International Shipping Glossary

Definition: International Commercial Terms published by the International Chamber of Commerce (ICC). They define the responsibilities of buyers and sellers in international trade, including who pays for transportation, insurance, and duties.

Usage: Used in every international sales contract to clarify cost and risk allocation.

Common Incoterms:

• EXW (Ex Works): Seller makes goods available at their premises. Buyer bears all costs and risks from that point.
• FOB (Free on Board): Seller delivers goods on board the vessel. Buyer bears costs and risks from that point.
• CIF (Cost, Insurance & Freight): Seller pays for cost, insurance, and freight to destination port.
• DDP (Delivered Duty Paid): Seller delivers goods to buyer's premises, including all duties and taxes.

Definition: A legal document issued by a carrier to a shipper that details the type, quantity, and destination of the goods being carried. It serves as a receipt, contract, and document of title.

Usage: Required for all sea freight shipments. Used for customs clearance and to claim goods at destination.

Example: When shipping electronics from Guangzhou to Vladivostok, the carrier issues a B/L showing 500 cartons of smartphones, weight 5,000 kg, destination Vladivostok port.

Definition: A unit of cargo capacity equal to one 20-foot long container. Used to describe the capacity of container ships or terminals.

Usage: Industry standard for measuring container ship capacity and port throughput.

Example: A large container ship might have a capacity of 20,000 TEU, meaning it can carry 20,000 standard 20-foot containers.

Definition: A unit of volume equal to one cubic meter. Used to measure cargo volume for LCL (Less than Container Load) shipments.

Usage: Freight forwarders calculate LCL shipping costs based on CBM.

Example: A shipment of furniture measuring 2m × 1m × 1.5m = 3 CBM. LCL rate might be $100/CBM, so shipping cost = $300.

Definition: A shipment that occupies the entire capacity of a container. The shipper has exclusive use of the container.

Usage: Used when you have enough cargo to fill a container (typically 10+ CBM for 20ft, 25+ CBM for 40ft).

Example: Shipping 500 cartons of electronics from Yiwu to Moscow. Total volume 28 CBM. Book a 40ft container (FCL) instead of LCL to save costs.

Definition: A shipment that does not fill a full container. Multiple shippers' cargo is consolidated into one container.

Usage: Used for smaller shipments (under 10 CBM). More expensive per CBM than FCL but more flexible.

Example: Shipping 3 CBM of samples from Shenzhen to Almaty. Use LCL service, pay per CBM rate.

Definition: A company or individual that arranges shipping and logistics services on behalf of shippers. Acts as an intermediary between shippers and carriers.

Usage: Freight forwarders handle documentation, customs clearance, cargo insurance, and coordinate multi-modal transport.

Example: ChenXin Cargo arranges rail freight from Guangzhou to Moscow, handling Chinese export customs, Russian import customs, and door-to-door delivery.

Definition: The process of getting permission from customs authorities to import or export goods. Involves submitting documents, paying duties and taxes, and passing inspections.

Usage: Required for all international shipments. Delays in customs clearance can add days or weeks to transit time.

Example: When importing machinery to Russia, you need a customs broker to file the import declaration, pay 15% import duty + 20% VAT, and pass customs inspection.

Definition: An internationally standardized system of names and numbers to classify traded products. Used by customs authorities to determine duties and taxes.

Usage: Required on commercial invoices and customs declarations. Determines import duty rates.

Example: Smartphones have HS code 8517.12. Cotton t-shirts have HS code 6109.10. Using the wrong HS code can result in incorrect duty payments or customs delays.

Definition: The time it takes for cargo to move from origin to destination. Includes transportation time but usually excludes customs clearance and last-mile delivery.

Usage: Used to compare different shipping modes and plan supply chains.

Example: Rail freight from Guangzhou to Moscow: 16-20 days transit time. Sea freight: 35-45 days. Air freight: 3-7 days.

Definition: Charges levied by the carrier when the shipper or consignee exceeds the allowed free time for using the container at the port or terminal.

Usage: Applies when cargo is not picked up or returned within the free period (typically 5-7 days).

Example: If you don't pick up your container from the port within 7 days of arrival, you'll pay demurrage charges of $50-100 per day.

Definition: A document issued by a bank guaranteeing that a seller will receive payment up to a certain amount, provided that the seller presents compliant documents.

Usage: Used in international trade to reduce payment risk for both buyers and sellers.

Example: A Russian buyer opens an L/C for $100,000. The Chinese supplier ships goods and presents the B/L, invoice, and packing list to the bank. The bank pays the supplier upon document verification.

Definition: A document certifying the country where the goods were manufactured. Required for customs clearance and to determine duty rates.

Usage: Required by most importing countries. May qualify for preferential duty rates under free trade agreements.

Example: Goods shipped from China to Russia need a Certificate of Origin (Form A or Form E) to qualify for reduced import duties under certain trade agreements.

Definition: Goods that pose a risk to health, safety, property, or the environment during transportation. Subject to special packaging, labeling, and documentation requirements.

Usage: Classified into 9 classes (explosives, gases, flammable liquids, etc.). Each class has specific transport regulations.

Example: Lithium batteries are Class 9 dangerous goods. Shipping them requires special packaging, MSDS documents, and compliance with IATA (air) or IMDG (sea) regulations.

Definition: A company that provides ocean transportation services without owning or operating vessels. Acts as a carrier to shippers and a shipper to vessel operators.

Usage: NVOCCs issue their own B/L and consolidate shipments from multiple shippers.

Example: ChenXin Cargo, as an NVOCC, can issue B/L for sea freight shipments even though we don't own container ships. We book space with vessel operators and provide consolidated services to our clients.

Definition: The transport of goods over a short distance, typically from a port or terminal to a nearby warehouse or final destination.

Usage: Common in intermodal transport to connect ocean ports with inland destinations.

Example: After your container arrives at Vladivostok port, drayage service transports it to a warehouse 50 km away.

Definition: The transfer of cargo from one vessel or vehicle to another during transit. Common in sea freight when no direct route is available.

Usage: Used when origin and destination are not directly connected by a single carrier or route.

Example: Shipping from Guangzhou to Novorossiysk (Black Sea) may involve transshipment at Singapore or Colombo ports.

Definition: Charges applied when a container is kept outside the port or terminal beyond the allowed free time.

Usage: Different from demurrage (which applies inside the port). Detention applies when you take the container out but don't return it on time.

Example: You pick up your container from the port and deliver it to your warehouse. If you don't return the empty container within 5 days, you pay detention charges.

Definition: A measure of how much weight a ship can safely carry, including cargo, fuel, crew, and supplies. Expressed in metric tons.

Usage: Used to describe the capacity of bulk carriers and tankers.

Example: A bulk carrier with 50,000 DWT can carry up to 50,000 metric tons of cargo plus fuel, water, and crew.

Definition: TEU = Twenty-foot Equivalent Unit (20ft container). FEU = Forty-foot Equivalent Unit (40ft container). 1 FEU = 2 TEU.

Usage: Used to describe container sizes and ship capacity.

Example: A 40ft container (1 FEU) has roughly double the capacity of a 20ft container (1 TEU). For heavy cargo, 20ft is preferred; for light, bulky cargo, 40ft is better.