If there’s one thing you’ve probably noticed about shipping international freight, it’s that the process is full of jargon. There are abbreviations and acronyms galore. Which means that if you don’t fully understand them, there’s plenty of scope to make mistakes. So, what are the most important terms that you need to know when processing international freight?
10 Terms You Must Know When Sending International Freight
EORI number
EORI is the acronym for Economic Operators Registration and Identification. It is compulsory for all importers and exporters to hold a unique EORI number if they wish to clear customs anywhere within the European Union and UK. Even if the goods are simply in transit through these territories. Its role is to enable customs to effectively track shipments. The EORI system replaced the Trader’s Unique Reference Number (TURN) in 2009.
Commercial Invoice/Customs Invoice
Regardless of origination or destination, all shipments should contain a Commercial Invoice – also known as Customs Invoice. Without a commercial invoice, your shipment may be delayed or even denied by customs and excise. It can also help avoid disputes over payments with your buyers.
Certificate of Origin
Essential for customs clearance, a Certificate of Origin (COO) not only helps to verify where the goods have come from. But if they are moving between countries that have a trade agreement in place, it can secure a reduction in import duties and taxes.
Bill of Lading
A Bill of Lading (BOL) is essential for any goods shipped by a third-party carrier. It’s essentially a contract between the carrier, the company that shipped the goods, and the person receiving them. It acts as a record of the terms of service. And as a receipt.
HS Code
The HS Code refers to the Harmonised System for classifying cargo. Each item in any shipment should have a unique HS code. With subcategories of similar products being differentiated by the last six numbers of their code. The example given on the UK Government website is:
Women’s wool trousers have an HS6 code of 610461, but men’s cotton trousers have an HS6 code of 620342.
If you use the incorrect HS codes for your shipments, your goods will be delayed, and potentially seized.
Incoterms
An abbreviation of Internation Commercial Terms, Incoterms refers to a set of trade term definitions developed by the International Chamber of Commerce (ICC). They are recognised globally. And define the explicit responsibilities and obligations between the buyer and seller.
Demurrage
If you’re organised and don’t leave your cargo hanging about, you may never hear this term. But demurrage is a fee levied by container lines when containers haven’t been collected within an agreed timescale.
DAP
DAP stands for Delivered at Place. And this means that it’s the responsibility of the seller to organise and pay for the delivery of the consignment to a location named by the buyer. The seller is also responsible for any loss or damage. But they are not responsible for costs related to customs clearance. The term DPU – Delivered at Place Unloaded – is also common.
Airway Bill
An airway bill (AWB) is essential for all airfreight. Rather like the BOL, it acts as a contract between the airline and the carrier. And it details the goods that are being shipped, their origination, destination, and value.
Container Manifest
This is simply a document that states the contents of a container. It should include its origin and destination. In some countries, this is a mandatory document, but it depends on the cargo.
Understanding the terms and jargon used within the freight industry can save you time, effort, and money. But it’s easy to make mistakes. That’s why so many businesses choose to work with an experienced freight forwarder. So the devil in the detail can be put into the hands of the experts.
Are you looking for a freight forwarder to support your business? Get in touch with Plexus Freight.
