{"source":"https://traddal.com/resources/shipping-terminology","title":"Shipping and customs terms","description":"Plain definitions of the shipping, customs and trade terms that turn up on quotes, waybills and entries, with links to the detail.","robots":"index, follow","updated":"2026-11-06T10:34:48.198Z","breadcrumbs":[{"name":"Resources","url":"https://traddal.com/resources"},{"name":"Shipping terms","url":"https://traddal.com/resources/shipping-terminology"}],"facts":[],"lede":"Plain definitions of the shipping, customs and trade terms that turn up on quotes, waybills and entries, with links to the detail.","sections":[{"id":"overview","title":"","body":[{"type":"prose","text":"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](/resources/incoterms-explained)."}]},{"id":"parties","title":"Parties","body":[{"type":"table","caption":"Parties","columns":[{"header":"Term"},{"header":"What it means"}],"rows":[[{"text":"Consignee","inline":true},{"text":"The party the goods are being delivered to, named on the waybill","inline":true}],[{"text":"Consignor or shipper","inline":true},{"text":"The party sending the goods","inline":true}],[{"text":"Importer of record","inline":true},{"text":"The party legally responsible for the import declaration and duty. It isn't always the buyer","inline":true}],[{"text":"Declarant","inline":true},{"text":"In EU and UK rules, the person who makes the declaration, in their own name or through a representative","inline":true}],[{"text":"Customs broker","inline":true},{"text":"A licensed agent who files customs entries for others","inline":true}],[{"text":"Freight forwarder","inline":true},{"text":"An agent that arranges carriage, and often the paperwork, without necessarily carrying the goods","inline":true}],[{"text":"NVOCC","inline":true},{"text":"A carrier that issues its own bills of lading for sea freight, without operating ships","inline":true}],[{"text":"Carrier","inline":true},{"text":"The company that actually transports the goods, or takes on the contract to do so","inline":true}],[{"text":"Notify party","inline":true},{"text":"The person the carrier tells when the goods arrive","inline":true}],[{"text":"Ultimate consignee","inline":true},{"text":"The party that will finally receive the goods, which can be different from the importer","inline":true}]],"records":[{"Term":"Consignee","What it means":"The party the goods are being delivered to, named on the waybill"},{"Term":"Consignor or shipper","What it means":"The party sending the goods"},{"Term":"Importer of record","What it means":"The party legally responsible for the import declaration and duty. It isn't always the buyer"},{"Term":"Declarant","What it means":"In EU and UK rules, the person who makes the declaration, in their own name or through a representative"},{"Term":"Customs broker","What it means":"A licensed agent who files customs entries for others"},{"Term":"Freight forwarder","What it means":"An agent that arranges carriage, and often the paperwork, without necessarily carrying the goods"},{"Term":"NVOCC","What it means":"A carrier that issues its own bills of lading for sea freight, without operating ships"},{"Term":"Carrier","What it means":"The company that actually transports the goods, or takes on the contract to do so"},{"Term":"Notify party","What it means":"The person the carrier tells when the goods arrive"},{"Term":"Ultimate consignee","What it means":"The party that will finally receive the goods, which can be different from the importer"}]}]},{"id":"documents","title":"Documents","body":[{"type":"table","caption":"Documents","columns":[{"header":"Term"},{"header":"What it means"}],"rows":[[{"text":"[Commercial invoice](/resources/commercial-invoices)","inline":true},{"text":"The seller's bill, which customs uses to establish the value","inline":true}],[{"text":"Proforma invoice","inline":true},{"text":"A quote in invoice form, sent before the sale or when no sale exists","inline":true}],[{"text":"Packing list","inline":true},{"text":"What's in each package, with weights and dimensions","inline":true}],[{"text":"[Bill of lading](/resources/air-waybill-vs-bill-of-lading)","inline":true},{"text":"The sea carrier's receipt and contract, and, if negotiable, a title document","inline":true}],[{"text":"Sea waybill","inline":true},{"text":"A non-negotiable alternative to a bill of lading","inline":true}],[{"text":"[Air waybill](/resources/air-waybill-vs-bill-of-lading)","inline":true},{"text":"The airline's receipt and contract. Master is airline to forwarder, house is forwarder to shipper","inline":true}],[{"text":"Telex release","inline":true},{"text":"The carrier releases the goods without the original bill, on the shipper's instruction","inline":true}],[{"text":"[Certificate of origin](/resources/certificates-of-origin)","inline":true},{"text":"A document stating where goods come from, either general or under a trade deal","inline":true}],[{"text":"Consular invoice","inline":true},{"text":"An invoice certified by the destination's embassy or consulate","inline":true}],[{"text":"Letter of credit","inline":true},{"text":"A bank's promise to pay against specified documents","inline":true}],[{"text":"[Power of attorney](/resources/power-of-attorney-for-customs)","inline":true},{"text":"Written authority for an agent to act at customs","inline":true}],[{"text":"Customs bond","inline":true},{"text":"A guarantee of duty and compliance, required for US formal entries","inline":true}]],"records":[{"Term":"Commercial invoice","What it means":"The seller's bill, which customs uses to establish the value"},{"Term":"Proforma invoice","What it means":"A quote in invoice form, sent before the sale or when no sale exists"},{"Term":"Packing list","What it means":"What's in each package, with weights and dimensions"},{"Term":"Bill of lading","What it means":"The sea carrier's receipt and contract, and, if negotiable, a title document"},{"Term":"Sea waybill","What it means":"A non-negotiable alternative to a bill of lading"},{"Term":"Air waybill","What it means":"The airline's receipt and contract. Master is airline to forwarder, house is forwarder to shipper"},{"Term":"Telex release","What it means":"The carrier releases the goods without the original bill, on the shipper's instruction"},{"Term":"Certificate of origin","What it means":"A document stating where goods come from, either general or under a trade deal"},{"Term":"Consular invoice","What it means":"An invoice certified by the destination's embassy or consulate"},{"Term":"Letter of credit","What it means":"A bank's promise to pay against specified documents"},{"Term":"Power of attorney","What it means":"Written authority for an agent to act at customs"},{"Term":"Customs bond","What it means":"A guarantee of duty and compliance, required for US formal entries"}]}]},{"id":"customs-and-valuation","title":"Customs and valuation","body":[{"type":"table","caption":"Customs and valuation","columns":[{"header":"Term"},{"header":"What it means"}],"rows":[[{"text":"[HS code](/resources/hs-codes)","inline":true},{"text":"The six-digit international product code, with extra digits added nationally","inline":true}],[{"text":"[Customs value](/resources/landed-cost)","inline":true},{"text":"The value that duty is calculated on, usually the price paid plus or minus set adjustments","inline":true}],[{"text":"CIF basis","inline":true},{"text":"Value includes freight and insurance to the border","inline":true}],[{"text":"FOB basis","inline":true},{"text":"Value excludes international freight and insurance. Not to be confused with the FOB sales rule, though the idea is related","inline":true}],[{"text":"Assist","inline":true},{"text":"Something the buyer supplied to the factory for free or below cost, such as a mould","inline":true}],[{"text":"Ad valorem","inline":true},{"text":"A duty charged as a percentage of value","inline":true}],[{"text":"Specific duty","inline":true},{"text":"A fixed amount per unit, such as per kilogram","inline":true}],[{"text":"Compound duty","inline":true},{"text":"Ad valorem and specific duties added together","inline":true}],[{"text":"MFN rate","inline":true},{"text":"The general duty a WTO member charges other members, without a preference","inline":true}],[{"text":"Preferential rate","inline":true},{"text":"A lower rate for goods that qualify under a [trade agreement](/resources/trade-agreements)","inline":true}],[{"text":"Tariff quota","inline":true},{"text":"A lower rate for a limited volume, and a higher one above that","inline":true}],[{"text":"[De minimis](/resources/de-minimis)","inline":true},{"text":"The value below which duty or tax isn't collected","inline":true}],[{"text":"Drawback","inline":true},{"text":"A refund of duty when imported goods, or goods made with them, are exported","inline":true}],[{"text":"Anti-dumping duty","inline":true},{"text":"An extra duty on goods sold below normal value that injure an industry","inline":true}],[{"text":"Countervailing duty","inline":true},{"text":"An extra duty offsetting a foreign subsidy","inline":true}],[{"text":"Temporary storage","inline":true},{"text":"EU status for goods not yet cleared, [up to 90 days](https://taxation-customs.ec.europa.eu/system/files/2019-03/02_taxud_ucc_entry_of_goods_and_temporary_storage_quick_info_en.pdf)","inline":true}],[{"text":"Free circulation","inline":true},{"text":"EU status of goods once import duties are paid or secured","inline":true}],[{"text":"Bonded warehouse","inline":true},{"text":"Storage where duty and tax are suspended until the goods leave","inline":true}],[{"text":"Foreign-trade zone","inline":true},{"text":"US site treated as outside the customs territory for duty purposes","inline":true}],[{"text":"Liquidation","inline":true},{"text":"The final computation of duty on a US entry","inline":true}],[{"text":"Formal and informal entry","inline":true},{"text":"US entry types, split at $2,500 for most goods. See [customs clearance](/resources/customs-clearance)","inline":true}],[{"text":"[EORI](/resources/eori-numbers)","inline":true},{"text":"EU and GB business identification number for customs","inline":true}],[{"text":"Postponed VAT accounting","inline":true},{"text":"UK method of [accounting for import VAT on the return](/resources/uk-vat-on-imports)","inline":true}],[{"text":"[IOSS](/resources/eu-ioss-and-vat)","inline":true},{"text":"EU scheme for charging VAT at sale on orders up to EUR 150","inline":true}],[{"text":"[ICS2](/resources/eu-ics2)","inline":true},{"text":"The EU's advance security filing system","inline":true}],[{"text":"Importer number","inline":true},{"text":"The US or other national registration identifying an importer","inline":true}]],"records":[{"Term":"HS code","What it means":"The six-digit international product code, with extra digits added nationally"},{"Term":"Customs value","What it means":"The value that duty is calculated on, usually the price paid plus or minus set adjustments"},{"Term":"CIF basis","What it means":"Value includes freight and insurance to the border"},{"Term":"FOB basis","What it means":"Value excludes international freight and insurance. Not to be confused with the FOB sales rule, though the idea is related"},{"Term":"Assist","What it means":"Something the buyer supplied to the factory for free or below cost, such as a mould"},{"Term":"Ad valorem","What it means":"A duty charged as a percentage of value"},{"Term":"Specific duty","What it means":"A fixed amount per unit, such as per kilogram"},{"Term":"Compound duty","What it means":"Ad valorem and specific duties added together"},{"Term":"MFN rate","What it means":"The general duty a WTO member charges other members, without a preference"},{"Term":"Preferential rate","What it means":"A lower rate for goods that qualify under a trade agreement"},{"Term":"Tariff quota","What it means":"A lower rate for a limited volume, and a higher one above that"},{"Term":"De minimis","What it means":"The value below which duty or tax isn't collected"},{"Term":"Drawback","What it means":"A refund of duty when imported goods, or goods made with them, are exported"},{"Term":"Anti-dumping duty","What it means":"An extra duty on goods sold below normal value that injure an industry"},{"Term":"Countervailing duty","What it means":"An extra duty offsetting a foreign subsidy"},{"Term":"Temporary storage","What it means":"EU status for goods not yet cleared, up to 90 days"},{"Term":"Free circulation","What it means":"EU status of goods once import duties are paid or secured"},{"Term":"Bonded warehouse","What it means":"Storage where duty and tax are suspended until the goods leave"},{"Term":"Foreign-trade zone","What it means":"US site treated as outside the customs territory for duty purposes"},{"Term":"Liquidation","What it means":"The final computation of duty on a US entry"},{"Term":"Formal and informal entry","What it means":"US entry types, split at $2,500 for most goods. See customs clearance"},{"Term":"EORI","What it means":"EU and GB business identification number for customs"},{"Term":"Postponed VAT accounting","What it means":"UK method of accounting for import VAT on the return"},{"Term":"IOSS","What it means":"EU scheme for charging VAT at sale on orders up to EUR 150"},{"Term":"ICS2","What it means":"The EU's advance security filing system"},{"Term":"Importer number","What it means":"The US or other national registration identifying an importer"}]}]},{"id":"freight-and-charges","title":"Freight and charges","body":[{"type":"table","caption":"Freight and charges","columns":[{"header":"Term"},{"header":"What it means"}],"rows":[[{"text":"FCL","inline":true},{"text":"Full container load, a whole container for one shipper","inline":true}],[{"text":"LCL","inline":true},{"text":"Less than container load, sharing a container with others","inline":true}],[{"text":"TEU and FEU","inline":true},{"text":"Twenty-foot and forty-foot equivalent units, how container capacity is measured","inline":true}],[{"text":"Chargeable weight","inline":true},{"text":"In air freight, the greater of actual weight and volumetric weight","inline":true}],[{"text":"Volumetric weight","inline":true},{"text":"A weight calculated from the dimensions, using the carrier's divisor","inline":true}],[{"text":"CBM","inline":true},{"text":"Cubic metre, the usual unit for LCL","inline":true}],[{"text":"Demurrage","inline":true},{"text":"Charged for keeping a container at the terminal too long, usually by the carrier","inline":true}],[{"text":"Detention","inline":true},{"text":"Charged for keeping the container too long outside the terminal","inline":true}],[{"text":"Storage","inline":true},{"text":"The terminal or warehouse's own charge for holding cargo","inline":true}],[{"text":"BAF","inline":true},{"text":"Bunker adjustment factor, a fuel surcharge on sea freight","inline":true}],[{"text":"THC","inline":true},{"text":"Terminal handling charge, at origin or destination","inline":true}],[{"text":"Peak season surcharge","inline":true},{"text":"A carrier's premium in high-demand months, which HMRC [counts in customs value](https://www.gov.uk/guidance/delivery-costs-to-include-in-the-customs-value) when it relates to the journey","inline":true}],[{"text":"Disbursement fee","inline":true},{"text":"A courier's charge for paying duty on your behalf","inline":true}],[{"text":"Transhipment","inline":true},{"text":"Moving cargo between vessels or aircraft on the way. It doesn't change origin","inline":true}],[{"text":"Dangerous goods","inline":true},{"text":"Items with transport hazards, carried under specific rules","inline":true}],[{"text":"Consolidation","inline":true},{"text":"Combining several shippers' goods into one load","inline":true}],[{"text":"Cross-dock","inline":true},{"text":"Unloading and reloading without storage","inline":true}]],"records":[{"Term":"FCL","What it means":"Full container load, a whole container for one shipper"},{"Term":"LCL","What it means":"Less than container load, sharing a container with others"},{"Term":"TEU and FEU","What it means":"Twenty-foot and forty-foot equivalent units, how container capacity is measured"},{"Term":"Chargeable weight","What it means":"In air freight, the greater of actual weight and volumetric weight"},{"Term":"Volumetric weight","What it means":"A weight calculated from the dimensions, using the carrier's divisor"},{"Term":"CBM","What it means":"Cubic metre, the usual unit for LCL"},{"Term":"Demurrage","What it means":"Charged for keeping a container at the terminal too long, usually by the carrier"},{"Term":"Detention","What it means":"Charged for keeping the container too long outside the terminal"},{"Term":"Storage","What it means":"The terminal or warehouse's own charge for holding cargo"},{"Term":"BAF","What it means":"Bunker adjustment factor, a fuel surcharge on sea freight"},{"Term":"THC","What it means":"Terminal handling charge, at origin or destination"},{"Term":"Peak season surcharge","What it means":"A carrier's premium in high-demand months, which HMRC counts in customs value when it relates to the journey"},{"Term":"Disbursement fee","What it means":"A courier's charge for paying duty on your behalf"},{"Term":"Transhipment","What it means":"Moving cargo between vessels or aircraft on the way. It doesn't change origin"},{"Term":"Dangerous goods","What it means":"Items with transport hazards, carried under specific rules"},{"Term":"Consolidation","What it means":"Combining several shippers' goods into one load"},{"Term":"Cross-dock","What it means":"Unloading and reloading without storage"}]}]},{"id":"a-few-that-get-confused","title":"A few that get confused","body":[{"type":"prose","text":"**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.\n\nFor the sums, see [landed cost](/resources/landed-cost). And to draft the air document itself, the [AWB generator](/tools/awb-generator) is free."}]}],"sources":["[Department for Business and Trade: Understand international trade terms](https://www.business.gov.uk/learn/categories/selling-across-borders-product-and-services-regulations-licensing-and-logistics/get-your-goods-into-the-destination-country/understand-international-trade-terms/), checked 5 November 2026","[WTO: Glossary](https://www.wto.org/english/thewto_e/glossary_e/glossary_e.htm), checked 5 November 2026","[WTO: Jargon buster](https://www.wto.org/english/tratop_e/dda_e/status_e/jargon_e.htm), checked 5 November 2026","[WCO: What is the Harmonized System](https://www.wcoomd.org/en/topics/nomenclature/overview/what-is-the-harmonized-system.aspx), checked 5 November 2026","[eCFR: 19 CFR 142.2 and 142.12, time for filing entry](https://www.ecfr.gov/current/title-19/section-142.2), checked 5 November 2026","[European Commission: Entry of goods and temporary storage, quick info](https://taxation-customs.ec.europa.eu/system/files/2019-03/02_taxud_ucc_entry_of_goods_and_temporary_storage_quick_info_en.pdf), checked 5 November 2026","[European Commission: Guide to the VAT One Stop Shop](https://vat-one-stop-shop.ec.europa.eu/document/download/55f4ec9d-83e6-4942-9e8d-11d44c243087_en?filename=OSS+Guidelines_revised_1Jan2027_0.pdf), checked 5 November 2026","[HMRC: Delivery costs to include in the customs value](https://www.gov.uk/guidance/delivery-costs-to-include-in-the-customs-value), checked 5 November 2026","[ICC: Incoterms rules history](https://iccwbo.org/business-solutions/incoterms-rules/incoterms-rules-history/), checked 5 November 2026"],"guide":{"slug":"shipping-terminology","kind":"topic","section":"Reference"},"markdown":"https://traddal.com/resources/shipping-terminology.md"}