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Industry/Incoterms

A B C D E F G H I J K L M N O P Q R S T V W X Y Z
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- ACCEPTANCE
- A draft, payable at a determinable future, date upon the
face of which the drawee acknowledges his obligation to
pay it at maturity. (Broadly speaking, any agreement to
purchase goods under specified terms. An agreement to
purchase goods at a state price and under stated terms.)
- ACT OF GOD
- A natural event, not preventable by any human agency,
such as flood, storms, or lightning. Forces of nature
that a carrier has no control over, and therefore cannot
be held accountable.
- ADVANCE FREIGHT
- Partial payment of the bill of lading freight in advance;
in other respects is the same as guaranteed freight.
- AIR WAYBILL
- A bill of lading (see bill of) that covers both domestic
and international flights transporting goods to a
specified destination. This is a non-negotiable
instrument of air transport that serves as a receipt for
the shipper, indicating that the carrier has accepted the
goods listed and obligates itself to carry the
consignment to the airport of destination according to
specified conditions.
- ALL RISK
- The broadest form of coverage available, providing
protection against all risks of physical loss or damage
from any external cause. Does not cover loss or damage
due to delay, inherent vice, preshipment condition,
inadequate packaging, or loss of market.
- ALONGSIDE
- A phrase referring to the side of a ship. Goods to be
delivered "alongside" are to be placed on the
dock or barge within reach of the transport ship's tackle
so that they can be loaded aboard the ship.
- ARBITRAGE
- The buying of foreign exchange, securities, or
commodities in one market and the simultaneous selling in
another market, in terms of a third market. By this
manipulation a profit is made because of the difference
in the rates of exchange or in the prices of securities
or commodities involved.
- AVERAGE
- Any loss or damage due to insured perils that is less
than a total loss. Two types of average occur: Particular
Average and General Average.
- BENEFICIARY
- The person in whose favor a draft is issued or a letter
of credit opened.
- BILL OF LADING
- The document issued on behalf of the carrier describing
the kind and quantity of goods being shipped, the
shipper, the consignee, the ports of loading and
discharge and the carrying vessel. It serves as a
document of title, a contract of carriage, and a receipt
for goods.
- BONDED WAREHOUSE
- A building authorized by Customs authorities for storage
of goods on which payment of duties is deferred until the
goods are removed.
- BREAK BULK
- Loose cargo, such as cartons, stowed directly in the
ship's hold as opposed to containerized or bulk cargo.
See "Containerization."
- BULK SHIPMENTS
- Shipments which are not packaged, but are loaded directly
into the vessel's holds. Examples of commodities that can
be shipped in bulk are ores, coal, scrap, iron, grain,
rice, vegetable oil, tallow, fuel oil, fertilizers, and
similar commodities.
- C&F
- (Cost and Freight) Seller owns goods until they are
loaded on vessel; selling price includes all costs so far
plus cost of freight. The buyer is responsible for
insurance.
- C.I.F.
- (Cost, Insurance and Freight.) Seller owns goods until
they are loaded on vessel; selling price includes cost of
goods, insurance, and freight.
- CARGO
- Goods, merchandise or commodities of every description
which may be carried aboard a vessel, in consideration of
the freight charged; does not include provisions and
stores for use on board.
- CARNET
- A customs document permitting the holder to carry or send
merchandise temporarily into certain foreign countries
(for display, demonstration, or similar purposes) without
paying duties or posting bonds.
- CARRIAGE OF GOODS BY SEA ACT (C.O.G.S.A.)
- 1936 U.S. Statute that governs the acts that a carrier is
responsible for and defines the terms used in shipping.
The act provides that the shipowner's liability will be
limited to $500 per shipping package, and it stipulates a
one-year time limit for filing suit against the carrier.
This act automatically applies to international ocean
movements but not to domestic ocean transits unless the
carrier agrees to be bound by it.
- CARRIER
- Usually means Steamship Company, but can also refer to
trucking company, airline, or railroad as transporter of
cargo.
- CERTIFICATE OF INSPECTION
- A document often required with shipments of perishable or
other goods, when certification notes the good condition
of the merchandise immediately prior to shipment.
- CERTIFICATE OF MANUFACTURE
- A statement sometimes notarized by a producer, usually
also the seller, or merchandiser that indicates the goods
have been manufactured and are at the disposal of the
buyer.
- CERTIFICATE OF ORIGIN
- A specified document, required by certain foreign
countries for tariff purposes, certifying the country of
origin of the merchandise. Sometimes requires the
signature of the consul of the country to which it is
destined.
- CHARTER PARTY
- A written contract between the owner of a vessel and the
one (the charterer) desiring to empty the vessel, setting
forth the terms of the arrangement, i.e., freight rate
and ports involved in the contemplated trip.
- COLLECT FREIGHT
- Freight payable at destination provided the vessel
delivers the goods as specified.
- COMMERCIAL INVOICE
- A statement of transaction between a seller and buyer
prepared by the seller, and a description of the
merchandise, price, terms, etc.
- COMMERCIAL SET
- Set of four "negotiable" documents that
represents and takes the place of the goods themselves in
the financing of the cargo sales transaction.
- COMMON CARRIER
- Transporter who holds himself out to the general public
for the transportation of goods over a definite route and
according to a regular schedule.
- CONSIGNEE
- Party who is to receive the good; usually the buyer.
- CONSIGNMENT
- Merchandise shipped to a foreign agent or customer when
an actual purchase has not been made, but under an
agreement obliging the consignee to pay the consignor for
the goods when sold.
- CONSOLIDATION
- The Consolidation Endorsement may be added to an Open
Cargo Policy at an agreed premium, to provide coverage on
merchandise while in transit to, and while at, a common
consolidation point for the purpose of preparing or
consolidating the merchandise for export.
- CONSULAR DOCUMENTS
- Bills of lading, certificates of origin or special
invoice forms that are officially signed by the consul of
the country of destination.
- CONSULAR INVOICE
- A detailed statement of goods shipped certified by the
consul at the point of shipment.
- CONTAINERIZATION
- Shipping systems based on large cargo-carrying containers
ranging up to 48 feet long that can be easily
interchanged between trucks, trains and ships without
rehandling the contents.
- CONTRABAND
- During the time of war, materials carried aboard a vessel
that could aid a belligerent in the process of the war,
such as arms, weapons or munitions.
- CUSTOMS BROKER
- Licensed by U.S. Customs to clear shipments for clients,
also can forward goods "In Bond" to your port.
- D/A-DOCUMENTS AGAINST ACCEPTANCE
- Instructions from a shipper to his bank that the
documents attached to a time draft for collection are
deliverable to the drawee against his acceptance of the
draft.
- D/P-DOCUMENTS AGAINST PAYMENT
- Instructions a shipper gives to his bank that the
documents attached to a draft for collection are
deliverable to the drawee only against his payment of the
draft.
- DECK CARGO
- Cargo carried outside rather than within the enclosed
cargo spaces of a vessel.
- DELAY
- Even under All Risk coverage, damage due to delay is not
recoverable. Most underwriters have inserted a
"Delay Cause" in the Open Cargo Policy, which
states specifically that damage caused by delay is not
recoverable even if the delay was due to a peril insured
against.
- DOCK RECEIPT
- Receipt issued by an ocean carrier or its agent for
merchandise delivered at its dock or warehouse awaiting
shipment.
- DOCUMENTARY CREDIT
- A commercial letter of credit providing for payment by a
bank to the name beneficiary, usually the seller of
merchandise, against delivery of documents specified in
the credit.
- DOCUMENTS
- Papers customarily attached to foreign drafts, consisting
of ocean bills of lading, marine insurance certificates,
and commercial invoices, and where required, including
certificates of origin and consular invoices.
- DRAFT
- Buyer's payment for goods.
- DUTY
- (a) ad valorem duty means an assessed amount at a certain
percentage rate on the monetary value of an import. (b)
Specific duty: an assessment on the weight or quantity of
an article without preference to its monetary value or
market price. (c) Drawback: a recovery in whole or in
part of duty paid on imported merchandise at the time of
exportation, in the same or different form.
- EX (POINT OF ORIGIN)
- From the point where the shipment begins movement, e.g.,
"Ex Factory" "Ex Mine" or "Ex
Warehouse." See "Terms of Sale."
- EX-DOCK
- (From dock.) Seller owns goods until they are unloaded on
dock at port of discharge; selling price includes all
costs so far plus cost of unloading from vessel.
- EX-FACTORY
- Seller owns goods until they are picked up at his
factory; selling price is the cost of the goods.
- F.A.S. VESSEL
- (Free alongside steamer.) Seller owns goods until they
are delivered alongside vessel; selling price includes
all costs so far plus cost of transportation to dock.
- F.C.&S.
- Free of Capture & Seizure - Clause excluding war
risks from the Marine Policy; war risks can be covered by
issuing a separate War Policy with an additional premium
being charged.
- F.O.B. TRUCK
- (Free on board truck.) Seller owns goods until they are
loaded on truck at his factory; selling price includes
all costs so far plus cost of loading on truck.
- F.O.B. VESSEL
- (Free on board vessel.) Seller owns goods until they are
loaded on vessel; selling price includes all costs so far
plus cost of loading on vessel.
- F.O.B. WAREHOUSE
- (Free on board warehouse.) Seller owns goods until they
are delivered to buyer's warehouse at final destination;
selling price includes all costs so far plus
transportation to final warehouse.
- F.O.B./F.A.S. ENDORSEMENT
- If a merchant sells on F.O.B., F.A.S., C&F or similar
terms, it is the buyer's responsibility to place the
insurance.
- FORCE MAJEURE
- The title of a standard clause in marine contracts
exempting the parties for non-fulfillment of their
obligations as a result of conditions beyond their
control, such as earthquakes, floods, or war.
- FREE TRADE ZONE
- A port designated by the government of a country for
duty-free entry of any non-prohibited goods. Merchandise
may be stored, displayed, used for manufacturing, etc.,
within the zone and reexported without duties being paid.
Duties are imposed on the merchandise (or items
manufactured from the merchandise) only when the goods
pass from the zone into an area of the country subject to
the Customs Authority. Also called FOREIGN TRADE ZONE
- FREIGHT
- The money charged by the carrier for transporting goods.
- GENERAL AVERAGE (G.A.)
- Ancient principle of equity in which all parties in a sea
adventure (ship, cargo, and freight) proportionately
share losses resulting from a voluntary and successful
sacrifice of part of the ship or cargo to save the whole
adventure from an impending peril, or extraordinary
expenses necessarily incurred for the joint benefit of
ship and cargo.
- GENERAL AVERAGE SECURITY
- Documents the cargo owner presents to the General Average
Adjuster to replace the vessel owner's maritime lien on
cargo for its share of General Average and to obtain
release of the goods by the Steamship Company. G.A.
Security consists of a G.A. Bond and either a cash
deposit or an Underwriter's Guarantee.
- GOODS
- Cargo shipped by sea or air.
- GUARANTEED FREIGHT
- Freight payable whether the goods are delivered or not,
provided the failure to deliver the goods resulted from
causes beyond the carrier's control.
- HARMONIZED SYSTEM
- An international commodity classification system,
developed under auspices of Customs Cooperation Council,
adopted by the United States in 1989 and increasingly the
most widely accepted import/export classification
methodology. Replaces SCHEDULE B export codes and TARIFF
SCHEDULE OF THE U.S. import codes.
- IN BOND
- A term applied to the status of merchandise admitted
provisionally to a country without payment of duties --
either for storage in a bonded warehouse or for
trans-shipment to another point, where duties will
eventually be imposed.
- INHERENT VICE
- A loss caused by the inherent nature of the thing insured
and not the result of a casualty or external cause.
- INLAND BILL OF LADING
- A bill of lading used in transporting goods overland to
the exporter's international carrier.
- IRREVOCABLE LETTER OF CREDIT
- A letter of credit in which the specified payment is
guaranteed by the bank if all terms and conditions are
met by the drawee.
- LETTER OF CREDIT - COMMERCIAL
- A letter addressed by a bank, at the insurance and
responsibility of a buyer of merchandise, to a seller,
authorizing him to draw drafts to a stipulated amount
under specified terms and undertaking conditionally or
unconditionally to provide eventual payment for drafts.
- LOAN RECEIPT
- Document signed by the Assured where he acknowledges
receipt of money advanced by the insurance company as an
interest-free loan (instead of payment of a loss)
repayable to the insurance company only if the loss is
recovered from a third party and then only to the extent
of the recovery.
- LOSS OF MARKET
- A situation in which, for one reason or another, sound
cargo is no longer wanted by the consignee when it
arrives. This is a "business loss" not
recoverable under a Marine Cargo Policy; e.g., Christmas
trees arriving in January undamaged.
- MANIFEST
- An itemized list by Bill of Lading number of the kind and
quantity of all cargoes loaded aboard a vessel, prepared
by the vessel's Master.
- NAMED PERILS POLICY
- Any marine policy limiting coverage to perils
specifically listed in the policy; opposed to All Risks
policy. See "All Risks."
- OCEAN BILL OF LADING
- Bill of lading indicating that the exporter consigns a
shipment to an international carrier for transportation
to a specified foreign market. Unlike an inland B/L, the
ocean B/L also serves as a collection. If it is a
straight B/L, the foreign buyer can obtain the shipment
from the carrier by simply showing proof of identity. If
a negotiable B/L is used, the buyer must first pay for
the goods, post a bond, or meet other conditions
agreeable to the seller.
- OPEN POLICY
- A cargo policy with no expiration date that provides
automatic coverage of cargo to or from an Assured in a
specified trade at agreed rates, terms, and conditions.
Usually consists of separate Marine and War policies.
- PALLET
- A low portable platform, usually wooden, on which cargo
is stacked for storage or transportation; a skid.
- PERILS OF THE SEA
- Fortuitous accidents or casualties, peculiar to
transportation on a navigable water, such as stranding,
sinking, collision of the vessel, striking a submerged
object, or encountering heavy weather or other unusual
forces of nature.
- PHYTOSANITARY INSPECTION CERTIFICATE
- A certificate, issued by the US Department of Agriculture
to satisfy import regulations for foreign countries,
indicating that a US shipment has been inspected and is
free from harmful pests and plant diseases.
- PILFERAGE
- The theft of part of the contents of a shipping package.
- POLITICAL RISK
- In export financing the risk of loss due to such causes
as currency inconvertibility, government action
preventing entry of goods, expropriation or confiscation,
war, etc.
- PRO FORMA INVOICE
- An invoice provided by a supplier prior to the shipment
of merchandise, informing the buyer of the kinds and
quantities of goods to be sent, their value, and
important specifications (weight, size, etc.)
- SHIPPER'S EXPORT DECLARATION
- A form required for all shipments by the US Treasury
Department and prepared by the shipper, indicating the
value, weight, destination, and other basic information
about an export shipment.
- SHIPPER'S LOAD AND COUNT
- Note on bill of lading indication that the contents of a
container were loaded and counted by the shipper and not
checked or verified by the Steamship Company.
- SPECIAL POLICY OF INSURANCE
- Document issued on behalf of the Underwriter stating the
terms and conditions of the marine insurance. Issued when
evidence of insurance is required, as by the bank issuing
the Letter of Credit.
- STANDARD INTERNATIONAL TRADE CLASSIFICATION (SITC)
- A standard numerical code system developed by the United
Nations to classify commodities used in international
trade.
- STRAIGHT BILL OF LADING
- A non-negotiable bill of lading in which the goods are
consigned directly to a named consignee.
- SUBROGATION
- The operation by which the insurance company (on payment
of a claim) assumes all of the assured's rights to
recovery from any third parties; substitution of one
creditor for another.
- SURVEYOR
- A marine specialist who examines damaged property and
determines the cause, nature, and extent of damage and
methods of repair and/or replacement. He is not an
adjuster, and all his actions are without prejudice to
policy terms and conditions.
- TARE WEIGHT
- The weight of a container and packing materials without
the weight of the goods it contains.
- TENOR
- The term fixed for payment of a draft.
- TERMS OF SALE
- The invoice is the sales contract between buyer and
seller and indicates the Terms of Sale.
- THROUGH BILL OF LADING
- A single bill of lading converting both the domestic and
international carriage of an export shipment. An air
waybill is essentially a through bill of lading used for
air shipments. However, ocean shipments usually require
two separate documents -- an inland B/L for domestic
carriage and an ocean B/L for international carriage.
Through bills of lading are insufficient for ocean
shipments.
- TONNAGE
- Gross Tonnage - Total internal carrying capacity of a
vessel expressed in measurement tons (one measurement ton
= 100 cu. ft.).
- TRANSIT SHIPMENT
- A term designating a shipment destined for an interior
point or a place best reached by reshipment from another
port.
- TRANSSHIPMENT
- To transfer from one ship or conveyance to another for
further transit.
- VALUATION CLAUSE
- The clause in the Marine Policy that contains a fixed
basis of valuation agreed upon by the Assured and the
Underwriter and which establishes the insured value of
the merchandise. The Clause determines the amount payable
under any recoverable loss or General Average
contribution.
- VESSEL
- Every description of watercraft or other artificial
contrivance used, or capable of being used, as a means of
transportation on water.
- WAR RISKS
- Those risks related to two (or more) belligerents
engaging in hostilities, whether or not there has been a
formal declaration of war. Such risks are excluded by the
F.C.&S. (Free of Capture and Seizure) Warranty, but
may be covered by a separate War Risk Policy, at an
additional premium.
- WAREHOUSE RECEIPT
- A receipt supplied by a warehouseman for goods he has
placed in storage.
- WAREHOUSE-TO-WAREHOUSE CLAUSE
- The clause in the Cargo Policy that defines when coverage
commences and terminates. It is the intent of the policy
to attach at the time the goods leave the warehouse of
origin named in the Policy, and to continue while the
goods are in due course of transit until delivered to the
warehouse of destination named in the Policy, where it
terminates.
- WHARFAGE
- A charge assessed by a pier or dock owner for handling
incoming or outgoing cargo.
SOURCES
- US Department of Commerce, International Trade
Administration, A Basic Guide to Exporting,
Washington, DC 20230.
- Reprinted by permission from International Strategies,
Inc., 1995
- Used with permission from Edward Hinkelman, Dictionary
of International Trade, World Trade Press
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