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    1. Sammie is offline

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      #1

      Shipping Abbreviations and Terms

      Iíve been defining a lot of terms in individual threads of late. Figured it was a good time to do an updated index thread for the forum. Iíll provide links to threads that go into more specific detail for each term as I find them.

      ABBREVIATION OR TERMQUICK DEFINITION
      AWB - Air waybillShipping document specifying terms for the courier and instructions for the airline.
      BCL - Bank Confirmation LetterBank letter confirming that the account holder has certain funds available. Mostly used to verify that a buyer has sufficient funds for a given transaction.
      B/L or BOL - Bill of LadingShipping document serving both as a receipt of goods delivered and as instructions for the carrier(s) involved.
      CIF - Cost, Insurance, FreightA maritime-only Incoterm used in international commerce that indicates that the seller provides the costs of freight for delivery to a named port and insurance for the goods.
      COD - Cash on deliveryFinancial transaction wherein the payment for goods/services is done at the time of delivery/execution rather than in advance.
      COGS - Cost of Goods SoldAka Direct Costs, the sum of all expenditures for materials and labour to produce a product or provide a service.
      DDP - Delivered Duty PaidA previously privately-held companyís first issuance of common stocks or shares to the public, after which the company is publicly traded.
      L/C - Letter of CreditUsed like escrow for international transactions. Gives seller proof that the buyer has funds, but doesnít release funds until buyer has set eyes on the goods.
      LOI - Letter of IntentInformal document between 2 or more parties outlining the agreement before finalisation. Details the agreement as well as procedures should negotiations break down.
      NAFTA - North American Free Trade AgreementAn agreement signed in 1994 between Canada, the US, and Mexico to remove tariffs and other barriers to free trade between the three countries.
      NCND(A) - Non-Circumvention Non-Disclosure (Agreement)Agreement between parties involved in a business transaction that dictates that the involved parties may not deal with one another without working through the mutual party that introduced them.
      P.O.D. - Proof of DeliveryPhysical or electronic document provided to the seller as proof that the buyer received and signed for the shipped package within the time and date agreed.
      POD - Proof of DepositManual process in cheque clearing wherein the amount on the cheque is verified against the amount on the deposit slip.
      T/T - Telegraphic TransferBuyer sends funds directly from his bank to the sellerís bank by wire.
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    2. Thank you for this post:

      samspot123 (22 Jun 2012), naughtyca (27 Jul 2012), yuzhibozuozhu (07 Aug 2012), Amyliu861201 (24 Aug 2012), swapnilramani (21 Dec 2012), sharn (21 Jan 2014), cheertone (11 Oct 2014), abrish (30 Aug 2015), Christinachen (26 Oct 2015)

    3. experience is offline

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      #2
      There are two important Incoterms absent from this list, and one is particularly important.

      EXW. Stands for Ex Works. This means that all costs and liability rest with the buyer from the moment they leave the factory.

      FOB. Stands for Free On Board. Strictly speaking it is a shipping term used for sea freight, but as a result of common usage it has come to be used in relation to all shipments. It means that all freight charges to the point of loading (at the sea port or airport) have been included in the quoted price.

      It is commonly misused by suppliers in China, who often state FOB when they should quote EXW.

      If the supplier quotes FOB factory, that means loaded on transport at the place of manufacture. If you receive such a quote make sure that you ask what freight and other charges will be involved in transporting the goods to the airport or seaport, because there will be extra charges.

      One reason this term is misused could be because suppliers can make money on inland charges. For example if they have a factory in mainland China, but their export office is in Hong Kong, they will incur costs in shipping the goods to Hong Kong and they may want to pass these costs on to you at a profit. If they quote FOB, be sure to ask if there are any additional inland charges. The supplierís liability ends once the goods are delivered to the carrier. If quoted FOB factory, that means effectively that their liability ends at their loading dock and you take any risks for loss or damage from that point.

      There are quite a lot of other terms, both Incoterms and business terms relating to international trade that I explain in detail in my book, but it is far too extensive to post here. If anyone wants any term explained, just ask.
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      To learn safe overseas sourcing and how to buy small (or large) quantities at best prices see→ http://provenchinasourcing.comLearn to find genuine manufacturers and negotiate small orders at prices way below what wholesalers charge. Written after my health enforced retirement and provides insider information from veteran with experience exporting 1978-1987 importing since 1987 Learn to import the easy way

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