Freight Forwarding terminology you need to know

Here’s a quick list of the most important basic terms you need to understand in order to gather reliable information from your freight forwarder:


Whether you’re dealing with air freight, sea freight or another type of service, the common terminology is going to be the same.



Consignee

the consignee is the importer


Third Party Move/Triangle shipment

You buy from a supplier and have goods shipped directly to your customer in another country. – Very important that you understand the terms that you have purchased under and sold under. They often won’t be the same, so you should be aware of your financial obligations under both correct means of issuing Bill of Lading


Express Release/Telex Release

Refers to bill of lading. Under telex/express release, you do not require an original bill of lading from the supplier. You can gain release of your goods with a copy. Suppliers will normally only arrange a telex release, once you have paid them for the goods or you are in compliance with agreed payment terms.


Customs clearance

Also: Customs Entry/Customs Brokerage - The process of clearing your goods through customs/quarantine.


Bonded

Shipments are considered bonded while they’re under the control of the customs. Shipments are typically considered bonded until import duties are paid.


 

Incoterms

Terms of trade for the sale of goods. It is highly recommended you familiarise yourselves with these.



Incoterms 2021
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  • EXW: Ex Works

  • FOB: Free on Board

  • CFR: Costs and freight

  • CIF: Costs, Insurance & Freight

  • DAP: Delivered Duty Unpaid


 

Volume /Chargeable rate

Air 1 cbm=167 KG Sea 1 cbm= 1000 KG


eg: if you have airfreight that has a dead weight of 50 KG, however it is bulky and 1.5cbm, the chargeable weight would be 251 KG. it should be noted that couriers often have a different ratio application


 

Bill of lading

or BOL. A document is the most important document that provides information about what’s being shipped, who the consignee is and who the dispatcher is. This is a legal document.


Certificate of origin

In order for your customs agent to apply many Free Trade Agreements, they will require a certificate of origin. Suppliers would apply for this with the relevant governing body


Arrival notice

Document issued by freight forwarders to consignees advising them of their shipments arrival. If your shipments arrival details change many forwarders will send out an email with another arrival notice. Don’t ignore these! Forward the email on to your broker if your cargo moved CIF/CFR.


 


This is just a basic glimpse into the world of freight forwarding. There are numerous additional terms referring to the procedures, documents and the services being offered by such companies. The terms mentioned above rank amongst the most commonly used ones. If you know what they mean, you will streamline and enhance your communication with freight forwarding companies significantly.


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