Act of God
An act beyond human control, such as lightning, flood or earthquake.
A notification sent by the carrier on ship’s arrival to the consignee, the “Notify Party,” and – when applicable – the “Also Notify Party.” These parties in interest are listed in blocks 3, 4 and 10, respectively, of the Bill of Lading.
Bill of Lading (B/L)
A document that establishes the terms of a contract between a shipper and transportation company. It serves as a document of title, a contract of carriage and a receipt for goods.
CFR or C&F (Cost and Freight) (…Named Port of Destination):
A Term of Sale where the seller pays the costs and freight necessary to bring the goods to the named port of destination, Terms of Sale but the risk of loss of or damage to the goods, as (continued) well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the seller to the buyer when the goods pass the ship’s rail in the port of shipment. The CFR term requires the seller to clear the goods for export.
CIF (Cost, Insurance and Freight) (…Named Place of Destination):
A Term of Sale where the seller has the same obligations as under the CFR but also has to procure marine insurance against the buyer’s risk of loss or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The CIF term requires the seller to clear the goods for export.
FOB (Free On Board) (…Named Port of Shipment):
An International Term of Sale that means the seller fulfills his or her obligation to deliver when the goods have passed over the ship’s rail at the named port of shipment. This means that the buyer has to bear all costs and risks to loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export.
A shortening of the term, “Roll On/Roll Off.” A method of ocean cargo service using a vessel with ramps which allows wheeled vehicles to be loaded and discharged without cranes.
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 specifications (weight, size, etc.).
Represents a complete record of the transaction between the exporter and importer with regards to the goods sold. Also reports the content of the shipment and serves as the basis for all other documents about the shipment.
Letter of Credit (LC)
A document, issued by a bank per instructions by a buyer of goods, authorizing the seller to draw a specified sum of money under specified terms, usually the receipt by the bank of certain documents within a given time.
Confirmed Letter of Credit
A letter of credit, issued by a foreign bank, whose validity has been confirmed by a domestic bank. An exporter with a confirmed letter of credit is assured of payment even if the foreign buyer or the foreign bank defaults.
Irrevocable Letter of Credit
Letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee and which cannot be revoked without joint agreement of both the buyer and the seller.
The bank that adds its confirmation to another bank’s (the issuing bank’s) letter of credit and promises to pay the beneficiary upon presentation of documents specified in the letter of credit.
(1) A stock of merchandise advanced to a dealer and located at his place of business, but with title remaining in the source of supply.
(2) A shipment of goods to a consignee.
A person or company to whom commodities are shipped.
A person or company shown on the bill of lading as the shipper.
The person or company who is usually the supplier or owner of commodities shipped. Also called Consignor. A classification, storage or switching area.
A person whose business is to act as an agent on behalf of the shipper. A freight forwarder frequently makes the booking reservation.
A penalty charge against shippers or consignees for delaying the carrier’s equipment beyond the allowed free time. The free time and demurrage charges are set forth in the charter party or freight tariff.