The Secret to Understanding the Freight Rate Sheet – Abbreviations

Accessorial Charges – Charges that are applied to the base tariff rate or base contract rate, e.g., bunkers, container, currency, destination/delivery.

Aden War Risk Surcharge – A surcharge on goods transiting the Gulf of Aden used to compensate shippers for additional costs including crew risk compensation, cancellation of economical speed, and redeployment of vessels.

Ad Valorem – A term from Latin meaning, “according to value.” An import duty applied as a percentage of the cargo’s dutiable value.

AI – Abbreviation for “All Inclusive.” The total price to move cargo from origin to destination, inclusive of all charges (limited to transportation costs).

Arrival Notice – A notification by carrier of ship’s arrival to the consignee, the “Notify Party,” and – when applicable – the “Also Notify Party.”

BAF – Abbreviation for “Bunker Adjustment Factor.” Used to compensate steamship lines for fluctuating fuel costs. Sometimes called “Fuel Adjustment Factor” or FAF.

Base Rate – The cost of shipping a container from one point to another. Rates fluctuate frequently based on a number of different factors.

BL Fee – “Bill of Lading Fee.” A fee charged by the shipping line for the processing of the bill of lading on behalf of the client.

BUC – Abbreviation for “Bunker Charge.” An extra charge sometimes added to steamship freight rates; justified by higher fuel costs. Also known as Fuel Adjustment Factor or FAF.

CAF – Abbreviation for “Currency Adjustment Factor.” A charge, expressed as a percentage of a base rate, that is applied to compensate ocean carriers of currency fluctuations.

Cargo Data Declaration Fee – A surcharge assessed for the additional costs of declaring cargo information in advance to the European Union authorities as required for authorities to evaluate any potential security and safety threats.

Carrier – Any person or entity who, in a contract of carriage, undertakes to perform or to procure the perfor­mance of carriage by rail, road, sea, air, inland waterway or by a combination of such modes.

CBM (CM) – Abbreviation for “Cubic Meter.”

CFS – Abbreviation for “Container Freight Station.” A shipping dock where cargo is loaded (“stuffed”) into or unloaded (“stripped”) from containers. Generally, this involves less than containerload shipments, although small shipments destined to same consignee are often consolidated. Container reloading from/to rail or motor carrier equipment is a typical activity. These facilities can be located in container yards, or off dock.

Chassis Utilization Surcharge – A fee imposed for the use of a chassis in conjunction with the shipping container to facilitate overland transportation.

CL – Abbreviation for “Container load”.

COD – Abbreviation for “Collect (cash) on Delivery.”

Congestion – The term used for situations where ships have to queue up and wait for a spot so they can load or offload.

Container Yard (CY) – A materials-handling/storage facility used for completely unitized loads in containers and/or empty containers. Commonly referred to as CY.

CSF – Abbreviation for “Carrier Security Fee.” Charges for security of cargo during the shipment.

Customs – A government agency charged with enforcing the rules passed to protect the country’s import and ex­port revenues.

Customs Filing Fee – A fee paid to the customs broker for arranging your customs clearance.

Customs Formalities – Requirements referring to customs regulations including documentation, security, information and physical inspection responsibilities.

CYRC – Abbreviation for “Container Yard Receiving Charge.”

DDC – Abbreviation for “Destination Delivery Charge.” A charge, based on container size, that is applied in many tariffs to cargo. This charge is considered accessorial and is added to the base ocean freight. This charge covers crane lifts off the vessel, drayage of the container within the terminal and gate fees at the terminal operation.

Demurrage – A penalty charge against shippers or consignees for delaying the carrier’s equipment or vessel beyond the allowed free time. Demurrage applies to cargo; detention applies to equipment. If you store a container at the port beyond free days, then demurrage and detention applies. If you keep a container for too long on any other premise (not on the port’s premises), then only detention applies.

Destination – The place to which a shipment is consigned or the place where the carrier actually turns over cargo to consignee or his agent.

Detention – A penalty charge against shippers or consignees for delaying carrier’s equipment beyond allowed time. Demurrage applies to cargo; detention applies to equipment. If you store a container at the port beyond free days, then demurrage and detention applies. If you keep a container for too long on any other premise (not on the port’s premises), then only detention applies

DTHC – Abbreviation for “Destination Terminal Handling Charge.”

Dutiable Value – The amount on which an Ad Valorem or customs duty is calculated.

EBS – Abbreviation for “Emergency Bunker Surcharge.” A surcharge added to the cost of freight to cover fuel costs.

EIS – Abbreviation for “Equipment Imbalance Surcharge.” A surcharge on an ocean freight rate, imposed by shipping lines, to recover costs related to removing large quantities of empty containers from a country or countries where there is no export use for those containers that had been previously imported into those places. The charge is usually a flat rate per container, and it is not necessarily applied in all trades or at all times, rather it is only applied when such trade imbalances necessitate large expenditure on shifting empty containers from one place to another.

ENS – Abbreviation for “Entry Summary Declaration.” An ENS is an electronic declaration of goods being carried into the customs territory of the community.

Environment Fee Destination – Environmental surcharges imposed by the destination port. Covers various contingencies such as hydrocarbon spill cleanup costs and other mandated fees.

ERR – Abbreviation for “Emergency Rate Restoration.” A surcharge added to the cost of freight to cover increases in shipping costs.

ERS – Abbreviation for “Equipment Repositioning Surcharge.” A fee imposed when a shipper requests that the carrier make empty containers available that must be moved from one location to another

ETA – Abbreviation for “Estimated Time of Arrival.”

ETD – Abbreviation for “Estimated Time of Departure.”

ETR – Abbreviation for “Estimated Time of Readiness.”

ETT – Abbreviation for “Estimated Time to Travel.”

FCL – Abbreviation for “Full Container Load.”

Forwarding Fee – A fee charged for the services of a freight forwarding company.

Freight Forwarder – A person whose business is to act as an agent on behalf of the shipper. A freight forwarder frequently makes the booking reservation. In the United States, freight forwarders are now licensed by the FMC as “Ocean Intermediaries.

FS – Abbreviation for “Fuel Surcharge.”

GAS – Abbreviation for “Gulf of Aden Surcharge.” Used to compensate shipping lines for additional costs incurred due to transiting the Gulf of Aden.

GRI – Abbreviation for “General Rate Increase.” Used to describe an across-the-board tariff rate increase implemented by conference members and applied to base rates.

Handling Fee – A fee for transporting, storing, or packaging goods.

Hazardous Surcharge – A surcharge imposed for shipping hazardous materials or goods.

HC – Abbreviation for “High Cube.” Containers that are 9 ft 6 ins high instead of usual 8 ft 6 ins.

ISF – Abbreviation for “Importer Security Filing.” A US Customs and Border Protection (CBP) regulation requiring importers and vessel carriers to provide data electronically to CBP for in-bound ocean shipments. Also known as 10+2.

ISPS – Abbreviation for “International Ship and Port Security Code.” It is an amendment to the Safety of Life at Sea (SOLAS) Convention (1974/1988) on minimum security arrangements for ships, ports and government agencies. Having come into force in 2004, it prescribes responsibilities to governments, shipping companies, shipboard personnel, and port/facility personnel to “detect security threats and take preventative measures against security incidents affecting ships or port facilities used in international trade.”

LCL (LTL) – Abbreviation for “Less than Container Load” or “Less than Truck Load.” The quantity of freight which is less than that required for the application of a container load rate.

MT – Abbreviation for “Metric Ton.”

NBC – Abbreviation for “New Bunker Charge.”

NOx – Abbreviation for “Nitrogen Oxides.” Refers to the gasses NO and NO2 produced from the reaction of nitrogen and oxygen gases in the air during combustion.

Ocean Rate – See Base Rate

Origin – Location where shipment begins its movement.

OWS – Abbreviation for “Over Weight Surcharge.”

Piracy Surcharge – A charge assessed to compensate shipping companies for increased costs associated with avoiding piracy and hijacking.

POD – Abbreviation for “Port of Destination.”

POL – Abbreviation for “Port of Loading.”

Port Dues – Fees charged by the harbor authority on ships using the port`s facilities.

Port of Entry – Port where cargo is unloaded and enters a country.

Port of Exit – Place where cargo is loaded and leaves a country.

PSS – Abbreviation for “Peak Season Surcharge.”

Release Fee – A fee charged by the destination port to release cargo for further movement or action.

SCS – Abbreviation for “Suez Canal Surcharge.” Used to compensate shipping companies for additional costs incurred due to transiting the Suez Canal.

Sea Freight Rate – See Base Rate

SES – Abbreviation for “Special Equipment Surcharge.”

Shipper – The person or company who is usually the supplier or owner of commodities shipped. Also called Consignor.

Surcharge – An extra or additional charge.

Surtax – An extra or additional tax.

TAD – Abbreviation for “Transit Accompanying Document.” A document accompanying uncleared goods during transit from one authorized location to another.

THC – Abbreviation for “Terminal Handling Charge.” Sometimes referred to as Capatazia, in particular in Brazil.

THC Destination – Terminal Handling Charges incurred at the destination port.

THC Origin – Terminal Handling Charges incurred at the port of origin.

Terminal Charge – A charge made for a service performed in a carrier’s terminal area.

Terror – The threat of terrorist acts against the shipping and port industry.

TEU – Abbreviation for “Twenty foot Equivalent Unit.”

Wharfage – A Charge assessed by a pier or dock owner against freight handled over the pier or dock or against a steamship company using the pier or dock.

3PL – Abbreviation for “Third Party Logistics.” A company that provides logistics services to other companies for some or all of their logistics needs. It typically includes warehousing and transportation services. Most 3PL’s also have freight forwarding licenses.