloaded subject to the following conditions:
Presentation of the incoming invoice
The importer of the goods must submit an entry invoice (customs copy) electronically for clearance of the goods, before or upon arrival of the goods. On the entry invoice, the importer himself determines the duties and taxes to be paid, which is called self-assessment. The importer will self-assess the duty after considering the applicable exchange rate and the import duty rate. After approval of the entry invoice, the importer has to pay the GST and duty to be entered in the Indian Customs Electronic Date Exchange System (ICEDIS). Once entered in ICEDIS, an entry invoice number will be generated.
Subsequently, the importer must present the entry invoice (customs copy), cross-check with duties paid and other supporting documents to the port authorities to make an order allowing clearance. After making a clearance order, the port officer would generate a duplicate entry invoice (importer’s copy) and a triplicate entry invoice (exchange control copy). Both copies would subsequently be given to the authorised person.
- The note for unloading the goods must be mentioned in the report.
- It may only be unloaded at places approved by the competent customs office.
- Under the supervision of the competent authorities.
- Should be unloaded only during working hours.
Delivery of goods
On showing the customs clearances to the port authorities, the importer can take the delivery of his goods. In case of cargo deposited in a warehouse, the importer would another bill of entry called the ex-bond bill of entry to clear the whole or part of the warehoused cargo