part one trading words & phrases

Trading Words & Phrases

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PART ONE

Trading Words & PhrasesPages 001 - 201


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001 l Abandonment

001 l Abnormal

Acceptance Drafts (See – Sight Drafts)

002 l Ad Valorem

003 l Airwaybill

004 l American Foreign Trade Definitions

Anti-dumping (See – Dumping)

005 l Applicant

005 l Arbitration

006 l Avalise

007 l Average

007 l Avoidance

AWB (See – Airwaybill)

008 l Back-to-Back Documentary Credit

BAF (See – Bunker Adjustment Factor)

009 l Balance of Payments

Bank Drafts (See – Sight Drafts & Acceptance Drafts)

Bank Guarantees (i.r.o. missing Bills of Lading, see Indemnities)

009 l Beneficiary

010 l Bill of Exchange

011 l Bill of Lading

013 l Blank Endorsed

014 l BOLERO

015 l Bond

016 l Bond Store

017 l Bottom Limit

017 l Box Rate(s)

018 l Breakbulk

018 l Bulk

019 l Bulk Containers

019 l Bumping

020 l Bunker Adjustment Factor

020 l Buyer


A

B

INDEX


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C&F (See – Cost and Freight as a customs valuation expression)

C&F or CF (See – Cost and Freight as a commercial term)

C&FFO (See – Cost and Freight, Free Out)

021 l Cabotage

CAD (See – Cash Against Documents)

CAF (See – Currency Adjustment Factor)

022 l Capital Equipment or Goods

Cargo Clauses (See – International Underwriting Association)

023 l Carnet

023 l Carriage and Insurance Paid To

026 l Carriage Paid To

027 l Carrier

028 l Carrier Haulage

029 l Cartage

030 l Cash Against Documents

CD (Container Depot. See – Container Freight Station)

Cells (See – Slots & Cells)

031 l Centre Mounted

032 l Certificate of Origin

032 l Certificate of Receipt

CF (See – Cost and Freight as a commercial term)

CFR (See – Cost and Freight as a commercial term)

033 l Change Of Documents

033 l Charter Party

c.i.f. (See – Cost, Insurance and Freight as a customs valuation expression)

CIF (See – Cost, Insurance and Freight as a a commercial term)

CIFFO (See – Cost and Freight, Free Out)

034 l Clean Report of Findings

035 l Clearing Agent

036 l Clip-On Units

C/O (See – Certificate of Origin)

COD (See – Change of Documents)

037 l Co-loading

037 l Combined Transport

039 l Comingling

039 l Commercial Invoice

040 l Commercial Terms

C


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041 l Commodity Trading

041 l Conciliation

042 l Confirmed Documentary Credit

044 l Congestion Surcharge

044 l Consignee

045 l Consignment Stock

046 l Consolidation

047 l Container Freight Station

047 l Container Numbering

Container Service Charge (See – Terminal Handling Charge)

048 l Container Service Indicators

049 l Container Size Types

Container Yard (See – Container Freight Station)

Conveyance Limit (See – Bottom Limit)

050 l Corner Castings and Twist-Locks

052 l Cost and Freight

052 - Cost and Freight (As a commercial term)

054 - cost and freight (As a customs valuation expression)

055 l Cost and Freight, Free Out

055 l Costing

056 l Cost Insurance and Freight

056 - Cost Insurance and Freight (As a commercial term)

058 - cost insurance and freight (As a customs valuation expression)

060 l Cost of Money (The)

061 l Countertrade

061 l Countervailing

062 l Courier Services

CPT (See – Carriage Paid To)

063 l Cross-Docking

CSC (See – Terminal Handling Charge)

063 l Currency Adjustment Factor

064 l Customs Valuation Terms

CY (See – Container Freight Station)

D/A (See – Bills of Exchange)

DAF (Refer to the Commercial Terms Companion)

DAP (See – Delivered At Place)

C

D


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DAT (Refer to the Commercial Terms Companion)

DCSA (See – Digital Container Shipping Association)

DDC (See – Terminal Handling Charge)

DDP (See – Delivered Duty Paid)

DDU (Refer to the Commercial Terms Companion)

067 l Deadfreight

068 l Degrouping

Delivered At Frontier (Refer to the Commercial Terms Companion)

069 l Delivered At Place

070 l Delivered At Place Unloaded

Delivered At Terminal (Refer to the Commercial Terms Companion)

072 l Delivered Duty Paid

Delivered Duty Unpaid (Refer to the Commercial Terms Companion)

Delivered Ex Quay (Refer to the Commercial Terms Companion)

Delivered Ex Ship (Refer to the Commercial Terms Companion)

073 l Demurrage (and Detention)

DEQ (Refer to the Commercial Terms Companion)

DES (RRefer to the Commercial Terms Companion)

Destination Delivery Charge (See – Terminal Handling Charge)

074 l Digital Container Shipping Association

075 l Direct Service

075 l Documentary Credit

Documents Against Acceptance (See – Bills of Exchange)

Documents Against Payment (See – Bills of Exchange)

077 l Dogleg Service

077 l Door-to-Door

D/P (See – Bills of Exchange)

DPU (See – Delivered at Place Unloaded)

Drafts (See – Sight Drafts & Acceptance Drafts)

078 l Drawback

Drayage (See – Cartage)

078 l Drop Shipment

Dry Bulk (See – Bulk and Bulk Containers)

079 l Dumping

079 l Dunnage

EDI (See – Electronic Data Interchange)

080 l Electronic Data Interchange

D

E


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080 l Embargo

081 l Endorsed in Full

082 l Estimating

083 l Excess

EX Ship (Refer to the Commercial Terms Companion)

EXW (Ex Works as a commercial term)

084 l Ex Works

084 - Ex Works (As a commercial term)

086 - ex-works (As a customs valuation expression)

FAK (See – Freight All Kinds – Part D)

f.a.s. (See – Free Alongside Ship as a customs valuation expression)

FAS (See – Free Alongside Ship as a commercial term)

FAV (See – First Available Vessel)

FCA (See – Free Carrier)

FCL (See – Full Container Load)

FEC (See – Forward Cover)

087 l Federation of Oils, Seeds and Fats Associations (The)

087 l Feeder Service

FILO (See – Free In, Liner Out)

FIO or FI&O (See – Free In and Out)

088 l First Available Vessel

089 l Flat Rack

090 l Floor Value

FLT (See – Full Liner Terms)

FOA (Refer to the Commercial Terms Companion)

f.o.b. (See – free on board as a customs valuation expression)

FOB (See – Free On Board as a commercial term)

FOB Airport (Refer to the Commercial Terms Companion)

FOR (Refer to the Commercial Terms Companion)

FOSFA (See – Federation of Oils, Seeds and Fats Associations)

090 l Force Majeure

091 l Foreign Exchange

091 l Foreign Exchange Contract

Forward Cover (See – Foreign Exchange Contract)

FOT (Refer to the Commercial Terms Companion)

092 l Franchise

E

F


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093 l Franco Domicile

093 l Free Alongside Ship

093 - Free Alongside Ship (As a commercial term)

095 - free alongside ship (As a custom valuation expression)

096 l Free Carrier

098 l Freedom of Contract

099 l Free In and Out

100 l Free In, Liner Out

Free On Aircraft (Refer to the Commercial Terms Companion)

Free On Board, Airport (Refer to the Commercial Terms Companion)

100 l Free On Board

100 - Free On Board (As a commercial term)

103 - free on board (As a customs valuation expression)

Free On Rail (Refer to the Commercial Terms Companion)

Free On Truck (Refer to the Commercial Terms Companion)

104 l Free ‘Port’/ Free Zone/ Free Trade Zone

105 l Free Trade Area

105 l Freight

106 l Freight All Kinds

106 l Freight Forwarder

107 l Freight Tonne

FTD (See – American Foreign Trade Definitions)

107 l Full Container Load

108 l Full Liner Terms

GA (See – General Average)

GAFTA (See – Grains and Feed Trade Association)

GATT (See – General Agreement on Tariffs and Trade)

109 l General Agreement on Tariffs and Trade

109 l General Average

110 l General Purpose

110 l Globalization

111 l Good Faith

GP (See – General Purpose)

112 l Grain and Feed Trade Association (The)

Green Clause Documentary Credit (See – Red Clause Documentary Credit)

Gross Weights (See – Nett, Tare and Gross weights)

F

G


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G

H

I

112 l Groupage

113 l Hague Rules

114 l Hague-Visby Rules

114 l Half-Height

114 l Hamburg Rules

115 l Harmonized System

Haulage (See – Cartage)

115 l House Transport Documents

116 l Hub and Spoke

IATA (See – International Air Transport Association)

ICC (See – International Chamber of Commerce)

IFS (See – Container Freight Station)

ILU (See – International Underwriting Association of London, Cargo Clauses)

IMO (See – International Maritime Organization)

117 l Imbalance

In Bond (See – Bond)

118 l Incoterms Rules

118 l Indemnities

119 l Indent

Inland Freight Station (See – Container Freight Station)

Institute of London Underwriters (See – International Underwriting Association of London, Cargo Clauses)

120 l Insurable Interest

121 l Insurance

121 l Insurance Basis of Valuation

122 l Intermingling

Intermodal (See – Combined Transport)

122 l International Air Transport Association

123 l International Chamber of Commerce

International Institute for the Unification of Private Law (See – UNIDROIT)

123 l International Maritime Organization

International Organization for Standardization (See – ISO)

International Standard Banking Practise (See – Uniform Customs and Practises for Documentary Credits

International Standards Organization (See – ISO)


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123 l International Underwriting Association of London, Cargo Clauses

ISBP (See – Uniform Customs and Practices for Documentary Credits)

124 l ISO

IUA (See – International Underwriting Association of London, Cargo Clauses)

125 l Jettison

JIT (See – Just In Time)

125 l Just In Time

Laden On Board (See – Shipped On Board)

125 l Landside / Ship’s Side

LASH (See – Lighters)

126 l Lashing Points

Lay Days (See – Laytime)

127 l Laytime

LCL (See – Less than Container Load)

127 l Less than Container Load

Letter of Credit (See either Documentary Credit or Standby Letter of Credit)

127 l Letter of Indemnity

128 l Lex Mercatoria

130 l Liability (Limitation of Carrier’s Liability)

131 l Licences

132 l Lien

LIFO (See – Liner In, Free Out)

132 l Lighters

Limitation of Carrier’s Liability (See – Liability)

133 l Liner In, Free Out

134 l Liner Terms

134 l Liner Waybill

136 l Liquid Tank Containers

136 l Location Limit

137 l Logistics

LOI (See – Letter of Indemnity)

138 l Low-Bed Trailer

138 l Manifest

139 l Marine Insurance

I

J

L

M


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140 l Marks and Numbers

140 l Master Documents

141 l Mate’s Receipt

141 l Merchant Haulage

142 l Merchanting

144 l Milestone Payment Agreements

144 l Minimum Insurance

145 l Montreal Convention

145 l Multimodal

146 l Negotiable (in respect of a Bill of Lading)

147 l Nett, Tare & Gross Weights

147 l No Disposal Clause

148 l Non Vessel Owning Common Carrier

149 l Notify Party

150 l No Value Declared

NVD (See – No Value Declared)

NVO or NVOCC (See – Non Vessel Owning Common Carrier)

150 l Open Account

151 l Open Marine Policy

152 l Open-Side Containers

152 l Open-Top Container

153 l Out of Gauge

154 l Out-turn Report

155 l Packing / Packaging

155 l Peak Season Surcharge

Permits (See – Licences)

156 l Phytosanitary Inspection

157 l Pledge

157 l Port of Distress

Port Rotation (See – First Available Vessel)

Port-To-Port (See – Quay-To-Quay)

Post-Shipment Inspection (See – Pre-Shipment Inspection)

158 l Pre-Shipment Inspection

158 l Pro Forma

M

N

O

P


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159 l Quay To Quay

Quota Systems (See – Licences)

RAFTD (See – American Foreign Trade Definitions)

159 l Rate Class

160 l Rates of Exchange (in connection with freight charges)

Receiving Dates (See – Stack Dates)

161 l Red Clause Documentary Credit (and Green Clause)

162 l Release Letter

Revised American Foreign Trade Definitions (See – American Foreign Trade Definitions)

163 l Revolving Documentary Credit

164 l Roll On / Roll Off

164 l Rotterdam Rules

165 l Said To Contain

Safety Of Life At Sea (See – SOLAS)

166 l SCAR Clause

166 l Seal

Sea Waybill (See – Liner Waybill)

167 l Seller

Service Indicators (See – Container Service Indicators)

SDR (See – Special Drawing Rights)

168 l Shipped On Board

170 l Shipper

171 l Shipper’s Certificate

171 l Shipping / Shipped / (to) Ship

Shipping Guarantee (In respect of missing Bills of Lading) (See – Indemnities)

Ship Side (See – Landside)

172 l Short Shipped / Shut Out

Shut out (See –Short-Shipped)

172 l Sight Drafts & Acceptance Drafts

174 l Slots & Cells

SOB (See – Shipped On Board)

174 l SOLAS

174 l Special Drawing Rights

175 l Stack Dates

176 l Standby Letter of Credit

Q

R

S


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S

T

177 l State or State’s Warehouse

STC (See – Said To Contain)

178 l Stevedore

179 l Stowage

Straight Bill of Lading (US Trade): (See – SCAR Clause)

(Other Trades): (See – Liner Waybill)

Straight Consignment Automatic Release (See – SCAR Clause)

181 l String Sales

182 l Subrogation

182 l Supplier Credit

183 l Tailboard or Tailgate Inspection

Tank Containers (See – Liquid Tank Containers)

Tare Weights (See – Nett, Tare and Gross Weights)

Tariff Headings (See – Harmonized System)

184 l Telegraphic Transfer

184 l Telex Release

185 l Terminal Handling Charge

186 l TEU

THC (See – Terminal Handling Charge)

The Cost of Money (See – Cost of Money)

186 l Through Bill of Lading

187 l Time-bar

188 l Time Zones

189 l TIR

Tonne (See – Freight Tonne)

190 l Tracking

Trailer Interchange Receipt (See – TIR)

Transport Internationaux Routiers (See – TIR)

190 l Transhipment

191 l Trimmed/Trimming

Trucking (See – Cartage)

192 l Truck-Tractor

192 l Turnkey

Twenty-Foot Equivalent Unit (See – TEU)


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Twist Locks (See – Corner Castings and Twist Locks)

UCP (See – Uniform Customs and Practices for Documentary Credits)

UCR (See – Unique Consignment Reference)

UNCISG (See – United Nations Convention for the International Sale of Goods)

UNICITRAL (See – United Nations Commission on International Trade Law)

194 l UNIDROIT

Uniform Commercial Code - Foreign Trade Definitions

194 l Uniform Customs and Practice for Documentary Credits

195 l Uniform Rules for Collections

Unimodal (See – Combined Transport)

196 l Unique Consignment Reference

196 l United Nations Commission on International Trade Law

197 l United Nations Convention on Contracts for the International Sale of Goods

197 l Unit Load Device

URC (See – Uniform Rules for Collections)

198 l Verified Gross Mass

Vessel Owning Common Carrier (See – Non Vessel Owning Common Carrier)

VGM (See – Verified Gross Mass)

VOCC (See – Non Vessel Owning Common Carrier)

199 l Volumetric Mass

199 l Warehouse Receipt

200 l Warsaw Convention

Warsaw-Oxford Rules (Refer to the Commercial Terms Companion)

Waybills (See – Liner Waybills)

200 l Weight or Measure (W/M)

200 l Wharfage

201 l World Trade Organization

201 l York-Antwerp Rules

T

U

V

W

Y


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l Preamble

1a Terminology 205

1b What are commercial terms? 206

1c An origin of f.o.b. and c.i.f. 208

l Incoterm rules

2a The Development of Incoterms rules 215

2b Current Incoterms® 2020 229

• Introduction to Incoterms® 2020 229

• EXW Ex Works 242

• FCA Free Carrier 248

• CPT Carriage Paid To 258

• CIP Carriage & Insurance Paid To 266

• DAP Delivered At Place 274

• DPU Delivered at Place Unloaded 280

• DDP Delivered Duty Paid 286

• FAS Free Alongside Ship 292

• FOB Free On Board 300

• CFR Cost and Freight 308

• CIF Cost Insurance and Freight 318

2c Redundant Incoterms rules (1967 – 2010) 328

• DAF Delivered At Frontier 328

• DAT Delivered At Terminal 329

• DDU Delivered Duty Unpaid 329

• DEQ Delivered Ex Quay 330

• DES Delivered Ex Ship 330

• FOB Airport Free On Board Airport 331

• FOR / FOT Free On Rail / Free On Truck 332

l The American Foreign Trade Definitions

3a American Foreign Trade Definitions Overview 334

3b American Foreign Trade Definitions (1919) 337

• Definitions of Export Quotations 337

• F.O.B. Named Place 339

• F.O.B. (named point) FREIGHT PREPAID 339

• F.O.B. (named point) FREIGHT ALLOWED TO 341

• F.O.B. Cars (named point on seaboard) 341

• F.O.B. Cars (named port) L.C.L. 343

• F.O.B. Cars (named port) LIGHTERAGE FREE 343

1.

2.

3.

INDEX

i

Page


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4.

5.

Page

• F.A.S. vessel (named port) 345

• F.O.B. vessel (named port) 345

• C.&F. (named foreign port) 347

• C.I.F. (named foreign port) 347

• General Recommendations 349

3c Revised American Foreign Trade Definitions (1941) 353

• FOREWORD 353

• General Notes of Caution 353

• EX (Point of Origin) 355

• F.O.B. (inland carrier at inland point of departure) 357

• F.O.B. FREIGHT PREPAID TO (point of exportation) 357

• F.O.B. FREIGHT ALLOWED TO (named point) 359

• F.O.B. (at named point of exportation) 359

• F.O.B. VESSEL (named port of shipment) 361

• F.O.B. (named inland point in country of importation) 363

• Comments On All F.O.B. Terms 365

• F.A.S. VESSEL (named port of shipment) 367

• C. & F. (named point of destination) 369

• C.I.F. (named point of destination) 371

• C. & F. and C.I.F. Comments 373

• Ex Dock 377

3d UCC Foreign Trade Definitions Overview 378

3e UCC Foreign Trade Definitions 382

• § 28:2-319. F.O.B. and F.A.S. terms. 382

• Uniform Commercial Code Comment 382

• § 28:2-320. C.I.F. and C. & F. terms. 383


• § 28:2-322. Delivery “ex-ship” 386

l The Warsaw-Oxford Rules

4a The Warsaw-Oxford Rules Overview 388

4b The Warsaw-Oxford Rules (1932) 390

l Common Q&As on Commercial Terms5Q01: Is EXW different to ‘ex-works’; when would I use the Incoterm EXW? 398

5Q02: We export FCA. In our L/C we wanted to use the forwarder’s receipt to trigger

payment. The issuing bank wants to use the forwarder’s house airwaybill?

Which is correct? 400


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• F.A.S. vessel (named port) 345

• F.O.B. vessel (named port) 345

• C.&F. (named foreign port) 347

• C.I.F. (named foreign port) 347

• General Recommendations 349

3c Revised American Foreign Trade Definitions (1941) 353

• FOREWORD 353

• General Notes of Caution 353

• EX (Point of Origin) 355

• F.O.B. (inland carrier at inland point of departure) 357

• F.O.B. FREIGHT PREPAID TO (point of exportation) 357

• F.O.B. FREIGHT ALLOWED TO (named point) 359

• F.O.B. (at named point of exportation) 359

• F.O.B. VESSEL (named port of shipment) 361

• F.O.B. (named inland point in country of importation) 363

• Comments On All F.O.B. Terms 365

• F.A.S. VESSEL (named port of shipment) 367

• C. & F. (named point of destination) 369

• C.I.F. (named point of destination) 371

• C. & F. and C.I.F. Comments 373

• Ex Dock 377

3d UCC Foreign Trade Definitions Overview 378

3e UCC Foreign Trade Definitions 382

• § 28:2-319. F.O.B. and F.A.S. terms. 382


• § 28:2-320. C.I.F. and C. & F. terms. 383


• § 28:2-322. Delivery “ex-ship” 386

l The Warsaw-Oxford Rules

4a The Warsaw-Oxford Rules Overview 388

4b The Warsaw-Oxford Rules (1932) 390

l Common Q&As on Commercial Terms5Q01: Is EXW different to ‘ex-works’; when would I use the Incoterm EXW? 398

5Q02: We export FCA. In our L/C we wanted to use the forwarder’s receipt to trigger

payment. The issuing bank wants to use the forwarder’s house airwaybill?

Which is correct? 400

5Q03: Who is responsible for securing, crating, or packing cargo into containers, or for

securing cargo onto trucks, when the commercial term is 'FCA supplier's

premises'? 402

5Q04: When may revenue be recognized per the Incoterm used in the sales agreement? 403

5Q05: How should a seafreight seller structure an FOB model to minimise risk? 405

5Q06: We want to deliver as close as possible to our customer's premises, but we don't

want the risk of import clearance delays. What term should we use? 410

5Q07: In an FCA sale, must the seller act as the shipper? 411

5Q08: We buy CIF partly because the supplier can obtain insurance cover at a lower rate

than we do. Is it that simple? What else should we consider? 412

5Q09: Is 'CIF Johannesburg, South Africa' a valid import commercial term? May I export

on 'CIF Manchester, UK' terms? How do I sell to an inland address? 414

5Q10: What is the difference between using the Incoterm CPT as opposed to DAP: what

are the advantages and disadvantages - and is there a price difference? 415

5Q11: Who pays the empty turn-in on containers under DAP? 419

5Q12: We exported not knowing that a pre-shipment inspection was required. Was this

something the buyer should have told us, or should we have known? Should the

clearing or freight agent have arranged this or told us in advance? Who now

pays the costs: we sold CPT? 420

5Q13: When would I not use Incoterms? 422

5Q14: Which Incoterms are best suited to which payment terms, and/or vice versa? 424

5Q15: Which Incoterms work best with an L/C? 428

5Q16: Should we be using Incoterms for our domestic sales too? FCA appears to fit many

of our sales 430

5Q17: I sell CPT. The freight costs have increased - may I increase the prices to the buyer? 432

5Q18: As a middleman in the transaction, is there a particular Incoterms rule that works

best with merchanting models? 433

5Q19: I imported several small shipments, FOB from the USA. The agent is invoicing me

for local collection and inland charges on some of these. Shouldn't the seller

always pay these costs? 435

5Q20: I buy parts on a CFR or CIF basis. However, a new supplier is quoting C&FFO.

What is different, what must I look out for? 437

5Q21: We sell FOB, but some clients want to change and would rather buy CFR or CIF.

Is this to our advantage, or not?? 438

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