A distinct set of terminology used in the shipping and logistics sector facilitates international trade. Understanding these key terms is crucial for effectiveness and seamless operations, whether you’re handling international trade, supply chain coordination, or shipment management.
These ten logistics and shipping terms are essential to understand:
1. FOB (Free On Board): Until the goods are loaded onto the vessel, the seller bears all costs; after that, the buyer is responsible.
2. EXW (Ex Works): All transportation expenses from the seller’s location are covered by the buyer.
3. Estimated Time of Arrival (ETA): The anticipated day and time that a shipment will arrive at its destination.
4. Estimated Time of Departure (ETD): The time and date that a shipment is expected to depart its point of origin.
5. Less than Container Load, or LCL, is a shipment that is mixed with other items and does not fill an entire container.
6. Full Container Load (FCL): A shipment that takes up a whole shipping container.
7. Bill of Lading (BOL): A legal document that lists the contents, ownership, and delivery instructions of a shipment.
8. CIF (Cost, Insurance, and Freight): The seller covers the cost of the goods, insurance, and freight to the port of destination.
9. DAP (Delivered at Place): The buyer pays customs taxes even though the seller delivers the goods to the buyer’s address.
10. Warehouse: A location where products are stored prior to delivery or distribution.