Frequently asked logistics terminologies encompass terms related to the movement, storage, and management of goods within the supply chain. Common queries often revolve around understanding concepts like "lead time," referring to the duration between placing an order and receiving it, or "just-in-time," a strategy aimed at minimizing inventory and production costs. Additionally, questions about "freight terms" such as FOB (Free on Board) and CIF (Cost, Insurance, Freight) arise, reflecting inquiries about the responsibility and costs associated with the transportation of goods. With that being said, here is a list of FAQs and their answers
Q: Who is a Shipper?
A: A Shipper is a person or company that sends or transports goods by sea shipping, air shipping, trucking, or railway. A shipper in shipping is listed on the bill of lading (BOL).
Q: What is Consignee?
A: This person or entity is the shipment receiver and generally the owner of the shipped goods. Unless there are other instructions, the consignee is the entity or person legally required to be present to accept the shipment. A consignee in shipping is listed on the bill of lading.
Q: What is Notify Party?
ANotify party is any party that is notified with shipment information by a carrier upon the arrival of cargo at its destination. In most instances, the freight forwarder, customs broker, freight forwarder, or carrier is shown as the notifying party in order to facilitate prompt customs clearance and cargo delivery.
Q: What is POR (Port of Receipt)?
APOR (Place of Receipt) refers to the place where the carrier has contracted to receive the goods if the place is not the port of loading.
Q: What is POL (Port of Loading)?
A: POL (Port of Loading) is a port or a place where goods are loaded aboard a ship, secured and ready to be transported.
Note: Transshipments from one merchant ship to another are regarded as loading after unloading.
Q: What is the Port of Discharge?
A: Port of discharge is the place where a ship or aircraft unloads its shipments, which are then discharged to their respective consignees. Also called a port of unloading.
Q: What is POD (Port of Delivery)?
A(POD) Place of Delivery means the final destination of the container or cargo for delivery from the carrier.
Q:What is Cargo Haulage?
ACargo transport refers to the whole or part of the ocean transportation or air shipping of your cargo. which is designed to move goods from one location to another. Also known as freight transport.
Q: What is Shipping?
AShipping is the transport of goods from one port to another by sea, air, railway, or trucking, such as the transport of merchandise from the warehouse to the customer. The shipping process follows the manufacture and packing of goods and will be controlled by a freight forwarder or logistics.
Q: What is FCL Shipping?
AFCL (full container load) is an ocean shipment in which the cargo occupies a full container (of any size).
Q: What is LCL Shipping?
A: LCL is an acronym used in logistics, which means ‘Less than Container-Load’. LCL is used when a single shipper’s goods do not completely fill an entire container. When this happens, in order to fill an entire container, space in the container is split between orders and/or shippers.
Q: What is DIT in Shipping?
A: DIT is an acronym used in logistics that means "delay in transit". This indicates that a sea freight or air freight schedule will be delayed, either at the request of the customer or due to uncontrollable circumstances (e.g. bad weather).
Q: What is Sea Freight?
A: Sea freight also can be called ocean freight is the most common mode of transport that importers and exporters use. In fact, a full 90% of goods are shipped by ocean freight and sea freight. The other international freight transport modes (courier, air freight, express) are all faster, but they are also more expensive.
Q: What are Freight Costs?
A: Freight costs are also known as freight charges or freight rates. It is the amount paid to a carrier for the transportation of goods by sea or air from the point of origin to an agreed location.
Q: What is Freight Charge?
A: Freight charge, also known as freight rate, is the amount paid to a carrier company for the transportation of goods from the point of origin to an agreed location.
Q: What is Vessel Dwell Time?
A: Vessel dwell time is the time a vessel spends in port securing the vessel, unloading or loading cargo, and other activities. Container overstay charges may apply when a container exceeds a specific dwell time at the port.
Q: What are Incoterms in Shipping?
A: Incoterms are rules, that define the terms of trade for the sale of goods all around the world. Entering the world of global trade, ocean shipping, and air shipping means understanding your roles and responsibilities in importing or exporting goods – and that requires an understanding of Incoterms.
Q: What is FOB Incoterms?
A: FOB [Free on Board] means that the seller (consignor) is responsible for the transportation of the goods to the port of shipment and the cost of loading. The buyer (consignee) pays the costs of ocean freight, insurance, unloading, and transportation from the arrival port to the final destination. The seller passes the risk to the buyer when the goods are loaded at the originating port. FOB is one of the most used Incoterms.
Q: What is EXW Incoterms?
AEWX (Ex Works) means that the seller delivers when it places the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e., works, factory, warehouse, etc.). EXW is one of many important Incoterms.
QWhis is CIF Incoterm?
A: CIF is a Shipping Incoterm that stands for Cost, Insurance, and Freight agreement, with the seller holding responsibility for all three. When purchasing internationally, the seller is responsible for exporting the cargo and shipping it until they arrive at the destination port, while insuring the cargo throughout the voyage.
When shipping under CIF Incoterms, the transfer of possession begins once the goods are loaded safely onto the boat, but the seller is responsible for paying freight charges and procuring the shipping insurance. This means the seller pays for all costs associated with moving the cargo until the goods arrive at the destination port. The buyer is responsible for the import process and the costs associated with bringing the shipment through customs and delivering the products to their final destination.
CIF only applies to sea or waterway shipments, and no other forms of shipping. This shipment method is most commonly used when shipping full containers;
Q: What is C&F Incoterms?
A: CNF stands for Cost and Freight. This means the supplier of goods is responsible for the freight-related charges. The buyer of the products is responsible for organizing and paying the insurance on the goods.
CNF is also known as C&F and CFR. All terms have the same meaning.
Q: What is DAP Incoterms?
A: DAP means, Delivered at Place ( up to the named destination mentioned). In DAP terms, the seller delivers goods up to the destination mentioned in the contract agreed mutually. The term DAP can be used in any mode of transport.
Q: What is FCA Incoterms?
AFCA (Free Carrier) means that the seller (consignee) delivers the goods to a carrier or another person nominated by the buyer, at the seller’s premises or another named place. With FCA shipping terms, the parties are well-advised to specify, as clearly as possible, the point within the named place of delivery, as the risk passes to the buyer at that point.
Q: What is TEU in Container Shipping?
ATEU is an acronym used in logistics, which means ‘Twenty Equipment Unit’ or in other terms a ’20-foot container’. TEU is the smallest container used to transport goods.
Q: What is FEU in Container Shipping?
A: A Forty-foot Equivalent Unit (FEU) is cargo equal to one forty-foot (40 x 8 x 8 feet) or two twenty-foot (20 x 8 x 8 feet) containers. One FEU equals approximately 25 metric tons or 72 cubic meters.
Q: What is FFE in Container Shipping?
A: FFE means Forty-Foot Equivalent unit (one 40’ container). 40HC and 45HC containers are also referred to as FFE.
Q: What is Container Turnaround?
A: Container Turnaround is the return of an empty container to a specific location where it is intended to be used again. The Covid-19 pandemic has resulted in a shift in customer spending away from services to goods due to restrictions imposed by national lockdowns. As demand increased, this led to a shortage of containers becoming more prominent, particularly in terms of supply shortages where they were most needed.
Q: What is a Telex Release Bill of Lading?
A: In some instances, a shipper or exporter may surrender one or all of the original bills of lading that have been issued to them at the load port. Based on this surrender, they will instruct the load port agent to advise the discharge port agent that the cargo covered under the surrendered bills of lading may be released to the consignee shown on the bill of lading without the presentation of any original bills of lading.
Q: What is the COD Shipping Term?
ACash on delivery (COD) is a type of transaction where the recipient pays for a good at the time of delivery rather than using credit. The terms and accepted forms of payment vary according to the payment provisions of the purchase agreement.
Q: What is the COO Shipping Term?
A: A Certificate of Origin (COO) is a document commonly used in international trade. It establishes the country of origin of the product, which is particularly important for an exporter claiming import duty benefits against the product(s). It is often in the form of a statement attached to the commercial invoice, or a separate declaration, which gives a line item-wise list of the origin of all products.
Q: What is Duty Drawback?
A: Duty drawback is the refund of customs duties, taxes, and charges paid on imported items that match the items exported or destroyed. The refund may be part or all of the import duty paid by the trader, which includes customs duties, sales tax, and any other refundable charges.
Q: What is a Customs Broker?
A: Customs brokers are professionals who provide expert services and arrange customs clearance procedures for you during the shipment of goods. Customs brokers ensure that goods meet all standards and regulations for imported or exported goods.
Q: What is Import Duty?
A: Import duty is taxes levied by a country's customs authorities on imports and some exports. The value of the goods usually determines the import duty. Depending on the situation, import duty may also be called customs duty, tariff, import tax, or import tariff.
Q: What is CHB (Customs House Brokerage) & Customs Clearance?
A: CHB means "Customs House Brokerage" in the logistics industry. All goods crossing the border must go through customs clearance checkpoints - whether they are exported or imported.
When it comes to customs clearance, each country has its own regulations, documents, and procedures. A customs broker or customs clearance is a service provided by experts who know which regulations apply, which documents need to be submitted, and the different formalities required depending on the country from which the goods are exported or imported.