GENERAL TRAINING GLOBAL FORWARDING DIVISION
GENERAL DEFINITIONS:
FREIGHT FORWARDING:
The action or group of actions oriented to plan and coordinate the movement of commodities across
international borders on behalf of shippers.
It is a service-based practice.
FREIGHT FORWARDER:
A person or company that organizes shipments for individuals or corporations to get goods from the
manufacturer or producer facility to a final point of distribution.
Forwarders contract with carriers to move the cargo from one country to another. A forwarder does not
move the cargo directly but acts as an expert in the logistics network.
International freight forwarders typically handle international shipments and have additional expertise
in preparing and processing customs documentation and performing activities pertaining to
international shipments.
TYPE OF FREIGHT TRANSPORTATION
There are four major types of transportation
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Ground: Road- In land
Rail: Train
Ocean: Vessel
Air
Although these are the main categories of freight transportation, each method has its own process that
differs from other.
SHIPPING PROCESS
FREIGHT FORWARDER
Cargo pick
up
In land trasportation
WAREHOUSE
PORT OF LOADING
Bill of Lading / Export
declaration - Customs
clearance
Loading and Shipping
Cargo released to
consignee
Example:
Inland transportation
PORT OF DISCHARGE
SHIPPING PARTIES TERMINOLOGY
IMPORTER:
Also known as consignee, is the person or company whose to receive the commodity at destination and
is liable for import charges.
EXPORTER:
Also known as shipper, I the person or company selling the commodity to the consignee and whose
behalf the forwarding agent is to issue the export declaration.
HAULAGE:
Moving the container from warehouse to the Port of Loading via road or railway.
NOTIFY PARTY:
Company or companies involved in a shipping process and must be timely informed, it also will be part
of the B/L
TRUCKER:
The company contracted to move the containers from the POL (port of loading) to the warehouse (drop
off) and pick up full containers to deliver at the POL.
CARRIER:
Company providing ocean transportation of goods.
EQUIPMENT TERMINOLOGY
CONTAINER:
Equipment used by carriers for goods transportation regulated by the international transpirations law.
There are three different types of containers that can be used depending on the type of commodity as
below.
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General-purpose containers
Open top containers
Flat rack containers
Refrigerated containers
Tank containers
- GENERAL PURPOSE CONTINER:
Used for general cargo that can be shipped under the container's dimension limits.
- OPEN TOP CONTAINER:
have an open top covered by a tarpaulin instead of a solid roof. This enables oversized cargo such as
timber and scrap metal to be loaded from the top. Open top containers normally also have end doors,
like closed containers, to give flexibility for loading and unloading.
- FLAT RACK CONTAINERS:
Used when the cargo cannot fit the standard container dimensions. A flat rack only has walls or support
post on the ends, which allows for the loading of cargo from the top and/or sides.
- REFRIGERATED CONTAINER:
Refrigerated containers, also called reefer containers, are used for goods that need to be temperature
controlled during shipping.
- TANK CONTAINER:
A tank container or tank-tainer is an intermodal container for the transport of liquids, gases and
powders as bulk cargo. It is built to the ISO standards, making it suitable for different modes of
transportation; as such, it is also called an ISO tank.
Containers can be differentiated by Sizes as below:
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20 feet containers: Max weight of 20 kg (including containers weight)
40 feet containers: Max weight 25 kg (including containers weight)
40 feet high cube container: 26 kg (including containers weight)
VESSEL:
A craft for traveling on water, now usually one larger than an ordinary rowboat, a ship or boat.
VOYAGE:
Identification number of a specific vessel trip scheduled in a period of time.
DOCUMENTATION DEFINITIONS
QUOTATION:
Offer sent by the seller (Freight forwarder) to the customer specifying terms and conditions of the
service including freight rates.
PUERCHASE ORDER:
A commercial document also Known as Booking request sent by the buyer or Shipper to the Freight
forwarder specifying number of containers, size of container POL, POD and desired sailing date.
BOOKING CONFIRMATION:
Legal document sent by the freight forwarder to the customer informing the reservation made in a
specific vessel – voyage under a carrier contract.
It must contain the following:
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Sailing Date: Estimated date on which the vessel will depart from the Port of Origin
Port Cut off: Date and time limit to gate-in the containers in the Port of Origin. After the
specified date and time, the port won’t receive any container for thar specific reservation.
Documentation Cut off: Date and time limit to submit the mandatory documentation for
international transportation (Export Declaration – Shipping instructions).
ERD: Early receiving date referring to the earliest date and time in which containers can be
received by the Port of Origin, any container in gated for a specific reservation before ERD will
generate additional charges.
Number of containers including container size
Vessel name
Voyage number
Booking number: Identification number used for track and trace purposes
Carrier name
Shipper Name
PACKING LIST:
Document sent by the seller to the warehouse containing the instructions of the material to dispatch for
a specific purchase order and booking number.
It must contain material quantities, type of material, weight and dimensions.
CONTAINER LIST:
Document sent by the warehouse informing the material loaded in a container for a specific booking
including net weight, gross weight, number of units (bags, cartons, crates, drums) used to complete
export documentation.
AES – EXPORT DECLARATION:
Legal document submitted by the Freight Forwarder based on the information received by the
warehouse in which the agent is reporting the US CUSTOMS the mandatory information necessary to
move the cargo across international borders such as
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Type of commodity:
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HS CODE: numeric identification under USA customs regulations for all specific commodities.
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Net weight: Weight of the goods without packaging
Gross weight: weight of the cargo including packaging
FOB Value: Basic price of the goods
SHIPPER: Company exporting the goods
USPPI: The person in the United States that receives the primary benefits, monetary or
otherwise, of the export transaction. Generally, that person is the U.S. seller, manufacturer.
CONSIGNEE: Company buying the goods and final receiver
FREIGHT FORWARDER: Company in charge of the logistics process and owner of the contract
with the carrier
POL
POD
CARRIER
VESSEL
VOYAGE
BOOKING NUMBER
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SHIPPING INTRUCTIONS:
Legal document submitted by the Freight Forwarder to the carrier informing the cargo loaded in each
container reserved for each booking based on the instructions received by the warehouse and the
shipper
In most cases the SI must contain the following
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Container numbers: Identification of each container
Seal number: Identification of the seal placed in the container by the warehouse after loading
the container.
Net weight
Gross Weight
Number of units
Type of commodity
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HS CODE
Shipper: Including contact information
Notify Party: Including contact information
Consignee: Including contact information
Vessel name
Voyage
Booking number
Release requirements: Given by the shipper and usually in most cases BL release is done at
destination.
ITN: Export declaration number.
BILL OF LADING DRAFT:
Including contact information:
Bill of Lading generated by the carrier after documentation is completed and needs to be approved by
the shipper upon revision.
SHIPPING BILL OF LADING:
Final BL sent to shipper after approval necessary to release the cargo at destination.
CARGO MANIFEST:
A cargo manifest is a consolidated list of all the cargo that is on board a cargo vessel. The list of all cargo
carried on the vessel will appear under the vessel name and identification marks of the vessel.
It would also show the route taken by the vessel. A manifest, in general, is a complete list of the cargo or
passengers. Just like the cargo manifest, the passenger manifest lists details of all the passengers who
are onboard a ship or airplane. This list would include details of the crew members as well.
Typically, a cargo manifest would list all the bills of lading along with the above details and the total
number of goods being transported shown per bill of lading. However, the individual bills of ladings will
be attached to this cover sheet.
ARRIVAL NOTICE:
Alert sent by the carrier or Forwarding agent to the consignee and Notify Party informing the arrival of a
shipment at destination.
CHARGES DEFITIONS
SALE RATE:
Price assigned to a shipment under the contract with each carrier in a specific sailing date. Usually are
subject to change.
DOCUMENTATION FEE:
Price charged to the shipper to process Export documentation
TRUCKING FEE:
Price charged to the shipper for in land containers movement.
STORAGE:
Storage is a fee levied on a shipping line by the port authority if their container stays at the port or
terminal beyond the laytime given to clear them.
DEMURRAGE
Is a charge imposed by a shipping line to the consignee if the container isn't cleared and returned to a
designated empty depot in specified free days after cargo has arrived at destination.
The terminal provides a determine number of free days after cargo arrives to pick up the container and
clear the cargo if container is not picked during those free days demurrage charges will be applied
DETENTION:
Detention is another charge that can be levied by a shipping transport provider for not returning an
empty container to a container yard or port after an agreed time.
Carriers provide a certain number of free days to return empty containers at their destination after the
consignee has picked up, if the container is returned after the given days detention charges will apply.
PER DIEM:
Is a fee charged by carriers at Origin when a container is pulled to be loaded and is not in gated within
the free days provided.
Carriers provide a certain number of free days at origin after an empty container is pulled from the port
to be in gated full, if a container stays out of the POL longer than the given days Per diem charges will
apply.
INCOTERMS
Incoterms can be defined as the universal set of rules and guidelines that help facilitate trade. In
essence, they provide a common language traders can use to set the terms for their trades.
Buyers and sellers can use Incoterms in a variety of activities necessary to conduct business. Typical
activities that call for the use of Incoterms include filling out a purchase order, labeling a shipment for
transport, completing a certificate of origin, or documenting a free carrier agreement (FCA)
Incoterms Rules for Any Mode of Transport
Some common examples of Incoterms rules for any mode of transportation include differentiate
depending on the responsibility assumed by seller and Buyer under their agreement. The seven
Incoterms for any mode of transport are below:
EXW: Ex Works:
The seller makes the goods available at its location, so the buyer can take over all the transportation
costs and also bears the risks of bringing the goods to their final destination.
FCA: Free Carrier:
The seller hands over the goods at the disposal of the first carrier. After the buyer takes over all the
costs, the risk passes when the goods are handed over to the first carrier.
Free Alongside Ship (FAS):
The seller must place the goods alongside the ship at the named port, the risk of loss or damage to the
goods passes when the goods are alongside the ship, and the buyer bears all the costs from that
moment on.
Free on Board (FOB):
The seller must load the goods on board the ship, nominated by the buyer. Cost and risk are divided
when the goods are actually on board.
Cost and Freight (CFR):
The seller must pay the costs and freight to bring the goods to the port of destination. Although the risk
is transferred to the buyer when the goods are loaded on the ship.
Cost, Insurance and Freight (CIF):
It’s exactly like CFR except that the seller must in addition procure and pay for the insurance.
Carriage Paid To (CPT):
The seller delivers the goods to the carrier or another person nominated by the seller at an agreed place
(if any such place is agreed between parties) and that the seller must contract for and pay the costs of
carriage necessary to bring the goods to the named place of destination.
Carrier and Insurance Paid to (CIP):
The seller pays for the carriage and insurance to the named destination point, but risk passes when the
goods are handed over to the first carrier.
Delivered At Place (DAP):
The seller delivers when the goods are placed at the disposal of the buyer on the arriving means of
transport ready for unloading at the named place of destination. The seller bears all risks involved in
bringing the goods to the named place.
Delivered at Place Unloaded (DPU):
The seller delivers the goods to a named place by the buyer and unloads them to be transposed. The
risk is transferred to the buyer when the goods are unloaded at their destination.
Customs clearance at destination is the buyer's responsibility.
Delivered Duty Paid (DDP):
The seller is responsible for delivering the goods to the named place in the country of the buyer, and
pays all costs in bringing the goods to the destination including customs clearance at destination.
The risk is transferred to the buyer once the goods are delivered to the named place. Unloading is under
the buyer's responsibility.