Resources
Plain-language definitions of common cargo insurance, marine shipping, and international trade terms.
This glossary is provided for general informational purposes only. It does not constitute legal, financial, or insurance advice, and the wording of any specific policy will always take precedence.
Additional charges applied by a carrier for services that fall outside standard pickup and delivery, such as lift-gate use, residential delivery, or inside handling.
Example: A residential delivery requiring a lift-gate may attract two accessorial fees in addition to the base freight rate.
A non-negotiable transport document issued by an airline or its agent that acts as a receipt for the cargo and sets out the terms of carriage by air.
Example: An AWB number is typically used by the shipper to track the air shipment from origin to destination airport.
A form of cargo insurance that covers physical loss or damage from external causes, except for perils that are specifically listed as exclusions in the policy.
Example: An electronics shipment damaged by water during a storm may be covered, subject to the policy terms and exclusions.
A notification sent by the carrier to the consignee indicating that the cargo has arrived at the destination port and is available for collection.
Example: A shipping line may send an arrival notice to the importer before the vessel reaches the destination port.
An international customs document that allows the temporary import of goods such as commercial samples, professional equipment, or trade-fair items without paying duties or taxes in participating countries.
Example: A company sending demonstration equipment to a trade show abroad may use an ATA Carnet to simplify temporary import formalities.
A status granted by a national customs administration to a company involved in the international movement of goods that meets defined security and compliance standards.
Example: AEO-certified operators may benefit from simplified customs procedures in some jurisdictions.
A vehicle capable of sensing its environment and operating with limited or no human input, sometimes used in pilot projects for line-haul transport or yard moves.
Example: Autonomous yard tractors may be tested in closed terminal environments to move trailers between docks.
A term in marine insurance referring to a partial loss. It can be a Particular Average (affecting one owner’s cargo) or a General Average (shared among all parties to the voyage).
Example: If cargo is jettisoned to save a vessel, the loss may be shared proportionally between cargo owners under General Average rules.
The return leg of a transport route, typically used to carry a new shipment back toward the vehicle’s origin and reduce empty running.
Example: A truck delivering goods to a regional hub may collect a backhaul load on its way back to the main depot.
A transport document issued by a carrier that acknowledges receipt of cargo, sets out the terms of carriage, and can serve as a document of title to the goods.
Example: An original ocean bill of lading is often required to release cargo at the destination port.
Storage of imported goods under customs control, where duties and taxes are suspended until the goods are released for onward distribution or re-exported.
Example: Goods awaiting onward shipment to several markets may be held in a bonded warehouse to defer duty payment.
Cargo that is loaded and transported as individual units, packages, or pieces, rather than inside containers or as homogeneous bulk.
Example: Steel coils, project cargo, or large machinery are often shipped as breakbulk on specialised vessels.
Unpackaged cargo loaded directly into a vessel’s hold or a dedicated tank, such as grain, coal, ore, or liquid chemicals.
Example: An iron-ore shipment moved on a bulk carrier is handled as dry bulk cargo.
A surcharge applied by ocean carriers to reflect fluctuations in marine fuel (bunker) prices. It is shown separately from the base ocean freight rate.
Example: When fuel prices rise sharply, carriers may publish a higher BAF for the following quarter.
A document declaring the country in which goods were produced or manufactured, often required by customs authorities and trade agreements.
Example: A textile shipment may need a certificate of origin to apply for preferential duty under a free-trade agreement.
A wheeled trailer frame designed to carry an ocean container by road between port, depot, and consignee.
Example: A 40-foot container picked up at the port is mounted on a chassis for road delivery to the warehouse.
An Incoterm for sea and inland waterway transport under which the seller pays the cost, freight, and a minimum insurance cover to bring the goods to the named destination port.
Example: Under CIF Rotterdam, the seller arranges ocean freight and a minimum insurance cover up to the port of Rotterdam.
A temperature-controlled supply chain used to keep products such as pharmaceuticals or perishable foods within a defined temperature range from production to delivery.
Example: Vaccines often require an unbroken cold chain to remain effective on delivery.
A trade document issued by the seller to the buyer that describes the goods sold, their value, and the terms of sale. It is used by customs authorities to assess duties and taxes.
Example: Customs may compare the commercial invoice with the packing list and bill of lading during clearance.
The state of meeting applicable laws, regulations, standards, and contractual requirements that apply to products, services, processes, or documentation.
Example: Export compliance checks may include screening parties against sanctions lists before shipping.
The party named on the transport document to whom the goods are to be delivered at the destination.
Example: The importer listed on the bill of lading is generally the consignee for the inbound shipment.
The practice of combining several smaller shipments from one or more shippers into a single container or load to make use of available capacity.
Example: A forwarder may offer weekly consolidation services between Asia and Europe for LCL shippers.
A situation in which cargo is damaged to such an extent that the cost of repair or recovery would exceed its insured value, so it is treated as a total loss for claim purposes.
Example: Water-damaged electronics for which cleaning and refurbishment would cost more than the insured value may be declared a constructive total loss.
A facility where LCL shipments from multiple shippers are consolidated into containers for export, or deconsolidated from containers after import.
Example: After arrival, an LCL container is moved to a CFS where each consignee’s goods are separated for delivery.
A licensed professional or company that prepares and submits customs declarations and related documents on behalf of importers and exporters.
Example: A customs broker may classify goods under the correct HS code and file the import declaration with the authorities.
The process of meeting the documentary, duty, and regulatory requirements that allow goods to be imported into or exported from a country.
Example: Customs clearance may include lodging an entry, paying duties, and obtaining release of the cargo.
Substances or articles that present a risk to people, property, or the environment because of their chemical or physical properties, and that are subject to specific transport regulations.
Example: Lithium batteries shipped by air must be declared and packaged in line with dangerous goods regulations.
An Incoterm under which the seller delivers the goods to the buyer’s named place, cleared for import and with all duties and taxes paid.
Example: Under DDP Paris, the seller is responsible for delivery to the buyer’s site and for paying French import duties and VAT.
The amount the insured must pay out of pocket on each claim before the insurance coverage applies. A higher deductible generally results in a lower premium.
Example: With a USD 1,000 deductible, the insured pays the first USD 1,000 of a covered claim and the insurer pays the remainder, subject to policy terms.
Charges applied by an ocean carrier or terminal when a container remains at the port beyond the agreed free time after discharge.
Example: Delays in customs clearance can extend dwell time at the port and trigger demurrage charges.
Charges applied when a container is not returned empty to the carrier’s depot within the agreed free time after being picked up from the port.
Example: If unloading at the consignee’s warehouse takes longer than planned, detention may be billed by the shipping line.
A departure from the vessel’s usual or agreed route. Depending on the reason and the notification given, it may affect the validity of the insurance coverage.
Example: A vessel may deviate to avoid a storm or high-risk area; insurers usually expect timely notification so coverage can continue.
The adoption or expanded use of digital technologies to change how logistics processes are designed, executed, and measured.
Example: Replacing paper proof-of-delivery with electronic capture is a common digitalisation step.
The conversion of analogue information such as paper documents or handwritten records into digital form so that it can be stored, processed, and exchanged electronically.
Example: Scanning paper customs files into a document management system is a form of digitisation.
Coverage that responds to the value of import duties and taxes already paid or owed when cargo is lost, damaged, or rejected by customs authorities, subject to policy terms.
Example: If imported goods are damaged in transit, the insurance may respond to both the cargo value and the prepaid import duties, subject to the policy.
The time a container or shipment remains at a port, terminal, or warehouse before continuing its journey.
Example: Long dwell times at a congested port can lead to higher demurrage and storage charges.
A standardised electronic format used by trading partners to exchange business documents such as purchase orders, invoices, and shipping instructions between their systems.
Example: A shipper may send EDI booking messages to a carrier instead of submitting requests by email.
An Economic Operators Registration and Identification number used by customs authorities in the European Union to identify businesses that import or export goods.
Example: A non-EU exporter shipping regularly into the EU may need to obtain an EORI number for customs filings.
Estimated Time of Arrival and Estimated Time of Departure: the planned date and time when a vessel, aircraft, or truck is expected to arrive at or leave a location.
Example: A booking confirmation typically shows the ETD at the origin port and the ETA at the destination port.
An Incoterm under which the seller makes the goods available at their own premises and the buyer takes on transport, export, and import responsibilities from that point.
Example: Under EXW Shenzhen, the buyer arranges pickup at the seller’s warehouse and handles all onward logistics.
An Incoterm under which the seller delivers the goods, cleared for export, to a carrier or another party nominated by the buyer at a named place.
Example: Under FCA seller’s warehouse, risk passes to the buyer once the goods are loaded on the buyer’s collecting truck.
An Incoterm under which the seller delivers the goods on board the vessel at the named port of shipment. From that point, the buyer is responsible for arranging insurance and freight.
Example: Under FOB Bangkok, the buyer arranges ocean freight and cargo insurance from the Thai port to the destination.
Unforeseeable circumstances beyond a party’s control that prevent the performance of a contract, such as natural disasters, war, or government actions.
Example: Pandemic-related lockdowns preventing cargo pickup, or a typhoon closing ports, may be treated as force majeure events under a contract.
A lead-logistics model in which a single provider coordinates the wider supply chain on behalf of a shipper, often managing multiple 3PLs and other partners.
Example: A 4PL may design the network, select carriers, and oversee day-to-day execution across regions.
A treaty between two or more countries that reduces or removes tariffs and other trade barriers on qualifying goods exchanged between them.
Example: Goods that meet the origin rules of an FTA may qualify for a lower or zero import duty in the partner country.
A designated area within a country where goods may be imported, stored, handled, or re-exported under simplified customs rules and with deferred or relieved duties.
Example: Goods stored in a free zone for later re-export may not be subject to local import duties.
A company that organizes shipments for individuals or businesses to move goods from origin to destination, acting as an intermediary between the shipper and the carriers.
Example: A freight forwarder may consolidate LCL shipments from several exporters into a single container.
An ocean shipment in which the cargo of a single shipper occupies an entire container.
Example: A shipment of 22 pallets of equipment may be moved as a single 40-foot FCL.
A road shipment in which a single shipper books the full capacity of a truck or trailer, whether or not the cargo fills it entirely.
Example: Time-sensitive shipments may be booked FTL to avoid stops for additional pickups and deliveries.
A principle of maritime law under which all parties to a sea voyage proportionally share losses resulting from a voluntary sacrifice of part of the cargo or vessel to save the rest.
Example: If a captain jettisons containers during a storm to stabilize the ship, contributions may be required from all cargo interests.
A quality framework that sets out how medicinal products should be procured, stored, transported, and delivered so that quality and integrity are maintained throughout the supply chain.
Example: GDP-compliant operations typically include temperature monitoring, qualified vehicles, and trained personnel.
The total weight of the cargo including its packaging, pallets, and container. It is used to calculate freight rates and may inform insurance premium calculations.
Example: A 20-foot container may show a gross weight of 22,000 kg covering cargo, packaging, and container.
A company that operates trucks to move freight by road, typically on behalf of shippers, freight forwarders, or 3PL providers.
Example: A freight forwarder may subcontract a regional haulier to handle final-mile road delivery.
Cargo that can cause harm to people or the environment through long-term health effects or contamination, as distinct from dangerous goods, which focus on immediate physical or chemical hazards.
Example: Certain industrial chemicals are treated as hazardous cargo and require specific handling and documentation.
A bill of lading issued by a freight forwarder or NVOCC to its customer for the cargo handled within a consolidated shipment.
Example: An LCL shipper typically receives an HBL from the forwarder, while the master bill is held between the forwarder and the carrier.
A standardised numerical code used by customs authorities worldwide to classify goods for import, export, and statistical purposes. It is maintained by the World Customs Organization.
Example: An HS code determines the duty rate and any controls that apply to a specific product at import.
A set of international trade terms published by the International Chamber of Commerce that define the responsibilities of buyers and sellers for delivery, risk, costs, and insurance in a cross-border sale.
Example: Selecting an Incoterm such as CIF or FOB clarifies which party arranges and pays for the main carriage and cargo insurance.
Damage arising from the natural characteristics or defects of the cargo itself, such as rust, decay, or deterioration. This is generally excluded from cargo insurance coverage.
Example: Fresh fruit ripening and spoiling during normal transit, or metal rusting in humid conditions, are often considered inherent vice.
Standard sets of wordings used in marine cargo insurance policies. ICC (A) is the widest of the three sets, while ICC (B) and ICC (C) cover progressively narrower lists of named perils.
Example: ICC (A) may respond to a wider range of losses than ICC (C), which is limited to specific named perils such as fire or collision.
The movement of cargo in the same loading unit, such as a container, using two or more modes of transport without handling the goods themselves at mode changes.
Example: A container may move by truck to a rail terminal, by train to a port, and then by ship to its destination.
A supply-chain approach in which materials and goods are delivered to match production or sales schedules, with the aim of reducing inventory held on site.
Example: An automotive plant may rely on JIT deliveries of components several times per day from nearby suppliers.
The total cost of bringing a product to its final destination, including the purchase price, freight, insurance, duties, taxes, and handling fees.
Example: Comparing landed cost rather than ex-works price gives a more accurate view of supplier competitiveness.
The final stage of the delivery process, moving goods from a local hub or distribution centre to the end recipient.
Example: An e-commerce parcel may use a regional carrier for last-mile delivery to a residential address.
An ocean shipment in which goods from several shippers are consolidated into a single container, with freight charged based on volume or weight.
Example: Small shipments of a few cubic metres are often moved as LCL rather than as a full container.
A road shipment that does not require a full truck, where freight from multiple shippers shares trailer space and cost is allocated by volume or weight.
Example: A pallet of finished goods sent across a region may be moved as LTL freight.
A payment instrument issued by a bank on behalf of a buyer, under which the bank commits to pay the seller once specified shipping and documentary conditions are met.
Example: An exporter shipping to a new buyer may request a letter of credit to reduce non-payment risk.
A unit equal to one linear metre of loading space across the full width of a truck or trailer, used to price road freight when goods cannot be stacked.
Example: A non-stackable pallet of 1.2 m by 0.8 m typically counts as around 0.4 load metres.
A surcharge applied by barge operators when low river water levels reduce the loading capacity of inland vessels and increase per-unit transport costs.
Example: During dry summers on the Rhine, barge operators may apply low water surcharges to inland container moves.
Insurance that covers loss of or damage to ships, cargo, and related interests during transport or handling between the points of origin and destination, subject to policy terms.
Example: A marine policy may cover an electronics shipment moving from a factory in China to a distributor in Malaysia.
The transport document issued by the airline to the freight forwarder covering a consolidated air shipment, which may contain several house air waybills.
Example: Several HAWBs for different shippers may travel under a single MAWB issued by the airline.
Transport that involves more than one mode (sea, air, rail, road) under a single contract and a single transport document.
Example: Cargo may move by truck to a port, by sea to a destination port, and then by rail to the final delivery point.
A company that contracts with ocean carriers for vessel space and resells it to shippers under its own bills of lading, without operating ships itself.
Example: An NVOCC may publish its own ocean rates and issue house bills of lading to LCL or FCL customers.
The person or company named on the bill of lading or air waybill that the carrier must inform when the cargo arrives at the destination.
Example: The notify party is often a customs broker handling the import clearance for the consignee.
The transport of goods by sea, typically in containers, and the charges associated with that service.
Example: Ocean freight is commonly used for international shipments where transit time is less critical than cost.
A shipping document that details the contents of each package in a consignment, including item descriptions, quantities, weights, and dimensions.
Example: Customs officers may use the packing list together with the commercial invoice during an inspection.
The practice of stacking and securing goods onto pallets so they can be handled, moved, and stored as a single load unit.
Example: Palletisation can speed up loading and unloading and reduce the risk of damage during handling.
A partial loss that affects only the cargo of a specific owner, in contrast to General Average, which is shared among all parties to the voyage.
Example: A single container damaged by a forklift during loading, while the rest of the cargo is unaffected, illustrates particular average.
Goods with a limited shelf life that may deteriorate during transport unless temperature, humidity, or transit time are kept within defined limits.
Example: Fresh produce, dairy, and certain pharmaceuticals are typically handled as perishable goods.
The port where cargo is loaded onto the vessel for the main sea leg (POL) and the port where it is unloaded at the end of that leg (POD).
Example: A shipment may show Shanghai as the POL and Los Angeles as the POD on its bill of lading.
The amount paid to the insurer in exchange for the coverage provided. It is typically calculated as a percentage of the insured value, based on the risk factors of the shipment.
Example: A 0.25% rate applied to a USD 100,000 insured value results in a USD 250 premium.
A regulatory period during which imported goods, animals, or plants are isolated and inspected to prevent the introduction of pests, diseases, or contaminants.
Example: Live plants imported into some countries may be held in quarantine before being released to the buyer.
A refrigerated shipping container with an integrated cooling unit, used to transport temperature-sensitive cargo such as food, flowers, or pharmaceuticals.
Example: A reefer container set at -18°C may be used to ship frozen seafood from Norway to Asia.
A technology that uses radio waves to read identifiers stored on small tags attached to assets, packages, or containers, supporting automated tracking.
Example: Warehouses may use RFID gates to register pallet movements without manual barcode scanning.
A shipping method for wheeled cargo, such as cars, trucks, or heavy equipment, that is driven on and off the vessel using built-in ramps.
Example: RoRo vessels are commonly used to move new cars between manufacturing regions and consumer markets.
Operations carried out to rescue cargo or a vessel from loss at sea or another peril. Reasonable salvage costs may be recoverable under the insurance policy.
Example: Tugboats assisting a grounded vessel may generate salvage charges that are addressed under the relevant insurance policies.
A documented set of step-by-step instructions that describes how a routine logistics or compliance task should be performed in a consistent way.
Example: A warehouse SOP may set out how to handle damaged inbound cartons on receipt.
Charges incurred when cargo is stored at a third-party facility such as an inland terminal, port terminal, or warehouse beyond an agreed free period.
Example: Cargo waiting for documentation at an inland terminal may accumulate daily storage charges.
A policy provision requiring the insured to take reasonable steps to prevent or minimize a covered loss, and allowing recovery of the reasonable expenses incurred to do so.
Example: Renting refrigerated storage to protect perishable cargo after a container breakdown may fall within sue and labor expenses.
The network of organisations, people, activities, and resources involved in producing a good or service and delivering it to the end customer.
Example: A laptop’s supply chain may include component suppliers, assembly plants, ocean carriers, distributors, and retailers.
An additional charge added by a carrier to the base rate to reflect specific costs or market conditions, such as fuel, currency, or peak-season demand.
Example: A peak-season surcharge may apply on Asia-to-Europe lanes during periods of high shipping demand.
A tax applied by a government to goods crossing its borders, generally to raise revenue or influence trade flows.
Example: Tariff rates often depend on the product’s HS code and the country of origin.
An arrangement in which a company outsources elements of its distribution, warehousing, or fulfilment operations to an external logistics provider.
Example: A retailer may use a 3PL provider to operate its warehouses and manage last-mile delivery.
A bill of lading that covers cargo moving under more than one mode of transport or carrier from origin to final destination under a single document.
Example: A through B/L may cover an inland leg by rail followed by an ocean leg to the destination port.
Complete loss of the cargo for the insured. It may be actual (the cargo is physically destroyed or irretrievably lost) or constructive (recovery or repair is not economically viable).
Example: A container lost overboard during a storm is an example of actual total loss; cargo whose repair would exceed its value can be a constructive total loss.
The process of identifying the past and current location of a shipment as it moves through the supply chain, typically using carrier scans, GPS, or telematics data.
Example: A consignee may use a track-and-trace portal to monitor a shipment from collection to delivery.
The period during which cargo is being transported from origin to destination, including any temporary storage and transshipment along the route.
Example: Transit typically begins when the cargo leaves the seller’s warehouse and ends when it is delivered to the buyer’s premises.
Software that helps shippers and logistics providers plan, execute, and optimise the physical movement of goods across modes and carriers.
Example: A TMS may automate carrier selection, rate comparison, and shipment booking.
A standard unit for describing container capacity, based on a 20-foot ISO container. A 40-foot container counts as two TEUs.
Example: A vessel with a nominal capacity of 18,000 TEU can carry the equivalent of 18,000 twenty-foot containers.
A standardised container or pallet used in air cargo to consolidate baggage, mail, or freight into a single handling unit suitable for aircraft holds.
Example: Cargo destined for a wide-body flight is typically built up onto ULDs at the airline’s warehouse.
The total verified weight of a packed container, including cargo, packaging, dunnage, and the tare weight of the container, which must be submitted to the carrier before loading on a vessel.
Example: A shipper may weigh the loaded container at a certified scale to declare the VGM to the shipping line.
A calculated weight used by carriers for low-density cargo, based on the space the shipment occupies rather than its actual physical weight.
Example: Air carriers typically bill on the higher of actual gross weight or volumetric weight.
Risks arising from war, civil war, revolution, terrorism, piracy, and similar hostile acts. These are usually excluded from standard cargo policies and may be covered under a separate war risks cover.
Example: Cargo affected by hostile acts may require a dedicated war risks cover in addition to the main cargo policy.
Software that supports day-to-day warehouse operations such as receiving, putaway, inventory tracking, picking, packing, and shipping.
Example: A WMS may direct an operator to the best storage location for incoming pallets based on velocity and size.
A coverage feature that extends the cargo insurance from the seller’s warehouse to the buyer’s warehouse, subject to the conditions and time limits set out in the policy.
Example: Coverage may begin when cargo leaves a manufacturer’s warehouse in Vietnam and end on delivery to a retailer’s warehouse in Australia.
The storage of goods in a dedicated facility between production and distribution, including activities such as receiving, put-away, inventory control, and order picking.
Example: An importer may use a regional warehousing partner to consolidate stock close to its main customers.
A non-negotiable transport document that serves as a receipt for the goods and sets out the terms of carriage, without acting as a document of title.
Example: A sea waybill can speed up release at destination because no original document needs to be surrendered.
Definitions are general descriptions of industry terms. Coverage and exclusions depend on the terms, conditions, and applicable law of each individual policy. For advice on your specific situation, please contact our team.
