Logistics and Supply Chain Glossary

Cost and Freight. An Incoterms rule under which the seller pays the freight to the port of destination, with risk transferring to the buyer once the goods are loaded on board the vessel at the port of shipment. Used for sea transport only.

Cost, Insurance and Freight. Similar to CFR, but the seller must also arrange marine insurance. Used for sea and inland waterway transport only.

Carriage and Insurance Paid To. Similar to CPT, but the seller must also arrange insurance against the buyer's risk of loss during carriage. Suitable for any mode of transport.

Carriage Paid To. An Incoterms rule under which the seller pays the freight to the destination, with risk transferring to the buyer when the goods are handed over to the first carrier. Suitable for any mode of transport.

Delivered at Place. An Incoterms rule under which the seller delivers the goods to the named destination and places them at the buyer's disposal. The buyer is responsible for import clearance.

Delivered Duty Paid. An Incoterms rule under which the seller bears all costs and risks of delivering the goods to the destination, including import clearance and duty payment. This rule places the maximum responsibility on the seller.

Door-to-Door. A through transport service in which the carrier picks up the goods from the shipper's factory or warehouse and delivers them directly to the consignee's factory or warehouse.

Delivered at Place Unloaded. Introduced in Incoterms 2020. The seller delivers the goods to the named destination and unloads them. It is the only Incoterms rule that requires the seller to unload the goods.

Ex Works. An Incoterms rule under which the seller makes the goods available at their premises. The buyer bears all costs and risks from that point onwards. This rule places the minimum obligation on the seller.

Free Alongside Ship. An Incoterms rule under which the seller delivers the goods alongside the vessel at the port of shipment. Used for sea and inland waterway transport only.

Free Carrier. An Incoterms rule under which the seller delivers the goods to the carrier nominated by the buyer. Suitable for any mode of transport.

Free on Board. An Incoterms rule under which the seller is responsible for loading the goods on board the vessel and arranging export clearance. Risk transfers to the buyer once the goods are loaded on board. Used for sea and inland waterway transport only.

International Commercial Terms. Standard global trade terms issued by the International Chamber of Commerce (ICC), defining the allocation of costs, risks and responsibilities between the buyer and the seller in the delivery of goods. The 2020 edition contains 11 rules.

Port-to-Port. The carrier's responsibility extends from the port of loading to the port of discharge, excluding inland transport at either end.

Authorised Economic Operator. A company or organisation involved in the international movement of goods and that has been approved by a national Customs administration, enjoying simplified Customs procedures.

Bonded Warehouse. A warehouse approved by Customs where goods can be stored with duty and tax payment deferred until the goods are withdrawn for distribution.

Carbon Border Adjustment Mechanism. An EU regulation requiring importers of certain carbon-intensive goods (steel, aluminium, cement, fertilizers, electricity, hydrogen) to buy carbon certificates equivalent to the carbon price that would have been paid if the goods were produced under EU carbon pricing rules. Effective transitional phase started October 2023; full implementation from January 2026.

Commercial Invoice. A list of goods and their prices issued by the seller to the buyer. It is a core document for Customs declaration and settlement of payment.

Certificate of Origin (CO). An official document certifying the country of origin of the goods, which affects tariff rates and trade restriction measures. The most basic type of origin certificate, applicable to all countries.

Customs Clearance. The process of declaring goods to Customs, paying duties, undergoing inspection and obtaining release for import or export.

Customs Duty (Tariff). A tax levied by a government on imported or exported goods. Duties are determined based on the HS Code classification, the country of origin and the applicable trade agreements. Types include ad valorem duty (percentage of value), specific duty (per unit) and compound duty (combination of both).

EORI. An EU-wide system for registering and identifying economic operators (businesses) involved in customs activities within the European Union. An EORI number is required for all import, export and transit declarations in EU member states.

GSP Certificate of Origin Form A. A certificate issued under the Generalized System of Preferences (GSP), allowing eligible developing-country exports to receive reduced or zero tariff rates in developed-country markets (e.g. EU, Japan).

ASEAN-China Free Trade Area Certificate of Origin Form E. Used for goods traded between China and ASEAN member states, qualifying for preferential tariff rates under the ACFTA agreement.

China-Pakistan Free Trade Area Certificate of Origin Form F. Used for goods traded between China and Pakistan, qualifying for preferential tariff rates under the CPFTA agreement.

China-Korea Free Trade Area Certificate of Origin Form K. Used for goods traded between China and South Korea, qualifying for preferential tariff rates under the CKFTA agreement.

China-Switzerland Free Trade Area Certificate of Origin Form L. Used for goods traded between China and Switzerland, qualifying for preferential tariff rates under the CSFTA agreement.

China-Peru Free Trade Area Certificate of Origin Form N. Used for goods traded between China and Peru, qualifying for preferential tariff rates under the CPFTA agreement.

China-New Zealand Free Trade Area Certificate of Origin Form P. Used for goods traded between China and New Zealand, qualifying for preferential tariff rates under the CNZFTA agreement.

China-Chile Free Trade Area Certificate of Origin Form R. Used for goods traded between China and Chile, qualifying for preferential tariff rates under the CCFTA agreement.

Harmonized System Code. A commodity classification coding system developed by the WCO (World Customs Organization), used for Customs classification and duty determination.

Packing List. A document detailing the description, quantity, weight and volume of each item or carton of goods. Essential for Customs inspection and warehouse receiving.

Value Added Tax. A consumption tax levied on the value added to goods and services at each stage of production and distribution. In international trade, VAT applies to imported goods upon Customs clearance and is often refundable for exported goods.

Bill of Lading (Sea). A receipt for the goods, evidence of the contract of carriage and a document of title issued by the carrier. It is negotiable and is the core document in sea freight.

Bunker Adjustment Factor. A surcharge levied on shippers due to fluctuations in bunker fuel prices, adjusted in line with oil price movements.

Blank Sailing. A situation where a shipping line cancels a sailing (void sailing) or skips a port call, commonly used to manage capacity during off-peak seasons.

Booking. The process of applying for and confirming cargo space with a shipping line or airline.

Currency Adjustment Factor. A surcharge applied to compensate for exchange rate fluctuations, offsetting losses caused by the depreciation of the currency in which freight is settled.

Container Freight Station. A facility where LCL cargo is consolidated and deconsolidated, and where LCL goods are received and delivered.

Cut-off. Deadlines set by the shipping line: Customs Cut-off is the latest time for Customs declaration; SI Cut-off is the latest time for submitting shipping instructions; CY Cut-off is the latest time for cargo delivery to the container yard.

Container Yard. A facility where FCL containers are received, stored and handled. FCL cargo is typically delivered and picked up here.

Demurrage. A charge levied by the shipping line when a container remains at the port or terminal beyond the free storage period (i.e. the cargo has not been collected).

Detention. A charge levied by the shipping line when a container, after being picked up from the terminal, is not returned within the free usage period (i.e. the container has not been returned).

Direct. Cargo shipped from the port of loading directly to the port of discharge without transshipment.

Dry Van. The most common type of general-purpose container, used for carrying dry general cargo.

Freight All Kinds. A flat rate applied regardless of cargo type, commonly used for LCL freight pricing.

Full Container Load. A shipment in which one shipper exclusively occupies a container, with cargo volume sufficient to fill one or more containers.

Feeder. A feeder service uses small to medium-sized vessels to transport cargo between feeder ports and hub ports (or vice versa), connecting with mother vessels on main routes.

Forty-foot Equivalent Unit. A 40-foot container equals 2 TEUs.

Flat Rack. A container with no side walls or roof, consisting only of a floor and end walls, used for loading overlong, overwide or overheight cargo.

Free Time. The number of days of free storage (Demurrage) and free container usage (Detention) granted by the shipping line.

General Average. An extraordinary sacrifice intentionally made and extraordinary expenditure incurred for common safety, which is shared proportionally among all benefiting parties.

General Rate Increase. A general increase in base freight rates implemented by shipping lines.

House Bill of Lading. A bill of lading issued by the freight forwarder to the actual shipper.

International Ship and Port Facility Security. A surcharge levied for the implementation of the ISPS security code.

Less than Container Load. Cargo from multiple shippers consolidated into a single container, with each shipper charged according to volume or weight.

Low Sulphur Surcharge. A surcharge levied because international conventions require vessels to use low-sulphur fuel.

Master Bill of Lading. A bill of lading issued by the shipping line. The shipper named on it is the freight forwarder and the consignee is the forwarder's agent at the destination.

Mother Vessel. A large ocean-going container vessel operating on main trade routes, with high capacity and calling at major hub ports.

Non-Vessel Operating Common Carrier. A carrier that does not own vessels but issues bills of lading and operates sea freight services in the capacity of a carrier.

Open Top. A container with an open top covered by a tarpaulin, facilitating top loading of overheight or large cargo.

Port of Discharge / Port of Destination. The port at which cargo is discharged from the vessel (which may be a transshipment port or the final destination port).

Port of Loading. The port at which cargo is loaded onto the vessel for shipment.

Peak Season Surcharge. A surcharge levied during the peak shipping season (usually in the second half of the year) when capacity is tight.

Reefer Container. A container equipped with a refrigeration unit capable of controlling temperature, used for transporting frozen or chilled cargo.

Roll / Rollover. Booked cargo that failed to be loaded onto the scheduled sailing due to insufficient space or other reasons, and is rolled over to the next sailing.

Seaway Bill. A transport document that is not a document of title. The consignee takes delivery upon proof of identity without presenting an original, enabling swift release.

Shipping Instructions. The bill of lading content information provided by the shipper to the shipping line for the production of the bill of lading.

Switch B/L. The replacement of the original bill of lading with a second set during transshipment, commonly used to change the shipper or consignee or to conceal the identity of an intermediary.

Tank Container. A tank-shaped container used for transporting liquids such as chemicals and liquid foodstuffs.

Telex Release. After the consignee's original bill of lading is surrendered at the port of loading, the port of destination is notified by electronic means to release the cargo without the original bill of lading.

Twenty-foot Equivalent Unit. A standard unit of measurement for container traffic volume. One 20-foot (20×8×8 feet) container equals 1 TEU. A 40-foot container equals 2 TEUs.

Terminal Handling Charge. A charge levied for loading, unloading and handling operations when a container enters or leaves a terminal.

Transshipment (Transhipment). Cargo discharged from the original vessel at an intermediate port and loaded onto another vessel to continue its journey to the port of destination.

Verified Gross Mass. Under the SOLAS Convention, the shipper is required to declare the verified gross mass of a container before it is loaded onto the vessel.

Vessel Operating Common Carrier. A carrier that actually owns and operates vessels.

Aircraft on Ground. Refers to an aircraft grounded due to a mechanical fault awaiting repair, requiring the urgent transport of aircraft parts and materials. It receives the highest-priority transport service.

Available to Board. Indicates that cargo has completed security screening and documentation processing and is ready to be loaded onto the aircraft.

Air Waybill. A receipt for goods and evidence of the contract of carriage issued by the carrier or its agent. It is the core document in air freight. An air waybill is non-negotiable.

Cargo Change Advice. A notice issued when amendments to the waybill content (e.g. consignee, port of destination, etc.) are made after the goods have been dispatched.

Chargeable Weight. The greater of the actual gross weight and the volumetric weight, used as the basis for freight calculation.

Consolidation. A process whereby a freight forwarder combines loose shipments from multiple shippers into a single consolidated consignment to obtain more favourable freight rates.

Courier / Express service. Door-to-door transport of small urgent shipments, usually carried by express courier companies such as DHL, FedEx and UPS.

Dangerous Goods Regulations. Regulations issued by IATA governing the transport of dangerous goods by air, specifying requirements for classification, packaging, marking and documentation.

Direct Shipment. Cargo transported from the departure airport directly to the destination airport without transit.

Electronic Air Waybill. An initiative promoted by IATA that replaces the paper AWB with electronic data, simplifying processes and reducing costs.

Electronic House AWB. Electronic HAWB message data transmitted by the freight forwarder to the airline.

Freight Waybill (electronic). Electronic MAWB message data transmitted by the freight forwarder to the airline.

House Air Waybill. A waybill issued by the freight forwarder to the actual shipper. The shipper named on it is the actual shipper and the consignee is the actual consignee.

International Air Transport Association. The trade association of the world's airlines, which sets air freight rates, safety standards and dangerous goods transport regulations.

International Civil Aviation Organization. A specialised agency of the United Nations responsible for developing standards and recommended practices for international civil aviation.

Live Animals. The transport of live animals is carried out in accordance with the IATA Live Animals Regulations (LAR), which impose strict requirements on containers and handling.

Master Air Waybill. A waybill issued by the airline. The shipper named on it is the freight forwarder and the consignee is the forwarder's agent at the destination.

No Value Declared. A notation on the waybill indicating that the shipper has not declared a value for the goods. The carrier's liability is limited to the amounts specified under the Warsaw / Montreal Convention.

Perishable Cargo. Air freight cargo such as fresh food, cut flowers and pharmaceuticals that requires temperature-controlled transport and priority handling.

Shipper's Load and Count. A notation on the waybill indicating that the goods were loaded and counted by the shipper, and that the carrier does not verify the number of pieces.

The Air Cargo Tariff. A global reference tool for air freight rates and rules published by IATA.

Unit Load Device. A standardised container or pallet (e.g. AKE, PMC, etc.) used in air freight to load cargo, which can be loaded directly into the aircraft hold.

Volumetric Weight / Dimensional Weight. The weight calculated based on cargo volume. In air freight, it is typically calculated at 1 CBM = 167 kg.

Actual Time of Arrival. The actual time at which a vessel or aircraft arrives.

Actual Time of Departure. The actual time at which a vessel or aircraft departs.

Cubic Meter. A unit of measurement for cargo volume, an important basis for freight calculation.

Cold chain. A refrigerated temperature-controlled supply chain most commonly used for pharmaceutical products or foodstuffs. An unbroken cold chain is an uninterrupted series of refrigerated production, storage and distribution facilities which maintain a stipulated low-temperature range.

Consignee. The party entitled to take delivery of the goods, usually named on the bill of lading or waybill.

Dangerous goods are substances or articles that pose a risk to people, property or the environment, due to their chemical or physical properties. Dangerous goods are often confused with hazardous cargo, which relates to a slightly different risk classification based on health effects.

Estimated Time of Arrival. The expected time at which a means of transport is due to arrive.

Estimated Time of Departure. The expected time at which a means of transport is due to depart.

Freight Forwarder. An intermediary that accepts a shipper's commission to arrange services such as booking, Customs clearance, warehousing and transport.

Full Truckload. When a shipment occupies a truck exclusively. This may be because the shipment fills a whole truck, or because the shipper wants faster collection and delivery. It is more expensive than LTL.

Gross Weight (G.W.). The total weight of the goods including packaging.

Load metre / Load meter. 1 linear metre of loading space in a truck or trailer for calculating freight cost. Used when goods cannot be stacked. One europallet is 0.4 load metres.

Less Than Truckload. When a shipment does not need a whole truck, goods are shipped with other customers' goods. This is a lower-cost solution than booking a whole truck.

Net Weight (N.W.). The actual weight of the goods excluding packaging.

Notify Party. The party to be notified by the carrier upon the arrival of the goods, usually the consignee or their agent.

Shipper. The party that concludes a contract of carriage with the carrier and delivers the goods.

Tare Weight (Tare). The weight of the packaging container (Gross Weight − Net Weight = Tare Weight).

Transport Management System. A supply chain management subset which helps optimise the effectiveness and efficiency of transportation fleets.

Transit. The transport of goods passing through a third country or territory, which may refer to transshipment or transit passage.

Warehouse Management System. A software application which supports and enhances warehouse functionality and distribution centre management.