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The International Supply Chain and Logistics industry is full of unique shipping terms and shipping abbreviations. And also these are quite important and used every day to describe everything from modes of transport, units of measure, Inventory, pricing structures, Incoterms, and much more.
So it is important that importers, exporters, and also freight companies to correctly communicate these terms to avoid problems or disputes arising from misunderstanding them. So therefore we have put together all the terms and abbreviations that are used in International Logistics and Supply Chain Management. You have to understand these terms in order to be successful in global trade. You can also download these terms as a PDF chart.
ABC analysis is the classification of items in inventory according to the importance defined in terms of criteria such as sales volume and purchase volume. The ABC analysis does the classification for products and the customers into three categories:- ( A- Outstanding Important) ( B- of average importance) ( C- relatively unimportant).as a source for a control scheme. ABC analysis helps to pay the right amount of attention to the right category of items/product.
An exporter can use the Advance Authorization Scheme to import the input/raw materials that are required for the execution of his/her export orders without payment of customs duty. This Facility is available to both manufacturers as well as merchant exporters.
As duty-free raw materials can be imported before the final product is exported, this scheme is called the Advance Authorization Scheme. Earlier this scheme was known as the Advance License Scheme.
AWB is an abbreviation for Airway Bill. Airway Bill is a contract between the owner of the goods/shipper and the air carrier. The document covers transport by air. The receipt issued by the carrier, whether an airline company or a freight forwarder, is a non-negotiable document serving as a receipt to the consignor for the goods, and containing the conditions of the transport. It consists of all the details of the consignee, shipper, origin airport code, destination airport code, the shipment value of goods, description of the goods, gross weight, and special handling instructions if any. These details are used so that the person can be contacted on the arrival of goods.
There are some situations in which a foreign manufacturer starts exporting the products to another country at a very low price as compared to the price in his/her domestic market. Such tricks are referred to as the ‘dumping’ and are used to get rid of the unsold or excessive stock or to cause injury to the domestic industry. So to nullify the impact of dumping the Central Government can impose anti-dumping duty equivalent to the margin of dumping. Anti-dumping helps provide relief and safeguard to the domestic industry against the injury that is being caused by dumping.
This duty is compatible with WTO agreements, which permit imposition of such duty if the act of dumping is proven.
After-Sale Service is very important for any enterprise to succeed. After the goods/cargo is being delivered to the customer there might be the chances that the customer may face a problem or any issue with the product. So at that moment, it is very important for any enterprise to provide the after-sale service. This may include the service such as repairs, maintenance and/or telephone support.
A Bill Of Lading(B/L) is the most important document in the shipping and logistics industry. This document is issued by the shipping company or its agent.
It acknowledges the receipt of the goods mentioned in the bill for shipment on board the vessel. This document provides title as to who legally owns the cargo. The document acts as a receipt for the goods that change the hands from exporter to the carrier. It also acts as a contract between the shipper/exporter and the carrier for the carriage of goods and to deliver the same in the like order and condition as received, to the consignee or his order provided the freight and other charges specified in the Bill of Lading have been duly paid.
The owner of the cargo or else the holder of the B/L has the legal right to claim the goods or else transfer the ownership of the goods to any other person involved in trading those specified goods.
A Bill of Entry is filed by the importers before the arrival of the imported goods. It is submitted to the customs department as a part of the customs clearance process. Also, later on, a copy has to be submitted to the bank for verification purposes.
This is the cargo that cannot be shipped in the standard containers. This cargo is shipped as a unit or package (for example palletized cargo, boxed cargo, barrels, and drums).
These are the goods that are being kept in the bonded warehouse (government warehouse) until duty is paid. These goods are stored in the bonded warehouse under the supervision of customs authorities and are kept there until the custom duty is paid.
A Binder is a thin wood or burlap that is placed between the layers of containers. Binders help the stacked container to stay together.
B2B is an abbreviation for business to business. This means that when one business/enterprise exchanges goods with another business are termed as a transaction between Business to Business.
B2C is an abbreviation for Business to consumer. This means that when the business sends the goods to its customers directly without any intermediaries in between is termed as Business to Consumer.
BAF means Bunker Adjustment Factor. BAF is also known as the ‘Fuel Adjustment Factor’. BAF is an adjustment in shipping companies’ freight rates to take into account the fluctuation(increase) in the price of the ship’s fuel. This practice has been followed by all shipping conferences since 1973 when there was a great surge in bunker prices. These charges are determined by carrier conferences and are applicable for a certain period and also for certain trade routes.
Bill of exchange is an instrument in writing , issued by the Seller (drawer) instructing the Buyer (drawee) to pay the seller’s bank (payee) a certain sum of money (normally the full invoice value) on demand (at sight) or at fixed or determine future time. A suitable form can be obtained from the seller’s bank or can be drawn up on a blank sheet of paper.
CAF means Currency Adjustment Factor. Shipping lines always quote their freight rates in US Dollars; however, they incur expenses in various currencies. In case of fluctuations in the value of currencies against the US Dollar, the shipping lines may face losses. To compensate for those losses, the currency adjustment factor or CAF is being introduced, so that there is no change in the freight revenues for the shipowner in spite of the currency fluctuations.
A Carnet or ATA (admission temporaries) is an international customs document issued by more than 87 countries. It is used for the temporary duty/tax-free export or import of goods under international conventions. It enables the holder to temporarily take merchandise into certain countries, as samples or for display purposes, without the payment of duties or taxes on equipment or merchandise.
CPT is an abbreviation for Carriage Paid to. “Carriage Paid To” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.
CIP is an abbreviation for Carriage and Insurance Paid To. “Carriage and Insurance Paid to” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination. “The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.”
CFR is an abbreviation for Cost and Freight. CFR means the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss or damage to the goods passes when the goods are on board the vessel. the seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.
CIF is an abbreviation for Cost Insurance and Freight. CIF means that the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss or damage to the goods passes when the goods are on board the vessel. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination. The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIF the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.
A Company/enterprise that is engaged in the business of transporting the goods. It is a company that is responsible for the transport of goods by air, water, and land. The main responsibility of the carrier is to ship the cargo/goods from one place to another.
The Inspection Certificate is required by some importers and countries in order to attest to the specifications of the goods shipped. A certificate of inspection is a document certifying that the concerned goods or merchandise was in good condition/state prior to its shipment. This declaration is usually performed by a government agency or by an independent testing organization.
The Insurance Certificate is used to assure the importer/consignee that insurance will cover the loss of damage to the cargo during transit(marine/air insurance). This can be obtained from the freight forwarder.
The Certificate of Origin is a very useful and important document when it comes to export-import trading This certificate indicates that the goods, which are being exported to the overseas market are actually being manufactured in a specific country mentioned therein. This type of certificate is sent by the exporter to the importer. The certificate of origin document is used for the clearance of the cargo/goods from the customs authority at the port of the importing country. The certificate of origin is useful when the country of export and the country of import both have a current Free Trade Agreement in place. These Free Trade agreements can almost reduce or eliminate the import duties and tariffs in the country of import. The Chamber of Commerce is the one that will authorize the Certificate of Origin Documents that are going to be used in the global trade.
The chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user, is known as the distribution chain or the distribution channel. The distribution channel is a process of transferring the products or services from producer to consumer or end-user. Channel of Distribution includes the warehouses, brokers, wholesalers, and retailers, etc.
As the invoice is a fundamental document of prime importance. The invoice is being prepared first, and several other documents are then prepared by deriving information from the invoice. The Commercial Invoice confirms all of the details of the goods that have been shipped. This includes shipper & consignee’s details, product information, pricing, currency, and IncoTerm details.
In Simple terms, the consignor is the sender of the goods.
The Consignee is the receiver of the goods.
CFS is an abbreviation for Container Freight Station. CFS is a warehouse station that is responsible for the consolidation or deconsolidation of cargo before the goods are imported or exported. In simpler terms, it is a place where the goods are stored before loading and after the unloading of the cargo.
CRM is an abbreviation for Customer Relationship Management. CRM is an information system or a methodology with Internet capabilities that help an enterprise manage the customer relationship. CRM helps to generate leads for the marketing teams, telesales, billing, order taking, and delivery confirmations. CRM connects organizations and improves their relationship with the customers.
CONCOR is an abbreviation for Container Corporation of India. CONCOR provides the rail or road link between ports and terminals. CONCOR is the sole provider of containerized rail transport in India. The Rail link reduces the dependence of the exporters on road transport and also helps reduce traffic congestion on roads.
CKD is an abbreviation for a complete knockdown. CKD means that the product is being delivered in parts and then later on it is being assembled at the destination by the consumer or the reseller. This process of shipping the products in parts is done to save the freight charges. An example of this would be the automobile industry/bicycle industry in which the various components are delivered from suppliers worldwide and assembled in the importing country.
DWT is an abbreviation for Dead Weight Tonnage. Deadweight Tonnage is a measure of how much weight a ship is carrying or can safely carry. It takes into consideration the weight of goods/cargo, fuel, ballast water, freshwater, passengers/crew, but excluding the weight of the ship in the calculation.
DAP is an abbreviation for DAP. “Delivered at Place” means that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. The seller bears all risks involved in bringing the goods to the named place.
DAT is an abbreviation for Delivered at Terminal. DAT means that the seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal at the named port or place of destination. “Terminal” includes a place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal. The seller bears all risks involved in bringing the goods to and unloading them at the terminal at the named port or place of destination.
DDP is an abbreviation for Delivered Duty Paid.DDP means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination. The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities.
Duty Drawback is a refund of import duty paid on goods that are being exported. If the goods that are being imported and upon which the customs duty has been paid are exported or have been used in the manufacture of goods that are being exported, then the exporter may be entitled to a refund of the original import duty paid.
In simple terms, Duty Drawback can be claimed on the import duty paid on raw materials used for producing goods for export or on imported goods that were exported within a specific time frame.
DP means Delivery against the Payment. It is also known as sight draft. In this case, the buyer/importer cannot take the delivery of the goods/cargo and documents without making the payment. This means that the goods will be released only on the payment.
DA means Delivery against the Acceptance. It is also known as Usance draft. When the exporter agreed to give credit to the foreign buyer, he draws the Usance Bill of exchange. A draft may be according to the period of credit namely 30 or 60 days and it is presented to the importer who upon acceptance of the draft, receives the documents to obtain the release of the goods before payment is done for them. On the due date, the importer will make the payment to the bank. The Bank will then forward the money to the exporter’s bank.
Demurrage is a charge to be paid by the shipper or consignee to the carrier as a penalty for delaying the carrier’s cargo beyond the allowed free time. It is a charge that is levied by the port authority to the importer in cases they have not taken delivery of the full container and move it out of the port/terminal area for unpacking within the allowed free days.
Detention is the same as demurrage except that instead of applying to delays in cargo, detention applies to delays in equipment. Detention is the charge levied by the shipping line to the importer in cases when they have taken the full container for unloading let’s assume within the free days but have not returned the empty container to the nominated empty depot before the expiry of the free days allowed.
DGFT means Directorate General of Foreign Trade. The DGFT has its Headquarters located in New Delhi, is responsible for formulating and implementing the Foreign Trade Policy with the main objective of promoting India’s exports. DGFT HQ and many of its regional offices are ISO 9000:2008 certified Organizations. All regional offices provide facilitation to exporters in regard to developments in international trade, i.e. WTO agreements, Rules of Origin and anti-dumping issues, etc. to help exporters in their import and export decisions in an international dynamic environment.
The objective of DEPB is to neutralize the incidence of Customs duty on the import content of the export product. The neutralization shall be provided by way of grant of duty credit against the export product.
DFRC is issued to a merchant-exporter or manufacturer-exporter for the import of inputs used in the manufacture of goods without payment of basic customs duty. However, such inputs shall be subject to the payment of additional customs duty equal to the excise duty at the time of import.
The word EXIM is an abbreviation for Export-Import.
ETA means Estimated Time of Arrival.
ETD means Estimated Time of Departure.
EDI is an abbreviation for Electronic Data Interchange. In the case of electronic data interchange, businesses communicate and exchange information with the help of electronic medium rather than the traditional method of exchanging information. EDI simply means to exchange the data/files electronically. EDI system is operating at customs offices for smooth handling of international trade operations.
E-Tendring is an internet-based process in which the entire tendering process, right from advertisement to finalization of tenders is carried online. The advantage of e-Tendring is there is a speedy exchange of information.
EPC is an abbreviation for Export Promotion Council. The government in many countries has set up the Export Promotion Council (EPCs) to provide information/help and to facilitate the exports. The main purpose of the EPC is to promote and develop the export of the country. The Export Promotion Council (EPC) keeps the latest information of the trends and new opportunities in the international market for goods and services and assist their members in taking advantage of such opportunities in order to expand and diversify exports.
EXW is an abbreviation for EX-Works. EXW is the term which is used more often in international shipping term or Incoterm. This term explains the division of responsibility between the shipper(exporter/Seller) and the Importer(consignee/buyer) in the process of shipping the goods from one country towards another.
Under the EX Work shipping term, the sole responsibility of the seller in the whole transportation chain is to make sure that the goods/cargo that they are selling has been made available for collection at the seller’s premises.
Ex Works” means that the seller delivers when it places the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e., works, factory, warehouse, etc.). The seller does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export, where such clearance is applicable.
ECGC means Export Credit Guarantee Corporation of India Ltd. It was set up in the year 1957 with the objective of promoting exports from the country by providing Credit Risk Insurance and other related services for exports. It is wholly owned and managed by the Government of India.
Over the years ECGC has designed different export credit risk insurance products/policies to suit the requirements/needs of Indian exporters and commercial banks extending export credit.
A freight forwarder is a company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market or from the manufacturer to the final stage of distribution. A freight forwarder is a private service company that is being licensed to support shippers and the movement of their cargo/goods. They act as an agent for the exporter (the shipper) in moving cargo to an international destination.
For the movement of international cargo/goods, the exporter needs an expert with knowledge of various formalities and contacts with various agencies, such as shipping lines, port authorities, customs, warehouses, etc. Since the freight forwarders are working and providing service in this industry for long time they possess such contacts and knowledge for the benefit of the shipper.
FOB is an abbreviation for Freight on Board. FOB means the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel, and the buyer bears all costs from that moment onwards.
FAS is an abbreviation for Free Alongside Ship. FAS means that the seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment. The risk of loss of or damage to the goods passes when the goods are alongside the ship, and the buyer bears all costs from that moment onwards.
FCA is an abbreviation for Free Carrier. FCA means the seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place. The parties are well advised to specify as clearly as possible the point within the named place of delivery, as the risk passes to the buyer at that point.
FCL is an abbreviation for Full Container Load. When an exporter has a sufficient quantity of cargo/goods to send to the overseas buyer/importer then the exporter chooses to book the Full Container Load and does not choose to go for the Less Container Load (LCL). In an LCL container where the container space is shared among other importers, this is not possible in FCL. In an FCL the complete space in the container is owned by only one shipper/exporter/sender.
FIB is an abbreviation for Freight Investigation Bureau. The FIB is based at the Office of the Director-General Shipping, Mumbai and it looks into the problems related to ocean freight. It also gives suggestions and settles disputes related to ocean freight.
FTL or ‘Full Truck Load’ means that the load will fill up the whole truck. Generally, shippers that accommodate full truckloads cater to those customers who normally ship in large amounts. The huge quantities of goods being shipped equalizes the cost of a larger truck. The larger FTL loads generally contain a shipment from one firm and one destination.
A FIFO is an inventory management system in which the first or oldest stock is being used first. This ensures that the oldest stock is being used first and reduces the costs of obsolete inventory. For example:- in a grocery store, perishable goods like milk that have close expiry dates will be stocked in front to be sold. All grocery stores apply the FIFFO inventory management method to avoid obsolete inventory which can no longer be sold. Since FIFO ensures the usage or selling of the oldest items in stock before they become obsolete companies save money.
FTZ is an abbreviation for Free Trade Zone. These are the port/zone designated by the government of a country for duty-free entry of any prohibited commodity/goods. Merchandise may be stored, displayed, and can be used for manufacturing within the zone/area and then re-exported without any duties.
When the exporter ships the goods in the overseas market and before receiving the payment, he can consider ‘factoring’ his export bill. In other words, factoring is a financial transaction whereby an exporter sells his accounts receivables (means the invoices) to a third party (called a factor) at a lesser rate in exchange for instant cash with which to finance continued business.
There might be the risk involved in export transactions whereas the importer/buyer may not make payment for the goods/cargo that is being exported. In this situation, the exporter may consider selling the accounts receivable to a third party, who is called a factor. So then the factor assumes all administrative responsibility of collecting the dues from the buyer and the associated credit risk. The factor conducts his/her own research of the importer before purchasing the receivable.
Factoring is a type of financial service given by specialist organizations. It is considered to be one of the oldest forms of business financing. Also, it can be considered as a cash management tool for several firms where long receivables are a part of the business cycle. Factoring is to be considered as a service that covers the financing and collection of account receivables in domestic and international trade. The advantage to the exporter is that he is relieved from the burden of collecting the receivables, verifying the creditworthiness of the importers, and receives immediate cash, which will improve the cash flow.
GST is an abbreviation for Goods and Service Tax. GST tax system works as the one indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain with set-off benefits at all the previous stages.
The Benefits of GST for business will be such as Easy Compliance, Uniformity of tax rates and structures, removal of cascading, improved competitiveness, gain to manufacturers and exporters and the benefit of GST to the government will be in simple and easy administer, better controls on leakage, higher revenue efficiency. Whereas the consumer will benefit from this as single and transparent tax proportionate to the value of the goods and services, and also in relief in overall tax burden.
The General Agreement Trade and Tariffs is a legal agreement between many countries whose main aim is to promote international trade by reducing the trade barriers such as tariffs. GATT was signed by 23 countries on 30 October 1947 after an intensive negotiation.
Gross Weight is the total weight of the shipment along with the packaging.
Green Supply Chain Management is now being increasingly implemented by many business enterprises to overcome the challenges for logistics management in the 21st century. Green supply chains tend to incorporate environmentally friendly practices/methods by way of reducing wastes and less exploitation of natural resources. Enterprises are creating an awareness of environmentally friendly practices and are formulating company policies to put environmental activities into practice in the logistics activities of the supply chain.
Thus GSCM = Green Purchasing + Green Manufacturing/ Materials Management + Green Distribution / Marketing + Reverse Logistics.
HSN is an abbreviation for the Harmonised System Nomenclature. It is also referred to as the HS code. HS code plays a very important role in determining import and export controls as well as duty rates for a product in international trade. The HS Code is developed by the World Customs Organization (WCO), these codes are used in the classification of goods that are traded in the international market. It came into effect in 1988 and it consists of over 5000 commodity groups. Each group is given an identification code of six digits. These codes are used by all the countries for import and export trade.
Inventory is a list of goods and materials stored for future use, mainly in the production process or those goods and materials themselves, held available in stock by a business. Thus today’s inventory is tomorrow’s production. Therefore inventories are materials or resources of any kind having some economic value, either awaiting conversion or in use in the future.
Inventory is an indispensable part of every organization that it has to maintain for various purposes. Over inventory or under inventory, both can cause a financial impact health of the business, and affect business opportunities. Inventory holding is being adopted by organizations, as a hedge against different external and internal factors, as a precaution, as an opportunity, as a need, and for speculative purposes. There are three types of cost that together constitute total inventory costs:-
Inventory when in excess of current demand regularly means, that its owner must provide a place for its storage when not in use.
These are the cost incurred from getting a machine ready to produce the desired good.
It is simply the cost of the purchased item itself.
ICD is the abbreviation for the Inland Container Depots. ICD is also known as dry ports since they have all the facilities which a normal port has for handling the export-import cargo. The ICD performs the same functions as a port, except for the loading and unloading of ships (the stevedoring operation).
An ICD is a large enclosed/secure area where cargo-carrying containers are stored under customs bond. They are connected to seaports by rail network or by the road or both and such movements are carried out under customs bond. ICD also store empty containers before they are sent off for stuffing. Prior to the creation of ICD, the containers were sent from seaports and would return back at the seaports and this was a wasteful exercise in terms of time as well as money, so after the creation of ICDs, the shippers can save time and money by calling containers from a nearby ICD.
The Indian Institute of Packaging was set up in the year 1966. The Institute began in a very humble way, with an office in Mumbai, and now has expanded the operations/ activities with its Head Quarter Located in Mumbai and other centers located at Delhi, Kolkata, Hyderabad, and also in Chennai.
The main goal of this organization is to improve the standard of packaging needed for the promotion of exports and create infrastructural facilities for overall packaging improvement in India.
Incoterms are universal trade terms published by the International Chamber of Commerce. They are related to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods sold.
Published by the International Chamber of Commerce(ICC) with its headquarters located in Paris, these terms are recognized by governments, legal authorities, and practitioners globally to assist in International Trade. Generally, parties to a contract are unaware of the different trading practices in their respective countries. This leads to misunderstanding, disputes, and waste of time and money. Thus Incoterms are the solutions to these problems which help countries involved in international trade in interpreting trade terms.
Incoterms consist of three-letter codes that are intended to communicate the tasks, costs, and risk associated with transportation and delivery of goods in an international transaction. They define how the responsibility is allocated between the seller/exporter and the buyer/importer for different parts of the transaction.
The Incoterms are:- EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAT, DAP, and DDP.
The Jawaharlal Nehru Port (JNPT) is also known as the Nhava Sheva port, it is one of the largest container port in India which is located in Navi Mumbai’s Raigad district (Maharashtra) and handles the majority of containerized trade that is done in India. It is responsible for around 50% of the total containerized cargo volume, across the major ports of India. The JNPT port has 5 container terminals which are the The Jawaharlal Nehru Port Container Terminal (JNPCT); the Nhava Sheva International Container Terminal (NSICT); the Gateway Terminals India Pvt. Ltd.(GTIPL); Nhava Sheva International Gateway Terminal (NSIGT) and also the newly commissioned Bharat Mumbai Container Terminals Private Limited (BMCT).
JIT is an abbreviation for Just in Time. JIT is quite popular these days. JIT is a system in which the supplies, materials, or goods produced or procured on the basis of demand. Joint collaboration between the suppliers, manufacturers, and distributors, or retailers puts an effort not only in cutting/reduce the inventory holding cost but also strive to meet the customer demands.
The nautical mile is given the abbreviation as Capital (M) or Capital (NM). Nautical miles are used by the sailors or navigators and the reason they uses because it is directly related to latitude and longitude. So the plane or ship that travels big distances that travel around the world they measure it in nautical miles.
Less than Container Load (LCL) means a small amount of cargo that is insufficient to on its own be economically shipped and needs to be consolidated with other small cargoes so that it can be shipped in one Full Container Load (FCL).
For example:- If a shipper has small quantities that are needed to be shipped he may not choose to use the Full container load as the quantity that needs to shipped is less so he contacts the freight forwarder for consolidation of small cargoes along with other cargoes that are going the same destination.
Letter of credit is an instrument issued by the bank and it adds a bank’s promise to pay the exporter on behalf of the importer, provided the exporter has complied with all the terms and conditions of the LC. A letter of credit issued by a foreign bank and sometimes it is confirmed by a U.S. bank. This confirmation means that the U.S. bank (that is the confirming bank) adds its promise to pay to that of the foreign bank (the issuing bank). There are different types of Letter of credit (LC) such as the Revocable, Irrevocable, Revolving, Transferable, Red Clause. Most of the time the irrevocable LC is being used because it cannot be changed unless both parties agree and it is not advisable to use the revocable LC as it carries many risks for the exporter.
Logistics means the transfer/movement of goods/cargo from Point A towards Point B. The Logistics Service provider companies are the ones that provide the service of freight forwarding and customs brokerage etc.
Less than truckload is also called the Less than container Load(LCL). In the case of LTL carrier mixes freight from several customers in a single truckload. LTL shipping is more cost-effective in comparison to the other available shipping alternatives. The main advantage of an LTL carrier is having the things delivered for a fraction of the cost of hiring a whole truck and trailer for one shipment.
As the carrier transports many shipments from several shippers, the freight carrier pools all the shipments into a single truck. This method is like cost-sharing with friends, where each shipper pays a part of the cost of the truck. LTL usually has more destinations or pick-up locations to accommodate the various requirements of the different shipments on board.
Lift on, Lift off are also known as the LOLO ship. LOLO ships are the ones that are equipped with onboard cranes that are used for loading and unloading cargo/goods without any support from the external cranes.
LIFO means the Last goods to be stocked are the first goods to be removed. LIFO is an inventory system that a company uses to assess their inventory cost that will affect their profits. The amount of profit a company declares will directly affect its income taxes. In accounting terms, LIFO usually means a lower profit to the company, but it has the advantage of paying fewer income taxes. This would be more cash in hand for a business that can be used for investment or purchasing.
It is the total cost which an importer pays to have goods delivered at their premises. Landed costs generally consist of the cost of goods, currency exchange, international transport, insurance premium, port charges, delivery charges, custom duties, bank charges, and also documentation fees.
After the cargo is cleared from the customs examination and other formalities are over and then it is handed over to the shipping company for loading. A mate’s receipt is being issued and signed by the officer of a vessel, to acknowledge that the goods ready to be loaded on the ship. The Mate receipt act as evidence that the goods were loaded in the vessel, but the receipt does not have the same validity as compared to that of the Bill of Lading (B/L).
NVOCC stands for the Non-Vessel Operating Common Carrier. An NVOCC acts as a cargo consolidator who buys space from the carrier and then sells the space to the small shippers. The NVOCC can also be mentioned here as a shipper to the carriers and a carrier to the shippers.
An NVOCC is also considered to be an ocean carrier that transports goods under its own House Bill of Lading, without operating an ocean transportation vessel. The NVOCC signs the contract with the shipping line that guarantees the shipment of a certain number of units each year and in return the shipping line offers some suitable rates to the NVOCC.
In simple terms, the net weight is the weight of the product without its packaging.
No objection certificate (NOC) is a legal document that is being issued by an organization or an individual to say that they have no objection to the mentioned details in the document. If the exporter wants to bring back the goods from the importers country due to some reason/issues then, in that case, the exporter requires NOC from importers and if there is a delay in this process then there are chances to bear heavy demurrage on the consignment, so for the safer side, it is advisable to the exporter that they must always ask for NOC from the importer/buyer.
The Over Dimensional Cargo is a cargo that extends outside the loading deck of the vehicle that is transporting the cargo. In simple terms Over Dimensional Cargo (ODC) means the cargo that is being carried as a single divisible unit and which then exceeds the dimensional limits that are being prescribed as per the Rule 93 of Central Motor Vehicle Rules,1989 made under the Motor Vehicle Act.
Every ODC requires permission from the state authorities before traveling on the road and if a vehicle is caught carrying the ODC without any permissions, a fine is imposed(the fine depends on the state policy).
In general, the Performa Invoice is a kind of pro forma of the invoice. The Pro Forma Invoice is being prepared by an exporter/seller and is sent to the importer/buyer in the overseas market for necessary acceptance.
When the importer/buyer is ready to purchase the goods from the seller he will request a Pro forma Invoice. This document suggests to a buyer what the actual invoice would look like if he were to place an order and the goods being supplied to him.
Port of Loading is also referred to be as the port of exit. Port of Loading (POL) is the port/place at which the goods/cargo is being loaded onto the ship.
The Port of discharge is also referred to be as the port of entry. A port of discharge is a place/port at which the goods/cargo is being unloaded from the ship.
The pre-payment is also known as the advance payment. It is the payment that the buyer pays the seller for the goods prior to the shipment.
The buyer sends the purchase order document to the seller. The Purchase order contains all the confirmed details regarding the product and pricing details.
The Packaging list is a document stating how all the products/goods have been packaged inside the shipment. The Packaging list is a very useful and important document for the customs authority at the time of examination and it is also useful for the warehouse keeper of the buyer to maintain the record of the inventory. The Packaging list consists of the details regarding the packaging type, quantities, sizes, and weights of all packages included inside the shipment. But it does not include the details of the per-unit rate and the value of goods.
The quotation is a document that is being prepared by the exporter/seller of the goods and is given to the importer/buyer. This document contains the details regarding the product specification, pricing, currency, packaging details, Incoterm, payment details, port of loading, port of discharge, and the shipping method.
QC means Quality Control. The term QC is used quite in the shipping industry. QC is a set of procedures intended to ensure that a product or service adheres to defined quality criteria or meets the requirements of the client..
The government in many countries has set up the Export Promotion Council (EPCs) to provide information/help and to facilitate the exports. The main purpose of the EPC is to promote and develop the export of the country.
An exporter may apply and register and become a member of EPC. On being given the membership of the particular promotion council the applicant shall be granted the Registration -cum Membership Certificate (RCMC).
The term remittance is mostly used when one person sends the payment to another person who is based in another country. This payment can be of any type which may consist of bills or invoices etc.
The reefer containers are used for the transportation of perishable cargo. These containers are designed to preserve the freshness of cargo at the most stable temperatures.
While sending goods from one country to another, an exporter has to fulfill many requirements such as submitting various types of documents, acquiring licenses, paying the duties, and so on. The Shipping Bill is required for seeking the permission of customs to export the goods by sea/air, so unless the exporter files the shipping bill, one cannot load the goods. The shipping bill contains the information regarding the description of export goods, the number and kind of packages, shipping marks & numbers, the value of the goods, the name of the vessel, the country of destination, etc. The goods/cargo can only be exported out of the country only after the shipping bill has been checked and is endorsed by the customs with a Let export Order(LEO).
There are four different types of Shipping Bill which are mentioned below:-
This type of shipping is printed on yellow paper and is for the goods that are to be exported on the payment of export duty.
The duty-free shipping bill is being printed on white paper and is for the goods exported without the duty payment. These are not eligible for duty drawback.
The drawback shipping bill is being printed on green paper but once the drawback has been paid, it is printed on the white paper.
This type of shipping bill is used for the export of goods under the government’s Duty Entitlement Passbook Scheme (DEPB) scheme and it is printed in blue.
A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request. The supply chain includes not only the manufacturer and suppliers, but also the transporters, warehouse, retailers, and even the customers themselves.Supply Chain Management is a set of procedures, which collectively enables companies to integrate their activities for efficient management of production, procurement, storage, dispatch, and customer service.
Shipping Conference is a quite wide term which cannot be explained in short, but to put it in simple terms it is a group of ocean freight carriers that voluntarily come together for the purpose of limiting and regulating competition among themselves. Shipping conferences are also called the liner conferences & ocean shipping conferences, they are formal agreements between liner shipping lines on a specific route, price-fixing, profit division, managing capacity, allocating routes, and loyalty discounts.
Generally, there are two types of shipping conferences, the ‘closed type’ and the ‘open type’.In case of closed conferences, they reserve the right to refuse membership to a shipping line. It works as an exclusive club, the membership to which is restricted whereas on the other hand in an open conference there are no restrictions upon membership other than ability and willingness to serve the trade.
India is currently the fastest-growing economy in the world, after China. The service sector in India has seen major expansion but the manufacturing sector has not been exploited yet. The SEZ in China has contributed a lot towards the growth of their nation’s economy. So after understanding the Chinese SEZ, India too has decided to create similar types of zones that will act as a platform to exporters as well as the foreign direct investment(FDI). The policy was introduced o 1 April 2000 for setting up SEZ in India with a motive to provide an internationally competitive and hassle-free environment for exports.
An SEZ is a specifically delineated duty-free enclave and is deemed to be foreign territory for the purpose of trade operations and duties& tariffs.
In International trade, the term shipper means the company that is selling the goods in overseas markets. But the shipper may also be known as the exporter or the consignor.
A Straight Bill of Lading is a non-negotiable bill of lading in which the goods are consigned directly to a named consignee.
Stuffing means putting the cargo into a container.
Terminal Handling Charges can also be considered as the Container Service Charges(CSC). The THC is the fees/charges that are being charged by the shipping terminals not only for the storage but also for the positioning of the containers before they are being loaded on the vessel. These charges usually consist of goods handling charges, unloading the container, stacking, and the crane service.
In general terms, the THC is the charges that are being collected by the terminal authorities at each port for equipment maintenance, equipment use, as well as for loading and offloading the cargo. These charges vary from port to port of the different country, as the cost of handling the goods/cargo would not be the same for all the ports.
No matter how big and heavy are the cargo ships the tug boats are still very important for the maritime industry. The Tug boats are small, strongly built ships that are used to guide/assist the large vessel/ships into and out of the ports. In short, these ships are used to assist the large vessel in berthing, unberthing as well as the movement of these large vessels within the port limits, and these kinds of ships can be seen on all the ports around the world. The Tug boats are also used to assist the large vessels during the period of bad weather or else when the vessel is carrying the dangerous or polluting cargoes.
The Purchase Department of any organization put outs the advertisement for the supply requirement opportunities to a number of suppliers through the ‘Tender Notice’ on a web portal. This tendering process encourages competition and provides a greater pool of suppliers to select from and finalize the deal.
Then the interested suppliers then prepare a tinder, the documents that draft the offer that they are making, and it includes the pricing, delivery schedules, as well as their eligibility for the project or procurement. They also highlight advantages over the competitors, provide information on qualifications, competencies as well as experience. The submitted tenders are then evaluated with regard to the organizations needs/requirements/criteria. The offer that best meets all of the requirements outlined in the request and provides the value for money generally wins the contract.
Tare weight is also known as the unladen weight, and it is usually the total weight of a truck/tractor/container when it is empty. The tare weight is determined by subtracting the net weight of the goods from the gross weight of the container. For the purpose of calculation, one can also check the load/weight of the vehicle on the electronic weighbridge.
In the case of the intermodal container, the gross weight is printed so that the calculation of the gross weight is done accurately when loading the goods/cargo.
A tariff is a tax that is being imposed on a product when it is imported into a country.
Terminals are also referred to as container terminals. It is a place where containers are picked up dropped off, maintained, and kept.
Trademark is usually comprised of a word, phrase, logo, symbol, design, image, or a combination of these elements. Registered Trademarks are almost always used as part of online branding strategies and therefore also serve as an important marketing role.
Telegraphic Transfer is an electronic means of transferring funds between banks.
A Unit Load Device(ULD) is considered to be a device that is used to move the cargo that is being shipped via airfreight. To be more specific ULD are the specially designed cargo pallets and containers that are being used to load the freight/luggage onto the aircraft. A ULD is used to consolidate the cargo/goods to assist the loading process onto an airplane and also to safely transport the cargo.
The ULD comes in two forms that are the pallet and the containers. The International Air Transport Association (IATA) is responsible for publishing the regulations around the use of Unit Load Device(ULD).
A ship is also known as a vessel. Generally, a ship is a larger vessel built to transport either the passengers or else the cargo. The cargo ships are classified into different types on the basis of the purpose, size, type of cargo they carry. Various types of ships carry these cargoes, some of the ships are as follows.
1.General cargo Vessel.
2.Bulk Carriers.
3.Tankers.
4.Passenger Vessel.
5.Container Vessel.
6.Roll-on/Roll-Off (Ro/Ro) Vessel.
7.Chemical Tankers/ Crude Carriers.
8.Livestock Carriers.
9.Reefer Vessel.
10.Tug Boats.
The time difference between the arrival of a vessel and its departure is known as Vessel Turnaround Time.
The Vessel Turnaround time is used to measure the efficiency of the port operations.
In India, venture capital came into the existence during the pre-independence period where many of the managing agency houses acted as venture capitalists, providing both finance and management to many new and high-risk industries. Venture Capital refers to money that is invested in companies during the early stages of their development. Such funds may come from wealthy individuals , government-backed Small Business Investment Companies (SBICs) , or professionally managed venture capital firms. Since investing is an unproven business venture is highly speculative, venture capital firms. Since investing in an unproven business venture is highly speculative, venture capitalists generally target companies that they believe offer significant potential for growth , and therefore an opportunity to earn a high rate of return in a relatively short period of time.
The term consists of two words – ‘venture’ & ‘capital’. The dictionary meaning of venture is “undertaking chance or danger” and capital means “the estimated total value of the business.” Thus Venture Capital refers to the estimated total value of a business used for undertaking a chance or danger. According to the International Finance Corporation (IFC) “venture capital is an equity featured capital seeking investment in new ideas, new companies, new production, new process or new services that offer the potential of high returns on investment.
Venture Capital is a form of “risk capital”. In other words, capital that is invested in a project (a business) where there is a substantial element of risk relating to the future creation of profits and cash flows. Risk capital is invested as shares ( equity) rather than as a loan and the investor requires a higher “rate of return” to compensate him for his risk.
Wharfage is a fee that is being charged by the freight terminal. It can be also referred to as a port duty. It is the fees/charges/cost for using the wharf for loading/unloading cargo and it is charged by the terminal operator/dock owner to the shipper for handling the cargo. Usually, these wharfage charges are included in the base freight rate or the Terminal Handling Charges.
Robert Hughes has defined Warehouse as “Warehousing is a set of activities that are involved in receiving and storing of goods and preparing them for reshipment.”
Warehousing plays a very important role in the international supply chain and logistics. Warehouses are the godowns for keeping and storing the goods at various points along the distribution network to improve the availability of material to customers and also simultaneously reduce the transportation costs.
Planning a warehouse is very important for proper storage and materials handling.
The different types of warehouses are Public, Private, Bonded, Government, Cold Storage, Consolidation, Break Bulk, Special Economic Zone, Warehouse for Reverse Logistics.
The services/functions provided by the warehouse are:- Receiving the goods, Preparation of Record, Barcoding and labelling, Information about the receipt/Accounting, Storage, Packing, Order Processing, Reverse Logistics, Returns as well as repairs.
The WTO headquarters is located in Geneva, Switzerland and was established on 1 January 1995. The WTO is the only global international organization that is dealing with the rules of trade between nations. The primary goal of the WTO is to ensure that trade flows as smoothly, convenient, and freely as possible.
For more information on WTO please visit:- https://www.wto.org/english/thewto_e/thewto_e.htm
An electronic weighbridge is a large set of scale mounted permanently on a concrete foundation/base that is used to weight the entire heavy road vehicles and their contents. The load that is being carried by the vehicle is usually calculated by weighing the vehicle when it is empty and also when it is being loaded. After paying the charges for using the weighbridge the weighbridge operator gives the receipt that contains all the load details which can be used for reference as well as record purpose.
ABC analysis is the classification of items in inventory according to the importance defined in terms of criteria such as sales volume and purchase volume. The ABC analysis does the classification for products and the customers into three categories:- ( A- Outstanding Important) ( B- of average importance) ( C- relatively unimportant).as a source for a control scheme. ABC analysis helps to pay the right amount of attention to the right category of items/product.
An exporter can use the Advance Authorization Scheme to import the input/raw materials that are required for the execution of his/her export orders without payment of customs duty. This Facility is available to both manufacturers as well as merchant exporters.
As duty-free raw materials can be imported before the final product is exported, this scheme is called the Advance Authorization Scheme. Earlier this scheme was known as the Advance License Scheme.
AWB is an abbreviation for Airway Bill. Airway Bill is a contract between the owner of the goods/shipper and the air carrier. The document covers transport by air. The receipt issued by the carrier, whether an airline company or a freight forwarder, is a non-negotiable document serving as a receipt to the consignor for the goods, and containing the conditions of the transport. It consists of all the details of the consignee, shipper, origin airport code, destination airport code, the shipment value of goods, description of the goods, gross weight, and special handling instructions if any. These details are used so that the person can be contacted on the arrival of goods.
There are some situations in which a foreign manufacturer starts exporting the products to another country at a very low price as compared to the price in his/her domestic market. Such tricks are referred to as the ‘dumping’ and are used to get rid of the unsold or excessive stock or to cause injury to the domestic industry. So to nullify the impact of dumping the Central Government can impose anti-dumping duty equivalent to the margin of dumping. Anti-dumping helps provide relief and safeguard to the domestic industry against the injury that is being caused by dumping.
This duty is compatible with WTO agreements, which permit imposition of such duty if the act of dumping is proven.
After-Sale Service is very important for any enterprise to succeed. After the goods/cargo is being delivered to the customer there might be the chances that the customer may face a problem or any issue with the product. So at that moment, it is very important for any enterprise to provide the after-sale service. This may include the service such as repairs, maintenance and/or telephone support.
A Bill Of Lading(B/L) is the most important document in the shipping and logistics industry. This document is issued by the shipping company or its agent.
It acknowledges the receipt of the goods mentioned in the bill for shipment on board the vessel. This document provides title as to who legally owns the cargo. The document acts as a receipt for the goods that change the hands from exporter to the carrier. It also acts as a contract between the shipper/exporter and the carrier for the carriage of goods and to deliver the same in the like order and condition as received, to the consignee or his order provided the freight and other charges specified in the Bill of Lading have been duly paid.
The owner of the cargo or else the holder of the B/L has the legal right to claim the goods or else transfer the ownership of the goods to any other person involved in trading those specified goods.
A Bill of Entry is filed by the importers before the arrival of the imported goods. It is submitted to the customs department as a part of the customs clearance process. Also, later on, a copy has to be submitted to the bank for verification purposes.
This is the cargo that cannot be shipped in the standard containers. This cargo is shipped as a unit or package (for example palletized cargo, boxed cargo, barrels, and drums).
These are the goods that are being kept in the bonded warehouse (government warehouse) until duty is paid. These goods are stored in the bonded warehouse under the supervision of customs authorities and are kept there until the custom duty is paid.
A Binder is a thin wood or burlap that is placed between the layers of containers. Binders help the stacked container to stay together.
B2B is an abbreviation for business to business. This means that when one business/enterprise exchanges goods with another business are termed as a transaction between Business to Business.
B2C is an abbreviation for Business to consumer. This means that when the business sends the goods to its customers directly without any intermediaries in between is termed as Business to Consumer.
BAF means Bunker Adjustment Factor. BAF is also known as the ‘Fuel Adjustment Factor’. BAF is an adjustment in shipping companies’ freight rates to take into account the fluctuation(increase) in the price of the ship’s fuel. This practice has been followed by all shipping conferences since 1973 when there was a great surge in bunker prices. These charges are determined by carrier conferences and are applicable for a certain period and also for certain trade routes.
Bill of exchange is an instrument in writing , issued by the Seller (drawer) instructing the Buyer (drawee) to pay the seller’s bank (payee) a certain sum of money (normally the full invoice value) on demand (at sight) or at fixed or determine future time. A suitable form can be obtained from the seller’s bank or can be drawn up on a blank sheet of paper.
CAF means Currency Adjustment Factor. Shipping lines always quote their freight rates in US Dollars; however, they incur expenses in various currencies. In case of fluctuations in the value of currencies against the US Dollar, the shipping lines may face losses. To compensate for those losses, the currency adjustment factor or CAF is being introduced, so that there is no change in the freight revenues for the shipowner in spite of the currency fluctuations.
A Carnet or ATA (admission temporaries) is an international customs document issued by more than 87 countries. It is used for the temporary duty/tax-free export or import of goods under international conventions. It enables the holder to temporarily take merchandise into certain countries, as samples or for display purposes, without the payment of duties or taxes on equipment or merchandise.
CPT is an abbreviation for Carriage Paid to. “Carriage Paid To” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination.
CIP is an abbreviation for Carriage and Insurance Paid To. “Carriage and Insurance Paid to” means that the seller delivers the goods to the carrier or another person nominated by the seller at an agreed place (if any such place is agreed between parties) and that the seller must contract for and pay the costs of carriage necessary to bring the goods to the named place of destination. “The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIP the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.”
CFR is an abbreviation for Cost and Freight. CFR means the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss or damage to the goods passes when the goods are on board the vessel. the seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination.
CIF is an abbreviation for Cost Insurance and Freight. CIF means that the seller delivers the goods on board the vessel or procures the goods already so delivered. The risk of loss or damage to the goods passes when the goods are on board the vessel. The seller must contract for and pay the costs and freight necessary to bring the goods to the named port of destination. The seller also contracts for insurance cover against the buyer’s risk of loss of or damage to the goods during the carriage. The buyer should note that under CIF the seller is required to obtain insurance only on minimum cover. Should the buyer wish to have more insurance protection, it will need either to agree as much expressly with the seller or to make its own extra insurance arrangements.
A Company/enterprise that is engaged in the business of transporting the goods. It is a company that is responsible for the transport of goods by air, water, and land. The main responsibility of the carrier is to ship the cargo/goods from one place to another.
The Inspection Certificate is required by some importers and countries in order to attest to the specifications of the goods shipped. A certificate of inspection is a document certifying that the concerned goods or merchandise was in good condition/state prior to its shipment. This declaration is usually performed by a government agency or by an independent testing organization.
The Insurance Certificate is used to assure the importer/consignee that insurance will cover the loss of damage to the cargo during transit(marine/air insurance). This can be obtained from the freight forwarder.
The Certificate of Origin is a very useful and important document when it comes to export-import trading This certificate indicates that the goods, which are being exported to the overseas market are actually being manufactured in a specific country mentioned therein. This type of certificate is sent by the exporter to the importer. The certificate of origin document is used for the clearance of the cargo/goods from the customs authority at the port of the importing country. The certificate of origin is useful when the country of export and the country of import both have a current Free Trade Agreement in place. These Free Trade agreements can almost reduce or eliminate the import duties and tariffs in the country of import. The Chamber of Commerce is the one that will authorize the Certificate of Origin Documents that are going to be used in the global trade.
The chain of intermediaries, each passing the product down the chain to the next organization, before it finally reaches the consumer or end-user, is known as the distribution chain or the distribution channel. The distribution channel is a process of transferring the products or services from producer to consumer or end-user. Channel of Distribution includes the warehouses, brokers, wholesalers, and retailers, etc.
As the invoice is a fundamental document of prime importance. The invoice is being prepared first, and several other documents are then prepared by deriving information from the invoice. The Commercial Invoice confirms all of the details of the goods that have been shipped. This includes shipper & consignee’s details, product information, pricing, currency, and IncoTerm details.
In Simple terms, the consignor is the sender of the goods.
The Consignee is the receiver of the goods.
CFS is an abbreviation for Container Freight Station. CFS is a warehouse station that is responsible for the consolidation or deconsolidation of cargo before the goods are imported or exported. In simpler terms, it is a place where the goods are stored before loading and after the unloading of the cargo.
CRM is an abbreviation for Customer Relationship Management. CRM is an information system or a methodology with Internet capabilities that help an enterprise manage the customer relationship. CRM helps to generate leads for the marketing teams, telesales, billing, order taking, and delivery confirmations. CRM connects organizations and improves their relationship with the customers.
CONCOR is an abbreviation for Container Corporation of India. CONCOR provides the rail or road link between ports and terminals. CONCOR is the sole provider of containerized rail transport in India. The Rail link reduces the dependence of the exporters on road transport and also helps reduce traffic congestion on roads.
CKD is an abbreviation for a complete knockdown. CKD means that the product is being delivered in parts and then later on it is being assembled at the destination by the consumer or the reseller. This process of shipping the products in parts is done to save the freight charges. An example of this would be the automobile industry/bicycle industry in which the various components are delivered from suppliers worldwide and assembled in the importing country.
DWT is an abbreviation for Dead Weight Tonnage. Deadweight Tonnage is a measure of how much weight a ship is carrying or can safely carry. It takes into consideration the weight of goods/cargo, fuel, ballast water, freshwater, passengers/crew, but excluding the weight of the ship in the calculation.
DAP is an abbreviation for DAP. “Delivered at Place” means that the seller delivers when the goods are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. The seller bears all risks involved in bringing the goods to the named place.
DAT is an abbreviation for Delivered at Terminal. DAT means that the seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal at the named port or place of destination. “Terminal” includes a place, whether covered or not, such as a quay, warehouse, container yard or road, rail or air cargo terminal. The seller bears all risks involved in bringing the goods to and unloading them at the terminal at the named port or place of destination.
DDP is an abbreviation for Delivered Duty Paid.DDP means that the seller delivers the goods when the goods are placed at the disposal of the buyer, cleared for import on the arriving means of transport ready for unloading at the named place of destination. The seller bears all the costs and risks involved in bringing the goods to the place of destination and has an obligation to clear the goods not only for export but also for import, to pay any duty for both export and import and to carry out all customs formalities.
Duty Drawback is a refund of import duty paid on goods that are being exported. If the goods that are being imported and upon which the customs duty has been paid are exported or have been used in the manufacture of goods that are being exported, then the exporter may be entitled to a refund of the original import duty paid.
In simple terms, Duty Drawback can be claimed on the import duty paid on raw materials used for producing goods for export or on imported goods that were exported within a specific time frame.
DP means Delivery against the Payment. It is also known as sight draft. In this case, the buyer/importer cannot take the delivery of the goods/cargo and documents without making the payment. This means that the goods will be released only on the payment.
DA means Delivery against the Acceptance. It is also known as Usance draft. When the exporter agreed to give credit to the foreign buyer, he draws the Usance Bill of exchange. A draft may be according to the period of credit namely 30 or 60 days and it is presented to the importer who upon acceptance of the draft, receives the documents to obtain the release of the goods before payment is done for them. On the due date, the importer will make the payment to the bank. The Bank will then forward the money to the exporter’s bank.
Demurrage is a charge to be paid by the shipper or consignee to the carrier as a penalty for delaying the carrier’s cargo beyond the allowed free time. It is a charge that is levied by the port authority to the importer in cases they have not taken delivery of the full container and move it out of the port/terminal area for unpacking within the allowed free days.
Detention is the same as demurrage except that instead of applying to delays in cargo, detention applies to delays in equipment. Detention is the charge levied by the shipping line to the importer in cases when they have taken the full container for unloading let’s assume within the free days but have not returned the empty container to the nominated empty depot before the expiry of the free days allowed.
DGFT means Directorate General of Foreign Trade. The DGFT has its Headquarters located in New Delhi, is responsible for formulating and implementing the Foreign Trade Policy with the main objective of promoting India’s exports. DGFT HQ and many of its regional offices are ISO 9000:2008 certified Organizations. All regional offices provide facilitation to exporters in regard to developments in international trade, i.e. WTO agreements, Rules of Origin and anti-dumping issues, etc. to help exporters in their import and export decisions in an international dynamic environment.
The objective of DEPB is to neutralize the incidence of Customs duty on the import content of the export product. The neutralization shall be provided by way of grant of duty credit against the export product.
DFRC is issued to a merchant-exporter or manufacturer-exporter for the import of inputs used in the manufacture of goods without payment of basic customs duty. However, such inputs shall be subject to the payment of additional customs duty equal to the excise duty at the time of import.
The word EXIM is an abbreviation for Export-Import.
ETA means Estimated Time of Arrival.
ETD means Estimated Time of Departure.
EDI is an abbreviation for Electronic Data Interchange. In the case of electronic data interchange, businesses communicate and exchange information with the help of electronic medium rather than the traditional method of exchanging information. EDI simply means to exchange the data/files electronically. EDI system is operating at customs offices for smooth handling of international trade operations.
E-Tendring is an internet-based process in which the entire tendering process, right from advertisement to finalization of tenders is carried online. The advantage of e-Tendring is there is a speedy exchange of information.
EPC is an abbreviation for Export Promotion Council. The government in many countries has set up the Export Promotion Council (EPCs) to provide information/help and to facilitate the exports. The main purpose of the EPC is to promote and develop the export of the country. The Export Promotion Council (EPC) keeps the latest information of the trends and new opportunities in the international market for goods and services and assist their members in taking advantage of such opportunities in order to expand and diversify exports.
EXW is an abbreviation for EX-Works. EXW is the term which is used more often in international shipping term or Incoterm. This term explains the division of responsibility between the shipper(exporter/Seller) and the Importer(consignee/buyer) in the process of shipping the goods from one country towards another.
Under the EX Work shipping term, the sole responsibility of the seller in the whole transportation chain is to make sure that the goods/cargo that they are selling has been made available for collection at the seller’s premises.
Ex Works” means that the seller delivers when it places the goods at the disposal of the buyer at the seller’s premises or at another named place (i.e., works, factory, warehouse, etc.). The seller does not need to load the goods on any collecting vehicle, nor does it need to clear the goods for export, where such clearance is applicable.
ECGC means Export Credit Guarantee Corporation of India Ltd. It was set up in the year 1957 with the objective of promoting exports from the country by providing Credit Risk Insurance and other related services for exports. It is wholly owned and managed by the Government of India.
Over the years ECGC has designed different export credit risk insurance products/policies to suit the requirements/needs of Indian exporters and commercial banks extending export credit.
A freight forwarder is a company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market or from the manufacturer to the final stage of distribution. A freight forwarder is a private service company that is being licensed to support shippers and the movement of their cargo/goods. They act as an agent for the exporter (the shipper) in moving cargo to an international destination.
For the movement of international cargo/goods, the exporter needs an expert with knowledge of various formalities and contacts with various agencies, such as shipping lines, port authorities, customs, warehouses, etc. Since the freight forwarders are working and providing service in this industry for long time they possess such contacts and knowledge for the benefit of the shipper.
FOB is an abbreviation for Freight on Board. FOB means the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment or procures the goods already so delivered. The risk of loss of or damage to the goods passes when the goods are on board the vessel, and the buyer bears all costs from that moment onwards.
FAS is an abbreviation for Free Alongside Ship. FAS means that the seller delivers when the goods are placed alongside the vessel (e.g., on a quay or a barge) nominated by the buyer at the named port of shipment. The risk of loss of or damage to the goods passes when the goods are alongside the ship, and the buyer bears all costs from that moment onwards.
FCA is an abbreviation for Free Carrier. FCA means the seller delivers the goods to the carrier or another person nominated by the buyer at the seller’s premises or another named place. The parties are well advised to specify as clearly as possible the point within the named place of delivery, as the risk passes to the buyer at that point.
FCL is an abbreviation for Full Container Load. When an exporter has a sufficient quantity of cargo/goods to send to the overseas buyer/importer then the exporter chooses to book the Full Container Load and does not choose to go for the Less Container Load (LCL). In an LCL container where the container space is shared among other importers, this is not possible in FCL. In an FCL the complete space in the container is owned by only one shipper/exporter/sender.
FIB is an abbreviation for Freight Investigation Bureau. The FIB is based at the Office of the Director-General Shipping, Mumbai and it looks into the problems related to ocean freight. It also gives suggestions and settles disputes related to ocean freight.
FTL or ‘Full Truck Load’ means that the load will fill up the whole truck. Generally, shippers that accommodate full truckloads cater to those customers who normally ship in large amounts. The huge quantities of goods being shipped equalizes the cost of a larger truck. The larger FTL loads generally contain a shipment from one firm and one destination.
A FIFO is an inventory management system in which the first or oldest stock is being used first. This ensures that the oldest stock is being used first and reduces the costs of obsolete inventory. For example:- in a grocery store, perishable goods like milk that have close expiry dates will be stocked in front to be sold. All grocery stores apply the FIFFO inventory management method to avoid obsolete inventory which can no longer be sold. Since FIFO ensures the usage or selling of the oldest items in stock before they become obsolete companies save money.
FTZ is an abbreviation for Free Trade Zone. These are the port/zone designated by the government of a country for duty-free entry of any prohibited commodity/goods. Merchandise may be stored, displayed, and can be used for manufacturing within the zone/area and then re-exported without any duties.
When the exporter ships the goods in the overseas market and before receiving the payment, he can consider ‘factoring’ his export bill. In other words, factoring is a financial transaction whereby an exporter sells his accounts receivables (means the invoices) to a third party (called a factor) at a lesser rate in exchange for instant cash with which to finance continued business.
There might be the risk involved in export transactions whereas the importer/buyer may not make payment for the goods/cargo that is being exported. In this situation, the exporter may consider selling the accounts receivable to a third party, who is called a factor. So then the factor assumes all administrative responsibility of collecting the dues from the buyer and the associated credit risk. The factor conducts his/her own research of the importer before purchasing the receivable.
Factoring is a type of financial service given by specialist organizations. It is considered to be one of the oldest forms of business financing. Also, it can be considered as a cash management tool for several firms where long receivables are a part of the business cycle. Factoring is to be considered as a service that covers the financing and collection of account receivables in domestic and international trade. The advantage to the exporter is that he is relieved from the burden of collecting the receivables, verifying the creditworthiness of the importers, and receives immediate cash, which will improve the cash flow.
GST is an abbreviation for Goods and Service Tax. GST tax system works as the one indirect tax for the whole nation, which will make India one unified common market. GST is a single tax on the supply of goods and services, right from the manufacturer to the consumer. Credits of input taxes paid at each stage will be available in the subsequent stage of value addition, which makes GST essentially a tax only on value addition at each stage. The final consumer will thus bear only the GST charged by the last dealer in the supply chain with set-off benefits at all the previous stages.
The Benefits of GST for business will be such as Easy Compliance, Uniformity of tax rates and structures, removal of cascading, improved competitiveness, gain to manufacturers and exporters and the benefit of GST to the government will be in simple and easy administer, better controls on leakage, higher revenue efficiency. Whereas the consumer will benefit from this as single and transparent tax proportionate to the value of the goods and services, and also in relief in overall tax burden.
The General Agreement Trade and Tariffs is a legal agreement between many countries whose main aim is to promote international trade by reducing the trade barriers such as tariffs. GATT was signed by 23 countries on 30 October 1947 after an intensive negotiation.
Gross Weight is the total weight of the shipment along with the packaging.
Green Supply Chain Management is now being increasingly implemented by many business enterprises to overcome the challenges for logistics management in the 21st century. Green supply chains tend to incorporate environmentally friendly practices/methods by way of reducing wastes and less exploitation of natural resources. Enterprises are creating an awareness of environmentally friendly practices and are formulating company policies to put environmental activities into practice in the logistics activities of the supply chain.
Thus GSCM = Green Purchasing + Green Manufacturing/ Materials Management + Green Distribution / Marketing + Reverse Logistics.
HSN is an abbreviation for the Harmonised System Nomenclature. It is also referred to as the HS code. HS code plays a very important role in determining import and export controls as well as duty rates for a product in international trade. The HS Code is developed by the World Customs Organization (WCO), these codes are used in the classification of goods that are traded in the international market. It came into effect in 1988 and it consists of over 5000 commodity groups. Each group is given an identification code of six digits. These codes are used by all the countries for import and export trade.
Inventory is a list of goods and materials stored for future use, mainly in the production process or those goods and materials themselves, held available in stock by a business. Thus today’s inventory is tomorrow’s production. Therefore inventories are materials or resources of any kind having some economic value, either awaiting conversion or in use in the future.
Inventory is an indispensable part of every organization that it has to maintain for various purposes. Over inventory or under inventory, both can cause a financial impact health of the business, and affect business opportunities. Inventory holding is being adopted by organizations, as a hedge against different external and internal factors, as a precaution, as an opportunity, as a need, and for speculative purposes. There are three types of cost that together constitute total inventory costs:-
Inventory when in excess of current demand regularly means, that its owner must provide a place for its storage when not in use.
These are the cost incurred from getting a machine ready to produce the desired good.
It is simply the cost of the purchased item itself.
ICD is the abbreviation for the Inland Container Depots. ICD is also known as dry ports since they have all the facilities which a normal port has for handling the export-import cargo. The ICD performs the same functions as a port, except for the loading and unloading of ships (the stevedoring operation).
An ICD is a large enclosed/secure area where cargo-carrying containers are stored under customs bond. They are connected to seaports by rail network or by the road or both and such movements are carried out under customs bond. ICD also store empty containers before they are sent off for stuffing. Prior to the creation of ICD, the containers were sent from seaports and would return back at the seaports and this was a wasteful exercise in terms of time as well as money, so after the creation of ICDs, the shippers can save time and money by calling containers from a nearby ICD.
The Indian Institute of Packaging was set up in the year 1966. The Institute began in a very humble way, with an office in Mumbai, and now has expanded the operations/ activities with its Head Quarter Located in Mumbai and other centers located at Delhi, Kolkata, Hyderabad, and also in Chennai.
The main goal of this organization is to improve the standard of packaging needed for the promotion of exports and create infrastructural facilities for overall packaging improvement in India.
Incoterms are universal trade terms published by the International Chamber of Commerce. They are related to the rights and obligations of the parties to the contract of sale with respect to the delivery of goods sold.
Published by the International Chamber of Commerce(ICC) with its headquarters located in Paris, these terms are recognized by governments, legal authorities, and practitioners globally to assist in International Trade. Generally, parties to a contract are unaware of the different trading practices in their respective countries. This leads to misunderstanding, disputes, and waste of time and money. Thus Incoterms are the solutions to these problems which help countries involved in international trade in interpreting trade terms.
Incoterms consist of three-letter codes that are intended to communicate the tasks, costs, and risk associated with transportation and delivery of goods in an international transaction. They define how the responsibility is allocated between the seller/exporter and the buyer/importer for different parts of the transaction.
The Incoterms are:- EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAT, DAP, and DDP.
The Jawaharlal Nehru Port (JNPT) is also known as the Nhava Sheva port, it is one of the largest container port in India which is located in Navi Mumbai’s Raigad district (Maharashtra) and handles the majority of containerized trade that is done in India. It is responsible for around 50% of the total containerized cargo volume, across the major ports of India. The JNPT port has 5 container terminals which are the The Jawaharlal Nehru Port Container Terminal (JNPCT); the Nhava Sheva International Container Terminal (NSICT); the Gateway Terminals India Pvt. Ltd.(GTIPL); Nhava Sheva International Gateway Terminal (NSIGT) and also the newly commissioned Bharat Mumbai Container Terminals Private Limited (BMCT).
JIT is an abbreviation for Just in Time. JIT is quite popular these days. JIT is a system in which the supplies, materials, or goods produced or procured on the basis of demand. Joint collaboration between the suppliers, manufacturers, and distributors, or retailers puts an effort not only in cutting/reduce the inventory holding cost but also strive to meet the customer demands.
The nautical mile is given the abbreviation as Capital (M) or Capital (NM). Nautical miles are used by the sailors or navigators and the reason they uses because it is directly related to latitude and longitude. So the plane or ship that travels big distances that travel around the world they measure it in nautical miles.
Less than Container Load (LCL) means a small amount of cargo that is insufficient to on its own be economically shipped and needs to be consolidated with other small cargoes so that it can be shipped in one Full Container Load (FCL).
For example:- If a shipper has small quantities that are needed to be shipped he may not choose to use the Full container load as the quantity that needs to shipped is less so he contacts the freight forwarder for consolidation of small cargoes along with other cargoes that are going the same destination.
Letter of credit is an instrument issued by the bank and it adds a bank’s promise to pay the exporter on behalf of the importer, provided the exporter has complied with all the terms and conditions of the LC. A letter of credit issued by a foreign bank and sometimes it is confirmed by a U.S. bank. This confirmation means that the U.S. bank (that is the confirming bank) adds its promise to pay to that of the foreign bank (the issuing bank). There are different types of Letter of credit (LC) such as the Revocable, Irrevocable, Revolving, Transferable, Red Clause. Most of the time the irrevocable LC is being used because it cannot be changed unless both parties agree and it is not advisable to use the revocable LC as it carries many risks for the exporter.
Logistics means the transfer/movement of goods/cargo from Point A towards Point B. The Logistics Service provider companies are the ones that provide the service of freight forwarding and customs brokerage etc.
Less than truckload is also called the Less than container Load(LCL). In the case of LTL carrier mixes freight from several customers in a single truckload. LTL shipping is more cost-effective in comparison to the other available shipping alternatives. The main advantage of an LTL carrier is having the things delivered for a fraction of the cost of hiring a whole truck and trailer for one shipment.
As the carrier transports many shipments from several shippers, the freight carrier pools all the shipments into a single truck. This method is like cost-sharing with friends, where each shipper pays a part of the cost of the truck. LTL usually has more destinations or pick-up locations to accommodate the various requirements of the different shipments on board.
Lift on, Lift off are also known as the LOLO ship. LOLO ships are the ones that are equipped with onboard cranes that are used for loading and unloading cargo/goods without any support from the external cranes.
LIFO means the Last goods to be stocked are the first goods to be removed. LIFO is an inventory system that a company uses to assess their inventory cost that will affect their profits. The amount of profit a company declares will directly affect its income taxes. In accounting terms, LIFO usually means a lower profit to the company, but it has the advantage of paying fewer income taxes. This would be more cash in hand for a business that can be used for investment or purchasing.
It is the total cost which an importer pays to have goods delivered at their premises. Landed costs generally consist of the cost of goods, currency exchange, international transport, insurance premium, port charges, delivery charges, custom duties, bank charges, and also documentation fees.
After the cargo is cleared from the customs examination and other formalities are over and then it is handed over to the shipping company for loading. A mate’s receipt is being issued and signed by the officer of a vessel, to acknowledge that the goods ready to be loaded on the ship. The Mate receipt act as evidence that the goods were loaded in the vessel, but the receipt does not have the same validity as compared to that of the Bill of Lading (B/L).
NVOCC stands for the Non-Vessel Operating Common Carrier. An NVOCC acts as a cargo consolidator who buys space from the carrier and then sells the space to the small shippers. The NVOCC can also be mentioned here as a shipper to the carriers and a carrier to the shippers.
An NVOCC is also considered to be an ocean carrier that transports goods under its own House Bill of Lading, without operating an ocean transportation vessel. The NVOCC signs the contract with the shipping line that guarantees the shipment of a certain number of units each year and in return the shipping line offers some suitable rates to the NVOCC.
In simple terms, the net weight is the weight of the product without its packaging.
No objection certificate (NOC) is a legal document that is being issued by an organization or an individual to say that they have no objection to the mentioned details in the document. If the exporter wants to bring back the goods from the importers country due to some reason/issues then, in that case, the exporter requires NOC from importers and if there is a delay in this process then there are chances to bear heavy demurrage on the consignment, so for the safer side, it is advisable to the exporter that they must always ask for NOC from the importer/buyer.
The Over Dimensional Cargo is a cargo that extends outside the loading deck of the vehicle that is transporting the cargo. In simple terms Over Dimensional Cargo (ODC) means the cargo that is being carried as a single divisible unit and which then exceeds the dimensional limits that are being prescribed as per the Rule 93 of Central Motor Vehicle Rules,1989 made under the Motor Vehicle Act.
Every ODC requires permission from the state authorities before traveling on the road and if a vehicle is caught carrying the ODC without any permissions, a fine is imposed(the fine depends on the state policy).
In general, the Performa Invoice is a kind of pro forma of the invoice. The Pro Forma Invoice is being prepared by an exporter/seller and is sent to the importer/buyer in the overseas market for necessary acceptance.
When the importer/buyer is ready to purchase the goods from the seller he will request a Pro forma Invoice. This document suggests to a buyer what the actual invoice would look like if he were to place an order and the goods being supplied to him.
Port of Loading is also referred to be as the port of exit. Port of Loading (POL) is the port/place at which the goods/cargo is being loaded onto the ship.
The Port of discharge is also referred to be as the port of entry. A port of discharge is a place/port at which the goods/cargo is being unloaded from the ship.
The pre-payment is also known as the advance payment. It is the payment that the buyer pays the seller for the goods prior to the shipment.
The buyer sends the purchase order document to the seller. The Purchase order contains all the confirmed details regarding the product and pricing details.
The Packaging list is a document stating how all the products/goods have been packaged inside the shipment. The Packaging list is a very useful and important document for the customs authority at the time of examination and it is also useful for the warehouse keeper of the buyer to maintain the record of the inventory. The Packaging list consists of the details regarding the packaging type, quantities, sizes, and weights of all packages included inside the shipment. But it does not include the details of the per-unit rate and the value of goods.
The quotation is a document that is being prepared by the exporter/seller of the goods and is given to the importer/buyer. This document contains the details regarding the product specification, pricing, currency, packaging details, Incoterm, payment details, port of loading, port of discharge, and the shipping method.
QC means Quality Control. The term QC is used quite in the shipping industry. QC is a set of procedures intended to ensure that a product or service adheres to defined quality criteria or meets the requirements of the client..
The government in many countries has set up the Export Promotion Council (EPCs) to provide information/help and to facilitate the exports. The main purpose of the EPC is to promote and develop the export of the country.
An exporter may apply and register and become a member of EPC. On being given the membership of the particular promotion council the applicant shall be granted the Registration -cum Membership Certificate (RCMC).
The term remittance is mostly used when one person sends the payment to another person who is based in another country. This payment can be of any type which may consist of bills or invoices etc.
The reefer containers are used for the transportation of perishable cargo. These containers are designed to preserve the freshness of cargo at the most stable temperatures.
While sending goods from one country to another, an exporter has to fulfill many requirements such as submitting various types of documents, acquiring licenses, paying the duties, and so on. The Shipping Bill is required for seeking the permission of customs to export the goods by sea/air, so unless the exporter files the shipping bill, one cannot load the goods. The shipping bill contains the information regarding the description of export goods, the number and kind of packages, shipping marks & numbers, the value of the goods, the name of the vessel, the country of destination, etc. The goods/cargo can only be exported out of the country only after the shipping bill has been checked and is endorsed by the customs with a Let export Order(LEO).
There are four different types of Shipping Bill which are mentioned below:-
This type of shipping is printed on yellow paper and is for the goods that are to be exported on the payment of export duty.
The duty-free shipping bill is being printed on white paper and is for the goods exported without the duty payment. These are not eligible for duty drawback.
The drawback shipping bill is being printed on green paper but once the drawback has been paid, it is printed on the white paper.
This type of shipping bill is used for the export of goods under the government’s Duty Entitlement Passbook Scheme (DEPB) scheme and it is printed in blue.
A supply chain consists of all parties involved, directly or indirectly, in fulfilling a customer request. The supply chain includes not only the manufacturer and suppliers, but also the transporters, warehouse, retailers, and even the customers themselves.Supply Chain Management is a set of procedures, which collectively enables companies to integrate their activities for efficient management of production, procurement, storage, dispatch, and customer service.
Shipping Conference is a quite wide term which cannot be explained in short, but to put it in simple terms it is a group of ocean freight carriers that voluntarily come together for the purpose of limiting and regulating competition among themselves. Shipping conferences are also called the liner conferences & ocean shipping conferences, they are formal agreements between liner shipping lines on a specific route, price-fixing, profit division, managing capacity, allocating routes, and loyalty discounts.
Generally, there are two types of shipping conferences, the ‘closed type’ and the ‘open type’.In case of closed conferences, they reserve the right to refuse membership to a shipping line. It works as an exclusive club, the membership to which is restricted whereas on the other hand in an open conference there are no restrictions upon membership other than ability and willingness to serve the trade.
India is currently the fastest-growing economy in the world, after China. The service sector in India has seen major expansion but the manufacturing sector has not been exploited yet. The SEZ in China has contributed a lot towards the growth of their nation’s economy. So after understanding the Chinese SEZ, India too has decided to create similar types of zones that will act as a platform to exporters as well as the foreign direct investment(FDI). The policy was introduced o 1 April 2000 for setting up SEZ in India with a motive to provide an internationally competitive and hassle-free environment for exports.
An SEZ is a specifically delineated duty-free enclave and is deemed to be foreign territory for the purpose of trade operations and duties& tariffs.
In International trade, the term shipper means the company that is selling the goods in overseas markets. But the shipper may also be known as the exporter or the consignor.
A Straight Bill of Lading is a non-negotiable bill of lading in which the goods are consigned directly to a named consignee.
Stuffing means putting the cargo into a container.
Terminal Handling Charges can also be considered as the Container Service Charges(CSC). The THC is the fees/charges that are being charged by the shipping terminals not only for the storage but also for the positioning of the containers before they are being loaded on the vessel. These charges usually consist of goods handling charges, unloading the container, stacking, and the crane service.
In general terms, the THC is the charges that are being collected by the terminal authorities at each port for equipment maintenance, equipment use, as well as for loading and offloading the cargo. These charges vary from port to port of the different country, as the cost of handling the goods/cargo would not be the same for all the ports.
No matter how big and heavy are the cargo ships the tug boats are still very important for the maritime industry. The Tug boats are small, strongly built ships that are used to guide/assist the large vessel/ships into and out of the ports. In short, these ships are used to assist the large vessel in berthing, unberthing as well as the movement of these large vessels within the port limits, and these kinds of ships can be seen on all the ports around the world. The Tug boats are also used to assist the large vessels during the period of bad weather or else when the vessel is carrying the dangerous or polluting cargoes.
The Purchase Department of any organization put outs the advertisement for the supply requirement opportunities to a number of suppliers through the ‘Tender Notice’ on a web portal. This tendering process encourages competition and provides a greater pool of suppliers to select from and finalize the deal.
Then the interested suppliers then prepare a tinder, the documents that draft the offer that they are making, and it includes the pricing, delivery schedules, as well as their eligibility for the project or procurement. They also highlight advantages over the competitors, provide information on qualifications, competencies as well as experience. The submitted tenders are then evaluated with regard to the organizations needs/requirements/criteria. The offer that best meets all of the requirements outlined in the request and provides the value for money generally wins the contract.
Tare weight is also known as the unladen weight, and it is usually the total weight of a truck/tractor/container when it is empty. The tare weight is determined by subtracting the net weight of the goods from the gross weight of the container. For the purpose of calculation, one can also check the load/weight of the vehicle on the electronic weighbridge.
In the case of the intermodal container, the gross weight is printed so that the calculation of the gross weight is done accurately when loading the goods/cargo.
A tariff is a tax that is being imposed on a product when it is imported into a country.
Terminals are also referred to as container terminals. It is a place where containers are picked up dropped off, maintained, and kept.
Trademark is usually comprised of a word, phrase, logo, symbol, design, image, or a combination of these elements. Registered Trademarks are almost always used as part of online branding strategies and therefore also serve as an important marketing role.
Telegraphic Transfer is an electronic means of transferring funds between banks.
A Unit Load Device(ULD) is considered to be a device that is used to move the cargo that is being shipped via airfreight. To be more specific ULD are the specially designed cargo pallets and containers that are being used to load the freight/luggage onto the aircraft. A ULD is used to consolidate the cargo/goods to assist the loading process onto an airplane and also to safely transport the cargo.
The ULD comes in two forms that are the pallet and the containers. The International Air Transport Association (IATA) is responsible for publishing the regulations around the use of Unit Load Device(ULD).
A ship is also known as a vessel. Generally, a ship is a larger vessel built to transport either the passengers or else the cargo. The cargo ships are classified into different types on the basis of the purpose, size, type of cargo they carry. Various types of ships carry these cargoes, some of the ships are as follows.
1.General cargo Vessel.
2.Bulk Carriers.
3.Tankers.
4.Passenger Vessel.
5.Container Vessel.
6.Roll-on/Roll-Off (Ro/Ro) Vessel.
7.Chemical Tankers/ Crude Carriers.
8.Livestock Carriers.
9.Reefer Vessel.
10.Tug Boats.
The time difference between the arrival of a vessel and its departure is known as Vessel Turnaround Time.
The Vessel Turnaround time is used to measure the efficiency of the port operations.
In India, venture capital came into the existence during the pre-independence period where many of the managing agency houses acted as venture capitalists, providing both finance and management to many new and high-risk industries. Venture Capital refers to money that is invested in companies during the early stages of their development. Such funds may come from wealthy individuals , government-backed Small Business Investment Companies (SBICs) , or professionally managed venture capital firms. Since investing is an unproven business venture is highly speculative, venture capital firms. Since investing in an unproven business venture is highly speculative, venture capitalists generally target companies that they believe offer significant potential for growth , and therefore an opportunity to earn a high rate of return in a relatively short period of time.
The term consists of two words – ‘venture’ & ‘capital’. The dictionary meaning of venture is “undertaking chance or danger” and capital means “the estimated total value of the business.” Thus Venture Capital refers to the estimated total value of a business used for undertaking a chance or danger. According to the International Finance Corporation (IFC) “venture capital is an equity featured capital seeking investment in new ideas, new companies, new production, new process or new services that offer the potential of high returns on investment.
Venture Capital is a form of “risk capital”. In other words, capital that is invested in a project (a business) where there is a substantial element of risk relating to the future creation of profits and cash flows. Risk capital is invested as shares ( equity) rather than as a loan and the investor requires a higher “rate of return” to compensate him for his risk.
Wharfage is a fee that is being charged by the freight terminal. It can be also referred to as a port duty. It is the fees/charges/cost for using the wharf for loading/unloading cargo and it is charged by the terminal operator/dock owner to the shipper for handling the cargo. Usually, these wharfage charges are included in the base freight rate or the Terminal Handling Charges.
Robert Hughes has defined Warehouse as “Warehousing is a set of activities that are involved in receiving and storing of goods and preparing them for reshipment.”
Warehousing plays a very important role in the international supply chain and logistics. Warehouses are the godowns for keeping and storing the goods at various points along the distribution network to improve the availability of material to customers and also simultaneously reduce the transportation costs.
Planning a warehouse is very important for proper storage and materials handling.
The different types of warehouses are Public, Private, Bonded, Government, Cold Storage, Consolidation, Break Bulk, Special Economic Zone, Warehouse for Reverse Logistics.
The services/functions provided by the warehouse are:- Receiving the goods, Preparation of Record, Barcoding and labelling, Information about the receipt/Accounting, Storage, Packing, Order Processing, Reverse Logistics, Returns as well as repairs.
The WTO headquarters is located in Geneva, Switzerland and was established on 1 January 1995. The WTO is the only global international organization that is dealing with the rules of trade between nations. The primary goal of the WTO is to ensure that trade flows as smoothly, convenient, and freely as possible.
For more information on WTO please visit:- https://www.wto.org/english/thewto_e/thewto_e.htm
An electronic weighbridge is a large set of scale mounted permanently on a concrete foundation/base that is used to weight the entire heavy road vehicles and their contents. The load that is being carried by the vehicle is usually calculated by weighing the vehicle when it is empty and also when it is being loaded. After paying the charges for using the weighbridge the weighbridge operator gives the receipt that contains all the load details which can be used for reference as well as record purpose.
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