English for Shipping: Essential Vocabulary & Phrases

"bill of lading"

A legal document issued by a carrier to a shipper that details the type, quantity, and destination of goods being transported; it also serves as a receipt and title document

"The exporter could not release the cargo to the buyer until the original bill of lading had been surrendered at the port of destination."

"sea waybill"

A non-negotiable transport document used for containerised shipments where the consignee takes delivery by identity verification rather than by presenting an original document

"The trading company chose a sea waybill instead of a bill of lading to speed up cargo release because the buyer and seller had an established relationship."

"packing list"

A detailed document accompanying a shipment that lists every item in each package, including dimensions, weight, and quantity, enabling customs inspection and warehouse receiving

"The customs broker cross-checked the packing list against the commercial invoice and found that three cartons of machine parts were missing from the manifest."

"certificate of origin"

An official document certifying the country in which goods were produced or substantially transformed, used to determine applicable customs duties and trade agreement eligibility

"The importer presented a certificate of origin issued by the chamber of commerce to qualify for the preferential tariff rate under the free trade agreement."

"letter of credit"

A payment instrument issued by a bank guaranteeing that a seller will receive payment provided they present the required shipping documents in full compliance with the stated terms

"The Vietnamese manufacturer insisted on a confirmed letter of credit before committing to the production run for the new European buyer."

"commercial invoice"

A formal billing document issued by the seller to the buyer that states the goods sold, their value, terms of sale, and payment instructions, used for customs valuation

"The freight forwarder returned the commercial invoice because it omitted the harmonised tariff code required for export clearance."

"shipper's export declaration"

An official document or electronic filing that exporters must submit to customs authorities providing details of goods being exported, required for statistical and control purposes

"The export compliance officer ensured the shipper's export declaration was filed via the Automated Export System before the vessel departed."

"dangerous goods declaration"

A mandatory document providing details of hazardous materials in a shipment, prepared by the shipper in accordance with IMDG or IATA regulations

"The shipping line refused to load the container until the shipper provided a properly completed dangerous goods declaration for the lithium batteries included in the cargo."

"Free On Board"

An Incoterm (FOB) meaning the seller delivers goods onto the vessel nominated by the buyer at the named port; risk transfers to the buyer once goods are on board

"The contract was priced on Free On Board Shanghai terms, so the Chinese supplier arranged and paid for all inland transport and loading costs up to the vessel."

"Cost, Insurance and Freight"

An Incoterm (CIF) under which the seller pays for carriage and insurance to the named port of destination; risk transfers to the buyer at the port of origin

"Although the goods were sold on Cost, Insurance and Freight Rotterdam terms, the buyer still needed to arrange its own additional insurance for the warehouse storage period."

"Delivered Duty Paid"

An Incoterm (DDP) placing maximum obligation on the seller, who must deliver goods cleared for import and ready for unloading at the named place, paying all duties and taxes

"The US retailer specified Delivered Duty Paid to its distribution centre so that all import customs procedures and costs were handled by the overseas supplier."

"Ex Works"

An Incoterm (EXW) placing minimum obligation on the seller, who simply makes goods available at their premises; the buyer bears all transport risk and costs from that point

"The small manufacturer offered Ex Works pricing from its factory in Guangdong, leaving the buyer responsible for export clearance, freight, and all subsequent costs."

"Carriage Paid To"

An Incoterm (CPT) where the seller contracts and pays for freight to the named destination; risk transfers to the buyer when the carrier takes charge of the goods

"The parties agreed Carriage Paid To Frankfurt Airport, meaning the seller arranged and funded the air freight but risk passed once the cargo was handed to the airline."

"Free Carrier"

An Incoterm (FCA) under which the seller delivers goods to the carrier nominated by the buyer at a named place; suitable for all modes of transport, including multimodal

"The seller agreed to Free Carrier terms at its warehouse gate, after which the buyer's freight forwarder took responsibility for loading and onward shipment."

"transfer of risk"

The point in a transaction at which liability for accidental loss or damage to goods passes from the seller to the buyer, determined by the Incoterm agreed in the contract

"When the container fell overboard during the voyage, the transfer of risk had already occurred at loading, so the importer's marine insurance policy responded to the loss."

"named place of delivery"

The specific location — port, city, terminal, or warehouse — designated in a contract of sale where the delivery obligation and risk transfer take place under a given Incoterm

"The contract stated DDP Hamburg, but an ambiguity over the named place of delivery led to a dispute about whether the seller was responsible for port handling charges."

"full container load"

A shipment in which a single shipper fills an entire container, paying for exclusive use regardless of whether the container is completely packed

"The large export order justified booking a full container load rather than sharing space, as it allowed the exporter to pack and seal the container at their own warehouse."

"less than container load"

A shipment where cargo from multiple shippers is consolidated into a single container, with each shipper paying only for the space their goods occupy

"The startup used less than container load shipments for its first three orders from China to keep freight costs proportionate to its modest import volumes."

"freight forwarder"

A company that organises the shipment of goods on behalf of shippers, booking cargo space, arranging documentation, and coordinating customs clearance

"The freight forwarder secured space on the last vessel before the Chinese New Year holiday and ensured all export documents were filed on time."

"charter party"

A contractual agreement between a shipowner and a charterer for the hire of a vessel or cargo space, setting out the terms for a voyage or time period

"The grain trader entered into a charter party for a Panamax bulk carrier for a voyage from the US Gulf to Japan, fixing the freight rate in dollars per metric tonne."

"demurrage"

A charge levied on a shipper or consignee for occupying a container or vessel berth beyond the agreed free time included in the shipping contract

"The importer incurred $8,000 in demurrage charges because its customs clearance documents were not ready within the five days of free time at the terminal."

"dead freight"

A payment owed to a shipowner when a charterer fails to load the full quantity of cargo agreed in the charter party, compensating the owner for unused space

"Because the harvest was smaller than expected, the commodity trader had to pay dead freight on the 15,000 tonnes of grain capacity it could not fill."

"transshipment"

The process of transferring cargo from one vessel or transport mode to another at an intermediate port before it reaches its final destination

"The shipment from Mombasa to Helsinki required transshipment at Rotterdam, adding two days of transit time but reducing the total freight cost significantly."

"freight rate"

The price charged by a carrier to transport goods between two points, typically quoted per container, per tonne, or per unit and subject to surcharges

"Freight rates on the Asia-Europe trade lane surged by 400% following the Red Sea disruptions as vessels were rerouted around the Cape of Good Hope."

"harmonised system code"

A standardised numerical code of six or more digits used worldwide to classify traded goods, determining applicable customs duties and trade statistics

"The customs broker spent two hours researching the correct harmonised system code for the new biocomposite material because its classification determined whether an anti-dumping duty applied."

"customs bond"

A financial guarantee required by customs authorities that ensures payment of duties, taxes, and penalties if the importer fails to comply with customs regulations

"The importer's customs broker arranged a continuous customs bond covering all annual import entries rather than a single-entry bond for each shipment."

"entry summary declaration"

A document or electronic filing submitted to customs authorities summarising the details of goods being imported, used to assess duties and control cargo

"US Customs and Border Protection required the entry summary declaration to be filed within ten days of cargo arriving at the first US port of entry."

"tariff classification"

The process of assigning the correct harmonised system code to a product, which determines the import duty rate, any applicable trade remedies, and licensing requirements

"The company sought a binding ruling from customs to obtain certainty on the tariff classification of its new product before committing to a large import order."

"antidumping duty"

An additional import tariff imposed on foreign goods sold in a domestic market at prices below their home market value, used to counteract unfair pricing practices

"US steel producers filed a complaint leading to the imposition of antidumping duty rates of up to 178% on certain Chinese steel products."

"bonded warehouse"

A customs-approved facility where imported goods can be stored without payment of duties until they are released for domestic sale or re-exported

"The electronics distributor stored its excess inventory in a bonded warehouse to defer import duty payments and improve its cash flow."

"Authorised Economic Operator"

A certification granted by customs authorities to trustworthy businesses in the supply chain, entitling them to expedited customs procedures and reduced inspections

"The logistics company spent eighteen months achieving Authorised Economic Operator status, which cut its average customs clearance time from two days to four hours."

"customs valuation"

The process of determining the value of imported goods for the purpose of calculating import duties, typically based on the transaction value method under WTO rules

"The customs authority challenged the customs valuation submitted by the importer, arguing that the declared price between related parties was artificially low."

"draft"

The vertical distance between the waterline and the lowest point of a vessel's keel, determining whether a ship can safely enter a particular port or waterway

"The heavily loaded Capesize bulker had a draft of 17.5 metres, which exceeded the maximum depth of the port channel and required partial discharge at anchorage."

"berth"

A designated space at a port terminal or quay where a vessel can moor to load or discharge cargo

"Port congestion meant that the container vessel had to wait at anchor for 36 hours before a berth became available at the terminal."

"manifest"

An official document listing all cargo, passengers, and crew aboard a vessel, required to be filed with port authorities before arrival and departure

"The port authority required the ship's agent to submit the cargo manifest electronically at least 24 hours before the vessel entered the port limit."

"notice of readiness"

A formal notification from a shipmaster to the charterer declaring that the vessel has arrived at the port and is ready to load or discharge, triggering the commencement of laytime

"The master tendered a notice of readiness at 0800 on Tuesday, and the charterer had six hours of allowed time before demurrage began to accrue."

"laytime"

The amount of time allowed under a charter party for a charterer to load or discharge cargo, after which demurrage charges apply if the operation is not complete

"Rain stoppages during loading at the Brazilian soybean terminal interrupted operations for 18 hours, but the charter party specified that weather working days excluded rain, so laytime was suspended."

"port state control"

Inspections conducted by port authorities of foreign-flagged vessels to verify compliance with international maritime safety and environmental conventions

"The cargo vessel was detained by port state control in Rotterdam after inspectors found deficiencies in the fire detection system and incomplete training records for the crew."

"emission control area"

A sea area designated under MARPOL regulations where stricter limits on vessel sulphur and nitrogen oxide emissions apply, requiring the use of low-sulphur fuel or scrubbers

"As the tanker entered the North Sea emission control area, the chief engineer switched from high-sulphur fuel oil to compliant low-sulphur distillate fuel to meet the 0.1% cap."

"carrier liability"

The legal responsibility of a shipping line or carrier for loss, damage, or delay to cargo that occurs while goods are in its care, typically governed by the Hague-Visby Rules

"The cargo owner claimed compensation under the carrier liability provisions of the Hague-Visby Rules after 40 cartons of pharmaceutical products were found water-damaged on arrival."

"export control"

Government regulations restricting the export of certain goods, software, or technology that could have military applications or threaten national security

"The aerospace manufacturer discovered that its new sensor system was subject to export control under the US Export Administration Regulations, requiring a licence before delivery to the customer in India."

"dual-use goods"

Products and technologies that have both civilian and potential military or proliferation applications, subject to stricter export licensing requirements

"The university had to apply for an export licence because the encryption software it developed was classified as dual-use goods under EU regulations."

"supply chain visibility"

The ability to track and monitor the movement of goods, information, and finances at every stage of the supply chain from origin to final delivery

"After the pandemic disruptions, the electronics company invested heavily in supply chain visibility tools to anticipate component shortages before they caused production stoppages."

"counterfeit goods"

Products that bear a trademark identical to or indistinguishable from a registered trademark, manufactured and sold without the authorisation of the rights holder

"Customs officers seized a container of counterfeit goods at the Port of Antwerp, including fake luxury handbags bearing the trademarks of several European fashion houses."

"trade finance"

Financial instruments and products used by companies to facilitate international trade, including letters of credit, documentary collections, and supply chain financing

"The small exporter struggled to compete with larger rivals until it secured trade finance from its bank, allowing it to produce goods and ship them before receiving payment."

"free trade zone"

A designated area within a country where goods can be imported, stored, handled, manufactured, and re-exported under simplified customs procedures and often with tax incentives

"The electronics assembler set up its regional distribution hub in the Jebel Ali free trade zone, benefiting from zero import duties and streamlined re-export procedures."

"conflict minerals"

Natural resources extracted in conflict zones and sold to perpetuate fighting, typically referring to tin, tantalum, tungsten, and gold from the Democratic Republic of Congo and adjoining countries

"The electronics company conducted annual due diligence on its smelter network to ensure that none of its conflict minerals sourcing linked to armed groups in Central Africa."

"shipper of record"

The entity legally identified on export documentation as the party responsible for the export of goods, bearing compliance obligations under export control laws

"When the freight forwarder agreed to act as shipper of record, it assumed full responsibility for obtaining the correct export licences and filing accurate electronic export information."