Shipping for Beginners: Basic Notions/Terminology/Abbreviations

 When diving into the world of shipping, you'll come across a range of terms, abbreviations, and concepts that are essential for navigating the industry. Here’s a basic guide to help you get started:

1. Key Shipping Terms

• Freight: The goods being transported or the charge for transporting them.
• Cargo: Goods or merchandise carried on a ship, aircraft, or motor vehicle.
• Consignment: A shipment of goods to a consignee (the person receiving the goods).
• Bill of Lading (BOL): A legal document between the shipper and carrier detailing the type, quantity, and destination of the goods.
• Shipper: The person or company that sends the cargo.
• Consignee: The person or company receiving the shipment.
• Carrier: The company responsible for transporting goods (could be by sea, air, or land).

2. Common Shipping Abbreviations

• FOB (Free On Board): The seller is responsible for the goods until they are loaded onto the ship. Afterward, the buyer assumes responsibility.
• CIF (Cost, Insurance, Freight): The seller covers the cost, insurance, and freight to bring goods to the port of destination.
• EXW (Ex Works): The seller makes the goods available at their premises, and the buyer covers all transportation costs and risks.
• ETA (Estimated Time of Arrival): The expected date and time that a shipment will arrive at its destination.
• ETD (Estimated Time of Departure): The scheduled date and time when a shipment will depart from the shipping point.
• TEU (Twenty-foot Equivalent Unit): A measure of cargo capacity, based on a 20-foot long container.
• LCL (Less than Container Load): Goods that do not fill a container and are grouped with other consignments.
• FCL (Full Container Load): When a shipper has enough goods to fill an entire container.
• B/L (Bill of Lading): A document issued by a carrier to acknowledge receipt of cargo for shipment.

3. Shipping Modes

• Air Freight: Transporting goods by airplane, often used for fast shipping of small or high-value items.
• Sea Freight: Moving large volumes of goods via container ships; often used for international trade.
• Road Freight: Transportation of goods via trucks or trailers, typically used for short to medium distances.
• Rail Freight: Moving goods via trains, especially in regions with good rail infrastructure.

4. Shipping Parties Involved

• Freight Forwarder: A company that organizes shipments for individuals or companies to get goods from the manufacturer to the market or final point of distribution.
• Customs Broker: A professional who helps shippers clear their goods through customs by ensuring all import/export regulations are met.
• 3PL (Third-Party Logistics Provider): A company that provides outsourced logistics services, which can include transportation, warehousing, inventory management, and more.

5. Basic Documents in Shipping

• Commercial Invoice: A document from the seller to the buyer that provides details about the goods sold and their value for customs purposes.
• Packing List: A document that lists all items in a shipment and their packaging.
• Certificate of Origin: A document declaring the country where the goods were manufactured.

6. Incoterms (International Commercial Terms)

Incoterms define the responsibilities of buyers and sellers for the delivery of goods. Some important ones include:

• DAP (Delivered at Place): The seller is responsible for delivering the goods to a specified destination.
• DDP (Delivered Duty Paid): The seller covers all costs, including duties, to deliver the goods to the buyer’s location.

Understanding these terms and abbreviations will help you navigate the shipping industry more efficiently.