International Shipping Terms and Definitions

Find definitions for key international shipping and customs terms in this handy glossary.

A


Ancillary Fee

Additional costs which may apply when you select a value-added solution to manage a shipment’s special clearance needs. The specific solutions may differ by country, depending on if additional processing is required by a local regulatory agency or if you or your importer request special processing from a FedEx customs broker.

 

Automated Commercial Environment (ACE)       

A commercial trade processing system used by U.S. Customs to automate border processing, enhance border security and support economic security with lawful international trade and travel. This system helps enforce trade and contraband laws and efficiently process goods to expedite the customs process.

 

Automated Export System (AES)  

The system used by the U.S. government to collect data on exports. Exporters are legally required to use it when filing Electronic Export Information for each shipment.

 

B


Bonded Warehouse

The customs-controlled facility used for the retention of imported goods upon their entry into the country. Goods that have not been formally cleared by customs are held here until the duty fee is paid. These facilities are used by businesses to help improve cash flows, since the assessment of duty and tax is applied once an order is ready to leave the location.

 

Broker

An individual or party that acts as a professional agent for the exporter and/or importer, facilitating the customs clearance process on their behalf and working to resolve delays or issues if they arise.

 

Broker-Inclusive

Automatically incorporating an agent (broker) that facilitates the customs clearance process on the exporter and/or importer’s behalf. This option is automatically selected when creating an international label online, meaning that each shipment with a FedEx international label will have representation through the customs clearance process unless otherwise noted.

 

Broker Select           

The option to use your own agent (broker) to facilitate the customs clearance process when exporting or importing, currently permitted by FedEx in over 120 countries. View all broker options.

 

Bureau of Industry and Security    

A federal agency under the U.S. Department of Commerce which regulates the export of most commercial items.

 

C


Carriage Value

See definition for Declared Value.

 

Caged Shipment

A shipment in a secure holding area at customs, where it remains until the correct information is obtained to finalize customs clearance.

 

Certificate of Origin

A document that certifies the country/territory where the product was made (i.e., its origin). This common export document is needed when shipping to many foreign markets. It may be required in order to obtain preferential tariff treatment under several Free Trade Agreements.

 

Clearance Entry Fee (CEF)

A fee that is charged when a FedEx International Ground shipment to or from Canada is processed as a brokerage-inclusive shipment and FedEx arranges for customs clearance services. This fee is charged in addition to any applicable duties and taxes.

 

Commerce Control List       

A list maintained by the Bureau of Industry and Security, designed to identify whether or not your product has an Export Control Classification Number (ECCN).

 

Commercial Invoice (CI)     

The primary document used by most foreign customs agencies for import control, valuation and duty determination. This document is prepared by the shipment’s exporter. Shipment importers require this document to prove ownership and arrange payment of duties and taxes.

 

Commodity

An item that has commercial value, and is reasonably interchangeable with other items of the same type. Most non-document shipments are commodities, and therefore require a Commercial Invoice for customs clearance.

 

Compliance

The state of adhering to all the rules and regulations that govern the exporting and importing of goods across borders, as determined by government agencies.

 

Compliance Plan

A documented process that is company-specific and outlines how the business will operate within the required governmental rules and regulations. Plans usually contain standard operating procedures (SOPs), training materials and frequency schedules, key contacts, current commodity lists and more.

 

Consignee

A person or company (named in the bill of lading) to whom commodities are shipped.

 

Customs Declaration

A document that traditionally accompanies exported goods and includes information such as the nature of the goods, their value, the recipient and the shipment’s ultimate destination. This document is required for statistical purposes, and accompanies all controlled goods being exported under the appropriate permit.

 

Customs Hold

A pause or stop in a shipment’s progress through the customs clearance process, enacted by customs agents who require additional information or wish to examine the shipment further. Final clearance remains pending for shipments while in this state. A hold can occur for a variety of reasons: Additional documents may be required or customs officials may need a further explanation of the shipment contents and/or their intended use. An intentional or random shipment inspection may also occur during this state.

 

Customs Self Assessment (CSA)

A streamlined clearance program available to low-risk, pre-approved importers, carriers and registered drivers when shipping eligible goods. This program simplifies some border requirements, allowing some shipments to be processed more efficiently.

 

Customs Value

The total declared value of all items in a shipment, which determines how much the recipient must pay in duties. For example, if the exporter is shipping 5 handbags each valued at $200 USD, they should enter a customs value of $1,000 USD.

 

Customs Broker

An agent that works on behalf of the exporter and/or importer to help shipments clear customs by minimizing delays and holdups. If a delay does occur, this agent works to resolve it, saving the exporter and/or importer the hassle of resolving it themselves.

 

D


Declared Value

The selling price or replacement cost of the contents of a given shipment, sometimes also known as the “carriage value.” This amount is also the maximum liability amount associated with the shipment.

 

Denied Parties

Individuals, companies and organizations whose export privileges have been denied by the Department of Commerce’s Bureau of Industry and Security. These parties appear on the bureau’s Denied Persons List. American companies and individuals may not participate in export transactions with these parties.

 

Dual-Use Item

An item that has both a commercial use and a potential military application, as determined from a political or diplomatic perspective.

 

Duties and Taxes

Fees collected on importing and exporting goods. Duty is charged to keep competition fair by bringing the cost of imported goods up to the same cost as those produced within the importing country. The person or business receiving the shipment is legally obliged to pay duties unless the sender has agreed to accept these charges in the contract of sale. Duties are also sometimes known as tariffs.

 

E


Electronic Export Information (EEI)

The electronic data that serves as a declaration of merchandise leaving the U.S. for export to a foreign country. This data is filed in the Automatic Export System (AES) and includes information about the sender, recipient and goods being exported. The EEI is used for export control and official U.S. export statistics.

 

Employer Identification Number (EIN)

A nine-digit number assigned to a business by the IRS, used to confirm the business’s license and identify it for tax purposes. A business may need to obtain an EIN for a variety of reasons, including (but not limited to) if it has employees, operates as partnerships or corporations, has tax-deferred pensions plans or operates under a number of other circumstances.

 

Export

A shipment transported out of a country/territory.

 

Export Administration Regulations (EAR)

Laws that govern the export of items that are intended for commercial use, but could potentially be used for military purposes.

 

Export Broker

See definition for Customs Broker.

 

Export Control Classification Numbers (ECCN)

Alphanumeric codes used to identify “dual-use items,” or items that have both a commercial use and a potential military application. Knowing the correct ECCN for a commodity can help you determine whether or not you need an export license in order to ship it internationally.

 

Export License

A government document permitting participation in the export of designated goods to certain destinations.

 

F


Free Trade Zone (FTZ)

A geographic area where goods may be landed, stored, handled, manufactured or reconfigured and re-exported under specific customs regulations, generally without being subject to customs duty.

 

Freight Forwarder

A company that gathers shipments from many companies, consolidates them and purchases space on ocean carriers and/or airlines to move the collection as one large shipment. These companies can arrange the entire shipment movement from pickup to end delivery, complete with prepaid shipment labels, required customs documentation and customs brokerage.

 

H


Harmonized Code

A six-digit code belonging to an international nomenclature system (The Harmonized System) designed to classify traded goods on a common basis for customs purposes. Including the correct Harmonized Code on your Commercial Invoice for international shipments can help prevent delays, fines and/or more expensive tariffs.

 

I


Import

A shipment brought into one country/territory from another.

 

Importer of Record

The entity or individual responsible for ensuring that legal goods are brought into a country/territory in accordance with the given region’s laws. This party is also responsible for filing the required customs documents.

 

Incoterms

A set of rules published by the International Chamber of Commerce (ICC) to define the responsibility of sellers and buyers during international transactions. This term is an abbreviated way to say “International Commerce Terms.”

 

International Air Waybill

Another term for the FedEx shipping label required for all international shipments. This label captures all the key details about the contents of the shipment, its destination and the means of delivery. You can fill one out online using a FedEx Ship Manager® platform or fill it out by hand.

 

International Traffic in Arms Regulations (ITAR)

Laws governing the export of items created as military/defense items and space-related technology.

 

N


NAFTA Certificate of Origin

A document used by Canada, Mexico, Puerto Rico and the United States to determine if imported goods qualify for reduced or duty-free entry.

 

Non-Resident Importer (NRI)

A company or organization located outside of Canada that ships goods to customers in Canada and assumes responsibility for customs clearance and other import-related requirements. Non-resident importer status allows non-Canadian companies to become approved importers of record for goods brought into Canada and pay any assessed duties and/or taxes.

 

O


Other Regulatory Agencies (ORA)

A designation of governmental agencies that help govern the importing and/or exporting of goods, but are not customs agencies themselves. For example, the U.S. Food and Drug Administration and the U.S. Fish and Wildlife Service both shape international trade through non-customs roles.

 

P


Packing List

A document prepared by the exporter that lists detailed packing information about the goods being shipped. It usually includes the dimensions and weight of the package contents, as well as information about how the goods were packed.

 

Power of Attorney (POA)

A legal document that authorizes one party to act on another’s behalf in private affairs, business and other legal matters. This document is sometimes also known as a Letter of Attorney.

 

Pro Forma Invoice

A document prepared by the exporter prior to sending out a shipment, informing the buyer of the goods to be sent, their value and other key specifications.

 

S


Schedule B Code

A 10-digit number based on the Harmonized Commodity Description and Coding System (HS), which is used to classify physical goods for export to another country. Every physical product has a Schedule B code.

 

Shipper's Export Declaration (SED)

An official U.S. government document that assists in trade regulation and serves as a census record of U.S. exports. This form is required for all U.S. exports with commodities valued at US $2,500 or higher. The shipper fills out this form with the value, weight, consignee, destination, and other details about their export shipment, as well as Schedule B identification numbers.

 

T


Terms of Sale

The point at which a product’s sellers have fulfilled their obligations to a shipment, so the shipment is said to have been delivered to the buyer. Terms of sale are shorthand expressions that set out the rights and obligations of each party when transporting the goods.