Glossary
Ad valorem
"According to the value" or "on the value". Rates of duty expressed as a percentage of the value of goods are known as "ad valorem rates".
Affreightment
Contracts between a carrier and an exporter, to carry goods by sea or by air. Bills of Lading and Airway Bills are evidence of "contract of affreightment".
Airway Bill
The document that covers transport of goods by air. Issued by the carrier, whether an airline or a freight forwarder, to the consignor as a receipt for the goods and as evidence of the conditions of transport. It also shows details of the consignee so they can be contact when the goods arrive. Note that unlike the Bill of Lading, an Airway Bill is not a fully negotiable instrument.
All Risks Clause
Indicates that a marine insurance policy covers a comprehensive range of risks to the cargo insured.
AQIS
Australian Quarantine Inspection Service (AQIS) provides quarantine inspection services for the arrival of international passengers, cargo, mail, animals and plants or their products into Australia, and inspection and certification for a range of animal and plant products exported from Australia.
Assessor
A person who assesses the value of cargo for the purposes of settling insurance claims.
BAF
Bunker Adjustment Factor - charged by shipping companies to alleviate fluctuating bunkering costs (ie ship's fuel oil).
Bank Draft (B/Dft)
A cheque drawn by one bank against funds deposited to its account in another bank.
Bill of Exchange
An order in writing given by one person to another requiring the receiver to pay a certain sum of money to another person at a fixed or determinable future date. Frequently known as a "draft" or "bill". See also definition for "Export Document Flow".
Bill of Lading
The document that covers transport of goods by sea. Issued by the carrier to the consignor, it serves as a receipt for the goods, as evidence of the contract of transport and as a document of title to the goods. Bills of Lading are fully negotiable instruments. Transfer of the Bill of Lading transfers ownership of the goods from one party to another. See also "Export Document flow".
Bond Store
Also known as a "Bonded Warehouse", Bond Store is a warehouse where goods are held under Customs control pending the payment of duty.
BSR
Basic Service Rate. The fees charged for wharfage and other port charges at both port of loading and port of unloading.
BSRA
Basic Service Rate Additional - usually an unpacking charge.
Cargo Inspectors
Perform independent and certifiable inspections of goods before they leave to confirm that they conform to the specifications called for in the contract of sale.
Carnet
The "ATA Carnet" is an international customs document that permits duty-free temporary import of goods (eg commercial samples) for up to one year. The initials "ATA" are an acronym of the French and English words "Admission Temporaire/Temporary Admission".
Cash Against Documents (CAD)
A transaction where full shipping documents are sent to a bank or agent at the destination instructing they are only to be handed over in exchange for full payment by the receiver of the goods.
CDV
The Current Domestic Value of exported goods in the country in which they were produced.
Certificate of Origin (CO)
Document proving place of manufacture or origin of goods specified.
CFR
"Cost and Freight" - means that the exporter's price includes all charges up to the arrival of the goods at the point of discharge from the vessel. It does not, however, include the cost of insuring the goods against loss or damage whilst in transit to that point. Must be followed by the name of the port of discharge, eg. "CFR Singapore". This term should not be used for transport by airfreight or containerised seafreight - see "CPT".
Charter Party
An agreement, between a ship's owner and a charterer, for the hiring of a vessel for a specific purpose.
CIF
Cost, Insurance and Freight. Very widely used, this term indicates that the exporter's price includes all charges up to the arrival of the goods at the point of discharge from the vessel including the cost of insuring them against loss or damage whilst in transit. Must be followed by the name of the port of discharge, eg. "CIF Hong Kong". This term should not be used for transport by airfreight or containerised seafreight - see CIP
CIP
Carriage and Insurance Paid (... to named place of destination). "CIP" indicates that the exporter is responsible for the cost of freight up to the point where the goods are delivered to a specified destination including the cost of insurance against loss or damage during transit. It is the importer's responsibility to clear the goods for import.
Claused Bill
A Bill of Lading which has a clause to show that the goods received by the shipping company were not in good order and condition.
Combined Transport or Multimodal Bill of Lading
A contract of carriage which covers transport of cargo from one point to another - even though this may involve road, rail or other forms of transport as well as shipment by sea.
Commercial Bill
A fixed short-term finance facility (usually up to a maximum 6 months) at a fixed interest rate.
Commercial Invoice
The document that confirms all the details of the contract of sale that exists between the seller and the buyer.
Common Carrier
A firm which carries any type of goods.
Conference
In export contexts, a "conference" is an agreement between ship owners, which rationalises sailing schedules and stabilises freight rates.
Confirming Houses
Offer an alternative when finance is not available from a bank. The confirming house pays you for the goods you export and your buyer in turn pays the confirming house.
Consignee
The person who, upon presentation of the necessary shipping documents, is recognised as the owner of the goods.
Consignor
The person consigning the cargo to the consignee.
Container Vessel
A vessel designed to carry ISO (International Standards Organisation) containers. These are generally 40ft (12m) or 20ft (6m) long and may be refrigerated, depending upon the type of cargo to be carried.
Countertrade
Where the seller of goods receives payment in other than monetary form.
Courier Services
Provide rapid, door to door delivery of documents and other communications around the world, outside of normal mail services.
CPT
Carriage Paid To (... named place of destination). Use of this term indicates that the exporter is responsible for the cost of freight up to the point where the goods are delivered to a specified destination, but is not responsible for insuring the goods against the risk of loss or damage while in transit. It is the importer's responsibility to clear the goods for import.
CU FT
Cubic Feet. 33.315 cubic feet = 1 cubic metre
Currency Adjustment Factor
A compensation factor for currency fluctuations, which might affect freight rates.
Customs Brokers
Provide advice and services on all matters related to the movement of goods from you to the buyer such as customs rates and procedures, quarantine regulations, export documentation, freight forwarding and costings.
Documents Against Acceptance (D/A)
A transaction where the shipper sends shipping documents attached to a draft (order for payment) for the amount due to a bank or agent at the destination to present to the consignee. If the consignee accepts the draft, they are then given the shipping documents to allow them to obtain possession of the goods before they pay for them.
DAF
Delivered At Frontier (... named place). Use of this term indicates that the exporter's obligation is fulfilled when the goods are delivered to a specified point at the frontier. There is no responsibility on the part of the exporter to declare the goods to the customs in the importing country, but it is the exporter's responsibility to clear the goods for export.
Documents Against Payment (D/P)
Same as Cash Against Documents (CAD).
DDP
Delivered Duty Paid (... named place of destination). "DDP" means that the exporter's obligation is fulfilled when the goods have been made available at a specified point in the importer's country. In this case the exporter is also responsible for payment of duties, taxes and other customs clearance charges.
DDU
Delivered Duty Unpaid (... named place of destination). "DDU" means that the exporter's obligation is fulfilled when the goods have been made available at a specified point in the importer's country. The exporter bears all costs incurred in delivering them to that point. The importer is responsible for duties and taxes etc. payable when goods are cleared through customs.
Demurrage
A charge levied on a charter vessel or cargo for delay or detention.
DEQ
Delivered Ex Quay (duty paid) (... named port of destination). This term indicates that the exporter is responsible for making the goods available to the importer on the wharf at the port of discharge, The exporter must bear all costs and risks involved in placing the goods at the disposal of the buyer at the port of destination. This term cannot be used for airfreight shipments.
DES
Delivered Ex Ship (... named port of destination). Use of this term indicates that the exporter accepts responsibility to make the goods available to the importer on board the ship at the port of discharge. Obviously this term cannot be used for airfreight consignments. It is the exporter's responsibility to clear the goods for export but not for import at the port of discharge.
Disbursement
A sum of money paid by an agent on behalf of a principal, eg. a freight forwarder pays freight to a shipping company on behalf of an exporter. Usually such "disbursements" will be requested from the exporter prior to payment being made to the shipping company.
Drawback
The repayment of customs duties paid on merchandise that later is exported either "as is" or as part of a finished product.
ECN
Export Clearance Number - a permit required for all exports over the value of AU$2000.00 per consignment.
Entrepot
A place where goods are "transhipped" (to transfer goods from one means of transportation to another).
Export Agents
Usually operating on a commission basis, export agents undertake sales activity on your behalf, arrange the export of the goods and look after the documentation. The actual sales transaction however is still between you and the client in the destination country.
Export Consultants
Provide market research services and specialist advice on marketing, export incentives, management and planning.
Export document form
To see an animation about the movement of export documents click here. See also the definitions for Airway Bill, Bill of Exchange, Bill of Lading, Letter of Credit.
Export Merchants
Purchase goods destined for export directly from you in your home country and export the goods to their overseas clients in their own right.
Export Packers
Specialised packing companies that ensure your goods are packed to withstand the rigours of handling, storage and climatic differences that may damage the goods in transit.
Express integrator
an agent who arranges transport of export cargo by integrating road and air transport services for time-critical delivery
EXW
Ex Works (... named place). This term signifies that the price quoted is for supply of goods, packed for export, at the exporter's premises. The exporter's contractual obligation is discharged when the goods are made available to the buyer. The exporter is not responsible for any element of transport or insurance cost or the cost of compliance with export formalities.
FAS
Free Alongside Ship (... named port of shipment). This term means that the exporter's obligations are fulfilled when the goods are placed alongside a ship. It is the exporter's responsibility to clear the goods for export.
FCA
Free Carrier (... named place). This term means that the exporter's obligations are fulfilled when goods are delivered to a carrier nominated by the buyer. It is the exporter's responsibility to clear the goods for export.
FCL
Full Container Load. One shipment from one exporter which fully utilises one or more shipping containers.
FIS (Free Into Store)
In addition to freight and insurance the exporter is responsible for the cost of all entry costs, including import duty, unloading, inland freight, broker¡s fees and custom house¡s fees.
FOB
Free On Board (... named port of shipment). "FOB" means the exporter is responsible for all costs up to the point where the goods actually cross the ship's rail. This term should only be used for non-containerised sea transport. For airfreight and containerised seafreight see "FCA".
Force Majeure
A standard clause in contracts which stipulates that an event outside the control of the parties to the contact makes the contract void.
Forty Foot Unit
Standard ISO (International Organisation for Standardisation) large shipping container, forty feet long (about 12 metres).
Forward Exchange Contract
An agreement between a bank and a customer in which the bank agrees to a fixed exchange rate for the future buying from or selling to that customer of a fixed amount of foreign currency.
Forwarding Agent
An agent who looks after all the freight matters on behalf of the exporter.
Freight Forwarder
An agent who arranges transport of export cargo.
Freight Rate
The rate charged for transporting cargo.
Gross Weight
The total weight of the goods and their packaging.
HAWB
House Airway Bill - this is a document issued by the Freight Forwarder, acting as a carrier, clearly showing the contract of affreightment between the freight forwarder and the exporter.
Hazardous Cargo
Cargo which is deemed to be hazardous by the carrier because of its flammable, corrosive, poisonous nature or other "inherent vice".
HBL
House Bill of Lading (the Bill of Lading issued by a Freight Forwarder), acting as a carrier, clearly showing the contract of affreightment between forwarder and exporter.
Incoterms
The meanings of trade terms vary from country to country. To avoid confusion, standard terms called Incoterms have been developed by the International Chamber of Commerce to make the terms of sale clear and precise. Incoterm abbreviations (eg. EXW, FOB, CIF) are used to specify the division of obligations, costs and risks between buyer and seller during shipment of goods. View animation about "Incoterms" by clicking here.
Landed Cost (or Landed Price)
The total cost comprising goods, insurance, freight, loading, unloading, inland transport and anything else involved in clearing the goods at the port of destination.
LCL
Less than Container Load (LCL); small shipments from several exporters, consolidated into one shipping container.
Letters of Credit
(Also known as "Documentary Credit"). A Letter of Credit is a conditional promise issued by a bank requiring the bank receiving it to pay a sum of money to a specified person or company upon fulfilment of the stipulated terms and conditions. See animation about "Letters of Credit" by clicking here.
LO/LO
Lift On / Lift Off - these are charges levied by Terminal operators.
Manifest
A list of the cargo loaded on a carrying vessel.
Marine Insurers
Provide specialist advice and cover for the most suitable form of insurance against exporting risks such as loss or damage in transit.
Merchant Banks
Provide export finance, foreign exchange settlements, currency hedging and trade and credit information services.
On-consignment
Goods for which payment will be made to the exporter after they have been sold by the importer.
Open Cover
A "blanket" insurance policy, which covers all consignments, shipped by the insured within the terms of the open cover. Individual shipments are declared against the open cover as and when they are made.
Pro-forma Invoice
A specimen invoice, requested by the buyer for the purpose of applying for such things as an import licence, or foreign exchange allocation prior to the sale.
Received Bill of Lading
A Bill of Lading which shows only that the goods have been received for shipment, unlike a "Shipped on Board Bill", which shows that the goods are actually on board a named vessel.
RO-RO Vessel
A RO-RO (Roll On/Roll Off) vessel is constructed so as to allow cargo (eg, cars, trucks) to be driven directly on board from the dockside.
Trading Banks
Provide a broad range of services for exporters including export finance, foreign currency dealings and credit assessments on overseas buyers.
Transshipment
Usually means "where goods are transferred from one vessel to another at a port other than the port of destination".
Twenty Foot Equivalent Unit (TEU)
Standard ISO (International Organisation for Standardisation) small shipping container twenty feet long (about 6 metres).
Value for Duty
The value which is declared to the customs at the port of discharge for the purpose of assessing customs duty.
Wharfage
Fees for use of wharf in loading and unloading cargo.
Source: Department of Innovation, Industry and Regional Development - Vic Export website
