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Shipping Pricing Terminologies

Shipping Pricing

Shipping Pricing Terminologies

Do you find yourself overwhelmed while getting the quotation from your freight forwarder? Then, this blog post is for you. Within this informative piece, we have compiled an extensive list of crucial pricing terminologies utilized within the shipping industry.  


Familiarizing yourself with these terminologies will not only enhance your understanding but also elevate your professional competence. To provide you with a comprehensive overview, we have categorized each term based on the mode of transportation you opt for, accompanied by its respective definition.

 

          Terms 

                                              Meaning 

       Category 

 

 

AMS 

 

 

Automated Manifest System 

It is an electronic information transmission system used by US Customs and Border Protection (CBP). The authorities require filing detailed information of air and ocean shipments on the system, as a security measure.   

 

 

Ocean/Air 

 

 

AWB 

 

 

Airway Bill 

It is a legal document issued by a carrier or an agent, containing details of the goods being shipped. It is a standard form distributed by the International Air Transport Association (IATA). 

 

 

Air 

 

BAF 

Bunker Adjustment Factor 

It is an additional surcharge on the ship operators to compensate for the fluctuating fuel prices. This charge is based on TEU and varies with the trade routes. 

 

Ocean 

 

BL  

 

Bill of Lading 

It is a legal document issued by a carrier to a shipper, stating the terms of the agreement. It includes the details of cargo being shipped, such as its type, quantity, and destination. 

 

Ocean 

 

BoE 

 

Bill of Entry 

It is a legal document that customs clearance agents or the importers fill out to claim Input Tax Credit (ITC) before the arrival of imported goods. 

 

Ocean/Air 

 

BRAF 

Bunker Recovery Adjustment Factor 

It is an additional charge imposed to compensate for the fluctuation in fuel prices. 

 

Ocean 

 

CAO 

 

Cargo Aircraft 

These are aircraft that have no passenger seats and are solely used to transport various types of cargo with maximum payload.  

 

Air 

 

CBM, M3 

 

Cubic Meter, Meter Cube 

It is the freight volume of the consignment for both local and international shipments. CBM is calculated using length, height, and width of the shipment.  

 

Ocean/Air 

 

CDS 

Customs Declaration Service 

CDS is an electronic system implemented by UK’s government to handle customs declaration processes.  

 

Ocean/Air 

 

CFS 

 

Container Freight Station 

CFS is a warehouse where goods are stored that belong to different shippers. The shipments are consolidated and deconsolidated here before being exported or after being imported. 

 

Ocean 

 

 

CI 

 

 

Commercial Invoice 

It is a document required for import and export clearance process and serves as evidence of sales transaction between the buyer and seller. In the buyer’s country, customs officials use this document to calculate the import duties and taxes. 

 

 

Ocean/Air 

 

 

COO 

 

 

Certificate of Origin 

This document contains the information on nationality of the product. It shows the country in which the product was manufactured. It is an important part of the custom clearance process as it can be used to determine the legitimacy of the product and calculate import duties on it.  

 

 

Ocean/Air 

 

CRO 

 

Container Release Order 

It is a legal document given by a shipping line to the exporter/shipper. It gives the shipper the authorization to pick up the empty container at the designated depot. 

 

Ocean 

 

CW 

 

Chargeable Weight 

Chargeable weight is an abstract quantity that airlines use to determine the cost for shipment of the goods. This could either be the volumetric weight or gross weight, whichever is greater.  

 

 

Air 

 

CY 

 

Container Yard 

It is a physical facility where ocean carriers accept and deliver containers. CY can also be used to issue or receive back the empty containers. 

 

Ocean 

 

D&D 

 

Demurrage and Detention 

Demurrage is a charge paid by merchants for the use of container within the terminal beyond its free time period. Whereas detention is a charge paid by the merchants for using containers outside the terminal, beyond free time period. 

 

Ocean/Air 

 

D2D 

 

Door to Door 

It is a shipment method where the consignment is picked from the sender’s door and delivered at the recipient’s door. (Curbside delivery only unless specified)  

 

Ocean/Air 

 

D2P 

  

Door to Port 

It is one of the affordable international shipping methods where the goods are picked from seller’s warehouse or business address and delivered to closest exit port to the buyer.  

 

Ocean/Air 

 

 

DAFZA 

 

 

Dubai Airport Free Zone 

DAFZA is one of the most advanced free zones that has over 2500+ registered businesses from 20+ different sectors. The free zone covers a total area of 54,000 sqm. It offers several benefits, including regulatory and tax-free advantages with complete ownership.  

 

 

Ocean/Air/Land 

 

 

DGR 

 

 

Dangerous Cargo 

Dangerous cargo means any good, material, or a substance that poses a risk to health, safety, or property while in transit. These goods are covered in the IMDG code due to their flammable, corrosive, and poisonous properties and nature. 

 

 

Ocean/Air 

 

 

DO 

 

 

Delivery Order 

It is a document issued by the shipper, carrier, or a freight forwarder for the port operator or a shipping line to hand over the cargo to the responsible party for import activities. The DO does not act as evidence of receipt of goods. 

 

 

Ocean/Air 

 

 

 

DPC 

 

 

 

Document Processing Charges 

Document Processing Charges refer to the fees or costs associated with handling, processing, and management of various documents involved in the shipping and logistics process.  
These charges are typically incurred by the shipper, consignee, or their authorized representatives, and they are paid to the relevant parties responsible for document preparation, verification, submission, and record-keeping. 

 

 

 

 

Ocean 

 

DTHC 

Destination Terminal Handling 

The fee is collected at the port of arrival, which includes the charges for loading and unloading containers from the vessel. 

 

Ocean 

 

EBS 

Emergency Bunker Surcharge 

EBS is a surcharge imposed to compensate for the fluctuating fuel prices. This is paid by the seller of the cargo at the port. 

 

Ocean 

 

 

ED 

 

 

Export Declaration 

It is a form submitted by the exporter at the port that provides information about the goods being shipped. The details it contains include the type, number, and value of the shipment. It is mandatory for shipments that are exported to a country not in the EU. 

 

 

Ocean/Air 

 

EFF 

 

Environmental Fuel Fee 

It is a surcharge levied on the cargo owners by the ocean carriers to offset the increase in the cost due to the use of cleaner fuels with low sulfur contents in the vessels.  

 

Ocean 

 

FEU 

Forty Feet Equivalent 

Unit 

It is a standard unit of measurement to determine the maximum container capacity of a 40-ft container. 

 

Ocean 

 

 

FSC 

 

 

Fuel Surcharges 

It is a fee that shipping companies impose on top of their base rates to account for the seasonal or regional variations in the fuel cost. This amount is charged as a protection of the carrier from the volatility of fuel prices. 

 

 

Air 

 

FTA 

Free 

Trade 

Agreement 

It is an agreement between two or more countries to reduce the trade barriers for easier import and export conditions. 

 

Trade 

 

 

FTZ 

 

 

Foreign Trade Zone 

It is a geographical area within the US, generally close to a port of entry. This area is considered to be out of customs territory, so the shippers can avoid paying customs duties while their products remain in the zone.   

 

 

Trade 

 

GCR 

 

General Cargo 

General cargo is a term referring to the goods that can be transported individually in one piece. It could be in the form of a pallet, package, or a box.  

 

Ocean/Air 

 

 

GRI 

 

General 

Rate

Increase 

It is an adjustment in ocean freight across specific or all trade lanes for a specific period of time. They are usually initiated by big carriers, spurred by changes in the demand and supply in freight shipping. 

 

 

Ocean 

 

GW 

 

Gross Weight 

It is the total weight of the shipment being carried, including the weight of the goods and their packaging. The tare weight of the transport unit is not calculated in GW. 

 

 

Ocean/Air 

 

 

HAWB  

 

 

House Airway Bill 

HAWB is issued by a freight forwarder on receipt of goods, agreeing to deliver the consignment to the destination. It is required for consolidated air shipments.   
The document can be tracked by importer, as well as exporter. 

 

 

Air 

 

HAZ 

 

Hazardous 

A category of cargo that presents an unreasonable risk to health, safety, or property while in transit. 

 

Ocean/Air 

 

HBL 

 

House Bill of Lading 

It is a legal document that indicates that the carrier has received the shipment. It also shows that the consignment has no damage and is ready to be shipped to the consignee. 

 

Ocean 

 

 

HC 

 

 

High Cube 

High cube containers have the dimension of 9’6”. They have the same floor space as a standard container; however, they offer extra storage by adding more height to the container. 

 

 

Ocean 

 

 

HFZ 

 

 

Hamriyah Free Zone 

HFZ is located in Sharjah, UAE, facilitating regional and international trade by providing multiple services, including logistics, modern infrastructure, and investors connectivity. The free zone spreads over an area of 24 sq km. 

 

 

Ocean/Air/Land 

 

HS Code 

 

Harmonized Systematic Code 

It is a 6-digit numerical classification system used for export processes. The custom authorities use this method to identify the products while calculating duties and taxes. 

 

Ocean/Air 

 

HWS 

 

Heavy Weight Surcharge 

Heavy weight surcharge is a cost imposed on 20 ft containers that weighs more than 14,000 kg tare. An empty 20-ft standard container itself weighs 2,300 kg and can carry cargo of 28,000 kg.   

 

Ocean 

 

 

IG 

 

 

In-Gauge 

In-Gauge is a categorization of products that have smaller or equal dimensions than to flat rack or open top containers. Examples include machinery or big trees that can be lowered in an open top container. 

 

 

Ocean 

 

ISPS 

International Shipment and Port Facility Security 

ISPS is maritime security regulation that helps ships and port facilities to coordinate in detecting and deterring acts that can be a threat to maritime security.  

 

Ocean 

 

 

JAFZA 

 

 

Jebel Ali Free Zone Authority 

It is a flagship freezone of DP world and considered to be the biggest customs bonded zone in the Middle East, spread over the area of 46,112 sqm. There are over 9,500 businesses operating. It offers several benefits such as 100% foreign ownerships, 0% import and export duties, and 0% corporate tax. 

 

 

Ocean/Air/Land 

 

LOLO 

 

Lift on Lift off 

Lift on Lift off is a type of cargo vessel that has its own cranes to facilitate the loading and unloading of the cargo, without the need for any external cranes. 

 

Ocean 

 

 

MAWB 

 

Master 

Airway 

Bill 

It is a legal transport document used in air shipment that acts as evidence of terms and conditions of goods transportation over the carrier’s route. MAWB is signed by air cargo carriers or their agents. 

 

 

Air 

 

 

MSDS 

 

Material

Safety Data Sheet 

It is a supporting document for the shipment that contains detailed information and a technical breakdown of the shipment’s content to show that the item does not fall under the Dangerous Good (DG) category.  

 

 

Ocean/Air/Land 

 

Non-HAZ 

 

Non-Hazardous 

Cargo that has no corrosive, flammable, reactive, or toxic property is non-hazardous cargo. There is no need for a warning label with these products. 

 

Ocean/Air 

 

NVOCC 

Non-Vessel Operating Common Carrier 

NVOCC is an ocean carrier who performs all the services as a freight forwarder; however, they do not own their vessels. 

 

Ocean 

 

 

NW 

 

 

Net Weight 

It is a measurement method in shipping where the weight of the product itself is only calculated, without considering any external factor that could contribute to its mass, including the weight of packaging or containers. 

 

 

Ocean/Air 

 

OH 

 

Over Height 

Over Height is a cargo categorization of products that are longer than 8 feet and cannot fit in a standard container.  

 

Ocean/Air 

 

OOG 

 

Out of Gauge 

Out of gauge is the categorization of products that are too tall or wide to fit the regular shipping container.  

 

Ocean 

 

 

OW 

 

 

Overweight 

An overweight is the load that exceeds 8000 pounds. Their weight surpasses the regulations of specific truck types. Special regulations are imposed on this type of cargo; mainly to protect the nation’s infrastructure. 

 

 

Ocean 

 

OW 

 

Over Width 

Over Width is a cargo categorization of products that are wider than 8.5 feet and cannot fit in a standard container. 

 

Ocean/Air 

 

 

P2D 

 

 

Port To Door 

It is a delivery service method where the items are picked from a port of an airport and delivered to the place decided by the consignee or the shipper. 

 

 

Ocean/Air 

 

 

P2P 

 

 

Port to Port 

Port to port refers to shipping of containerized goods from the port of origin to the port of destination. This is considered to be the most expensive part of the shipping process due to the risks faced by the shippers while at sea. 

 

 

Ocean/Air 

PAX 

Passenger Aircraft 

The passenger aircraft is the one that is used to fly travelers with capacity to hold minimum luggage. 

Air 

 

 

PER 

 

 

Perishable Cargo 

Perishable cargo is a category of products that requires certain temperature conditions to maintain their integrity. They can deteriorate during transportation if they are exposed to humidity or other unappropriated conditions. 

 

 

Ocean/Air 

 

 

PL 

 

 

Packing List 

This document itemizes all the contents in each package, including the goods list, their measurements and other details. It could be added inside each package or carton or could be attached outside the box with a copy inside.  

 

 

Ocean/Air 

 

PSS 

Peak 

Season Surcharge 

It is an additional charge imposed by shipping companies to the base freight rate when there is a high demand in the supply chain network.   

 

Ocean/Air 

 

RF/RE 

 

Reefer 

The term reefer in shipping refers to refrigerated shipping containers that are used to transport goods that requires temperature-controlled conditions. 

 

Ocean/Air 

 

SD 

 

Store Door/ Storage Door 

The store door/storage door is also known as carrier haulage. It is a situation where the carrier takes the responsibility for transporting the containers from the load address to the port. 

 

Ocean 

 

SC 

 

Security Surcharge 

It is a security infrastructure fee that airlines charge above their base rates to cover the additional security measures mandated by the airport authority. 

 

Air 

 

 

SI 

 

Shipping Instructions 

It is a document provided to the carrier by the customer and contains the details of the cargo and the requirements for its physical transportation.  

 

Ocean 

 

SL 

 

Shipping Line 

A shipping line is a company or an organization that owns a fleet of cargo vessels that they use to transport goods between two ports on international routes. 

 

Ocean 

STD 

Standard Container   

The 20-ft and 40-ft are considered to be the standard containers. They are used to deliver the majority of dry cargo across the globe.    

 

 

Ocean 

 

SWB 

 

Seaway Bill 

It is a transportation contract between a shipper and the maritime company. This document is not required for cargo delivery, as it is only used as a cargo receipt.  

 

Ocean 

 

 

TEU 

 

Twenty Feet Equivalent 

Unit 

It is an exact unit of measurement to determine the cargo capacity of the container ships and terminals. This measurement is derived from the dimensions of 20-ft container (20ft long, 8ft wide, and 8.6ft tall).  

 

 

Ocean 

 

 

THC 

 

Terminal Handling Charges 

Fees charged by the shipping terminals for storing and positioning the containers before they are loaded onto the vessels. It is also charged for equipment handling, maintenance, and discharging equipment.  

 

 

Ocean 

 

 

 

 

TLUC 

 

 

 

Truck Loading Unloading Charges 

Truck Loading Unloading Charges refer to the fees or costs associated with the loading and unloading of goods onto or from a truck during transportation.  
These charges are incurred by the shipper or consignee and are typically paid to the service provider responsible for handling the loading and unloading operations, such as a logistics company, warehouse, or a terminal operator. 

 

 

 

 

Ocean 

 

TOO 

Transfer 

of 

Ownership 

It is an act of point where the ownership of the shipment is transferred from one person to another. 

 

Ocean/Air 

 

 

TW 

 

 

Tare Weight 

Tare weight refers to the weight of an empty container, car, or vehicle. It must be mentioned in the documents according to the international shipping regulations. 

 

 

Ocean 

 

ULD 

 

Unit Load

Device 

ULD is an aircraft pallet, container, or a net combination of pallet to consolidate the cargo to help with loading the products onto an aircraft.                            

 

Air  

 

VAT 

Value 

Added 

Taxes 

A consumption tax levied on goods and services at each stage of the supply chain where value is added to the product. 

 

Ocean/Air 

 

VGM 

Verified 

Gross 

Mass 

VGM is a combined weight of the shipment that includes tare weight of the container, shipment’s cargo, dunnage, and bracing.  

 

Ocean 

 

 

VW 

 

 

Volumetric Weight 

This measurement is used by shipping companies to calculate the density of the package to see how much space it takes up in the container. This value will then be compared by the package’s physical weight.   

 

 

Ocean/Air 

 

W/M 

 

Weight per Measurement 

It is a measurement method that is used to calculate the freight rates. It could either be in terms of per metric ton (1000 kgs) or per cubic meter (35.3 cubic feet), whichever is greater.  

 

Ocean 

Get in touch with Al Sharqi’s experts for more details! 

Our customer service team is happy to assist you with planing your next booking.

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