Essential Shipping Terms: A Comprehensive Glossary
This glossary defines common shipping terms used in the international logistics and freight industry.
O/F (Ocean Freight)
The international shipping term used in the ocean freight industry means that the carrier is NOT responsible for the cost of loading and unloading goods onto/from the vessel.
RT (Revenue Ton)
A ton on which the shipment is freighted. If cargo is rated as weight or measure (W/M), whichever produces the highest revenue will be considered the revenue ton. Weights are based on metric tons and measures are based on cubic meters.
ISPS (International Ship and Port Facility Security Code)
An amendment to the Safety of Life at Sea (SOLAS) Convention (1974/1988) on minimum security arrangements for ships, ports, and government agencies. It came into force in 2004.
GRI (General Rate Increase)
The amount by which ocean carriers increase their base rates across specific lines, generally because of increased demand.
BL (Bill of Lading)
A bill of lading (BL or BoL) is a legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried. A bill of lading also serves as a shipment receipt when the carrier delivers the goods at a predetermined destination.
FCL (Full Container Load) / LCL (Less than Container Load)
FCL = Full Container Load. LCL = Less than Container Load, aka Groupage or Consolidation. They are two of the common shipping terms used in the international logistics industry for export and import ocean freight cargo. LCL means you share space with others, and also share the cost.
CSC/THC (Container Service Charges/Terminal Handling Charges)
Container Service Charges (CSC) or Terminal Handling Charges (THC) are additional costs, on top of the sea freight, charged by the shipping company for the handling of containers at the container terminal before being loaded onboard a vessel.
Examples include the unloading of the container from a truck, stacking, and transport from the stacking location to just below the crane. This concerns FCL (Full Container Load) shipments.
WM or W/M (Weight or Measurement)
Abbreviation for “Weight or Measurement;” the basis for assessing freight charges. Also known as “worm.” The rate charged under W/M will be whichever produces the highest revenue between the weight of the shipment and the measure of the shipment.
CBM (Cubic Meter)
Stands for “cubic meter” in shipping. This measurement is calculated by multiplying the width, height, and length together of one’s carton. And if one has multiple cartons to ship, by adding the CBMs of each carton together.
FOB (Free On Board)
Stands for “Free On Board” or “Freight On Board.” It is a shipping term used in retail to indicate who is responsible for paying transportation charges. If the FOB terms of sale indicate that it is “FOB delivered,” then this implies that the shipper will be responsible for all the carrier’s costs.
CIF (Cost, Insurance, and Freight)
Cost, Insurance, and Freight (CIF) is an expense paid by a seller to cover the costs, insurance, and freight against the possibility of loss or damage to a buyer’s order while it is in transit to an export port named in the sales contract. Once the freight loads, the buyer becomes responsible for all other costs.
Tailgate Delivery
Means that the driver will bring the item(s) to the tailgate of the truck for you to unload.
HS Code (Harmonized System Code)
The Harmonized Commodity Description and Coding System, also known as the Harmonized System (HS) of tariff nomenclature, is an internationally standardized system of names and numbers to classify traded products.
Multimodal Group (Incoterms 2020)
(Rules for any mode or modes of transport)
- EXW – Ex Works (named place of delivery)
- FCA – Free Carrier (named place of delivery) (replacing the old FAS and FOB)
- CPT – Carriage Paid To (named place of destination) (replacing the old C&F)
- CIP – Carriage and Insurance Paid to (named place of destination) (replacing the old CIF)
- DAT – Delivered At Terminal (named terminal at port or place of destination)
- DAP – Delivered At Place (named place of destination)
- DDP – Delivered Duty Paid (named place of destination)