D

Dangerous Cargo - Cargo which has properties that may be harmful or dangerous. Will have a code or class provided by IMDG.

 

Deadweight - A shipping expression to confirm the maximum carrying capacity of a vessel.


Deck Cargo - Cargo shipped on deck. An important clause for bills of lading for sensitive cargo (under deck) or dangerous cargo (on deck).

 

Declarations - A form of reporting shipments to an insurance company/broker under an open cargo policy.


Delivered at Frontier (DAF) - Seller responsible for making goods available at a precise place for the buyer. Seller is not responsible for insurance.

 

Delivered Duty Paid (DDP) - Seller responsible for making goods available at a precise place for the buyer. Seller assumes responsibility for import clearance and duties.

 

Delivered Duty Unpaid (DDU) - Seller responsible for making goods available at a precise place for the buyer. Buyer assumes responsibility for import clearance and duties.

 

Delivered Ex Quay (DEQ) - Seller responsible for making goods available to the buyer on the quay. Buyer assumes all responsibilities for import clearance and duties.


Delivered Ex Ship (DES) - Seller responsible for making goods available to the buyer on board the vessel. Seller responsible for getting to destination but not for import clearance and duties.

 

Delivery Instructions - Specific instructions to the carrier stating exactly where the goods will be delivered along with contact details.

 

Delivery Order - A document from the merchant ordering the collection of cargo at the port. In respect to the relationship with the carrier between the shipper and consignee this is an important document in some jurisdictions.

 

Demise Charter - See Bareboat Charter.

 

Demurrage - The charges a charterer or shipper pays the vessel owner or carrier for over use of the vessel or container. See Detention.


Depreciation - The write down of damaged cargo without the need for savage.

Detention - The charges a shipper pays a carrier for over use of container when it has been unstuffed. Demurrage refers to when a container is full. Detention refers to when a container is empty.

 

Devanning - The unloading of cargo from a container.

 

Discharge - The unloading of cargo from a vessel.

 

Dock - Area of water in a port for loading/unloading or repairing ships.

 

Dock Receipt - Document issued by the port confirming the goods have been received.


Door to Door - A sales or insurance term defining the period of transport from a shipper's warehouse to a consignee's warehouse. See Port to Port.

 

Dunnage - Often wood but can be any material that is placed around the cargo to prevent movement during shipment. If not treated can be a cause of cargo seizure or condensation.

 

Duty - A tax imposed by customs in respect to the importation of goods.

E

Endorsement - The signing of a document which amends or adds to it. Under insurance an endorsement is often used to extend cover to prohibited goods, and in shipping it is to transfer a negotiate bill of lading to another party.

 

En Route - Shipping term to define the cargo is in transit.

Error and Omission - An action which has not been correctly carried out or missed. Often used under professional liability insurance that protects companies against claims made by negligent acts.

 

Ex Works (EXW) - Incoterm where price is quoted for pick up at seller’s warehouse or if quoted, a named place. Refers the bare minimum for the seller.

Express Bill of Lading - A transit document that facilitates the release of cargo without the need of producing original bills of lading or sending them to destination. A non-negotiable document or a document of title, unlike a bill of lading. See Sea Waybill.

F

Facultative Insurance - Insurance placed for a single risk or shipment. See Open Policy.

Federal Aviation Administration (FAA) - Agency responsible for standards and procedures in respect of all aviation in the United States.

 

Federal Trade Commission (FTC) - Agency responsible to ensure all consumers are protected from unfair practices.

 

Feeder Vessel - Smaller vessels used to connect cargo to lesser known destinations from major shipping routes.

 

Flatrack - A container unit without any sides. Normally to carry out of gauge cargo.

 

Flag - A shipping term that establishes the vessels country of registry.

Flag of Convenience - National flag of a vessel that is registered in another country other than its owners. Often used to bypass national wage regulations.

Flexitank - A membrane inside a container for the movement of liquids. Avoids the use of tanks or drums.

 

Float On/Float Off (FO/FO) - A term to describe the shipment of a semi sub-submersible vessels which can lower itself in order to load heavy and large floating cargo on deck.


Force Majeure - Unexpected circumstances outside a contracting party's reasonable control that, having arisen, prevent it from performing its contractual obligations. Such as a war, strike, riot, crime, epidemic or an event described by the legal term act of God. See Act of God.


Force Majeure Clause - A clause that is included in a contract or convention to remove liability for natural and unavoidable catastrophes that interrupt the expected course of events and prevent participants from fulfilling obligations. Therefore, often excludes the carrier or party from any claims arising out of this act.

 

Foreign Flag - A shipping term for a vessel is not registered in that country but flies the country's flag.

Fortuitous - An accident or incident. A term used in insurance to avoid paper or inherent losses.

 

Forwarders Bill of Lading - A bill of lading issued by the forwarder or sometimes called House Bill of Lading.

 

Fraud - A legal term to define a wrongful or criminal deception intended to result in financial or personal gain.

 

Free Carrier (FCA) - Seller is responsible for clearing the goods for export and delivers them to the carrier. 

Free on Board (FOB) - Incoterm that defines the seller's responsibility once it passes the ship's rail.

 

Free Domicile - Shipper pays all transportation charges included duties and taxes.

 

Free Hand Shipments - A expression where the freight forwarder merely acts as name and is not involved in the routing.


Free In - Seller is responsible for loading charges.

 

Free In and Out - Charterer is responsible for loading and unloading charges.

Free of Capture and Seizure (FC&S Warranty) - A warranty in a cargo policy which specifically excludes coverage for losses due to hostile acts. A separate war risk policy is required. 

Free of Particular Average (FPA) - Loss or damage is only covered subject to certain conditions or events. 

Free on Board (FOB) - Seller clears goods for export and responsibility passes to the buyer at the ships rail.

 

Free Out - Buyer is responsible for unloading charges.

 

Free Time - Shipping term that allows charterers or merchants to unload or clear cargo. After this grace period demurrage, detention and storage charges are applicable.

 

Free Trade Zone - A zone that is regarded outside the jurisdiction of the country's customs territory. Merchants can bring in goods for assembly, reconditioning or re-export without incurring any duties.

Freight (FRT) - A term defining the cost of transportation. Can also refer to cargo.

 

Freight Collect - A term to define freight is still outstanding and the consignee must settle these charges before collecting the cargo.

Freight Forwarder - An individual or company engaged in the services of moving freight. See NVOCC.

 

Freight Pre-Paid - Freight that has already been paid to the carrier, and the shipper has already settled the charges.

Fresh Water - Not sea water and most likely rain. Important for cargo insurance to differentiate between inherent vice and fortuity.

Full Container Load (FCL) - A shipment type where a cargo occupies the full size of a container. Sometimes the container may not be fully filled, but the rate is charged on the basis of a full container. FCL is the standard form of shipping for a large cargo. Often shown on bills as FCL-FCL Shippers Load Stow and Count. Provides protection to carrier since they may not have stuffed the container.

 

Full Set - Often used to define the collection of a "full" set of originals. If three sets are issued then a full set would be defined as Three.

 

Fungibles - Commodities that share the same properties and can be easily replaced.

A

Abandonment - Formal notice when the damage is so severe the item cannot be repaired or salvaged. Can also be used to describe when cargo remains uncleared at destination.

 

Abbroachment - The purchase of all goods in a market in order to control all retail sales of those goods in that market. Controlling the market.

 

About - In respect to letters of credit, "about", means the toleration of +/- 10% in value of the goods.

Accepting Bank - A bank who is signing and accepts a bill of exchange and pays when this becomes due.

Accumulation Clause - A clause in the policy that increases the sum insured in the event the value of the cargo increases during the transit.

 

Act of God - A definition provided in International conventions to describe an act beyond someone’s control. Often an exclusion. See Force Majeure.

 

Adjustment - The refund or replacement of damaged goods by either the seller or by insurance company.

 

Adjuster - The individual who determines coverage and quantum on any particular claim.


Ad Valorem Bill of Lading - By reference of the cargo value under a bill of lading creates an Ad Valorem bill. It's often referred to as self-insurance because the carrier can no longer limit his liability and compensation must be made in full. Carriers will apply a higher freight rate for such a service.

 

Air Waybill - A shipping document used by the airlines for air freight. It is a contract for carriage that includes carriers' conditions of carriage including limits of liability and claims procedures. An air waybill is never negotiable, unlike Bills of Lading.


All Risk - A definition referring to Institute Cargo Clause A and is the most extensive insurance coverage. The reference to "All Risks" is that insurers cover all physical losses unless that which falls under the exclusions. Unlike "Named Perils" where losses are only covered if they fall under a named risk.

 

American Institute of Marine Underwriters (AIMU) - Reference to American Institute Clauses.

Antioxidant - A substance used for spontaneous combustion cargoes as a stabiliser.

 

Arbitration - The resolution of a dispute between two different parties through an impartial third party.


Arrival Notice - A notice to the consignee or shipping broker alerting them the projected arrival of freight and availability of freight for pick up.

 

Assignor - Rightful owner of property or to whom property is transferred.

 

Assurance - English term for insurance.

 

Assured - The individual, company or entity which is insured.

Astray Freight - A shipment that is miscarried or unloaded at a wrong destination and then forwarded correctly free of extra charge due to being 'astray'.

 

Attachment - The action of seizing property before a judgement to secure compensation for damages.

 

Average - A term applicable in insurance to proportion of loss when the cargo has been under or over insured. It also refers to a loss/damage of goods that is not a total loss. See General Average and Particular Average.

B

Back Dating a Bill of Lading - A very serious breach of a carrier intentionally backing dating the bill of lading from the date it was actually loaded. See Clean on Board, and Received for Shipment.

Bad Faith - The intent to mislead or deceive. Not by accident or an honest mistake. 

Bank Guarantee - A contract whereby a bank commits to pay a sum to a third party when a commitment is not met. Arises when cargo owners request from a carrier in the event of a large loss as a form of security or when Bills of Lading have been lost. 

 

Bankruptcy - The legal process dictating how an individual or company will repay their creditors.


Bareboat Charter - The chartering of a ship without crew, provisions are included and just the shell of the vessel. Often the actual owner is an affiliated company and the arrangement is a commercial one. See Demise Charter.

Beaufort Scale - A measure that relates to wind speed at sea or land. Scale 10 is defined as storm, whereas Scale 11 is hurricane.

 

Bill of Lading - A document issued by a carrier serving three functions. (1) Document of Title, (2) Contract of Carriage, and (3) Cargo receipt.

Blocking - Material used to prevent movement of cargo.


Blue Water - Deep sea transits, and not coastal shipments.

Booking Instructions - Information or instructions provided by the shipper to the freight forwarder or carrier.


Bordereau - Method under an open insurance policy of reporting shipments and losses to insurers. Generally not applicable when insurance certificates are issued.


Breakage - An allowance a manufacturer pays to a buyer for compensation for any losses or damages.

 

Broker - A person who acts as an intermediary between a buyer and seller. In the case of insurance, this is the intermediary between the insurer and assured.

 

Brown Water - Coastal shipping or transportation on barge.

 

Bulk Cargo - Cargo that is generally not shipped in containers or other carrying packages.

 

Bulkhead - A section on a vessel that separates the decks.

 

Bunkers - Another name for fuel for a vessel.

Bursting of Boilers - A named peril in Hull insurance but also forms part of the Inchmaree Clause in AIMU clauses.

C

Cabotage - The transport of goods or passengers between two places in the same country by a transport operator from another country. It originally applied to shipping along coastal routes, port to port, but now applies to aviation, railways, and road transport as well.

 

Capsize - A vessel too large for transit in Suez or Panama Canal which must go around the "capes" of Africa and South America.


Cargo - Goods moved in transit or storage.

 

Cargo Agent - A party who is instructed by a shipping company or airline to search for business and receive a commission in return.

Cargo Quilt - A blanket to protect temperature sensitive cargo.

 

Carnet - A document allowing the importation of goods to countries without the payment of customs duties. Usually for exhibition items.

Carriage of Goods by Sea Act (COGSA) - A United States statute governing the rights and responsibilities between shippers of cargo and ship-owners regarding ocean shipments to and from the United States. It is the US enactment of the International Convention Regarding Bills of Lading, commonly known as the "Hague Rules".

 

Carrier - A company whose business is to transport goods in return for freight. This includes Freight Forwarders or NVOCC's (Non Vessel Owning Common Carrier) who do not necessarily own the vehicles but still undertake to perform a service.

 

Cartage Agent - A company providing transportation within an area not serviced by the master carrier.

 

Cause of Loss - The proximate cause of the loss/damage. Dropping the cargo which results in theft, the loss will be caused by dropping.

 

Certificate of Inspection - A document verifying the condition of the cargo prior to shipment. Often companies such as SGS, Intertek, etc., provide such service for carriers or large shippers as a requirement for their insurance.

 

Certificate of Insurance - A document provided to the assured as evidence of insurance.

 

Certificate of Origin - A document attesting to the origin of the goods as a requirement for customs often in respect to restricted goods. Incorrect documentation or delay may result in seizure of the cargo.

 

Certificate of Weight - A document attesting to the weight of the goods as required by customs, port or the International convention for SOLAS (Safety of Life at Sea). Incorrect documentation or delay could result in fines.

CFR - Incoterm in respect to Cost and Freight. Insurance is not included in the transaction.

 

Charter Hire - The money paid to hire a vessel.

 

Charter Party - A contract between the owner of a vessel and a charterer. Duration can be based on time or voyage, or even space.

Chipping - Damage to the surface of goods.

CIFCI - Incoterm in respect to Cost, Insurance, Freight, Commission and Interest.

Civil Law - A legal system generally used in mainland Europe that follows rules statues.

Claim - A demand made against a third party or an insurance company for damages arising from transit. A demand must be kept separate from uncollected freight or premiums that are due.

Classification Society - A non-government organisation that provides and maintains technical standards for the operation of vessels and off-shore structures. Failure to comply with requirements will render the vessel uninsured.

Clause Paramount - A clause in a charter party or bill of lading that specifies the law and jurisdiction which will govern the agreement.

Claused Bill of Lading - A shipping transport document that marks discrepancies with the cargo prior to shipment. Letters of Credit rarely accept clause bills of lading, so there is always pressure on the master to accept a clean bill of lading.

 

Clean Bill of Lading - A shipping transport document without any discrepancies and the master confirms the cargo was loaded in good order and condition. Even with evidence of damage/loss the carrier is bound by this confirmation.

 

Clean On Board Bill of Lading - A shipping transport document declaring the date when the cargo actually was loaded on board the vessel. Not the date when the carrier takes procession of the container/cargo. See Received for Shipment Bill of Lading.

 

Collection Bank - The seller's bank.

 

Collection On Delivery (COD) - An agreement where the purchase price of the goods are collected by the carrier at delivery.

Collier - Coal carrier.

 

Combined Bill of Lading - A shipping transport document covering two or more modes of transportation. Under a combined bill of lading different limitations and times bars will apply during each mode.

 

Commercial Invoice - The document issued by the seller showing the description of the goods, value and terms of sale. It is often used by insurance companies to adjust claims or by customs for duty purposes. See Proforma Invoice.

 

Commercial Risk - A loss arising to protect commercial relationships. If the assured has no liability but wishes to settle anyway.

 

Commodity - The description of cargo; often used to describe raw materials.

 

Common Carrier - A vessel that can be used by the public such as a container or ro-ro vessel.

 

Common Law - Legal system generally used in the United Kingdom that derives from past cases or decisions.

 

Compound Duty - A duty based on the value of the cargo.

Compound Interest - The additional interest applied to a loan or claim. Interest on interest. Often courts apply interest and costs to court cases but when compound interest applies this can greatly increase the overall sum. USD1 mn with a 10% interest would be USD1,100,000 in the first year; USD1,210,000 in the second year; and so on.

Conditional Exclusion - An exclusion under the policy with certain exceptions. i.e., Excludes leakage, unless caused dropping.

Conditional Warranty - A warranty only valid if certain conditions are met or occur.

Conditions of Carriage - The carrier's terms of conditions usually found on the back of the transit document or website.

 

Conference - A group of carriers who form an association to set freight rates and shipping routes.

Confirming Bank - The bank that agrees responsibility to the seller's bank as soon as all the conditions under a letter of credit are met.

 

Confiscation - The detainment of cargo by a government or similar body.

 

Consignee - Also known as the receiver or the buyer.

 

Consignor - Also known as the exporter or seller.

 

Consolidated Container - A container with a number of different owners' cargo but going to the same destination.

 

Constructive Total Loss - An insurance expression that simply means the cost of repairing exceeds the value of the cargo.

 

Container - A structure with fittings that have a standard size for trucks/vessels that cargo is loaded into. Types consist of standard, high cube, open top, ventilated, and reefers. 


Container Freight Station (CFS) - An area allocated by the carrier for receiving break bulk cargo such as coffee or cocoa.

Container Number - Each carrier has their four letter pre-fix along with six digits and a check digit. Every container number is unique.

 

Container Seal - A device that is placed on a container when it leaves a warehouse to determine if it has been tampered with during transportation.

Container Ship - A vessel that transports containers.

Containerisation - The practice of standardising loads into boxes that greatly improves efficiency, cost and time for shipping.

Contraband - An illegal or cargo banned by a particular country.

 

Contract of Carriage - Terms and conditions on the back of a bill of lading or other transit document.

 

Contribution - The amount requested following an act of general average to compensate for the sacrifice.

Contributory Value - The value of each property on board following a general average act.

Cost Insurance Freight (CIF) - Incoterm (International Commercial Terms) to define cost, insurance, and freight. Considered the most common term.

 

Cost Insurance Merchandise (CIM) - "Convention Internationale concernant le transport des Merchandises". A standardised freight transit document issued in rail transport.

Country Damage - Loss or damage to the environment at harvest rather than man-made.

Cover Note - Issued by brokers that serves as proof of insurance.

 

Customs Broker - A company that is licensed to facilitate with customs in the importation of goods, and normally settles all charges.

Customs Duty - A tax collected by customs in respect to the importation of goods.

G

Gangway - A passage or walkway on a vessel.


Gantry - A bridge like structure with a platform to support equipment.

 

Gantry Crane - A crane with a gantry on top. Typically, the cranes seen at container terminals and able to lift/move containers from the vessel/shore.

Gard - A Swedish P&I Club. See P&I Club or IG Club.

Geared Vessel - Refers to vessels that have fixed cranes.

Gen Set - A power pack built into a unit/reefer to maintain temperature.

 

General Average - An act where any extraordinary sacrifice or expenditure is voluntarily and reasonably made at a time of peril for the purpose of preserving the common adventure. For example, the expenditure of tugboats when the vessel has lost power.

 

General Liability Insurance - A insurance policy issued to business to protect against liability claims for bodily injury and property damage arising from their premises and operations. For example, a member of the public slips on the reception floor.

 

GmbH - An abbreviation for private limited companies in German speaking countries.

 

Goods - Merchandise and products manufactured.

Glassine - A glossy transparent paper. Used either as bags or paper to provide protection from grease.

 

Grab - A device that collects bulk cargo in its claws.


Grandfather Clause - A clause in aviation that governs time slots for scheduled airlines.


Gross - The total amount before deductions. See Net. 

Gross Rate Receipts - A term to determine the volume by value in respect to the amount shipped.


Gross Tonnage - Expression in shipping to define the capacity of the vessel or volume of all the enclosed spaces.

 

Gross Weight - The weight of goods including carrying units and packaging.


Guarantee - Refers to a bank guarantee or personal guarantee whereby the company agrees to compensate the other party if there is a failure to perform certain obligations.

Guaranteed Out Turn (GOT) - A extension on cargo policies to warrant bill of lading quantity same as outturn to avoid. Benefit for shippers to avoid paper loss argument.

H

Hague-Visby Rules - International convention defining the limitations and conditions of a carrier in the movement of cargo. Generally, limits are 666.67 SDR or 2 SDRs per kilo with a one-year time bar.​

Hague Rules - International convention defining the limitations and conditions of a carrier in the movement of cargo. Generally, limits are £100 although some jurisdictions allow below this amount and one-year time bar.

Hamburg Rules - International conventions defining the limitations and conditions of a carrier in the movement of cargo, generally, limits are 835 or 2.5 SDR per kilo with a two-year time bar.

Handy Sized - A reference to small bulk vessels of normally 20-25,000 tons.

Harbour - A secure body of water where vessels tend to seek shelter or rest up.

 

Harbour Fees - Charges to use a harbour.

 

Harbour Master - An official who attends to the berthing of the vessel and/or governs the entry/exit of vessels.

Harter Act - A US statue that governs the transportation of merchandise to/from US ports. General focus is protecting the ship owner. See COGSA.

Hatch - The opening of a vessel deck that gives access to the cargo.


Hatch Cover - The cover of the opening of a vessels deck that gives access to the cargo.

 

Haulage - A English term for local commercial transportation usually by truck.

 

Hazardous - A material or substance that contains properties that could prove dangerous.

 

Heavy Lift - Transportation of cargo that is heavy and out of gauge but generally defined by over 100 tonnes.

Heavy Lift Charge - Charge by the carrier or port in carrying out high risk duties involving heavy lift cargo.


Hedge - To off-set a balance.

High Cube - A container with extended height.

 

Hitchment Bill of Lading - A bill of lading that provides shipments to be carried out in two or more loading ports. Involves one bill, one shipper and one consignee. 

 

Hold - The space below a vessel designed to store cargo.

Hook/Hook - Liability clause for carriage goods when the carrier's liability for cargo commences at the hook (crane) point at port of loading till delivery at the hook point in port of discharge. Definition has many different variations.


Hopper - A device to allow grain and similar bulk cargo to be loaded under the force of gravity. The top is larger than the bottom.

House Bill of Lading - A bill of lading issued by a freight forwarder. Allows a forwarder to keep their own identity and act in exactly the same way as a master bill of lading. See Forwarders Bill of Lading. 

 

House to House - Another term used to refer to door-to-door shipments.

 

Hull - The main body of a ship or other vessel.

 

Hull Insurance - Insurance to cover the vessel. 

Hygroscopic - Cargoes that have the tendency to absorb and attract moisture from the open atmosphere or surroundings.

I

Igloo - A carrying device used in aircraft.

Impact Recorder - A device that can log shock value and the time it occurred. e.g. To determine if something has been dropped. A simple solution for monitoring and recording impacts during transportation and storage.

 

Implied Exclusions - An exclusion under an insurance policy that is not written in. i.e. Wilful misconduct.

Implied Warranties - An insurance term for warranties not specifically mentioned in the policy but allows insurers to avoid cover in breach of these. Legality of the voyage and seaworthiness are generally considered to be implied. i.e. A warranty under an insurance policy that is not expressly set out. i.e. Unseaworthiness.

 

Import License - A official document issued by customs or governments permitting the importation of goods.

 

Import Quoter - A quantum issued by customs or governments permitting a specific number of imports for a particular good.

Importer - A person or company who brings in commodities from another country.

 

Impound - The seizure or detainment of cargo by customs, governments or courts. 

Incoterms - A international rule for pre-defined commercial terms published by the International Chamber of Commerce (ICC). This international trade terms which outlines the responsibilities and risks of buyers/sellers is widely used in international commercial transactions to determine the responsibility between shipper and consignee.

Increased Value (IV) - A secondary type of insurance that activates in the event of a total loss.

 

Indemnify - An insurance term to compensate for a loss.

 

Indemnity - All insurance policies are on an indemnity basis so in other words the assured should have paid or suffered a loss to be compensated.

 

Inflammable - Easy to set on fire. See Flammable.

 

Inherent Vice - A shipping or insurance term which means the cargo has certain fundamental weaknesses that are prone to loss or damages. Excluded under insurance policies unless proof can be provided and adequate protection has been provided to avoid such incidents.

 

Inland Bill of Lading - A bill of lading that is used for export without the use of ships or aircraft.

Innage - The quantity of liquid loaded into flexitanks or drums.

 

Insolvency - A term for when an individual or organisation can no longer meet its financial obligations to its lenders as debts become due. See Bankruptcy.

Inspection Certificate - A document certifying that merchandise was in good condition at the time of inspection and confirming to requirements/conditions, usually immediately prior to shipment. Inspectors are not surveyors, and therefore should not comment on causation, etc.

Insurable Interest - A crucial instrument of marine insurance where the party needs to have a financial interest in the loss. Initially to avoid sabotage for one's benefit. Need only exist at time of loss.

Insurance - A contractual relationship between an insurer and assured that will compensation the latter in the event of a loss arising under certain conditions.

 

Insurance Broker - A company that facilitates the insurance on behalf of the assured.

 

Insurance Certificate - A document that supports insurance has been purchased, although not always necessary in the event of an open cover policy.

Insurance Company - A company that compensates for a loss.

 

Insurance Coverage - The definition and type of insurance purchased that is detailed in an insurance policy.

Insurance Declaration - A spreadsheet provided to an insurance company listing all shipments under an open policy.

Insurance Interest - An insurance term to insure a person can never profit from insurance. He may still have an insurance interest even if he does not own the property.

 

Insurance Policy - The entire contract of insurance including any endorsements.

 

Insurance Premium - The charge for purchasing insurance.

Insured - The person who insurers themselves or property.

Insured Value - The amount the interest has been insured against to calculate or proportion any claim. The combined value including freight, insurance, packaging and mark up. i.e., CIF +10%.

Insurer - The company that compensates should a loss arise.

 

Intended - A term on bills of lading that allows the carrier to change the ports or vessels without any notice to the merchant.

 

Inter Club Agreement - Is a mechanism that apportions cargo liability claims between owners and charterers.

 

Intermodal Transport - The use of more than one mode of transport during any one shipment. 

 

International Group (IG) - A group of 13 not-for-profit mutual insurance associations which together form the International P&I Clubs ("Groups") to provide liability cover for approximately 90% of the world's ocean-going tonnage.

 

International Air Transport Association (IATA) - A trade association supporting aviation with global standards for airline safety, security, efficiency and sustainability. 

International Maritime of Dangerous Goods (IMDG) - A code used to classify and to regulate the transport of dangerous goods by sea in order to prevent injury to persons or damage to ships and their cargoes.

International Maritime Organisation (IMO) - Facilitates the stowage, handling and technical advice on cargo for land or sea.

Interstate Carrier - A US shipping term to define carriage beyond one or more states.

 

Invoice - A document supporting the terms of sale between the seller and buyer.

 

Irrevocable Letter of Credit - A letter of credit that cannot be amended or cancelled without mutual consent between all parties. Guarantees payment from buyer to seller as long as all the conditions are met. 

 

Issuance Date of the Documents - Often a requirement under the letter of credit, it determines the last date a bill of lading can be issued. 

 

Issuing Bank - The buyer's bank.

 

J

Jason Clause - A clause under a bill of lading or transit document that requires cargo owners to contribute to general average even if caused by carrier's negligence. 

Jettison - To throw cargo overboard at sea at a time of peril.

 

Joint Surveys - The mutual appointment of surveyors to attend an inspection together. In respect to claims it is important to offer the same access to third parties, especially if you wish to obtain recovery from them.

Jones Act - US Merchant Marine Act of 1920 regulating cabotage marine activity in respect of goods and crew. See Cabotage.

Just in Time - A business terms to define a methodology to minimise the storage of commodities from supplier to customers.

 

Jute Bags - A bag made of soft fibre that is often used to ship coffee, cocoa or other bean produce. Often favoured because of its cheap cost and strength.

K

K-Line - A major Japanese container shipping line. 

Knot - A nautical term to represent speed of 1.852kmp or 1.151mph.

Known Loss - A insurance term to confirm whether the assured is aware of any potential incident prior to purchase of insurance in the event they try to purchase it after sailing.

Kraft Paper - Strong paper that is used in packaging and provides protection for small amounts of container sweat and other forms of water exposure.

L

Latent Defect - A peril under Hull and Machinery policies where there is a defect in the vessel. Although adequate checks and precautions would be expected, therefore does not cover negligence.

 

Laytime - A charter party term in which the charterer is allowed for loading/unloading. 

 

Less Than Container Load (LCL) - Refers to partial shipments, generally where the carrier consolidates several different shipments into one container. 

 

Less Than Container Load (LCL/LCL) - A shipping terms to confirm "Less than Container Load". It serves the opposite of FCL/FCL shippers load stow and count where the carrier is given a full container sealed. LCL/LCL means the carrier is in charge of the stuffing and is liable for any shortage or damage from poor stuffing.
 

Letter of Abandonment - A letter surrendering the cargo to the line in the event it remains unclear. Should be issued by the cargo owner with confirmation of accepting outstanding costs. 

 

Letter of Assignment - Normally requested for instructions of a third party to handle claims. Recovery agents or lawyers required to show they are entitled to pursue any claim on their client’s behalf.

 

Letter of Credit (L/C) - A document issued by the bank confirming its commitment to pay when specific commitments have been met by the seller or accepting funds when commitments have been met by the buyer. 

 

Letter of Indemnity - A letter issued to confirm commitment to payment if certain conditions are not met or broken. Often issued by the merchant to accept certain cargoes or accepting responsibility for outstanding charges.

 

Letter of Undertaking - A similar letter issued to confirm commitment to payment if certain conditions are not met or broken. Often issued by the merchant to accept certain cargoes or accepting responsibility for outstanding charges.

Letter of Intent - A document containing the intentions of such party.

 

Lien - To take possession of cargo in absence of outstanding debt. Often used in case of uncleared cargo or failure to settle freight charges due.

 

Lighter - An open top barge for inland waterways.

Limit of Liability - A clause in an insurance policy stating the maximum liability for the insurer in respect of any one loss or aggregate.

 

Limitation Period - A period provided by international conventions and statute which limits the time in which legal action can be brought against a person in respect to claims.

 

Limited (Ltd) - Indicates a private limited company.


Limited Liability - A condition normally found in a policy or contract to express the limited nature of a company’s responsibility in respect to claims.

 

Liner - A shipping term to express a regular route between two set ports.


Liner Terms - Terms and conditions which the carrier will transport such goods. Typically includes freight and terminal handling charges (THC).

 

Liquidation - The process of bringing a business to an end and distributing its assets to claimants. It is an event that usually occurs when a company is insolvent, meaning it cannot pay its obligations when they are due.

 

Lloyd's of London - An insurance and reinsurance market located in London, United Kingdom. Generally known simply as Lloyd's.

 

Lloyd's Registry - A leading international provider of classification, compliance and consultancy services to the marine industry. Normally required by hull insurers to know the condition and whether the vessel meets international requirements.

Longshoreman - A dock worker who delivers cargo alongside a ship for loading and discharge cargo.

 

Loss of Content - A term to describe shortage without any sign of damage to packaging.

 

Loss of Market - Generally a term not covered under insurance policies where the merchant receives his cargo too late to sell. e.g. A lost chance to sell a potential buyer a specific item during a specific period, such as Christmas.

Loss of Specie - An insurance expression to describe the loss arising from a damage so severe that the item is no longer what it was when insured.​

 
 
 
 

W

War Clause - A cargo insurance clause to cover war, but not limited to civil strife, capture, seizure, arrest or detainment.

War Risk - A type of insurance to cover vessels, cargo and passengers against damage/risk due to acts of war, including hostile actions. i.e. Invasion, insurrection, rebellion and hijacking.

Warehouse Receipt - A receipt or document issued to show description and quantity of cargo.

Warehouse-to-Warehouse - A provision in an insurance policy that provides for coverage of cargo in transit from one warehouse to another. i.e. From warehouse of origin to deconsolidated warehouse at destination.

Warranty - An agreement between the two parties (the insured and the insurer) that must be carried out with full responsibility by the insured. See Express Warranty and Implied Warranty.

Warsaw Convention - The Convention for the Unification of certain rules relating to international carriage by air that outlines a carrier’s responsibilities and duties in the carriage of cargo. Many countries have replaced this with the Montreal Convention. See Montreal Convention. 

Waybill - A document issued by a carrier providing details, route and charges involving a particular shipment. Serves as a receipt, but not a document of title. See Seaway Bills.

Wharfage - A charge imposed by a yard for loading/unloading cargo.

Without Prejudice - A term often used in claims matters when acknowledging or making settlements to define without detriment to any existing right or claim.​

Y

York Antwerp Rules - A set of maritime rules that were established in 1890. This set of maritime rules outlines the rights and obligations of both ship and cargo owners in the case that cargo must be jettisoned in order to save a ship. The convention incorporates the details of General Average. See General Average.​

P

Packing List - A documented issued by the shipper to determine the quantity and commodity being shipped. Often a requirement to submit when making a claim.

Pallet - A wooden platform with a top and bottom deck that can be lifted by a forklift. More stable than skids and often preferred for loading. See Skids.

Parity - The quality in amount or value. Often used in respect to currency exchange rates.

Particular Average (PA) - Refers to the partial loss to the goods insured against. See General Average.

Payee - A person to whom money is paid or is to be paid.

Payor - The person or organisation who accepts payment or resumes responsibility.

Perils of the Sea - A insurance term but a named peril often in hull insurance policies to define unusual risks at sea. May include heavy weather but sometimes includes stranding or collisions.

Perishables - Goods that suffer from decay or damage over a short period of time.

Piggyback - The movement of trucks or trailers on top of another mode such as rail or trucks. 

Pilferage - Another word for petty theft or stealing, but generally used to define small amounts.

Pilot - A mariner who navigates ships through congested waters and often completes the berthing. Whilst may take complete control over the vessel, the master remains in charge and has full responsibility at all times.

Plimsoll Line - A marking on a ship's side showing the limit of legal submersion when loaded with cargo under various sea conditions.

Port - A location with one or more harbours where vessels can berth and discharge cargo. 

Port of Discharge - A location where the goods are unloaded from the ship.

 

Port of Distress - A port prior to arriving at destination where the carrier calls or terminates the voyage at the time of a major incident. 

Port of Entry - The port where goods are received into a country. See Free Port.

Port of Export - The port where goods depart a country.

 

Port of Refuge - A port prior to arriving at a destination where the carrier calls or terminates the voyage at the time of a major incident. 

Power of Attorney - Providing authority to someone to act on your behalf.

Pre-shipment Inspections - Can be a condition under cargo insurance policies for large, expensive or used goods to determine condition and quantity prior to sailing.

Prima Facie - A legal term used to describe something which appears to be true when you first consider it. Defines a fact (or a first encounter or a first sight) to be fact unless proven otherwise.

Pro Forma Invoice - An invoice provided by the supplier prior to the sale of his goods informing the buyer of the description and value. Maybe subject to change. See Commercial Invoice.

Proximate Cause - An event that causes a loss. i.e. Collision caused the water ingress and wet damage. Collision is the proximate cause and not the sea water. 

Purchase Order - A purchaser's written statement proposing sells terms.

Purpose Built Vessels - Vessel built with a particular cargo in mind, such as heavy lift or vehicle carrier. 

Q

Quay - Coastal land for mooring ships. See Wharf.

Quota - A limitation for the quantity of goods allowed in a country.

Quotation - A proposal from the seller for a particular purchase. 

R

Rail Waybill - A Transit document for the use of shipments by rail. Often are government run or some involvement with strict terms and conditions.

Received for Shipment Bill of Lading - A bill of lading issued by the carrier to confirm receipt. See Ad Valorem Bills in trouble shooter.

Receiver - Another term for a consignee or importer. 

 

Reconditioning - A term to improve/repair cargo to the condition prior to incident.
 

Re-export - The export of imported goods without added value.

 

Reinsurance - The practice whereby insurers transfer portions of their risk portfolios to other parties by some form of agreement to reduce the likelihood of paying a large obligation resulting from an insurance claim.​

Renminbi - The official currency of China. Yuan is the basic unit of the Renminbi, but can also be used to refer to the Renminbi.

Rider Clause - Addendum or Endorsement to the agreement. Commonly found in Charter Parties. 

 

Rigging - Equipment used to lift heavy or out of gauge (OOG) cargo. 

 

Risk - The threat or potential loss insured against. 

Roll-on/Roll-off (RoRo) - A type of vessel to describe vehicle carriers where cargo can be rolled on and off the vessel. 

Route - A term generally used with major lines to define their usual call of passage. 

Ryan Recorder - A portable device placed inside reefers to record temperatures for use by merchant.

M

M/V - An abbreviation for motor vessel commonly used as a pre-fix before the name. 

Manifest - A shipping document showing the description of the cargo used for customs. 

Margin - The difference between the cost of sold cargo and the total net sales. 

Marks and Numbers - Normally a reference on a bill of lading or transit document which identifies the cargo being shipped. 

Marring - A blemish or mark on the surface of goods. 

Masters Protest - A document issued by the master during unusual and extraordinary conditions. Normally during severe weather and is generally used to demonstrate or enforce the act of god defence.

 

Mates Receipt - A declaration issued by the vessels first officer to evidence the goods have been loaded aboard a vessel. It is not a document of title, but a temporary document used as a receipt until a bill of lading can be provided.

Memorandum Bill of Lading - A non-negotiable receipt bill of lading generally used as a copy. Not a document of title. Serving only as a receipt for cargo that does not show freight amount.

Memorandum Tariff - Shipping rates and routes serviced by shipping lines.

Metric Ton - A unit of weight equal to 1000 kilograms.

Minimum Bill of Lading - Refers to the minimum charge that carrier will make for the issuance. Often based on weight.

 

Mildew - A form of fungus appearing on the surface of goods if left for too long in moist, warm areas.

Misdelivery - A wrongful release of goods without document of titles.

Mitigation - The requirement under insurance and international conventions for the responsible party to take appropriate action to avert or minimise the loss or damage. Failure will prejudice any claim.

 

Moisture Content - A calculation of moisture for hygroscopic cargoes.

 

Montreal Convention - Establishes airline liability in the case of death or injury to passengers, as well as in cases of delay, damage or loss of baggage and cargo. See Warsaw Convention.
 

Mother Vessel - Common in fishing industry where a main vessel stays out in open water for several months and feeders ferry cargo.

Motor Vehicle - A vehicle that is self-propelled and is used in the movement of goods or people. Does not include trailers.

Multimodal - A shipping or insurance term to include at least two modes of transport. i.e. Air, ship, rail, truck, barge, etc.

 

Musty - Having a stale, mouldy, or damp smell if cargo is left unattended for long periods after becoming wet.​

N

Named Perils - Coverage under an insurance policy whereby causation must fall under a certain category. 

 

Nature of Loss - The causation of loss or how the loss derived. See Proximate Cause.
 

Negligence - A term to define failure to follow instructions or a sufficient standard. A breach of a duty of care which results in damage.

Negotiable - The ability to transfer ownership of goods to another third party.

Negotiable Bill of Lading - A bill of lading that may be endorsed to another party who is entitled to take delivery. The consignee box will often show "to order" or "to order of X" and endorsements on the back of the bill will determine the rightful owner.

Negotiating Bank - Generally the beneficiary bank that agrees to pay the beneficiary. Reviews seller's documents and will credit or pay the seller.

Net - The total amount after deductions. See Gross.

Net Loss - The amount of compensation including all deductions/expenses.

Net Tonnage - A vessels gross tonnage less the occupied space such as machinery or accommodation.

Net Weight - Weight of goods less of the packaging.

Neutral Air Waybill - Air waybill without any logo or company name of airline.

New for Old - A cargo term often used in personal effects policies. When cargo is second hand the policy will compensate any loss/damage for the replacement value. 

No Cure, No Pay - Generally a salvage term where it is agreed the salvor will not receive renumeration unless he is successful. However, often used by lawyers or recovery agents to confirm they will only charge for their services if they win their case. Often at a higher rate.

Non-Negotiable Bill of Lading - A bill of lading that cannot be endorsed to another party and only the party shown in the consignee box is entitled to take delivery. 

Non-delivery - A term to state the cargo cannot or will not be delivered. Cause may vary from wrongful delivery or abandonment. 

Non-Vessel Operating Common Carrier (NVOCC) - As the name suggests is a carrier who does not operate vessels. Commonly used in the US to define a freight forwarder.

Notary Public - A legal person who administers oaths or certifies documents as evidence of authenticity. 

 

Notify on Arrival - A common term in aviation (but not limited to) which requires the carrier to contact the notify party immediately upon arrival. Often time sensitive goods. 

Notify Party - The name of a party whom the carrier must inform when goods are due to arrive. A notify party is not a party to the contract.

Noxious Odours - Refers to a smell or scent that could potentially affect sensitive cargoes.
 

Nuclear Exclusion Clause - A warranty in a cargo policy which excludes loss due to nuclear reaction, radiation or radioactive contamination, even if caused by an insured peril. 

O

Ocean Bill of Lading - A more detailed name for a bill of lading.

On Board - Definition in shipping terms to define the cargo on board the vessel. Often used in letters of credit.

On Deck - Definition in shipping terms to define cargo on the deck of the vessel. Often waives a carrier's responsibility.

Open Policy - A insurance contract between the insurer and insured to cover multiple shipments. See Facultative Insurance.

Open Top Container - A container without a roof. Designed for high or cargo unable to be loaded via the doors.

Order Bill of Lading - A statement in the consignee box to show the goods are consigned to the order of a person or bank and can be transferred to third parties.

Oversized - Cargo beyond normal length or width for standard containers or trucks and may require a special permit. 

 

Overweight - Cargo beyond normal weight restrictions for standard containers or trucks and may need special permits. 
 

Oxidation - Rust but commonly refers to cosmetic damage to the surface and not structural. 

S

Salvage - Property saved from a wreck.

Salvage Loss - The financial adjustment for the sale of the damage goods less the commercial invoice value. 

Salvage Reward - The Compensation paid by insurers for the successful rescue of the vessel.

Sea Waybill - A transit document which functions as a bill of lading in all forms except as a document of title. Often a preferred method for shipments with known buyers, short turnaround times and containerised shipments. See Express Bills. 

Seaworthiness - A shipping term to define the condition of the vessel prior to sailing. 

 

Shipped on Deck - Annotation in a bill of lading stating that the goods have been shipped on the deck of a ship. Often used to waive responsibility of the carrier for loss or damage. See On-deck Bills of Lading.
 

Shipper - The company or person who ships cargo to destination.

Shippers Export Declaration Form - A document issued by the shipper for the US Customs Service outlining the value, weight and generally information about the shipment. Can also be issued by the Freight Forwarder if a Power of Attorney has been provided.

Shippers Load Stow and Count - A term provided on bills of lading in respect to containerised shipments to state the carrier did not load the cargo and has no knowledge of its contents or stowage. Often followed by FCL/FCL and provides protection for claims if the container arrives sealed and intact.

Shipping Instructions - Information from the shipper providing instructions to the carrier or freight forwarder. See Booking Instructions.

Shipping Manifest - A document issued by the master of the vessel detailing the cargo on his vessel.

Shipping Order - A copy of the shipper's instructions issued by the carrier or forwarder.

Short Form Bill of Lading - Bill of lading without the carrier's terms and conditions on the back.

 

Silver Nitrate Test - A cheap and effective way to detect saltwater contamination.

Slot Charter - Two carriers or a third-party reserve one or more "slots", aboard a container ship.


Smuggling - The illegal movement/import of goods (or prohibited or restricted goods) into or out of a country.

Soft Clause - A letter of credit clause giving complete control to the buyer so the seller cannot meet the conditions of the Letter of Credit on its own. i.e. Buyer must accept cargo prior to shipment.

 

Special Drawing Rights (SDR) - A supplementary foreign exchange reserve assets defined and maintained by the International Monetary Fund (IMF). The SDR is based on a basket of currencies and comes with the currency code, XDR.

 

Starboard - The righthand side of a ship, boat or aircraft when facing the front, or fore or bow.

 

Stevedore - A person in charge of loading cargo onto a vessel.

 

Storage - A daily cost of keeping cargo on quay.

 

Stowage - The packing of cargo.

Stowage Instructions - Instructions provided by shipper or agent in respect to any particular carriage requirements. i.e. Underdeck.

Stowage Plan - A diagram issued by a carrier to detail the exact location of all containers.

Straight Bill of Lading - A non-negotiable bill of lading.

Stripping - The unloading of a container.

Stuffing - The loading of the container.

Subrogation - The entitlement of an insurance company to pursue the recovery on behalf of the assured once they have settled any loss.

Sue and Labour - A term to define the charges to mitigate a loss. Often added to insurance policies to encourage the assured to take prompt action to minimise any loss knowing all reasonable charges will be recoverable.

Surety - A guarantee or bond provided as security. Often in return to release a vessel from arrest.

Survey - Inspection of cargo to determine the condition. May be pre-shipment as a precaution or after a loss has occurred.

Switch Bills of Lading - The changing of shipping details on a bill of lading. Often considered fraudulent.

T

Tariff - A tax or duty imposed on a particular class of imports or exports. 

 

Tender - A boat, or a larger ship used to service or support other boats or ships, generally by transporting people or supplies to and from shore or another ship.

 

Terminal - An area where loading or unloading of cargo occurs.

Terms of Trade - The relative price of exports in terms of imports. 

Through Bill of Lading - A transit document using covering two or more modes of transport. 

To Order - A term to describe a negotiable or transferable document of title.

Ton - A unit of weight equal to 1,016 kilograms or 2,000 pounds, but may vary by country.

Total Loss - A insurance definition to describe goods that are beyond repair or cease to be the commodity insured.

Trade Loss - A loss of weight considered unavoidable. i.e. Evaporation.

Trailer - A vehicle without power, drawn by another normally used to move cargo.

Tramp Line - A boat or ship which does not have a fixed schedule or published ports of call.

Transferable Letter of Credit - A letter of credit where the beneficiary has the option to transfer credit to a third party.

Transit Documents - Documents issued by the carrier to confirm receipt and planned carriage.

Trans-ship - To transfer from one ship, truck, freight car, or other conveyance to another. i.e. the movement of containers from one ship to another.

U

Unclean Bill of Lading - A term to define a bill of lading with description of damaged/loss of cargo. See Clean Bill of Lading.

Unloading - The removal of cargo from a vessel.

Utilisation - Term to define consolidating many smaller goods into one unit.

V

Value Added Tax (VAT) - A consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. Also known in some countries as a goods and services tax (GST).

 

​Vendor - A person or company offering something for sale. i.e. A supplier of the goods.

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