# 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.

Source: https://traddal.com/resources/shipping-terminology
Last updated: 2026-11-06

[Home](https://traddal.com/) / [Resources](https://traddal.com/resources) / [Shipping terms](https://traddal.com/resources/shipping-terminology)

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](https://traddal.com/resources/incoterms-explained).

## Parties

| Term | What it means |
| --- | --- |
| 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

| Term | What it means |
| --- | --- |
| [Commercial invoice](https://traddal.com/resources/commercial-invoices) | 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](https://traddal.com/resources/air-waybill-vs-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](https://traddal.com/resources/air-waybill-vs-bill-of-lading) | 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](https://traddal.com/resources/certificates-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](https://traddal.com/resources/power-of-attorney-for-customs) | 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

| Term | What it means |
| --- | --- |
| [HS code](https://traddal.com/resources/hs-codes) | The six-digit international product code, with extra digits added nationally |
| [Customs value](https://traddal.com/resources/landed-cost) | 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](https://traddal.com/resources/trade-agreements) |
| Tariff quota | A lower rate for a limited volume, and a higher one above that |
| [De minimis](https://traddal.com/resources/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](https://taxation-customs.ec.europa.eu/system/files/2019-03/02_taxud_ucc_entry_of_goods_and_temporary_storage_quick_info_en.pdf) |
| 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](https://traddal.com/resources/customs-clearance) |
| [EORI](https://traddal.com/resources/eori-numbers) | EU and GB business identification number for customs |
| Postponed VAT accounting | UK method of [accounting for import VAT on the return](https://traddal.com/resources/uk-vat-on-imports) |
| [IOSS](https://traddal.com/resources/eu-ioss-and-vat) | EU scheme for charging VAT at sale on orders up to EUR 150 |
| [ICS2](https://traddal.com/resources/eu-ics2) | The EU's advance security filing system |
| Importer number | The US or other national registration identifying an importer |

## Freight and charges

| Term | What it means |
| --- | --- |
| 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](https://www.gov.uk/guidance/delivery-costs-to-include-in-the-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](https://traddal.com/resources/landed-cost). And to draft the air document itself, the [AWB generator](https://traddal.com/tools/awb-generator) is free.

## Sources

1. [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
2. [WTO: Glossary](https://www.wto.org/english/thewto_e/glossary_e/glossary_e.htm), checked 5 November 2026
3. [WTO: Jargon buster](https://www.wto.org/english/tratop_e/dda_e/status_e/jargon_e.htm), checked 5 November 2026
4. [WCO: What is the Harmonized System](https://www.wcoomd.org/en/topics/nomenclature/overview/what-is-the-harmonized-system.aspx), checked 5 November 2026
5. [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
6. [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
7. [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
8. [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
9. [ICC: Incoterms rules history](https://iccwbo.org/business-solutions/incoterms-rules/incoterms-rules-history/), checked 5 November 2026