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A-Z of Shipping Terms

Like every other industry, the shipping and freight business is awash with jargon. We try not to use it when talking to you, but sometimes we slip up! To clarify and assist you with some of the most common shipping and freight terms please use our A-Z Glossary.

A

AEO (Authorised Economic Operator)

Authorised Economic Operator is a party involved in the international movement of goods that has been approved by or on behalf of a national Customs administration as complying with World Customs Organisation or equivalent supply chain security standards.

AWB (Airway bill)

Air Waybill or Consignment Note is the document airlines issue on receipt of cargo for shipment and as evidence for the contract of carriage, but it is not a document of title to the goods. The air waybill is non-negotiable. It includes an 11-digit Air Waybill number you can use to track your goods in transit.

ATR1

A customs document that allows goods moving between an EU country and Turkey to benefit from cheaper rates of duty.

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B

B/L (Bill of Lading)

The document that shipping companies issue on receipt of cargo for shipment and as evidence for the contract of carriage. As well as setting out all the details for each shipment, it includes a Bill of Lading Number you can use to use to track your goods in transit.

BAF (Bunker Adjustment Factor)

The Bunker Adjustment Factor, or BAF, as it is more commonly known, is one of the charges levied on goods transported via Sea Freight. This particular charge represents the fluctuating costs to the shipping, as an example varying global oil prices.

BIFA (British International Freight Association)

BIFA is a trade association for UK registered companies engaged in international movement of freight by all modes of transport, air, road, rail and sea. All Business undertaken by RJJ Freight Ltd of whatever nature is subject to the Standard Trading Conditions of BIFA 2005A edition.

BIP (Border Inspection Post)

Boarder controls operated by the Port Health Authorities.

Bonded Warehouse

A building or other secure area in which dutiable goods can be stored, manipulated or undergo manufacturing operations without payment of Vat and Duty. See also under ERTS.

BTIS (Binding Tariff Information System)

A system created by the EU to help formal classification of a product to a specific Customs commodity code and to establish the amount of VAT and Duty applicable for the specific product.

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C

C of O (Certificate of Origin)

An official document that, when stamped by the relevant authorities, provide the Country of Origin of the goods in transit. This is often required when shipping textiles.

CAF (Currency Adjustment Factor)

The Currency Adjustment Factor is a component of the cost of shipping goods, by air or by sea. It reflects changes in foreign exchange rates.

CHIEF (Customs Handling of Import and Export Freight)

The computer system used by HM Revenue & Customs to manage both the declaration and movement of goods into and out of the UK. The system also manages movements of goods owned by UK residents and businesses across EU boarders.

Commercial Release

A document sent out a warehouse operator that states that goods are ready for release to an authorised collector and all applicable taxes and duties have been paid.

Connecta

Connecta is an Airfreight Association of independent freight forwarders that unites the best independent air transport and logistics companies around the world.

Container Demurrage

If a container is used for longer than it was booked or agreed free time, the excess time is referred to as demurrage.

Customs Cleared

A cargo becomes customs cleared once it has been declared to the local customs authorities and all applicable taxes and duties have been paid. Once cleared, goods are ready for onward shipment.

Customs Commodity Code

A six, eight or 10 digit code that tells customs authorities exactly what the cargo is. See also Harmonised System Code.

CVC (Certificate of Veterinary Check)

Certificate of Veterinary Checks/Inspection is a legal regulatory document in which the attending veterinarian attests to the veracity of the information contained in the documents.

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D

Deferment Account

Organisations can apply for an account with HM Revenue & Customs – a deferment account. It’s like putting things on a tab in the pub or restaurant. When it’s time to pay duty or VAT it get charged to your account and you settle the bill.

Demurrage

If a container is used for longer than it was booked or agreed free time, the excess time is referred to as demurrage.

Devan (Devanning)

The act of taking cargo out of a container. Also referred to as deconsolidation.

DGN (Dangerous Goods Note)

A Dangerous Goods Note is usually completed by a consignor who is qualified within the company to complete this document. The DGN contains all the hazardous information required for the goods to be transport in a safe manner. A DGN is required for all hazardous goods shipments via air or sea.

DVLA (Driver and Vehicle Licensing Agency)

A vehicle require a UK registered number plate before it can be used on British roads. Where applicable Road Tax needs to be paid. DVLA issue a V5 document showing the vehicles technical data and the registered owner of the vehicle.

DVSA (Driver and Vehicle Standards Agency)

The Vehicle and Operator Services Agency (VOSA) merged with the Driving Standards Agency (DSA) in April 2014 to create DVSA. All garages needs to be DVSA approved in order to do MOT and vehicle testing.

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E

End-Use Relief

Organisations shipping aircraft, ships spares, hydrocarbon oil and some foodstuffs can apply for what is called end-use relief – an exemption from paying duty and VAT.

ERTS (Enhanced Remote Transit Shed)

A warehouse outside the port controlled by HM Revenue & Customs where goods can be held as un-cleared (Duty VAT unpaid, Non EEC status). For example a groupage container may be moved to these locations for devanning and then each individual shipment can be cleared separately through customs.

EORI (Economic Operator Registration and Identification scheme)

Businesses and individuals require to register with HM Revenue & Customs prior to arrival and/or departure for goods in the UK. An EORI number, formerly TURN number or VAT Number is a number, unique throughout the European Community, assigned by a customs authority in a Member State to economic operators (businesses) or persons. By registering for customs purposes in one Member State, an Economic Operator (EO) is able to obtain an EORI number which is valid throughout the Community. The EO will then use this number in all communications with any EC customs authorities where a customs identifier is required for example customs declarations.

EORI Number

EORI numbers are unique throughout the EU. Those issued in the UK starts with the letters GB. Most are then followed by 12 digits based on the trader’s VAT number.

EUR1

A form that, when completed and endorsed by HM Revenue & Customs, entitles goods originating in the UK or EU to lower – possible zero- import duties and they arrive in countries covered by EU trade agreements.

Express Release Bill

A bill of lading used when a shipper wants cargo to be released to a consignee immediately on arrival at a port, rather than to have to wait for the consignee to present the original bill of lading given to the shipper.

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F

FAK (Freight All Kinds)

Shipping industry term for a carrier’s tariff classification for all kinds of goods that are pooled and shipped together at one freight rate. Consolidated shipments are generally classified as FAK.

FBA

Fulfilment by Amazon (FBA), you store your products in Amazon’s fulfilment centres, and they pick, pack, deliver, and provide customer service for these products.

FCL (Full Container Load)

A shipment made in a dedicated 20- or 40- foot container.

FEU (Forty foot Equivalent Unit)

The length of a container in foot. Also referred to as 40’ or 40ft. A FEU is twice the size of a TEU.

FIATA (International Federation of Freight Forwarding Associations)

International Federation of Freight Forwarders Associations, a non-governmental organisation, representing some 40,000 forwarding and logistics companies in 150 countries.

FOS (Financial Ombudsman Service)

The Financial Ombudsman Service is the UK’s official body to address and assist with customer complaints and problems relating to financial and insurance products and services.

Fumigation

The process during which a container is filled with gases or pesticides to kill vermin or insects or other infestations that may have crept inside the container during loading before any cargo is devanned.

Free Circulation Goods

Goods on which the import duty, VAT and any excise duties have been paid and as a result are no long under HM Revenue & Customs control.

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G

General Cargo

Any cargo that isn’t packed into a standard container for shipment. This might be bulk cargo – grain or fertilisers, for example. Alternatively, it could be an item on a pallet or something that’s too big to fit into a container.

Groupage

The process of combining smaller shipments from separate shippers into a container to make it easier and cheaper to ship to a common destination.

GSP (Generalised System of Preferences)

A scheme that allows organisations in developing countries to ship goods into the EU and other developed countries to pay lower-than-normal rate of duty or, sometimes, no duty at all.

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H

Haulage

The process of moving goods to or from a port.

Haulier

Person or company responsible for moving goods to or from a port, typically using a van or truck.

HAWB (House Airway Bill)

Freight Forwarders offering a consolidated service – to combine goods from several different shippers into a single unit prior to shipment – issue a house air waybill to describe the unit’s content.

HMRC (Her Majesty Revenue & Customs)

Her Majesty’s Revenue and Customs or HM Revenue & Customs is a non-ministerial department of the UK Government responsible for the collection of taxes in the UK.

HiAb

Standard used in the trade to describe a lorry or tuck that comes with a small crane attached. The name comes from the original manufacturer of the device – the Swedish firm, Hydraliska Industri AB.

HS Code (Harmonised Code/Tariff Heading)

A six digit coding scheme used to describe goods being shipped. Developed by the World Customs Organisation, it is understood around the world.

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I

IATA ( The International Air Transport Association)

The International Air Transport Association, is the trade association for the world’s airlines, representing some 265 airlines worldwide.

ICD (Inland Clearance Depot)

An inland area that operates as an extension to a port and offers similar services as an approved Customs warehouse where cargo can be stored before being customs cleared.

Import Quota

The quantity of a commodity that can be imported at a lower rate of duty than would otherwise apply. Quotas apply to certain goods from particular countries.

INCO Terms ( International Commercial Terms)

The Inco terms rules or International Commercial Terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC). They are widely used in International commercial transactions or procurement processes. A series of three-letter trade terms related to common contractual sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs, and risks associated with the transportation and delivery of goods.

Insurance – Marine Cargo Insurance

Marine Cargo Insurance cover loss or damage to goods in transit, subject to the Institute Cargo Clauses. These clauses provide standard comprehensive marine insurance cover. The term “All Risks” broadly speaking means any accidental event which is external to the cargo. War and Strikes (including Terrorism) subject to the application of the appropriate Institute Clauses providing for War and Strikes risks. General Average contributions and salvage cover.

IPR (Inward Processing Relief)

A relief from duty and VAT on goods being imported from outside the EU only to be process. When the process is completed the goods will be exported to countries outside the EU.

IVA (Individual Vehicle Approval)

Previously known as Single Vehicle Approval (SVA). A legal requirement which is designed to ensure a vehicle complies with the current UK regulations for the use on British roads. All cars and vehicles manufactured within the preceding 10 years are required to undergo this process and in some cases modifications of the car or vehicle is required.

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L

LC (Letter of Credit)

A letter of credit is a letter from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.

LCL (Less than a Container Load)

A shipment too small to require a container of its own. The shipment will be grouped with other shipments to the same destination and loaded in a shared 20- or 40-foot container.

LO-LO (Load-On, Load-Off)

This term is usually describing the charge made for loading and or discharging a container from or onto a truck.

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M

Marine Cargo Insurance

See Insurance

MAWB (Master Airway Bill)

Master airway bill is issued by main carrier of goods on receipt of goods from a freight forwarder to deliver at destination as per agreed terms.

Moffitt Truck

Lorry or truck that comes with a fork-lift attached.

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N

NCTS (The New Computerised Transit System)

The computer system traders use to declare goods that will be moved by road across boarders between EU countries.

NIRU (National Import Relief Unit)

The department of HM Revenue & Customs that control the import of goods from outside the EU in cases where certain procedures apply or reliefs are being claimed.

NOVA (Notice of Vehicle Arrival)

All vehicles arriving into the UK require notification to HM Revenue & Customs within 14 days. For private individuals RJJ can assist with the NOVA formalities. A vehicle cannot be registered or licenses with the DVLA without a NOVA declaration.

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O

Original Bill of Lading

The bill of lading is given to the shipper as receipt of goods. Shipping lines may require this document to be surrendered to them prior to the release of the goods at destination port.

Overlanded

The term used to describe goods or containers that arrive unexpectedly at a port. They are on the ship, but not on the ship’s manifest.

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P

Port Health

The combination of national and local authorities responsible for protecting the UK against things that could put the safety of people at risk, harm livestock or damage the environment.Their function include ensuring infectious disease does not spread from vessels, enforcing controls on imported food and sampling shellfish for contamination.

Pre-Lodged

The act of registering goods with HM Revenue & Customs prior to their arrival at port.

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Q

Quota

The Import Quotas system allows the import of limited amounts of goods at a rate of duty lower than would otherwise apply. Quotas apply to certain goods from particular countries – so they are very specific.

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R

REDS (Registered Excise Dealer and Shipper)

Trader approval from HM Revenue & Customs to receive duty- suspended goods shipped from EU member states.

Release

See container release.

Restitution

Return of a container to port of other designated location as specified by the shipping line.

RoRo (Roll on/Roll off)

A description of cargo such as a car, bus, truck or trailer that can make its own way onto and off a ship via its loading ramp.

RPA (Rural Payments Agency)

The department of government that issues import licenses for agricultural and horticultural products and for certain types of food and drink.

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S

Sea Waybill

The document shipping lines issue on receipt of cargo for shipment.

Short-Landed

The term used to describe goods or containers that are recorded but have not arrived as expected, because they were not loaded on board a vessel or aircraft.

Short-Shipped

See Short-Landed.

Shunt

The movement of a container over a short distance – typically from the quayside to a warehouse in a port or from place to place within a dockyard.

SSN (Standard Shipping Note)

A standard shipping note is a form that contains information about the goods and the companies involved in sending, shipping and receiving goods overseas.

SVA (Single Vehicle Approval)

The vehicle approval process is now called Individual Vehicle Approval. See IVA.

SWB (Sea Way Bill)

A transport document for maritime shipment which serves as evidence of the contract of carriage and as a receipt for the goods, but is not a document of title. The sea waybill indicates the on board loading of the goods and can be used in cases where no ocean bill of lading and no other document of title is required.

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T

T1/TAD (Transit Accompanying Document)

A document generated by the EU’s new computerised transit system that accompanies un –cleared goods as they move from one authorised location to another.

Tremcard (Travel Emergency Card)

A document that must accompany hazardous goods and which identifies the hazard, explains how to handle the goods and says what should be done in the event of a spillage or other accident.

Turn Number

See EORI number

TEU (Twenty-foot Equivalent Unit)

The length of a container in foot. The capacity of a ship is measured in TEU, the number of 20-foot containers they can carry. Also referred to as 20’ or 20ft.

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U

UCN (Unique Consignment Number)

See Unique Consignment Reference

UCR (Unique Consignment Reference)

The number that will uniquely identify a shipment as it moves around the world. It is used by everyone in the shipping process – the shipping lines, ports and customs authorities.

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V

VAT (Value Added Tax)

A tax levied based on the value of goods or services. The rate varies according to the type of goods or service involved. Unless exempt, VAT is levied on goods as they are imported into the UK.

VAT Registration Number

Individuals and organisations are required to register for VAT if they have to levy VAT on goods or services. The VAT registration number is issued by HM Revenue & Customs.

VBS (Vehicle Booking System)

A system operated at many UK ports, that governs the movements of trucks collecting and delivering containers and other cargo in the port. To avoid congestion, vehicles must be pre-booked and arrive within an appointed time window.

VGM (Verified Gross Mass)

The SOLAS (Safety of Life at Sea) regulation allows for two methods to verify the gross mass of packed containers which is now mandatory to provide to the shipping line’s before a container is loaded onto a vessel.

Method 1. Weighing the packed container using calibrated and certified equipment; or

Method 2: Weighing all packages and cargo items, including the mass of pallets, dunnage and other securing material to be packed in the container and adding the tare mass of the container to the sum of the single masses, using a certified method approved by the competent authority of the State in which packing of the container was completed.

VOSA (Vehicle and Operator Services Agency)

See DVSA.

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W

WCA (World Cargo Alliance)

World Cargo Alliance is the world’s largest and most powerful network of independent freight forwarders and covers more than 150 countries around the world.

Wet Bond

A term used to describe a bonded warehouse which is authorised to store alcohol and other excisable goods prior to duties being paid.

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