10 Common Shipping Trading Terms You Must Know
When you’re trading in the shipping world, there are many interms and acronyms you need to know to make sure you’re understood. And, just as important, to understand what others are talking about.
Here are 10 of the most common shipping terms that you should know:
Bill of Lading (B/L)
When you’re shipping goods, you’ll need to know about the Bill of Lading. This is a document that serves as a receipt for the goods you’re shipping, and it’s also a contract between you and the carrier.
The B/L is also a record of the cargo being shipped, including details such as the weight, dimensions, and type of goods. It’s essential to make sure that all the information on the B/L is correct because if there are any problems with your shipment, the carrier can use the B/L as proof.
Cost Nett Freight (CNF)
When you’re shipping goods, you’ll need to know about the different cost calculations that go into it. One important term to understand is cost net freight (CNF).
CNF is the cost of shipping goods minus the cost of insurance and freight. It’s a great way to compare different shipping quotes because it takes into account all of the costs associated with getting your goods from Point A to Point B.
Make sure you understand all of the different shipping terms before you start negotiating rates with your suppliers!
Cost Insurance and Freight (CIF)
When you’re dealing with shipping and trading, you’re going to come across the term “Cost, Insurance, and Freight” or “CIF.” This is a way of describing how the price of a product is calculated.
Basically, CIF includes the cost of the product itself, plus the cost of transportation and insurance. So when you’re quoted a price that includes CIF, you know that everything is taken into account.
Delivered At Terminal (DAT)
When you see ‘Delivered At Terminal’ listed as the shipping term, the product has been delivered to the carrier’s terminal. The shipping carrier will then be responsible for getting it to the final destination. This is usually the cheapest option, but it can also be the slowest, so keep that in mind.
Delivered At Place (DAP)
When shipping goods, you’ll often hear the term “Delivered At Place” or DAP. This means that the buyer is responsible for taking delivery of the goods at the agreed-upon location.
This is different from “Free On Board” or FOB, which means that the seller is responsible for getting the goods to the buyer’s location. With DAP, the buyer is basically saying, “I don’t want to deal with transportation; I’ll just take the goods as they are.”
It’s a common shipping term, so make sure you know what it means to avoid confusion.
Full Container Load (FCL)
When shipping goods, you’ll often hear the term “Full Container Load” or FCL. FCL shipping means that the entire container is filled and is the most economical way to ship goods.
If you’re shipping a smaller quantity, you might choose to go with Less than Container Load or LCL. This is when your goods are shipped alongside other items in a container. It’s not as economical as shipping a full container, but it’s still a cost-effective option for small shipments.
Less Container Load (LCL)
A “less container load” (LCL) is when you don’t fill a container to capacity. This is an excellent option if you’re not shipping many goods, but it can be more expensive than shipping a full container.
Why? Because you’re splitting the cost of the container with other shippers. And that means you’ll need to pay for the cost of the entire container, even if your goods take up only a fraction of the space.
But there are some advantages to using LCL. For one, it’s often more affordable than shipping a full container. And it’s also a great option if you’re unsure how much cargo you’ll have.
If you’re interested in shipping LCL, talk to your freight forwarder, and they’ll be able to give you more information.
Free Carrier (FCA)
One of the most common is Free Carrier (FCA), and is when the seller is responsible for delivering the goods to the carrier.
This term is most often used in international transactions, and it’s important to understand it because it affects who is responsible for paying shipping costs. With FCA, the buyer is responsible for paying for transportation to the point of delivery. Still, the seller is responsible for handling all other costs associated with getting the goods to that point.
Make sure you understand the different shipping trading terms so you can make informed decisions about how to ship your products. It can make a big difference in terms of costs and timelines.
Free On Board (FOB)
The term “free on board” is one you’ll often hear in the shipping industry. It’s used to describe the point at which the buyer of a product becomes responsible for it.
In other words, when goods are shipped FOB, the seller is responsible for getting them to the buyer’s designated shipping location. From that point on, the buyer is responsible for them. It’s important to note that this includes any and all costs associated with getting the product to that point.
This is a critical term to understand, especially if you’re new to the shipping world. Make sure you know what it means and how it applies to your business transactions.
Shipping Ex-Works (EXW)
An ETA (estimated time of arrival) is a prediction of when goods will reach their destination. It’s usually calculated based on the shipping company’s experience with a particular route, the conditions at the time of departure, and the goods being shipped.
If you’re shipping goods, you must be aware of your ETA. This will help you plan for when your products will arrive and ensure you’re ready to receive them.
C stands for the container. When goods are shipped, they’re often placed in containers for transport. The type and size of the container will depend on the goods being shipped and the shipping company’s preferences.
Speak To Your Freight Expert
For straightforward advice about the most cost-effective way to ship your goods from China to customers in the US, Mexico, Canada, UK, France, Germany, Denmark, Sweden, Norway, Finland, or other Europe countries, please send a message to firstname.lastname@example.org.