Trade Glossary

154 terms shown

A

Ad valorem duty

A customs duty calculated as a percentage of the declared customs value of the goods, rather than as a fixed amount per unit or per kilogram. Most tariff lines worldwide are ad valorem. Estimate duty with the import duty calculator.

Advising bank

A bank, usually in the exporter's country, that checks the apparent authenticity of a letter of credit and passes it on to the beneficiary. Advising alone does not commit the bank to pay; that requires confirmation.

Air waybill (AWB)

The transport document issued by an airline or its agent for air cargo. It acts as a receipt and evidence of the contract of carriage but, unlike an ocean bill of lading, it is not a document of title, so the goods are released to the named consignee.

All-in rate

A freight quote that bundles the base rate with the main surcharges, such as fuel and currency adjustments, into a single figure. Always confirm which origin and destination charges are still excluded.

Anti-dumping duty

An additional import duty imposed when an investigation finds that goods are being exported below their normal value and that this is injuring the domestic industry of the importing country. It is charged on top of the ordinary tariff. See also dumping.

AQL (Acceptable Quality Limit)

The worst average defect level a buyer will tolerate in a sampling inspection. Used with standard sampling tables (commonly ISO 2859-1), it sets how many units are checked and how many defects are allowed before a lot fails; buyers usually set separate limits for critical, major and minor defects.

Arrival notice

A notice sent by the carrier or forwarder to the consignee or notify party that a shipment is about to arrive, listing the cargo details and the charges payable before release.

ATA carnet

An international customs document that lets trade-show exhibits, commercial samples and professional equipment enter participating countries temporarily without paying duties or posting separate security, provided they are re-exported within the carnet's validity. Carnets are issued through national chambers of commerce.

Authorized Economic Operator (AEO)

A status granted by customs authorities to businesses that meet set standards for supply-chain security and compliance. Benefits typically include fewer inspections and faster clearance, and many countries mutually recognize each other's programmes.

B

Back-to-back letter of credit

A structure in which an intermediary uses a letter of credit received from its buyer as backing to open a second credit in favour of its own supplier. Common with traders who prefer the end buyer and the manufacturer not to deal directly.

Beneficiary

The party in whose favour a letter of credit or guarantee is issued, normally the seller or exporter, who receives payment on presenting compliant documents.

Bill of exchange (draft)

A written, unconditional order from one party (the drawer) to another (the drawee) to pay a specified sum either on demand or at a fixed future date. Used in documentary collections and in many letters of credit.

Bill of lading (B/L)

The key ocean transport document issued by the carrier. It is a receipt for the goods, evidence of the contract of carriage and, when issued in negotiable "to order" form, a document of title that controls who may claim the cargo. See the trade documents checklist.

Bonded warehouse

A customs-approved facility where imported goods can be stored without paying duties and import taxes until they are released into the domestic market. Goods re-exported directly from bond usually never incur those charges.

Booking confirmation

The carrier's or forwarder's acceptance of a cargo booking, stating the vessel or flight, routing, cut-off times and where to collect empty containers.

Break bulk

Cargo shipped as individual pieces, bundles, crates or pallets and loaded directly into a vessel's hold rather than in containers. Typical for oversized machinery, steel and project cargo.

Bunker adjustment factor (BAF)

A surcharge ocean carriers add to the base freight rate to reflect changes in marine fuel (bunker) prices. It is revised periodically and may appear under other names, such as fuel surcharge.

C

Cargo insurance

Insurance covering goods against loss or damage in transit. Cover is commonly based on the Institute Cargo Clauses, where clause (A) is the broadest "all risks" form and clause (C) the most limited. Because carrier liability is capped by law and convention, cargo insurance fills the gap.

Carrier

The company that performs, or contracts to perform, the actual transport: a shipping line, airline, rail operator or trucking company.

Cash against documents (CAD)

A payment term in which the buyer pays, usually through the banks, in exchange for the shipping documents needed to take delivery of the goods. In practice it works the same way as documents against payment.

CBM (cubic metre)

The standard unit of freight volume, equal to a space of 1 m × 1 m × 1 m. LCL sea freight is usually priced per CBM or per revenue ton. Calculate CBM.

Certificate of origin (CO)

A document certifying the country in which goods were produced, often issued or endorsed by a chamber of commerce. A preferential certificate or origin statement is needed to claim reduced duty under a free trade agreement.

CFR (Cost and Freight)

An Incoterms rule for sea and inland waterway transport. The seller pays freight to the named destination port, but risk passes to the buyer once the goods are on board the vessel at the port of shipment, and the buyer arranges its own insurance.

Chargeable weight

The weight a carrier uses to bill a shipment: the greater of the actual gross weight and the volumetric weight. Light, bulky goods are therefore charged for the space they occupy rather than their mass. Work out chargeable weight.

CIF (Cost, Insurance and Freight)

An Incoterms rule for sea and inland waterway transport. The seller pays freight and minimum insurance cover to the destination port, but risk transfers to the buyer when the goods are loaded on board at origin. CIF is also the valuation basis for customs duty in many countries.

CIP (Carriage and Insurance Paid To)

An Incoterms rule for any mode of transport. The seller pays carriage and insurance to the named destination, while risk passes to the buyer when the goods are handed to the first carrier. Under Incoterms 2020 the seller must buy broader insurance cover than under CIF.

Commercial invoice

The seller's invoice to the buyer, describing the goods, quantities, unit prices, currency, Incoterms rule and parties. Customs uses it as the main basis for valuation and duty assessment, so it must match the other shipping documents.

Confirmed letter of credit

A letter of credit to which a second bank, usually in the exporter's country, adds its own undertaking to pay. It protects the seller against the risk of the issuing bank, or the buyer's country, failing to pay.

Consignee

The party to whom goods are shipped and who is entitled to take delivery at destination, as named on the transport document.

Consolidation

Combining several smaller shipments from different shippers into one container or air unit so they share the transport cost. The consolidator issues house documents to each individual shipper.

Container freight station (CFS)

A facility where LCL cargo is received and packed into containers for export, or unpacked and released to consignees after import.

Container yard (CY)

The area at or near a port terminal where full and empty containers are stored, received and released. "CY/CY" terms mean the carrier's responsibility runs from yard to yard.

Countervailing duty (CVD)

An extra import duty that offsets subsidies a foreign government gives its producers or exporters, applied when those subsidized imports are found to harm the domestic industry.

CPT (Carriage Paid To)

An Incoterms rule for any mode of transport. The seller pays carriage to the named destination, but risk passes to the buyer as soon as the goods are handed to the first carrier.

Currency adjustment factor (CAF)

A freight surcharge that compensates carriers for exchange-rate movements between the currency of the freight rate and the currencies in which they incur costs.

Customs bond

A financial guarantee, normally underwritten by a surety company, that an importer will pay the duties, taxes and penalties owed to customs. Some countries, notably the United States, require one for formal entries.

Customs broker

A licensed individual or firm that prepares and files import and export declarations, classifies goods, calculates duties and deals with customs on the trader's behalf. Read customs clearance basics.

Customs value

The value on which ad valorem duty is calculated. Most countries follow the WTO Valuation Agreement, starting from the price actually paid with set adjustments; some include international freight and insurance (CIF basis), others exclude them (FOB basis). Try the import duty calculator.

Cut-off time

The deadline by which cargo, containers or documents must reach the terminal or carrier to make a scheduled sailing or flight. Missing it usually means the shipment rolls to the next departure.

D

D/A (Documents against Acceptance)

A documentary collection in which the bank releases the shipping documents once the buyer accepts a time draft, promising to pay at a future date. The seller is extending credit and carries the risk of non-payment at maturity. Compare international payment terms.

D/P (Documents against Payment)

A documentary collection in which the buyer must pay a sight draft before the bank releases the documents needed to claim the goods. Safer for the seller than open account, but with no bank guarantee of payment.

Dangerous goods (DG)

Cargo that poses a risk to health, safety or property in transport, such as flammable liquids, corrosives, lithium batteries and compressed gases. It must be classified, packed, labelled and declared under the relevant rules, such as the IMDG Code for sea and the IATA Dangerous Goods Regulations for air.

DAP (Delivered at Place)

An Incoterms rule for any mode of transport. The seller bears cost and risk until the goods arrive, ready for unloading, at the named destination; the buyer handles unloading, import clearance, duties and taxes.

DDP (Delivered Duty Paid)

The Incoterms rule placing maximum obligation on the seller, who delivers to the named destination cleared for import with duties and taxes paid. Before agreeing to it, sellers should confirm they can legally act as importer and recover import VAT or GST. Incoterms 2020 explained.

De minimis

A value threshold below which imported goods are exempt from duty and/or import tax, or qualify for simplified clearance. Thresholds vary widely by country and may differ for duty and for tax.

Deadweight tonnage (DWT)

The total weight a vessel can safely carry, including cargo, fuel, fresh water, stores and crew, expressed in metric tonnes. A standard measure of ship size.

Demurrage

A charge for leaving a carrier's full container in the port terminal beyond the free time allowed. In ship chartering it also means compensation owed to the owner when loading or discharge exceeds the agreed laytime.

Detention

A charge for keeping the carrier's container outside the terminal, for example at the importer's warehouse, beyond the free time before returning it empty. Some carriers combine detention and demurrage into a single tariff.

Discrepancy

Any inconsistency between the documents presented under a letter of credit and the credit's terms, or between the documents themselves. A discrepancy allows the bank to refuse payment unless the applicant waives it.

Door-to-door

A service in which one provider handles transport from the seller's premises to the buyer's premises, covering pick-up, main carriage and final delivery.

DPU (Delivered at Place Unloaded)

An Incoterms rule for any mode of transport and the only rule in which the seller must unload the goods at the named destination. It replaced DAT in Incoterms 2020.

Drawback (duty drawback)

A refund of customs duties paid on imported goods that are later exported, either unchanged or as part of a manufactured export product. Claims usually require detailed records and must be filed within set deadlines.

Dual-use goods

Products, software or technology with both civilian and potential military uses, such as certain electronics, chemicals and encryption items. Their export is controlled and often requires a licence.

Dumping

Exporting goods at a price below their normal value, typically the price in the exporter's home market or the cost of production. When it causes material injury, importing countries may respond with anti-dumping duties.

Dunnage

Material such as timber, airbags, mats or bracing used to secure, support and protect cargo inside a container, truck or hold. Wooden dunnage may need to meet ISPM 15 treatment rules.

E

EORI number

The Economic Operators Registration and Identification number that businesses need to import into or export from the European Union or the United Kingdom. It identifies the trader on customs declarations.

ETA / ETD

Estimated Time of Arrival and Estimated Time of Departure for a vessel, flight or vehicle. Both are forecasts that change often, so plan buffers around them.

Excise duty

A tax on specific product categories such as alcohol, tobacco and fuel, charged on imports as well as on domestic production. It is separate from customs duty and from VAT or GST.

Export declaration

The formal statement filed with the exporting country's customs describing goods leaving the country. It supports export controls and trade statistics, and serves as proof of export for tax purposes.

Export licence

Government permission to export goods, technology or software that are subject to controls, such as dual-use items, military goods, cultural property or shipments to sanctioned destinations.

EXW (Ex Works)

The Incoterms rule with the least seller obligation: goods are made available at the seller's premises and the buyer bears every cost and risk from there, including loading and export clearance. For international sales, FCA is often more practical. Compare all eleven rules.

F

Factoring

Financing in which a business sells its unpaid invoices to a factor at a discount in exchange for immediate cash. In export factoring, the factor may also take on the risk of the foreign buyer not paying.

Factory audit

An on-site assessment of a supplier's facility covering capability, capacity and quality systems or, in a social audit, labour, health and safety conditions. Usually carried out before a first order is placed.

FAS (Free Alongside Ship)

An Incoterms rule for sea and inland waterway transport in which the seller delivers export-cleared goods alongside the buyer's vessel at the named port of shipment. Used mainly for bulk and break-bulk cargo.

FCA (Free Carrier)

An Incoterms rule for any mode of transport in which the seller hands export-cleared goods to the buyer's nominated carrier at a named place. It suits containerized cargo better than FOB because risk passes when the carrier takes charge of the goods. Use the Incoterms 2020 tool.

FCL (Full Container Load)

A shipment in which one shipper books an entire container, paying per container regardless of how full it is. Once volumes are large enough it is usually cheaper per unit than LCL. Check what fits with the container load calculator.

Feeder vessel

A smaller ship that carries containers between minor ports and large hub ports, where the cargo is transshipped to or from mainline vessels.

FEU (Forty-foot Equivalent Unit)

A unit of container capacity equal to one 40-foot container, or two TEU.

FOB (Free on Board)

An Incoterms rule for sea and inland waterway transport: the seller loads the goods on board the buyer's nominated vessel at the named port of shipment, and risk passes once they are on board. It is widely quoted in sourcing, though FCA is technically the better fit for containers. Read the Incoterms guide.

Force majeure

A contract clause that excuses a party from performing when prevented by extraordinary events beyond its control, such as natural disasters, war or government action. Its effect depends on the exact wording and the governing law.

Free time

The period a carrier or terminal allows for collecting, using and returning a container, or for storing cargo, before demurrage, detention or storage charges start.

Free trade agreement (FTA)

A treaty between two or more countries that reduces or removes tariffs and other barriers on qualifying goods traded between them. Goods must meet the agreement's rules of origin to benefit.

Free trade zone (FTZ)

A designated area where goods can be landed, stored, processed or re-exported without paying customs duty until they enter the domestic market. Also called a foreign trade zone, free zone or special economic zone, depending on the country.

Freight collect

Freight charges paid by the consignee at destination rather than by the shipper at origin.

Freight forwarder

A company that organizes shipments for shippers: booking space with carriers, preparing documents and arranging consolidation, insurance and often customs clearance. Many forwarders also operate as NVOCCs.

Freight prepaid

Freight charges paid by the shipper at origin, before or at the time of shipment.

G

General average

A maritime principle under which everyone with a financial interest in a voyage shares proportionately in a deliberate sacrifice or expense made to save the ship and cargo, such as jettisoning goods or paying for salvage. Cargo owners may have to post security before release even if their own goods were undamaged.

GRI (General Rules of Interpretation)

The six legally binding rules that govern how goods are classified in the Harmonized System. They are applied in order, starting with the wording of the headings and the section and chapter notes. HS codes explained.

Gross weight

The total weight of a shipment including packaging, pallets and packing materials. Net weight is the goods alone; tare weight is the packaging or container.

Groupage

Another word for consolidation, widely used in Europe: combining several small consignments into one shared load.

H

Harmonized System (HS)

The international product nomenclature maintained by the World Customs Organization and used by most countries as the basis of their customs tariffs and trade statistics. It groups goods into sections, chapters, headings and subheadings. Learn how the HS works.

High cube (HC)

A container one foot taller than a standard container of the same length, typically 9 ft 6 in high, giving extra volume for light, bulky cargo.

House bill of lading (HBL)

A bill of lading issued by a forwarder or NVOCC to an individual shipper for that shipper's cargo, which usually travels under a master bill issued by the actual ocean carrier.

HS code

The numeric code that identifies a product in the Harmonized System. The first six digits are internationally harmonized; each country adds further digits for its own tariff and statistical needs. Find an HS code.

I

IEC (Importer Exporter Code)

A ten-character business identification number issued in India by the Directorate General of Foreign Trade (DGFT). It is required for most commercial imports and exports.

Import licence

Government permission needed to import certain restricted goods, such as some agricultural products, chemicals, weapons or items subject to quota.

Importer of record (IOR)

The party legally responsible for making sure imported goods comply with local law, for filing the import declaration and for paying duties and taxes. See customs clearance basics.

Incoterms®

Standard trade terms published by the International Chamber of Commerce (ICC) that define where delivery happens, when risk transfers and which costs each party pays. The current edition, Incoterms 2020, contains eleven rules. Incoterms® is a registered trademark of the ICC. Explore the Incoterms 2020 tool.

Inland haulage

Road or rail transport of containers between a port and an inland location. Carrier haulage means the shipping line arranges it; merchant haulage means the shipper or consignee does.

Inspection certificate

A document from an independent inspection company or the buyer's agent confirming that goods were checked against agreed specifications, quantity or quality before shipment. Often required under a letter of credit.

Insurance certificate

A document issued under an open cargo policy as evidence that a particular shipment is insured, stating the insured value, the risks covered and how to claim. Required for CIF and CIP sales.

Irrevocable letter of credit

A letter of credit that cannot be amended or cancelled without the agreement of all parties involved. Under UCP 600 every credit is irrevocable unless clearly stated otherwise.

ISF (Importer Security Filing)

A United States requirement for importers to send specified shipment data electronically to US Customs and Border Protection before the cargo is loaded onto a US-bound ocean vessel. Often called "10+2" after its data elements.

J

Just-in-time (JIT)

An inventory approach in which materials arrive only as production needs them. It cuts stock-holding costs but makes the supply chain more vulnerable to shipping delays.

K

Known consignor

A shipper whose security procedures have been approved by an aviation security authority, so its air cargo can be loaded without further screening. Some countries use the term known shipper.

L

Landed cost

The full cost of getting goods to your door: product price plus freight, insurance, duties, taxes, brokerage, port and handling charges. It is the figure to compare suppliers on, not the ex-factory price. Calculate landed cost.

LCL (Less than Container Load)

A shipment too small to fill a container, which is consolidated with other shippers' cargo and charged by volume or weight. It costs more per unit than FCL and usually takes longer because of consolidation and deconsolidation.

Lead time

The time between placing an order and receiving the goods, combining production lead time with transit and clearance time.

Letter of credit (LC)

A bank's undertaking to pay the seller a stated amount, provided the seller presents documents that strictly comply with the credit's terms. It replaces the buyer's credit risk with the bank's. See how LCs compare with other payment terms.

Letter of indemnity (LOI)

A written promise to compensate a carrier or other party for any loss caused by acting on the requester's instructions, for example releasing cargo without an original bill of lading.

M

Manifest

A list of all cargo carried on a vessel, aircraft or vehicle, submitted to customs on departure and/or arrival.

Master bill of lading (MBL)

The bill of lading issued by the actual ocean carrier, usually to a forwarder or NVOCC, covering a whole container or consolidated load. The individual shippers inside it receive house bills.

MOQ (Minimum Order Quantity)

The smallest order a supplier will accept for a product, usually driven by production set-up, raw-material purchasing or packaging runs. MOQs are often negotiable, sometimes in exchange for a higher unit price.

Most-favoured-nation (MFN) tariff

The standard duty rate a WTO member applies to imports from all other members, unless a preferential agreement or trade remedy applies. In the United States it is also called the normal trade relations rate.

N

Non-tariff barrier (NTB)

Any restriction on trade other than a tariff, such as quotas, licensing, technical standards, sanitary rules or burdensome procedures.

Notify party

The party named on a bill of lading to be informed when the shipment arrives, often the buyer, its customs broker or an agent of its bank.

NVOCC (Non-Vessel Operating Common Carrier)

A company that acts as a carrier towards shippers, issuing its own house bills of lading and rates, but does not operate ships; it buys space from shipping lines.

O

ODM (Original Design Manufacturer)

A manufacturer that designs and makes products which other companies sell under their own brands, often with limited customization. The buyer typically does not own the underlying design.

OEM (Original Equipment Manufacturer)

In sourcing, a factory that produces goods to the buyer's own design and specifications for sale under the buyer's brand. In other industries the term can also refer to the brand owner of original parts.

Open account

A payment term in which goods are shipped and documents sent straight to the buyer, who pays on an agreed date after delivery. It is the most favourable term for the buyer and the riskiest for the seller. Weigh up payment terms.

Out-of-gauge (OOG) cargo

Cargo whose dimensions exceed the inside of a standard container, shipped on flat racks or open-top containers at special rates.

P

Packing list

A document detailing the contents of each package in a shipment, with quantities, weights, dimensions and marks. Customs, forwarders and receiving warehouses all rely on it. Check which documents you need.

Pallet

A flat platform, usually wood or plastic, on which goods are stacked and secured for forklift handling. Common footprints include the 1200 × 800 mm EUR pallet and the 48 × 40 in North American pallet. Plan loads with the pallet calculator.

Peak season surcharge (PSS)

A temporary surcharge carriers apply on certain trade lanes during periods of high demand.

Phytosanitary certificate

An official certificate from the exporting country's plant protection authority confirming that plants, plant products or other regulated items have been inspected and meet the importing country's pest requirements.

Port of discharge (POD)

The port where cargo is unloaded from the vessel. It may differ from the final destination when on-carriage follows.

Port of loading (POL)

The port where cargo is loaded onto the vessel for the main ocean voyage.

Pre-shipment inspection (PSI)

A check of goods before they leave the factory, usually once production is substantially complete, to verify quantity, quality, packing and marking against the order. Some countries also require PSI for customs or valuation purposes.

Preferential origin

Origin status that qualifies goods for reduced or zero duty under a free trade agreement or preference scheme. It must satisfy that agreement's specific rules and be backed by a certificate or statement of origin.

Proforma invoice

A preliminary invoice issued before shipment that sets out the goods, prices and terms. It is used to confirm orders, arrange payment, apply for import licences or open a letter of credit, but it is not a final demand for payment.

Purchase order (PO)

The buyer's formal document authorizing a purchase, specifying products, quantities, prices, delivery terms and payment terms. Once the supplier accepts it, it forms part of the contract.

Q

Quality control (QC)

Activities that check products meet specified requirements, including incoming material checks, in-line inspections during production and final random inspections.

Quota

A limit on the quantity or value of a product that may be imported or exported in a given period. A tariff-rate quota lets a set volume enter at a lower duty, with a higher duty on anything above it.

R

Reefer

A refrigerated container with its own cooling unit, used for perishables such as fresh produce, meat, seafood and pharmaceuticals. It needs a power supply at terminals and on board.

RFI (Request for Information)

An early-stage request asking potential suppliers to describe their capabilities, products and experience, used to build a shortlist before asking for prices.

RFP (Request for Proposal)

A request inviting suppliers to propose a solution and a price for a defined need, typically used when the approach matters as much as the cost.

RFQ (Request for Quotation)

A request asking suppliers to quote price and terms for clearly specified products and quantities, so offers can be compared like for like. How to write an RFQ.

Roll-on/roll-off (Ro-Ro)

Shipping in which wheeled cargo such as cars, trucks and mobile machinery is driven on and off the vessel via ramps.

Rules of origin

The criteria that decide where a product was made, such as being wholly obtained in a country, changing tariff classification during processing, or reaching a regional value content. Non-preferential rules apply to labelling and trade remedies; preferential rules decide eligibility for FTA rates.

S

Sea waybill

A non-negotiable ocean transport document. The carrier releases the goods to the named consignee on proof of identity, with no original to surrender, so it is faster than a bill of lading when no title transfer or bank security is needed.

Shipper

The party that hands goods over for transport and is named as shipper on the transport document, usually the seller or its agent.

Shipping marks

Identifying text, numbers and symbols marked on packages so they can be matched to documents and handled correctly, such as consignee reference, destination, carton numbers and handling symbols.

SKU (Stock Keeping Unit)

A unique code a business assigns to each distinct product variant, for example by size or colour, to track inventory and orders.

Sourcing agent

A person or company in the supplier's country that finds and vets factories, negotiates, follows production and arranges inspections on a buyer's behalf, usually for a commission or fee.

Standby letter of credit (SBLC)

A bank guarantee in letter-of-credit form that pays out only if the applicant fails to meet its obligations. It is a safety net rather than the intended means of payment.

Stuffing

Loading cargo into a container. The reverse, unloading it, is called stripping or devanning.

Surrender (telex release)

An arrangement in which the original bills of lading are surrendered to the carrier at origin, which then tells its destination office to release the cargo without originals. Sellers should agree to it only once they have been paid or are otherwise secured.

T

Tare weight

The weight of an empty container, vehicle or packaging. Gross weight minus tare weight gives the net weight of the goods.

Tariff

A schedule of duty rates applied to imported (or occasionally exported) goods; the word is also used for the duty itself.

Tariff classification

Determining the correct code for a product in a country's tariff schedule, based on the Harmonized System and the General Rules of Interpretation. The code drives the duty rate, statistics and any licensing or regulatory requirements. Use the HS code finder.

TEU (Twenty-foot Equivalent Unit)

The standard unit of container capacity, based on one 20-foot container. Vessel and port capacities are expressed in TEU. Estimate how much fits in a container.

THC (Terminal Handling Charge)

A charge for handling containers at the port terminal, such as lifting them on or off the vessel and moving them within the yard. It is charged separately at origin and destination.

Third-party logistics (3PL)

An outsourced provider of logistics services such as warehousing, order fulfilment, transport management and distribution.

Trade finance

Financial products that manage payment risk and fund the cash gap in international trade, including letters of credit, documentary collections, bank guarantees, factoring and supply chain finance.

Transit time

The time goods spend moving between the quoted origin and destination points, port to port or door to door. It excludes production time and often customs clearance.

Transshipment

Transferring cargo from one vessel or vehicle to another during the journey, for example at a hub port. Some letters of credit and free trade agreements restrict or set conditions on it.

U

UCP 600

The ICC's Uniform Customs and Practice for Documentary Credits, the rule set incorporated into most letters of credit. It governs how banks examine documents and handle presentations.

Uniform Rules for Collections (URC 522)

The ICC rules governing documentary collections such as D/P and D/A, setting out the roles and duties of the banks involved.

V

VAT/GST on imports

Value-added tax or goods and services tax charged when goods are imported, usually calculated on the customs value plus duty. VAT- or GST-registered businesses can often reclaim it as input tax.

Volumetric weight

A notional weight based on a package's dimensions, so carriers are paid fairly for light, bulky goods. For air freight it is commonly length × width × height in cm divided by 6,000 (the IATA standard); express couriers often use a smaller divisor. Calculate volumetric weight.

W

W/M (Weight or Measurement)

A pricing basis in which freight is charged on whichever is greater, weight in metric tonnes or volume in CBM, treating 1 CBM as equal to 1,000 kg. Each chargeable unit is called a revenue ton.

Warehouse receipt

A document issued by a warehouse operator acknowledging goods held in storage. Negotiable warehouse receipts can be pledged as collateral for financing.

Wharfage

A charge levied by a port authority on goods passing over its wharves or quays.

Z

Zero-rating

VAT or GST treatment in which exported goods are taxed at a zero rate, so the exporter charges no tax but can still reclaim input tax, provided valid proof of export is kept.