International Shipping Terms and Definitions
Find definitions for key international shipping and customs terms in this handy glossary.
Air Waybill (AWB)
Specifies the terms under which the air carrier is agreeing to transport the goods and contains limitations of liability; contract between shipper and carrier.
Advance Commercial Information (ACI)
Program that introduces more effective risk management processes and tools to identify threats to our health, security and safety prior to the arrival of cargo and conveyances.
Assessment of Duties and Taxes
Determining the amount of duties and taxes payable.
Bill of Lading
A contract between the owner of the goods and the carrier A straight bill of lading is nonnegotiable. A negotiable or shipper's order bill of lading can be bought, sold, or traded while goods are in transit.
A warehouse for storage or manufacture of goods on which payment of duties is deferred until the goods enter the Customs Territory. The goods are not subject to duties if reshipped to foreign points.
Certificate of Origin
A document that certifies the country where the product was made (i.e., its origin). A common export document, a Certificate of Origin is needed when exporting to many foreign markets. It may be required in order to obtain preferential tariff treatment under several Free Trade Agreements (i.e., USMCA/T-MEC/CUSMA, APTA, DR_CAFTA, etc.)
Commercial Invoice (CI)
A document prepared by the exporter or freight forwarder, and required by the foreign buyer, to prove ownership and arrange for payment to the exporter. It should provide basic information about the transaction, including description of goods, address of shipper and seller as well as delivery and payment terms. In some cases, the Commercial Invoice is used to assess customs duties.
Cost and Freight (C&F)
The exporter pays the costs and freight necessary to get the goods to the named destination. The risk of loss or damage is assumed by the buyer once the goods are loaded at the port of embarkation.
Cost, Insurance and Freight (CIF)
The exporter pays the cost of goods, cargo and insurance plus all transportation charges to the named port of destination.
Country of Origin of Goods
Country of origin in which the goods have been produced or manufactured.
The government service that is responsible for the assessment of import and export duties and taxes and administration of other laws and regulations that apply to the importation, transit and exportation of goods.
This term is also used when referring to any part of the customs service or its main or subsidiary offices.
This term is also used adjectivally in connection with customs officials, import or export duties control on goods, or any other matter within the purview of customs (customs officer, customs duties, customs office, customs declaration).
Customs and Border Protection (CBP)
Single unified border agency of the United States.
A document that traditionally accompanies exported goods bearing such information as the nature of the goods, their value, the recipient and their ultimate destination. Required for statistical purposes, it accompanies all controlled goods being exported under the appropriate permit.
A formal document used to clear goods through customs in the importing country by providing pertinent shipment information including but not limited to country of origin, description and value.
Customs Self-Assessment (CSA)
Offers approved importers, approved carriers, and registered drivers the benefits of a streamlined clearance option for CSA eligible goods.
Customs Trade Partnership Against Terrorism (CTPAT)
Joint government-business initiative designed to build cooperative relationships that seek to strengthen the overall supply chain and border security.
Department of Homeland Security (DHS)
Single, integrated agency focused on protecting the American people and their homeland.
Electronic Data Interchange (EDI)
Transfer of data between different companies using networks (ex. Internet).
Electronic Data Interchange for Administration, Commerce, and Transport (EDIFACT)
International standard for EDI (standards work toward universal, international conventions for electronic data interchange).
Electronic Manifest (E-Manifest)
Submission of a manifest electronically.
European Economic Community (EEC)
A group of 25 democratic European countries that are committed to working together for peace and prosperity.
A shipment transported out of a country.
A legal document that is necessary for the export of goods controlled by the government of Canada, specifically goods included on the Export Control List (see above) or goods destined for countries on the Area Control List.
Specific restrictions or ceilings imposed by an exporting country on the value or volume of certain exports to protect domestic producers and consumers from temporary shortages of the goods affected or to bolster their prices in world markets.
Food and Drug Administration (FDA)
U.S. agency responsible for protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, the U.S.’s food supply, medical devices, cosmetics, and products that emit radiation.
Foreign Trade Zone (FTZ)
An area within the U.S. that is legally considered outside of U.S. customs territory.
Free on Board (FOB)
The goods are placed on board the vessel by the seller at the port of shipment specified in the sales contract. The risk of loss or damage is transferred to the buyer when the goods pass the ship’s rail.
Harmonized System Code (HS Code)
A universally accepted classification system for trade goods, used to classify products and their corresponding tariff.
A shipment brought in from a foreign country.
Importer of Record (IOR)
The owner or purchaser of the goods; or, when designated by the owner, purchaser, or consignee, a licensed customs broker.
Memorandum of Understanding (MOU)
A legal document describing an agreement between parties.
North American Free Trade Agreement (NAFTA)
A trade agreement between Canada, the U.S. and Mexico that encourages free trade between these countries.
Prior Notice (PN)
Prior Notice requirements include a set of data elements on food imports that must be filed electronically, using either the FDA website or Automated Broker Interface (ABI).
Pro Forma Invoice
An invoice prepared by the exporter prior to shipping the goods, informing the buyer of the goods to be sent, their value and other key specifications.
A duty (or tax) levied on goods transported from one customs area to another. Tariffs raise the prices of imported goods, thus making them less competitive within the market of the importing country. Under the North American Free Trade Agreement, most duties on goods qualifying as NAFTA-originating and services from Canada to the U.S. and Mexico have been eliminated.
Value Added Tax (VAT)
Assessed on the value added to goods and services. The value added tax is imposed throughout the European Community and European Free Trade Association (EFTA) countries and many other trading nations, but not the U.S.
World Trade Organization (WTO)
The WTO is the only global international organization dealing with the rules of trade between nations. At its heart are the WTO agreements, negotiated and signed by the bulk of the world’s trading nations and ratified in their parliaments. The goal is to help producers of goods and services, exporters, and importers conduct their business.