SEA | LAND | AIR
Terminology and common scenarios
Ship Freighting (Sea) Example
You’re shipping goods from Shanghai, China, to New York, USA. Below are the key acronyms and their meanings in this process:
• FOB (Free On Board): The seller’s responsibility ends once the goods are loaded onto the ship. After that, the buyer assumes responsibility for the goods.
• Example: The seller loads the goods onto a ship in Shanghai, and you, as the buyer, assume responsibility for transport and costs after the goods are on board.
• CIF (Cost, Insurance, and Freight): The seller pays for the shipping cost, insurance, and freight to the port of destination. The buyer assumes responsibility after the goods arrive.
• Example: If you buy under CIF terms, the seller handles the costs to ship the goods to New York, but once they arrive, you are responsible for all risks and further costs.
• FCL (Full Container Load): You are shipping enough goods to fill an entire container.
• Example: Your shipment takes up a full 40-foot container, so you book an FCL, ensuring the container only holds your goods.
• LCL (Less than Container Load): You share container space with other shipments because your goods don’t fill a full container.
• Example: Your shipment is small, so you opt for LCL, paying for part of a container shared with other shippers.
• BOL (Bill of Lading): A document issued by the carrier that serves as proof of the shipment and a receipt of the goods.
• Example: Once your goods are loaded on the ship, the carrier issues a BOL, confirming that the shipment is on its way to New York.
• ETA (Estimated Time of Arrival): The predicted date and time when the shipment will reach the destination port.
• Example: The shipping company provides an ETA of October 20th for your goods to arrive at the New York port.
Land Freight (Truck/Rail) Example
You’re transporting goods by truck from Mexico to Canada. Below are the key acronyms and their meanings:
• FCA (Free Carrier): The seller’s responsibility ends once the goods are delivered to a specified carrier or location.
• Example: The seller delivers the goods to a truck at a warehouse in Mexico, and from there, your chosen carrier takes over for the journey to Canada.
• DDP (Delivered Duty Paid): The seller pays for all costs associated with transportation, including duties, taxes, and import fees, until the goods arrive at the buyer’s location.
• Example: The seller arranges delivery to your warehouse in Canada and covers all customs duties and taxes.
• POD (Proof of Delivery): A document signed by the receiver to confirm that the goods have been delivered as agreed.
• Example: After the goods arrive at your facility, you sign the POD to confirm receipt of the shipment.
• HS Code (Harmonized System Code): A standardized code used to classify products in international trade.
• Example: When shipping electronics, you include the correct HS Code to ensure the goods are properly classified for customs in both Mexico and Canada.
Air Freight Example
You’re shipping electronic goods from Los Angeles to Tokyo by air. Below are the key acronyms and their meanings in this process:
• AWB (Air Waybill): A document issued by an airline that serves as both a receipt for the cargo and a contract for the shipment.
• Example: After you hand over your goods to the airline, they provide you with an AWB, confirming the details of the shipment.
• DIM (Dimensional Weight): A calculation of shipping cost based on the size and weight of the package, typically used when size is more impactful than weight.
• Example: Your shipment is large but lightweight, so the airline charges based on DIM rather than the actual weight of the package.
• NFO (Next Flight Out): An urgent shipping service that places your cargo on the next available flight for the fastest possible delivery.
• Example: Your electronics need to arrive in Tokyo within 24 hours, so you use NFO to ensure they’re on the next flight to Japan.
• ULD (Unit Load Device): A container or pallet used to load cargo on an aircraft, maximizing space efficiency.
• Example: Your goods are packed into a ULD for secure and efficient loading onto the airplane.
• ETA (Estimated Time of Arrival): The estimated time the flight will land at the destination.
• Example: The airline provides an ETA of 10 a.m. the following day for the flight carrying your goods to arrive in Tokyo.
This comprehensive list now provides not only the definitions but also practical examples of how each acronym is used in the context of shipping by sea, land, and air.