Frequently Used Terms

Frequently Used Terms

  • AirWayBill

    The Air Waybill (AWB) is the most important document issued by a carrier either directly or through its authorised agent. It is a non-negotiable transport document. It covers transport of cargo from airport to airport. By accepting a shipment an IATA cargo agent is acting on behalf of the carrier whose air waybill is issued. There are several purposes that an air waybill serves, but its main functions ore: Contract of Carriage. Behind every original of the AWB are conditions of contract for carriage Evidence of Receipt of Goods When the shipper delivers goods to be forwarded, he will get a receipt. The receipt is proof that the shipment was handed over in good order and condition and also that the shipping instructions, as contained in the Shipper’s letter of Instructions, are acceptable. After completion, an original copy of the air waybill is given to the shipper as evidence of the acceptance of goods and as proof of contract of carriage.
  • Bill of lading

    A bill of lading (sometimes abbreviated as B/1. or BOL) is a document issued by a carrier which details a shipment of merchandise and gives title of that shipment to a specified party. Bills of lading are one of three important documents used in international trade to help guarantee that exporters receive payment and importers receive merchandise. A straight bill of lading is used when payment has been made in advance of shipment and requires a carrier to deliver the merchandise to the appropriate party. An order bill of lading is used when shipping merchandise prior to payment, requiring a carrier to deliver the merchandise to the importer, and at the endorsement of the exporter the carrier may transfer title to the importer. Endorsed order bills of lading can be traded as a security or serve as collateral against debt obligations. Bills of lading have a number of additional attributes, such as on board, received-for-shipment, clean, and foul. An on-board bill of lading denotes that merchandise has been physically loaded onto a shipping vessel, such as a freighter or cargo plane. A received.for-shipment bill of lading denotes that merchandise has been received, but is not guaranteed to have already been loaded onto a shipping vessel. Such bills can be converted upon being loaded. A clean bill of lading denotes that merchandise is in good condition upon being received by the shipping carrier, while a foul bill of lading denotes that merchandise has incurred damage prior to being received by the shipping carrier. Letters of credit usually will not allow for Foul bills of lading.
  • Forwarder’s bill of lading

    B/L issued by a freight forwarder to a shipper as a receipt for the goods being shipped with other cargo as one consignment (usually as a full container load). The shipping company’s (carrier’s) B/L shows the forwarder as the consignor, and the name of forwarder’s agent at the port of destination as the consignee. Although it is not a complete document of title, a forwarder’s B/L has a legal standing similar to that of a normal (carrier’s) B/L. If not specifically prohibited, it is capable of being negotiated and of acceptance by the importer’s bank for payment under a letter of credit. Also called house bill of lading.
  • Incoterms

    The Incoterms rules or International Commercial terms are a series of pre-defined commercial terms published by the International Chamber of Commerce (ICC) widely used in international commercial transactions. A series of three-letter trade terms related to common sales practices, the Incoterms rules are intended primarily to clearly communicate the tasks, costs and risks associated with the transportation and delivery of goods. The Incoterms rules are accepted by governments, legal authorities and practitioners worldwide for the interpretation of most commonly used terms in international trade. They are intended to reduce or remove altogether uncertainties arising from different interpretation of the rules in different countries. First published in 1936, the Incoterms rules have been periodically updated, with the eighth version (Incotorms 2010) having been published on January /, 2011. lncoterms” is a registered trademark of the ICC.
  • Forwarder’s Receipt

    The Forwarder’s Cargo Receipt provides validation that a vendor has delivered the specified cargo and all related documents to the designated receiver. It also enables the vendor to collect payment for the cargo from the clients bank as defined in the letter of Credit (1./C).
  • Letter of Credit

    A letter of credit is a document that a financial institution or similar issues to a seller of goods or services which provides that the issuer will pay the seller for goods or services the seller delivers to a third-party buyer. The seller then seeks reimbursement from the buyer or from the buyer’s bank. The document serves essentially as a guarantee to the seller that it will be paid by the issuer of the letter of credit regardless of whether the buyer ultimately fails to pay- In this way, the risk that the buyer will fail to pay is transferred from the seller to the letter of credit’s issuer. Letters of credit are used primarily in international trade for large transactions between a supplier in one country and a customer in another. In such cases, the International Chamber of Commerce Uniform Customs and Practice for Documentary Credits applies (UCP 600 being the latest version). They are also used in the land development process to ensure that approved public facilities (streets, sidewalks, storm water ponds, etc.) will be built. The parties to a letter of credit are the supplier, usually called the beneficiary, the issuing bank, of whom the buyer is a client, and sometimes an advising bank, of whom the beneficiary is a client. Almost all letters of credit are irrevocable, i.e., cannot be amended or concealed without the consent of the beneficiary, issuing bank, and confirming bank, if any. In executing a transaction, letters of credit incorporate functions common to giros and traveler’s cheques.
  • Full container load (FCL)

    A full container load (FCL) is on ISO standard container that is loaded and unloaded under the risk and account of one shipper and only one consignee. In practice, it means that the whole container is intended for one consignee. FCL container shipment tends to have lower freight rates than an equivalent weight of cargo in bulk. FCL is intended to designate a container loaded to its allowable maximum weight or volume, but in practice does not always mean a full payload or capacity.
  • Less than container load (LCL)

    less than container load (i.e.) is a shipment that is not large enough to fill a standard cargo container. The abbreviation LCL formerly applied to less than (railway) car load* for quantities of material from different shippers or for delivery to different destinations carried in a single railway car for efficiency. LCL freight was often sorted and redistributed into different railway cars at intermediate railway terminals en-route to the final destination. LCL is a quantity of cargo less than that required for the application of a carload rate. A quantity of cargo less than that fills the visible or rated capacity of an intermodal container. It can also be defined as a consignment of cargo which is inefficient to fill a shipping container. It is grouped with other consignments for the some destination in a container at a container freight station.
  • Unit Load Device (ULD)

    A unit load device (ULD), is a pallet or container used to load luggage, freight, and mail on wide-body aircraft and specific narrow-body aircraft. It allows a large quantity of cargo to be bundled into a single unit. Since this leads to fewer units to load, it saves ground crews time and effort and helps prevent delayed flights. Each ULD has its own packing list (or manifest) so that its contents can be tracked.