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Shipping Terms & Glossary

Incoterms 2000

When negotiating an international sales contract, both parties need to pay as much attention to the terms of sale as to the sales price.  To make it as clear as possible, an international set of trade terms (INCOTERMS) has been adopted by most countries that defines exactly the responsibilities and risks of both the buyer and seller including while the merchandise is in transit.

The following is a definition for each term about the responsibilities of both the buyer and seller for each of the current 13 INCOTERMS.

Origin Terms:
EXW Ex-Works, named place where shipment is available to the buyer, not loaded.
The seller will not contract for any transportation.
International Carriage NOT Paid by Seller:
FCA Free Carrier, unloaded at the seller's dock OR a named place where shipment is available to the international carrier or agent, not loaded.
This term can be used for any mode of transport.
FAS Free Alongside Ship, named ocean port of shipment.
Ocean shipments that are NOT containerized.
FOB Free On Board vessel, named ocean port of shipment.
This term is used for ocean shipments only where it is important that the goods pass the ship's rail.
International Carriage Paid by the Seller:
CFR Cost and Freight, Named ocean port of destination.
This term is used for ocean shipments that are not containerized.
CIF Cost, Insurance and Freight, named ocean port of destination.
This term is used for ocean shipments that are not containerized.
CPT Carriage Paid To, named place or port of destination.
This term is used for air or ocean containerized and roll-on roll-off shipments.
CIP Carriage and Insurance Paid To, named place or port of destination.
This term is used for air or ocean containerized and roll-on roll-off shipments.
Arrival At Stated Destination:
DAF Delivered At Frontier, named place of destination, by land, not unloaded.
This term is used for any mode of transportation but must be delivered by land.
DES Delivered Ex-Ship, named port of destination, not unloaded.
This term is used for ocean shipments only.
DEQ Delivered Ex-Quay, named port of destination, unloaded, not cleared.
This term is used for ocean shipments only.
DDU Delivered Duty Unpaid, named place of destination, not unloaded, not cleared.
This term is used for any mode of transportation.
DDP Delivered Duty Paid, named place of destination, not unloaded, cleared.
This term is used for any mode of transportation.

For a more complete description of each of the INCOTERMS, The IBT Guide to INCOTERMS 2000 book published by International Business Training fully and clearly defines each of the new INCOTERMS that became effective January 1, 2000, and includes a number of case studies that demonstrate the use of the different terms in real-life situations.

Carrier Surcharges Abbriviation
BAF Bunker Adjustment Factor
CAF Currency Adjustment Factor
CYRC Cy Receiving Charge
CUC Chassis Usage Charge
DTHC Destination Terminal Handling Charge
DDF Destination Document Fee
DNP Drop and Pick
DTH Destination Terminal Handling
DGC Dangerous Goods Premium for Ocean Sector
EBS Emergency Bunker Surcharge
FS Fuel Surcharge
IFP Interim FAF Assessment
IHC Inland Add-on
NBC New Bunker Charge
OAC Outport Add-on
PCS Port Secuity
PSS Peak Season Surchage
SES Special Equipment Surcharge


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actual gross weight
The sum of the container weight plus the payload contained in it.

actual payload
Maximum allowable weight of payload (actual weight minus tare weight).

actual weight
Gross shipping weight.
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box pallet  
A pallet with at least three fixed, removable, or collapsible vertical sides.

break bulk
Cargo transported not in a container. It may be in loose packages or in loose form, such as machinery.

break bulk cargo
See break bulk.
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cargo seal      
The metal device inserted into the handle assembly on the door of the container to prevent or to detect entry. The seal has a number that is recorded. In addition, this number is often noted on the bill of lading. The sophistication of seals can range from a simple, numbered plastic tag - called an entry seal and used on an empty container - to an electronic seal that immediately indicates through global electronic positioning technology when and where it has been broken.

cargo tonnage
The weight ton in the United States is the short ton, 2,000 pounds, or the long ton, 2,240 pounds. In British countries it is the English long ton, or gross ton, of 2,240 pounds. In France and other countries having the metric system, the weight ton is 2,204.62 pounds. The measurement ton is usually 40 cubic feet, but in some instances a larger number of cubic feet is taken as a weight ton. Most ocean freight is taken at weight or measurement (W/M), ship's option.

cargo weight
The weight of the cargo. Cargo weight plus tare weight equals gross weight.

carrying temperature
A narrow, prescribed range of temperatures in a container during transit that maintains the ideal temperature in the product and protects the product from harm. This information is displayed on a label attached to the container.

A wheeled carriage onto which a container is mounted for over-the-road conveyance. More specifically, it is a skeletal frame, semi-trailer which is equipped with license, lights, reflectors, brakes, etc., to meet the legal operating codes and requirements of the jurisdictions within which it operates. This unit has locking devices that secure the container to the frame. In the case of container yard operations, it is a skeletal trailer, generally without a license for use on the public roads, for moving containers within a yard.

Also, the part of a motor vehicle that includes, the frame, suspension system, wheels, steering mechanism etc., but not the engine or the body.

When used in an intermodal industry context, this refers to a steel or aluminum box into which goods or a commodity are packed for shipment.

container contamination
A container is considered contaminated when residue of previous cargo cannot be cleaned by normal sweeping or by normal steam cleaning. The remedy may then be:

  • structural repair,
  • removal of contaminated floor boards,
  • partial or full refurbishment,
  • chemical cleaning,
  • fumigating,
  • decontamination, or
  • deodorizing.

container damage
Defined by one or more physical defects on a container that affects the cargo carrying capabilities of the unit. This could have been caused by a single or a series of events, such as impact, abrasion, or contamination. Damaged containers are inspected and repaired to the ICII standards.

container load
A load sufficient in size to fill a container either by cubic measurement or by weight.

container load plan
A list and a graphic picture of the inside of a container showing where and how the cargo is stowed and the loading sequence.

containerizable cargo
Cargo that will fit into a container and result in an economical shipment consistent with delivery requirements.

controlled atmosphere
A term used in reference to a refrigerated container to indicate it is a type that permits the temperature within the container to be controlled. The reason that this is important is so a gas such as nitrogen can be maintained in a stable condition within the container. Nitrogen reduces the spoilage rate of fruits and vegetables.

corner post
A vertical structural member at each of the four corners of a container. These are made onto a square unit by top and bottom horizontal posts. The vertical and horizontal members are connected at the corner castings, thereby forming an end frame or corner structure.

cubic capacity
Has two meanings: (1) the carrying capacity of a container in terms of cubic measurement; and (2) the cubic space available for the stowage of cargo.

cubic feet per minute
Unit of measurement for the movement of a volume of gas or liquid per unit of time.

cubic foot
A measurement of 12 inches by 12 inches by 12 inches or 1,728 cubic inches.

cubic meter
A measurement of 1 meter by 1 meter by 1 meter. Abbreviated: CBMCM
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Dry 20-foot container.

Dry 40-foot container.

deadweight tonnage
The number of long tons (see ton) of cargo, stores, water, and fuel a vessel can transport. Relative to cargo, the weights for stores, water, and fuel are not significant. You can use DWT as a quick reference for the cargo carrying capacity of a ship.

deadweight cargo
Cargo of such a nature that one long ton is stowed in less than 70 cubic feet.
dry cargo When used in a tariff, this means cargo other than liquid cargo or cargo requiring temperature control.

dry cargo
When used in a tariff, this means cargo other than liquid cargo or cargo requiring temperature control.

Material used in stowing or bracing cargo to prevent movement.
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Abbreviation for the International Standards Organization designated "Forty-Foot Equivalent Unit."

flat rack
See flat rack container.

flat rack container
A special container for cargo too long or wide for standard containers.

floor loading
Static weight of cargo and the dynamic force of handling equipment, such as a forklift, for a particular container.

forklift pockets
Openings in the sides of containers for the insertion of forks by a forklift.

forklift truck
A three or four wheeled mechanical unit with forks at the front designed for lifting, carrying, and stowing cargo, pallets, or containers.

forty-foot equivalent unit
Abbreviated FEU. Refers to container size standard of 40 feet. 1 40-foot container equals 2 TEU. This equivalency standard was set by the ISO.

full container load
A container loaded, completely or almost, to its maximum weight limit or cubic content.
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One U.S. gallon equals 231 cubic inches or 0.1337 cubic feet.

Generator used to supply power to a refrigerated container.

Garment on hangar. Indicates a container that has been converted from a dry box to a garment container.

On a drop-frame chassis, the gooseneck is the upper level at the front of the chassis together with the structure connecting it to the lower level behind it. The gooseneck on the chassis structure fits into the gooseneck tunnel recess of containers built with this feature. This provides the securing and stability for the container at the front. The rear of the container is secured with the normal twistlock assembly.

gooseneck tunnel
The recess in the front portion of a container understructure into which the gooseneck structure of a chassis fits.

gross ton
2,240 pounds. See short ton.

gross tonnage
This is not a measurement of weight as we traditionally think of it. It is a measurement of the amount of vessel space: a ton is 100 cubic feet. A ship's gross tonnage is all the cubic feet in its enclosed spaces: cargo holds, engine room, and deck house divided by 100. See net tonnage.

gross weight
As a measurement, gross means the item you are evaluating consists of the overall total exclusive of deductions. When, for example, referring to an in-gate operation this is the total weight of the equipment - such as tractor, including fuel and driver - and chassis and cargo. But, if you were referring to the gross weight of the container only, this would be a combination of the container tare weight plus the cargo weight.

Removing the container from the stack train and putting it on a chassis.
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half height container
An open top container, sometimes fitted with removable covers, that is 4'3''/1.30m high.

high cube
A container that exceeds 8 feet 6 inches in height.
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in transit  
In passage.

inflatable dunnage
Flexible bags usually made from vinyl material; can be inflated within the void spaces of a stow to prevent movement of the cargo.

insulated container
A container insulated on the walls, roof, floor and doors, to reduce the effect of external temperatures on the cargo.

International Standards Organization
An organization founded in the late 1940's and headquartered in Geneva, Switzerland. Through the participation of its members, it establishes many world standards; for example, ISO 9002 as a business practice. In the intermodal area, the ISO is best known for establishing in the mid 1960's the standard for the size of a container, including all its components, such as the specifications for the corner casting. This reversed the situation where, by the time there were 20,000 containers worldwide in 1965, there were 11 different sizes. The resulting uniformity coordinated and established by the ISO permitted the evolution from containerization to intermodalism.

See International Standards Organization.
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known damage
Damage discovered before or at the time of delivery of a shipment.

known loss
A loss discovered before or at the time of delivery of a shipment.

Kilo or metric ton. Equals 2,204.6 pounds.
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Means the same as "loaded (aboard a vessel)."

To hold goods in position by the use of securing devices such as wire rope, lines, chains and straps.

lashing fitting
A cargo securing device in the floor fixed to the interior side panels of a container that provide for the lashing or securing of cargo.

lashing point
See lashing fitting.

lashing rod
A stout metal rod used in on-deck container stowage that secures containers to the deck. It ties a container corner casting to a fitting on the deck or on the lashing bridge. Used in conjunction with the interbox connector, this stabilizes the stacks on deck. This is necessary to compensate for the effects of ship movement in the open sea.

To load a vehicle or container. The freight in a vehicle or container. A container filled with freight that is moved from the customer-designated origin to the customer-designated destination. To load a program into a computer after the program has been translated into machine code. Any procedure for getting a computer or other device ready to operate by providing that device with the magnetic tape or disks that it needs to function.

long ton
2,240 pounds. See also ton.
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Abbreviations for: A meter, or 39.37 inches.


maximum cube
A level of cube utilization that closely approximates the stated cubic capacity of a container.

maximum gross weight
Weight of a container and its payload.

maximum payload
Maximum cargo that can be loaded into a container either by weight or volume.

1,000 board feet. 1 MBM equals 2,265 C.M.

1 meter equals 39.37 inches. Also spelled metre.

An alternative spelling of meter.

metric ton
2,204.6 pounds; or 40 cubic feet - used in water transportation rate-making. The same as a measurement ton. Also see ton.


min. wt.
Minimum Weight.

modified atmosphere
Abbreviated MAMOS. A blend of gases tailored to a specific load of cargo that replaces the normal atmosphere within a container.

Measurement ton. See metric ton.
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net short ton
2,000 pounds.

net tare weight
The weight of an empty cargo-carrying piece of equipment plus any fixtures permanently attached.

net ton
Metric ton.

net tonnage
Net tonnage measures volume of airspace. Like deadweight tonnage, it is used to rate a ship's cargo carrying capacity.

To determine NT, the cubic footage of all non-cargo spaces - crew accommodations, machinery and navigation areas, the engine room, and the fuel and water tanks - are measured. This measurement is divided by 100 to convert it to net tons. This figure is then subtracted from the gross tonnage figure. The result is net tons of cargo carrying capacity in cubic measure. See also gross tonnage.

net weight
When referring to goods, this is the weight of the product exclusive of all packaging.

Front of the container.

Net ton.
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obnoxious cargo  
Cargo that can by its nature contaminate its container, the vessel, or other cargo, for example: hides or fish meal.

open top
See open top container.

open top container
container fitted with a solid removable roof, or with a tarpaulin roof that can be loaded or unloaded from the top.

optimum cube
The highest level of cube utilization that can be achieved when loading cargo into an ocean-freight container.

overheight cargo
Cargo extending above the height of an open top container.
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Standard size platform on which packages can be stacked and then unitized - for example, with bands or plastic wrap for easy movement by a forklift truck. See pallet wrapping machine. Europe, the 1,200mm by 1,000mm pallet is in general use. The U.K. equivalent is 48 inches by 40 inches. Growing in popularity is the 48 inch by 48 inch pallet.

palletized cargo
Individual items of cargo loaded on a pallet.

General, this is the revenue-producing or useful load a means of transportation can carry. Translated to intermodal language, it is a container's maximum permitted cargo weight, not including cargo securing devices and dunnage.
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Refrigerated container, equipment or cargo.

reefer cargo
Industry language for the term "refrigerated cargo," which cargo requiring temperature control. See refrigeration.

reefer container
Industry language for the term "refrigerated container."

refrigerated container
See refrigeration.

In its simplest terms, refrigeration is simply the removal of heat from one medium to another by use of inert gas. In the case of refrigerated containers, it is removal of heat from inside the box - the cargo and surrounding air - to outside the box. The inert gas most commonly used is named R-12.

relative humidity
A percentage of the amount of moisture in air relative to saturated air at the same temperature.

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Metal strip and lead fastener used for locking freight car or container doors. Seals are numbered for recording purposes. A seal is generally affixed after Customs exams have been completed, and prior to the container being loaded on the first conveyance. See cargo seal.

set point temperature
The point, or points, at which the thermostat in a refrigerated container is set, that will maintain the ideal pulp temperature in the product.

A notation on the transport document, known as a bill of lading in the case of ocean carriage, stating the temperature at which the cargo must be maintained. This term is most commonly used in relation to a refrigerated container. Also known as air delivery temperature.

setting/air delivery temperature
See setting.

short ton
Abbreviated ST. 2,000 pounds. See also ton.

Refers to planks placed under a box, crate or piece of machinery to enable the piece to be easily handled by a mechanical lifting device. Battens, or a series of parallel runners, fitted beneath boxes or packages to raise them clear of the floor to permit easy access of forklift blades or other handling equipment.

skip sheet
A flat piece of cardboard that replaces a pallet.

special commodities
Highly perishable commodities that require special handling to arrive at their destination in optimum condition. Some examples are fish, meat, photographic film, fruit, and some candies.

special container
A container designed to carry overheight (open-top container), overwidth (flat rack container) or liquid (tank container) cargo.

Containers stowed more than one high and in a orderly way in one place in a Container Yard, CFS, depot, or on a vessel.

standard ton
Same as short ton. See also ton.

The placing and securing of cargo or containers on a vessel or on an aircraft. This also includes placing and securing cargo in a container.

stow plan
A diagrammatic picture of the vessel's cargo hatches showing the location of cargo or containers.

A marine term referring to loading freight into ships' holds.

stowage factor
The ratio of a cargo's cubic measurement to its weight, expressed in cubic feet to the ton or in cubic metres to the tonne. It is an expression of the total quantity of cargo which can be loaded in a space.

stowage instructions
Details given by the shipper or his agent about the way cargo is to be stowed.

stowage plan
See stow plan.

To load a container.

Loading cargo into a container. Also known as vanning.

superimposed load
The static and dynamic load forces imposed downward externally and vertically on the structure of a container.
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tank container  
A specially constructed container for transporting liquids and gases in bulk.

tare weight
The weight of equipment that is empty, that is, not carrying cargo. For example, an empty FEU of steel construction weighs between 6,000 to 8,380 pounds/2,860 to 3,800 kilograms. See also cargo weight and gross weight.

Waterproof fabric used for covering the top of an open top container.

temperature recorder
A waterproof device to permanently record the inside temperature of operating refrigerated containers. The device may be computerized, mechanical, or both. The chart onto which the information is inscribed mechanically is called the Partlow chart. Mr. Partlow was the inventor.

Abbreviation for the International Standards Organization designated "Twenty Foot Equivalent Unit".

A weight allowance made to reconcile weight variations of certain commodities.

A measurement of weight:
. A short ton, used for rough calculations, is 2,000 pounds. This "abbreviated" ton is used in cargo operations, particularly when working with break bulk cargo. It useful for doing mental quick calculations.
. A long ton, also known as gross ton, used for more precise calculations, is 2,240 pounds. The genesis of the long ton goes back to the 13th century, when merchant ships carried large cargoes of wine in giant casks, which were called "tuns." The number of tuns a ship could carry was a rough gauge of her capacity. By the 15th century, England had established a standard for the wine-filled tun: a capacity of 250 gallons, which converted to 2,240 pounds. In the 17th century, long after wine ceased to be a major cargo, usage brought about the modern spelling of ton.

A measurement of cubic volume
. Measurement ton is 40 cubic feet. Cargo can be taken at either weight or cubic volume.

This term is used in various contexts in the maritime industry to describe:
. the cubic capacity of a vessel,
. the displacement of a vessel in tons of water,
. the total weight of the cargo, or
. a fee charged per ton of cargo at a port, pier, dock or canal.

Another way to spell the word ton.

twenty-foot equivalent unit
Abbreviated TEU. Refers to container size standard of 20 feet. 2 20-foot containers equal 1 FEU. This equivalency standard was set by the ISO.

two-way pallet
A pallet so designed that the forks of a fork lift truck can be inserted from 2 sides only.
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unit load
Packages loaded on a pallet in a crate or any other way that enables them to be handled at one time as a unit.

Loading 1 or more large items of cargo onto a single piece of equipment, such as a pallet. The consolidation of a quantity of individual items into 1 large shipping unit for easier handling.

To consolidate several packages into 1 unit; to strap, band, or otherwise attach the several packages together.

unitized cargo
See unitize.

unitized load
A number of cartons or other pieces of cargo that are loaded onto a container as a single unit, typically either on a platform called a pallet, or a slipsheet. This type of handling fa ciliates handling by a load truck.

Unloading a container.
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See stuffing.
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A tonne of one thousand kilogrammes. See also ton.

weight cargo
A cargo on which the transportation charge is assessed on the basis of weight.

weight limits
Once a container loaded with cargo has been put on a chassis and this unit has been attached to a tractor, there is another consideration: the limitations of the weight-bearing capacity of the road system between the beginning and end of the over-the-road segment. In the U.S., these limitations are called "bridge laws," as they are usually based on the weight that can be supported by a bridge.

weights and measures
Measurement ton = 40 cubic ft. Net ton, or short ton = 2,000 lbs. Gross ton/long ton = 2,240 lbs. Metric ton/kilo ton = 2,204.6 lbs. Cubic meter = 35.314 cubic ft.
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