Shipping and customs terms
Plain definitions of the shipping, customs and trade terms that turn up on quotes, waybills and entries, with links to the detail.
More ways to read this page
These are the terms you'll meet on quotes, waybills and customs entries, in plain words. Where a term has a legal meaning in one country, we've said so, because the same word can do different jobs in another. For the sales terms such as FOB and DDP, go to Incoterms.
Parties
| Consignee | The party the goods are being delivered to, named on the waybill |
|---|---|
| Consignor or shipper | The party sending the goods |
| Importer of record | The party legally responsible for the import declaration and duty. It isn't always the buyer |
| Declarant | In EU and UK rules, the person who makes the declaration, in their own name or through a representative |
| Customs broker | A licensed agent who files customs entries for others |
| Freight forwarder | An agent that arranges carriage, and often the paperwork, without necessarily carrying the goods |
| NVOCC | A carrier that issues its own bills of lading for sea freight, without operating ships |
| Carrier | The company that actually transports the goods, or takes on the contract to do so |
| Notify party | The person the carrier tells when the goods arrive |
| Ultimate consignee | The party that will finally receive the goods, which can be different from the importer |
Documents
| Commercial invoice | The seller's bill, which customs uses to establish the value |
|---|---|
| Proforma invoice | A quote in invoice form, sent before the sale or when no sale exists |
| Packing list | What's in each package, with weights and dimensions |
| Bill of lading | The sea carrier's receipt and contract, and, if negotiable, a title document |
| Sea waybill | A non-negotiable alternative to a bill of lading |
| Air waybill | The airline's receipt and contract. Master is airline to forwarder, house is forwarder to shipper |
| Telex release | The carrier releases the goods without the original bill, on the shipper's instruction |
| Certificate of origin | A document stating where goods come from, either general or under a trade deal |
| Consular invoice | An invoice certified by the destination's embassy or consulate |
| Letter of credit | A bank's promise to pay against specified documents |
| Power of attorney | Written authority for an agent to act at customs |
| Customs bond | A guarantee of duty and compliance, required for US formal entries |
Customs and valuation
| HS code | The six-digit international product code, with extra digits added nationally |
|---|---|
| Customs value | The value that duty is calculated on, usually the price paid plus or minus set adjustments |
| CIF basis | Value includes freight and insurance to the border |
| FOB basis | Value excludes international freight and insurance. Not to be confused with the FOB sales rule, though the idea is related |
| Assist | Something the buyer supplied to the factory for free or below cost, such as a mould |
| Ad valorem | A duty charged as a percentage of value |
| Specific duty | A fixed amount per unit, such as per kilogram |
| Compound duty | Ad valorem and specific duties added together |
| MFN rate | The general duty a WTO member charges other members, without a preference |
| Preferential rate | A lower rate for goods that qualify under a trade agreement |
| Tariff quota | A lower rate for a limited volume, and a higher one above that |
| De minimis | The value below which duty or tax isn't collected |
| Drawback | A refund of duty when imported goods, or goods made with them, are exported |
| Anti-dumping duty | An extra duty on goods sold below normal value that injure an industry |
| Countervailing duty | An extra duty offsetting a foreign subsidy |
| Temporary storage | EU status for goods not yet cleared, up to 90 days |
| Free circulation | EU status of goods once import duties are paid or secured |
| Bonded warehouse | Storage where duty and tax are suspended until the goods leave |
| Foreign-trade zone | US site treated as outside the customs territory for duty purposes |
| Liquidation | The final computation of duty on a US entry |
| Formal and informal entry | US entry types, split at $2,500 for most goods. See customs clearance |
| EORI | EU and GB business identification number for customs |
| Postponed VAT accounting | UK method of accounting for import VAT on the return |
| IOSS | EU scheme for charging VAT at sale on orders up to EUR 150 |
| ICS2 | The EU's advance security filing system |
| Importer number | The US or other national registration identifying an importer |
Freight and charges
| FCL | Full container load, a whole container for one shipper |
|---|---|
| LCL | Less than container load, sharing a container with others |
| TEU and FEU | Twenty-foot and forty-foot equivalent units, how container capacity is measured |
| Chargeable weight | In air freight, the greater of actual weight and volumetric weight |
| Volumetric weight | A weight calculated from the dimensions, using the carrier's divisor |
| CBM | Cubic metre, the usual unit for LCL |
| Demurrage | Charged for keeping a container at the terminal too long, usually by the carrier |
| Detention | Charged for keeping the container too long outside the terminal |
| Storage | The terminal or warehouse's own charge for holding cargo |
| BAF | Bunker adjustment factor, a fuel surcharge on sea freight |
| THC | Terminal handling charge, at origin or destination |
| Peak season surcharge | A carrier's premium in high-demand months, which HMRC counts in customs value when it relates to the journey |
| Disbursement fee | A courier's charge for paying duty on your behalf |
| Transhipment | Moving cargo between vessels or aircraft on the way. It doesn't change origin |
| Dangerous goods | Items with transport hazards, carried under specific rules |
| Consolidation | Combining several shippers' goods into one load |
| Cross-dock | Unloading and reloading without storage |
A few that get confused
Freight forwarder or customs broker? A forwarder arranges the journey, and a broker files the customs entry. Some firms do both, but they're different licences or roles. Duty or tariff? In practice they mean the same thing: a tariff is the schedule, and duty is what you pay under it. Free on board or freight on board? The Incoterms rule is "Free on Board". Say which you mean, and use the rule's correct name in the contract.
For the sums, see landed cost. And to draft the air document itself, the AWB generator is free.
Sources
- Department for Business and Trade: Understand international trade terms, checked 5 November 2026
- WTO: Glossary, checked 5 November 2026
- WTO: Jargon buster, checked 5 November 2026
- WCO: What is the Harmonized System, checked 5 November 2026
- eCFR: 19 CFR 142.2 and 142.12, time for filing entry, checked 5 November 2026
- European Commission: Entry of goods and temporary storage, quick info, checked 5 November 2026
- European Commission: Guide to the VAT One Stop Shop, checked 5 November 2026
- HMRC: Delivery costs to include in the customs value, checked 5 November 2026
- ICC: Incoterms rules history, checked 5 November 2026