Embark on a journey through the dynamic dialogue of freight forwarding. Whether you’re new to freight forwarding or have been in the industry for a while and perhaps have never known what some terms actually mean, let’s decode the logistics lingo.
Your must know freight terms and phrases
Consignor and Consignee
The Consignor, also known commonly as the shipper, is the original owner or the sender of the goods and prepares the goods for shipment. The Consignee is the individual that receives them once the shipment arrives. They’re responsible for the receipt of the goods.
The point of transfer or ownership of the shipped goods can vary at different stages of the shipment, depending on the agreed terms.
Bill of Lading (BoL or B/L)
A Bill of Lading (BoL), serves as a crucial document in the intricate dance of shipping logistics. Issued by the Carrier to the Consignor, this document acts as a confirmation that the goods have been received in satisfactory condition and are ready for their journey to the Consignee.
Effectively a contract of carriage, the Bill of Lading outlines the terms and conditions that govern the transportation of these goods. It also functions as a receipt upon the goods’ commencement of travel and later transforms into a title upon reaching their destination.
This essential document also plays a financial role, allowing the Consignor to retain control by withholding the original Bill of Lading until payment is received, ensuring a seamless and secure exchange in the intricate world of global freight forwarding.
Incoterms
International Commercial Terms are a set of pre-defined terms set by the International Chamber of Commerce (ICC) that define tasks, costs, and risks in delivering goods. Choosing the correct terms impacts costs, risk management, and logistics, if you’re unsure you can speak to the team at Stockwell to understand the best terms for your shipment scenario.
CIF (Cost, Insurance, and Freight) & FOB (Free On Board)
If your freight is forwarding internationally, it must belong to someone. CIF and FOB are the two Incoterms that determine exactly who is responsible for goods in transit.
CIF (Cost, Insurance, and Freight)
CIF requires the Consignor to cover shipping costs and insurance. It ensures the Consignee that, from departure to arrival, any mishap is the seller’s liability. However, in CIF the Consignee has less control over costs, modes, and transit times.
An advantage of CIF is the convenience for buyers, as the Consignor manages all shipping arrangements, providing peace of mind to the Consignee.
FOB (Free On Board):
FOB ceases the seller’s responsibility when goods are loaded onto the ship. The Consignee takes over, bearing risks and costs. This offers more control over freight costs, transparency, and risk management for the Consignee.
The advantage of FOB is that it provides control over freight costs, transparency, and efficient risk management for the Consignee.
Terms to get your freight moving
LCL and FCL Freight Forwarding
When it comes to shipments, there are two main categories: Less than Container Load (LCL) and Full Container Load (FCL). It’s important to note that choosing between LCL and FCL is not just about the quantity of goods you’re shipping, it can also impact handling and delivery times.
LCL is economical for smaller shipments but may face longer customs clearance times as it’s shared container space with other shippers
FCL is efficient for larger volumes, providing quicker processing times as the container is from one shipper.
Demurrage and Detention
These terms represent penalties, highlighting the importance of efficiency in busy ports. Delays can cause cascading effects, emphasising the need for timely pick-ups and returns, that’s were penalties come in, acting as a deterrent for late pick-ups.
Cargo Manifest
This document aids customs in identifying high-risk shipments, ensuring safety and streamlining the processing of low-risk goods. It’s a complete breakdown of all the goods being carried on board a vessel.
Customs Duty
Customs Duty is a tax imposed by customs authorities for goods imported or exported. Customs Duty can also include tariffs on certain goods, often imposed by governments to protect domestic industries. To ensure the smooth flow of your freight, the Stockwells team can help you navigate customs brokerage.
Free Trade Agreement
A free trade agreement is an international agreement between two or more countries that eliminates certain barriers to trade, services and investment. Australia currently has eighteen agreements and partnerships in place to benefit exporters and importers.
Dunnage
A less common term, it refers to the material used to secure cargo during transportation, ensuring the integrity of goods. There’s a growing focus on using more eco-friendly and sustainable materials in dunnage to ensure goods arrive in pristine condition with less impact to the environment.
Quarantine Inspection
Goods arriving into Australia are subject to Australia’s strict biosecurity measures that involve inspections by the Department of Agriculture, Fisheries, and Forestry to prevent the introduction of pests and diseases.
Chain of Responsibility (CoR) Law
This Australian law holds everyone in the transport supply chain accountable for road safety, promoting a holistic approach to road safety.
In case you missed it, some more common terms covered
ETA (Estimated Time of Arrival) and ETD (Estimated Time of Departure)
ETA and ETD are pivotal timestamps in shipping, representing commitments and aiding in planning. They provide stakeholders with an expected timeline for a shipment’s movements.
Domestic Linehaul
Domestic Linehaul is commonly known as interstate transport and can help move your good from it’s arrival port to your warehouse destination. Stockwell is proud to offer linehaul and interstate transport services Australia-wide.
Transhipment
Transhipment involves transferring cargo from one vessel to another, often to capitalise on efficiencies or manage port capabilities. It’s a logistical decision based on factors like port capacities, vessel sizes, or cost and time efficiencies.
CBM (Cubic Metre)
CBM is a standardised volume measure crucial for understanding how much space cargo will occupy. Efficient space management is essential for cost-effective shipping.
Deadweight
Deadweight covers cargo and all aspects of a loaded ship, from crew provisions to fuel. It’s a comprehensive term reflecting the total weight a ship can carry.
TEU (Twenty-Foot Equivalent Unit)
TEU is a globally recognised measure that offers a uniform approach to gauging a ship’s cargo capacity. It aids communication between shipping companies, port authorities, and shippers.
Pallet
Pallets, usually made of wood, plastic, or metal, play a pivotal role in ensuring goods are securely stacked and easily lifted and moved by machinery like forklifts.
CFS (Container Freight Station)
CFSs are backstage hubs where goods are readied for shipment or unloaded from containers after arrival. They play a vital role in facilitating the efficient movement of goods.
Still feeling confused with logistics lingo?
The team at Stockwell International are here to help! Our friendly customer service-focused team lives and breathes logistics, and we can speak to you in terms you understand.
Speak to our team about getting your freight moving forward!
