Ocean Shipping Terminology

FAS VESSEL (Free Alongside Steamer) : Seller owns goods until they are delivered alongside vessel; selling price includes all costs so far plus cost of transportation to dock.

FC&S (Free of Capture & Seizure) : Clause excluding war risks from the Marine Policy; war risks can be covered by issuing a separate War Policy with an additional premium being charged.

FOB TRUCK (Free on Board Truck) : Seller owns goods until they are loaded on truck at his factory; selling price includes all costs so far plus cost of loading on truck.

FOB VESSEL (Free on Board Vessel) : Seller owns goods until they are loaded on vessel; selling price includes all costs so far plus cost of loading on vessel.

FOB WAREHOUSE (Free on Board Warehouse) : Seller owns goods until they are delivered to buyer's warehouse at final destination; selling price includes all costs so far plus transportation to final warehouse.

FOB/FAS ENDORSEMENT : If a merchant sells on FOB, FAS, C&F or similar terms, it is the buyer's responsibility to place the insurance.

FLAGS OF CONVENIENCE : Nations that have lax maritime registration rules. Many ships are registered in these countries because of their lenient safety and crew requirements.

FORCE MAJEURE : The title of a standard clause in marine contracts exempting the parties for non-fulfillment of their obligations as a result of conditions beyond their control, such as earthquakes, floods or war.

FREE TRADE ZONE : A port designated by the government of a country for duty-free entry of any non-prohibited goods. Merchandise may be stored, displayed, used for manufacturing, etc., within the zone and re-exported without duties being paid. Duties are imposed on the merchandise (or items manufactured from the merchandise) only when the goods pass from the zone into an area of the country subject to the Customs Authority. Also called FOREIGN TRADE ZONE.

FREIGHT : The money charged by the carrier for transporting goods.

FREIGHT FORWARDER : Companies that buy space in large quantities and sell it to shippers requiring less vessel space. Also perform many other services for shippers including preparation of export documentation and arranging for cargo insurance.

GENERAL AVERAGE (GA) : Ancient principle of equity in which all the parties in a sea adventure (ship, cargo, and freight) proportionately share losses resulting from a voluntary and successful sacrifice of part of the ship or cargo to save the whole adventure from an impending peril, or extraordinary expenses necessarily incurred for the joint benefit of ship and cargo.

GENERAL AVERAGE SECURITY : Documents the cargo owner presents to the General Average Adjuster to replace the vessel owner's maritime lien on cargo for its share of General Average and to obtain release of the goods by the Steamship Company. G.A. Security consists of a G.A. Bond and either a cash deposit or an Underwriter's Guarantee.

GOODS : Cargo shipped by sea or air.

GOODS IN TRANSIT : Goods moving between two points.

GUARANTEED FREIGHT : Freight payable whether the goods are delivered or not, provided the failure to deliver the goods resulted from causes beyond the carrier's control.

HARMONIZED SYSTEM :An international commodity classification system, developed under auspices of Customs Cooperation Council, adopted by the United States in 1989 and increasingly the most widely accepted import/export classification methodology. Replaces SCHEDULE B export codes and TARIFF SCHEDULE OF THE US import codes.

HAZARDOUS CARGO : Poses hazards to handlers or to other cargoes and, because of this, need special handling. Often subject to regulatory control.

IMPORT QUOTAS : Absolute limits to the quantity of a product that can be imported into a country during a particular time period.

IN BOND : A term applied to the status of merchandise admitted provisionally to a country without payment of duties -- either for storage in a bonded warehouse or for trans-shipment to another point, where duties will eventually be imposed.

INHERENT VICE : A loss caused by the inherent nature of the thing insured and not the result of a casualty or external cause.

INLAND BILL OF LADING : A bill of lading used in transporting goods overland to the exporter's international carrier.

INTERMODAL TRANSPORTATION : A shipment utilizing more than one mode of transport - i.e., a shipment moving in container by water and then rail.

IRREVOCABLE LETTER OF CREDIT : A letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee.

JUST-IN-TIME INVENTORY SYSTEM : An inventory system that keeps production inventory to an absolute minimum.

LCL (Less-than-carload; also Less-than-container load): A shipment that occupies less space than is available in a rail-car or cargo-carrying container.

INCO Terms are internationally accepted commercial terms defining the respective roles of the buyer and seller in the arrangement of transportation and other responsibilities, and clarify when the ownership of the merchandise takes place. They are used in conjunction with a sales agreement or other method of transacting the sale. Below is an example of how INCO Terms work in action. The definitions provided here are the most common uses of each term, but are not the only way these terms are used. Pay close attention to the location listed for each term, as this indicates where payment details change from Shipper to Consignee.

EXW (Ex works) - (factory, mill, warehouse: your door) : Title and risk pass to buyer including payment of all transportation and insurance cost from the seller's door. Used for any mode of transportation.

FCA (Free Carrier) - (pick a place after your origin to start) : Title and risk pass to buyer including transportation and insurance cost when the seller delivers goods cleared for export to the carrier. Seller is obligated to load the goods on the Buyer's collecting vehicle; it is the Buyer's obligation to receive the Seller's arriving vehicle unloaded.

FAS (Free Alongside Ship) - (port, after all origin port charges) : Title and risk pass to buyer including payment of all transportation and insurance cost once delivered alongside ship by the seller. Used for sea or inland waterway transportation. The export clearance obligation rests with the seller.

FOB (Free On Board) - (port-same as FAS) : Risk pass to buyer including payment of all transportation and insurance cost once delivered on board the ship by the seller. Used for sea or inland waterway transportation.

CFR (Cost and Freight) - (destination port-paid to arrival at destination port) : Title, risk and insurance cost pass to buyer when delivered on board the ship by seller who pays the transportation cost to the destination port. Used for sea or inland waterway transportation.

CIF (Cost, Insurance and Freight) - (destination port-same as CFR, but includes insurance) : Title and risk pass to buyer when delivered on board the ship by seller who pays transportation and insurance cost to destination port. Used for sea or inland waterway transportation.

CPT (Carriage Paid To) - (place at destination-includes all destination port charges) : Title, risk and insurance cost pass to buyer when delivered to carrier or seller who pays transportation and insurance cost to destination. Used for any mode of transportation.

CIP (Carriage and Insurance Paid To) - (place at destination-same as CPT but includes insurance) : Title and risk pass to buyer when delivered to carrier by seller who pays transportation and insurance cost to destination. Used for any mode of transportation.

DAF (Delivered to Frontier) - (border of country-same as paid by seller to border-all other charges to buyer) : Title, risk and responsibility for import clearance pass to buyer when delivered to named border point by seller. Used for any mode of transportation. (border of country-same as paid by seller to border-all other charges to buyer) Title, risk and responsibility for import clearance pass to buyer when delivered to named border point by seller. Used for any mode of transportation.

DES (Delivered Ex Ship) - (on board ship to destination port) : Title, risk, responsibility for vessel discharge and import clearance pass to buyer when seller delivers goods on board the ship to destination port. Used for sea or inland waterway transportation.

DEQ (Delivered Ex Quay i.e. Duty Paid) - (destination port-includes duties and taxes, but not destination charges or delivery) : Title and risk pass to buyer when delivered on board the ship at the destination point by the seller who delivers goods on dock at destination point cleared for import. Used for sea or inland waterway transportation.

DDU (Delivered Duty Unpaid) - (consignee door-excluding duties and taxes) : Title, risk, and responsibility for vessel discharge and import clearance pass to buyer when seller delivers goods on board the ship to destination port. Used for sea or inland waterway transportation.

DDP (Delivered Duty Paid) - (consignee door-includes all charges origin to destination) : Title and risk pass to buyer when seller delivers goods to named destination point cleared for import. Used for any mode of transportation.

Note : EXW, CPT, CIP, DAF, DDU and DDP are commonly used for any mode of transportation. FAS, FOB, CFR, CIF, DES, and DEQ are used for sea and inland waterway.

CALCULATION FOR CBM :
L X B X H ( IN CMS) = CBM
10,00,000
L X B X H ( IN INCH) = CBM
64,000

CALCULATION FOR VOLUME WT :
L X B X H (IN CMS) = VOLUME WT. IN KGS
6000
L X B X H (IN INCH) = VOLUME WT. IN KGS
366