Common Shipping Terms Every Business Should Know
The world of shipping and terms used by different carriers and different countries vary.
LTL, FTL, incoterms, freight, commodity, container… for a first-time shipper, these terms might seem strange and a little confusing.
Thankfully, World Options has created the following guide below help customers understand some of the most commonly used shipping terms and terminology.
A container or an intermodal container is a rectangular box made of corrugated steel used to transport goods.
This is a label which is usually printed of after a shipment is booked and attached to a package or freight and which contains the address of the shipper and the address of the receiver. Shipping labels will also contain a brief description of the item being shipped, a barcode, a tracking number, a reference number and the type of UPS shipping service which has been ordered by the purchaser of the goods.
If UPS are unable to pick up an item on the date scheduled by the seller, UPS will make three attempts of three successive business days in order to pick up the item.
A commercial invoice is a document produced by the seller of a product and given to the purchaser of a product which describes the price, description, quantity of goods and any taxes and duties paid.
A tracking number is a set of digits designed to track the movement of a package or a piece of freight. They are commonly provided to the person who initiated a shipping order, as a way of them accurately monitoring the transportation flow of their goods as they reach their destination. UPS tracking number is 18 characters long and always start with “1Z’
Certificate of Origin
This is a certificate which clarifies which state or country in which the goods originated. A certificate can be produced by a manufacturer or seller. A certificate of origin can also be produced by a chamber of commerce, in the country in which the product originated.
A semi-trailer is a metal box, which attaches to the back of a cab tractor truck. Most of World Options’ freight is shipped using semi-trailers.
NAFTA Certificate of Origin
A NAFTA certificate is a document which allows goods valued at over $1,000 to be shipped at a preferential tariff rate between the United States, Canada, and Mexico. A NAFTA certificate of origin needs to be completed by the exporter of an item and not the importer.
Commodity describes what is being sent as a raw material or a product. This can be ores, grain or coffee. When a commodity is being transported, the commodity becomes cargo. Commodities can also be traded by being bought and sold. This trade is known as Incoterms or International Commercial Terms.
When goods are transported inside or outside the European Union, EU law dictates that the goods need to be classified with a ten-digit number, which allows the goods to be processed properly and have the right amount of duty and taxes applied to them when passing customs.
Electronic Export Information (EEI)
A document required when shipping a schedule B item with a value greater than $2,500.
FTL stands for ‘full than truckload’. In an ‘FTL’ shipment the shipment will entirely fill up space inside a truck container.
LTL stands for ‘Less Than Truckload” which means that packages inside a truckload will not completely occupy the space.
A waybill is a document which details the item being shipped and contains specific details about the item. A waybill may contain information such as:
- the shipper’s name and address,
- the consignee's name and address,
- number of pieces
- weight (in kg or lbs)
- description of goods
- date of shipping
UPS requires a waybill for the shipping of multiple packages.
A Cites Permit is a permit which must be produced by the buyer and sender of goods, these goods originate from plant or endangered animals.
Bill of Lading (B/L)
A Bill of lading is a list, in the form of a receipt which specifies the items being transported in a ship’s cargo.
Incoterms are an abbreviation for “international commercial terms.” They are used by buyers and sellers so that each party clearly understands the terms and responsibilities during the transportation of goods so that any misunderstandings and confusions can be avoided.
An example of some incoterms includes:
- Ex Works (EXW)
- Free Carrier (FCA)
- Free on Board (FOB)