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Supply Chain Managment

Page history last edited by /pd 5 years, 6 months ago

SUPLY CHAIN MANAGMENT v2.0

 

What does a dreamer do when they have a passion and a vision for a  new paradigm in the Supply Chain ?  They Pen their thoughts down.

 

 

This is my pen testing zone for thoughts and ideas for a Supply Chain Paradigm for ALL.  Hopefully  this will become my final product :)-

 

 


 

Chapters (not in order - to be setup ) 

  

Status : Works in Progress - In no particular order.  ( Draft Mode )

 

1) Pillers of supply Chain

 

2) On Shelf Availability (OSA)

 

3) SCM Performance Measures

 

4) Suppy Chain KPIs

 

5) Supply Chain Risk - a Report by MIT and PW

 

6) Rail Report

 

7) Supply Chain Finance- As per Euro Banking Association report

 

8) Role of the Logistics Professional - Research from the  third annual study on the role of theglobal logistics manager. This report is designed to give an overview of the roles and responsibilities of logistics professionals, as well as the organizational structures and strategies they work within.

 

9) Export Benchmark  2014 . Via  American Shipper

 

10) Import Benchmark 2014 - via American Shipper


Glossary of TERMS

 


 

.A.R. - Against All Risks

An insurance term.
A.1. - First Class Condition
 
A.D. - After Date
 
Ad. val. - Ad Valorem
According to Value.
A.N. - Aft Hatch
 
A.S. - After Sight
 
ACCEPTANCE
An acceptance is a time draft that the drawee has either stamped or written the word accepted across the face of the draft and then signs the acceptance notation. If a bank is the drawee (the party that the draft is drawn on), a Banker’s Acceptance is created. If the drawee is an individual or company, it is referred to as a Trade Acceptance.
ACCESSORIAL CHARGE/"Accessorials"
A charge made by a carrier for other than basic ocean transportation. FMC 514.2 "Accessorial means a particular service or condition other than the basic transportation, which is usually described in a commodity description, TLI, or Tariff Rule, and for which a charge may be added to the basic ocean freight rate."
ADVISED CREDIT
A letter of credit that has been authenticated by the advising bank, insuring that the issuing bank did indeed issue the letter of credit. The advising bank does not take on any responsibility to effect payment as they would if they had confirmed the letter of credit. However, they will most likely assist in facilitating payment.
ALL INCLUSIVE/"ALL-IN"
A shipping rate that includes all shipping and accessorial charges.
AMENDMENT
The account party may contact the issuing bank in writing requesting that a term or condition in the original letter of credit be changed or deleted, or that a new term or condition be added to the letter of credit. According to the Uniform Customs and Practices (UCP) 500, amendments must be accepted or rejected in their entirety. In other words, if the amendment contains more than one change, and you like one change but not the other, you have to either accept or reject the entire amendment.
ASSIGNMENT of PROCEEDS
The beneficiary of a letter of credit may instruct the negotiating bank, in writing, to pay all or a portion of the proceeds due them to a third party. The request to assign the proceeds should be accompanied by the original letter of credit and the fee that the negotiating bank may charge for this service.
BAF or FAF - Bunker or Fuel adjustment factor
An accessorial charge for fuel.
B.B. - Break Bulk
Cargo loaded in bulk inside a vessel as compared to containerized cargo.
B/L - Bill of Lading
A contract of carriage, used by ocean, inland waterway, rail and truck common carriers, and contract carriers. Variety of B/L’s include an Ocean B/L, a Multimodal B/L, a Uniform B/L, & a Uniform Short B/L. The former two can be negotiable, and would carry title to the goods.
B.O. - Bad Order
Rail term where the car is in need of repair.
BENEFICIARY
The party that the letter of credit is issued in favor of. The beneficiary may also be referred to as the seller, exporter, the supplier or the vendor.
CAF - Currency adjustment factor
An accessorial charge to compensate for fluctuations in currencies.
C.E. - Consumption Entry
 
CFR or CNF Cost of Goods, and Freight
Shipper is responsible for paying the freight to destination.
CFS - Container Freight Station
A location where the carrier controls the loading &/or unloading of containers.
CHB - Customs House Broker
A person/company who has passed all requirements and is licensed to do import business with US Customs. The exam requires a proficiency in CFR 19, NAFTA, and the Harmonized Tariff.
CIF - Cost of Goods, Insurance and Freight
Incoterm where seller is responsible for arranging & paying freight to destination and covering insurance to destination.
C.O.D. - Cash on Delivery
 
COFC Container on Flat Car
Intermodal container without chassis.
C/O - Certificate of Origin
A document certifying that the goods described were from the area stated on the certificate. It usually is notarized and certified by the local Chamber of Commerce.
C.P. - Charter Party
This is a common expression used in Seafreight. The hiring of a vessel or ship is referred to as a ‘charter’. So, when a vessel is ‘chartered’, it means that the ship owner has hired it out to a second party (the ship itself would be referred to as being ‘on charter’ and so forth). The terms and conditions of the charter, that is to say the contractual terms and conditions of hire, are documented in a contract called a ‘charter party’. Note that the expression is sometimes written as one word (charterparty). In times past, the terms and conditions of the arrangement would have been uniquely drawn up on a document (the French word for which is taken from the Latin expression ‘carta’). This document when signed by the ship owner and the hirer would then be torn in two, with each keeping one piece. The French expression for this being ‘a part’ (on the side). So, from carta a part, the expression developed into an Anglicised form charter party.

These days, the underlying contracts are normally standard formats with established conditions for the trade, cargo type, trade route or vessel type employed.

As the terms and conditions of carriage are recorded on a document (the charter party) separate from the transport document, the transport document looses one of its traditional attributes (that of being ‘evidence’ of the contract of carriage). So, if a documentary credit was involved, the bank may call for both the charter party and the transport document or at the very least require the transport document to make reference to the charter party.

C.R. - Carrier's risk
 
CY/CY - Container Yard to Container Yard
A container yard is a location where containers may be parked, picked up, or delivered full or empty. A CY may further be a place of loading (stuffing) or unloading and/or where ocean carrier accepts custody and control of cargo.
CARNET
A Customs document that permits the party holding the carnet to carry or send merchandise temporarily into certain countries without paying duties or posting bonds. Used frequently for trade shows.
Chassis
Frame with wheels used to transport containers.
Conference
A group of carriers exempt from Anti-Trust laws because they can share services and establish rates.
CONFIRMATION
When the advising bank guarantees the obligation of the issuing bank, providing an extra layer of protection. Used most often when the credit worthiness of the issuing bank is in question, or the political or economic conditions of the issuing bank’s country are considered risky.
CONSIGNEE
The party appearing on a bill of lading to which the carrier has been instructed to deliver the goods.
D/D - Date Draft
 
D/S - Days After Sight
 
DDC - Destination Delivery Charge
An accessorial charge to deliver at destination.
Dead freight
This is an amount paid to the Shipping Line, for cargo withdrawn by the shipper or cancelled by the shipper (and so not loaded) that the Carrier was advised would be loaded under a contract of Carriage. The amount claimed by the Carrier is the full freight less any lifting charges either not included in the freight or accepted as not incurred (although this deduction if included in the original freight rate is at the discretion of the Carrier).

Effectively, once the contract is in place (and this is at the very moment of the verbal offer and acceptance, regardless of if a tangible document has been issued), the cargo must be shipped. If the shipper fails to load or cancels the booking, the Carrier can demand the full freight anyway this is even true if they then rebook the space for use by another shipper.

It is uncommon to come across this condition in a service which runs on a regular and frequent basis this does not mean to say that the Carrier in such a service does not have the right to claim Dead freight, but rather that they waive the right for commercial reasons. It is a more common risk and a regularly imposed penalty in less frequent or charter arrangements.

DGD - Dangerous Goods Declaration
Any substance that falls under one of 9 UN hazardous classifications as defined in the IMDGC.
DOT - Department of Transportation
U.S. cabinet level agency responsible for domestic transportation and US inland portions of international shipments. DOT is also the parent agency of the US Coast Guard.
Demurrage
Charges caused by containers being stored at port or CY beyond specified free time.
Detention
Charges caused by containers being kept outside port or CY beyond specified free time.
Direct Service
A Direct Service in Airfreight can mean one of two things. Either, it is a request for or a reference to, the cargo being handed directly to the Air Carrier as opposed to the Consolidator or Forwarder. In this context then, a Direct Service is the opposite of a consolidated service (see definition 28). Note that this is frequently called Direct IATA (with IATA being the International body that controls air activity [refer to definition 157]). However, not all Air Carriers are IATA members, so Direct with the Carrier would be a more accurate statement. The second use of the expression Direct Service is in requesting the routing of the cargo using one aircraft only. Whether or not the cargo is entrusted directly to the Carrier or via a Consolidator or Forwarder is not the point. What is important in this usage of the expression is that the cargo flies from origin to destination on a single craft. This would be the opposite of the dogleg service (refer to definition 8). The caution is that in using the expression in the context of the second definition (i.e. one aircraft) a consolidator may take it to mean the first definition (i.e. directly with the Carrier). The consequence of such a misunderstanding could be severe as the Freight Rates charged by Carriers for ‘direct’ handling of cargoes is often many times greater than the rate offered by the Forwarder.
DRAFT (Bill of Exchange)
A formal demand for payment from the drawer to the drawee stipulating the amount and currency to be paid at a specified time to the order of a named party, also referred to as the payee. A sight draft is for immediate payment; a time draft allows for a financing period, usually not more than 180 days.
DRAWBACK
The ability to be reimbursed for some or all of the duties paid on imported merchandise at the time of re-exportation.
Dray
The trucking movement of a container.
D.W. - Deadweight Ton
2,240 lbs.
E&O - Errors and Omissions
Insurance.
EAON - Except as Otherwise Noted
 
EAR - Export Administration Regulations
 
EIN - Exporter’s identification number
(Federal ID No.)
FAA - Free of All Average
Insurance term.
FAS - Free Along Side
Goods to be delivered by seller to a location along side of vessel, loading and carriage charges are for the buyers account.
FEC - Foreign Exchange Contract or Forward Cover
This is a Banking facility devised to allow (normally) importers to cost goods using a fixed exchange rate.

What this allows is for the importer to calculate the landed cost of the goods and to therefore sell goods at the first available moment, well in advance of the due date for the supplier to be paid. In this way the importer will avoid having to bear the risk of exchange rate fluctuation. The rate of exchange used by the bank is one that they anticipate will apply on the due date i.e. the date that the supplier is to be paid. For example: If cargo arrives on day one and is due to be paid for on day 90, the importer contacts the bank and enters into a contract with them, where the importer undertakes to buy the required foreign exchange on day 90. In recognition of this undertaking, the bank then fixes a rate of exchange, which will stand for that future purchase of currency by the importer. The importer uses this exchange rate in the costing calculations.

When day 90 arrives, the importer buys the exchange at the agreed rate (and pays his supplier). If the local currency has deteriorated against the foreign one, the importer has no risk equally if it has improved, he has no gain. However, it gives stability in markets where the local currency is volatile. Exporters also have a use for these contracts especially when they give their prices to foreign buyers in a currency other than their local currency. The scenario is now reversed as the exporter obtains a fixed rate at which the Bank will buy the foreign currency from the supplier when the supplier is paid. The exporter effectively ‘fixes’ their profit in this manner, and again avoids any consequence of exchange rate fluctuation.

FEU - Forty foot Equivalent Unit
See TEU.
FIO - Free In and Out
Ocean Loading/Unloading term.

BEWARE, the term free is a dangerous one. In this term, free means that the cost of loading and unloading are for the account of the shipper, and not the carrier.

For example, if you shipped a container from Hong Kong to Los Angeles for US$1,000 FIO, you would have to pay the carrier US$1,000 for the ocean freight, AND you would have to pay the Port tariff charges to load the container in Hong Kong plus the Los Angeles port tariff charges to unload the container, which would about double your shipping cost.

In other words, Free In and Out (FIO) means that the loading (in) charges, and unloading (out) charges are free as far as the carrier is concerned.

FMC - Federal Maritime Commission
 
FOB - Free on Board
Incoterm where seller is responsible for delivering goods to a specified port and the cost of loading goods onboard the vessel. This term must be clarified by stating a specific location and type of conveyance (i.e., FOB vessel, New Orleans, LA)
FTZ - Free Trade Zone
An area where goods can enter the country duty free. The goods can be stored, used or sold while in the zone without incurring duties. Duties are only paid when the goods leave the Free Trade Zone.
FORCE MAJEURE
A natural disaster, riot terrorist act, or war which is totally beyond a party’s control, and prevents them from fulfilling obligations under a contract.
Fortnightly
14 days (every other week).
Freight
This is an excellent example of how difficult it is to ‘crack the code’ of the freight vocabulary. The word Freight is used in many different ways to describe many loosely associated things. The following is not intended as a definitive list but should indicate the need to be careful with the words you use in trade, given also that the party you are communicating with is not necessarily accomplished in English. (The English word Freight being “Fret”, ”Fracht”, “Vracht”, “Vrag” and “Nolo” in French German Dutch Afrikaans and Italian respectively).

1. Freight as an expression used to indicate the actual cost of movement. This would be in the context of a ‘freight rate”, but you will be asked, “how much freight did you pay?” which could actually be the total of all transport costs from A to B, whether called freight-rates or not.

2. Freight as the actual action of movement. This would be in the question “how do you want to freight this?” e.g. air or sea or land.

3. Freight used to describe the actual cargo itself. As in “I’m sorry, but we cannot find your freight!” or in the expression Freight Forwarder.

4. (To) Freight is used to indicate that the charges are to be shown on a given document. For example, to freight a bill of lading is to endorse it with the prepaid and/or collect charges due.

Interestingly – and perhaps tellingly – the word derives from the Latin ‘onus’ meaning a burden!

Gantry Crane
A very big crane used to lift cargo from the pier to a vessel or vise versa.
GRI - General Rate Increase
An across the board rate increase by a carrier or a conference.
GRI - General Rules of Interpretation
The universal rules governing the Harmonized Tariff System.
HMF - Harbor Maintenance Fee
Another accessorial charge.
Hague Rules
Ocean B/L terms covering carrier liability established 25 Aug. 1924. Incorporated into US law in 1936 through COGSA (Carriage of goods at sea act). Hague Visby amendments of 1968 are not included in COGSA. Read the fine print on the back of the B/L.
Harmonized Tariff System
A comprehensive commodity classification system. Schedule B is the export classification system, and HTSUSA is the classification system used to classify cargo imported into the US, and assess duty thereon.
H.W.M. - High Water Mark
 
IMO - International Maritime Organization
Part of the UN which regulates international navigation and shipping safety through a framework of rules, treaties and regulations.
IPI - Inland Point Intermodal (Microbridge)
Cargo moving from an inland point, under control of the ocean carrier. FMC 514.2 "Intermodal transportation means continuous transportation involving more than one mode of service (e.g., ship rail motor and air), for pickup and/or delivery at a point beyond the area of the port at which the vessel calls."
Independent
A carrier who is not a member of a conference.
INCOTERMS
Standard set of definitions for delivery terms (terms of sale) established by the International Chamber of Commerce.
INCOTERMS 2000, The 13 Incoterms are:
bullet EXW--Ex Works (named place):
bullet FCA--Free Carrier (named place):
bullet FAS--Free AlongSide Ship (named port of shipment):
bullet FOB--Free On Board (named port of shipment):
bullet CFR--Cost and Freight (named port of destination):
bullet CIF--Cost, Insurance and Freight (named port of destination):
bullet CIP--Carriage and Insurance Paid to (named place of destination):
bullet CPT--Carriage Paid To (named place of destination):
bullet DAF--Delivered At Frontier (named place):
bullet DES--Delivered Ex Ship (named port of destination):
bullet DEQ--Delivered Ex Quay (named port of destination):
bullet DDU--Delivered Duty Unpaid (named place of destination):
bullet DDP--Delivered Duty Paid (named place of destination):
Inspection
Pre (or Post) - Shipment Inspection:

A Pre-Shipment inspection involves the inspection of cargo prior to loading or shipment by either an independent third party or by a representative of the buyer. The inspection is called for to assess the quantity, quality, composition or condition (or all of these) of the cargo.

Essentially, there are two types of inspection. An Inspection that is commercial in nature this is to say that the buyer or buyer and seller have agreed to the inspection or one that is mandated by law. When the inspection is legislated, it is normally a requirement of the government of the destination country. They will normally appoint an independent inspection service to act on their behalf in the various countries of origin and frequently, the clean report issued by the inspection service (or a certificate that the clean report has been issued) is the ‘trigger’ for payment. As such, the buyer cannot remit funds to the seller unless the cargo has passed the inspection. The extent of the inspection may be fixed and quite specific, dependant on the nature of the goods. Equally, the goods and circumstances dictate where and when such inspections take place. They can range in extent from a simple ‘tally’, e.g. counting boxes and opening a random sample of these, right up to drawing samples and subjecting them to chemical analysis in a laboratory.

With a ‘commercial’ inspection, the buyer normally appoints someone to be present at the loading, again checking quantities and random samples. This may be someone from the independent inspectorate field, or their own local agent etc. There are no guidelines for these informal commercial inspections but a common application is to endeavor to check that the quality of goods ordered on the strength of a high-grade sample meet the standards of the sample goods. Post Shipment Inspections are uncommon but still have their place in freight. Clearly the cargo has already moved and if the inspection reveals problems, these are compounded in that the cargo is no longer with the seller. These are often voluntary inspections and should not be confused with inspections mandated through Customs and Excise, for example.

INSURANCE
    Ocean Marine

    General Average

    E&O - Errors & Omissions

    OS&D - Over, Short, & Damage

    COGS - Carriage of Goods at Sea

    Hague Visby - see Hague rules.

INSURANCE COVER (Calculation):
In 1906, an Act of Parliament was passed in Britain governing the minimum requirements for maritime insurance. This Act (the Maritime Insurance Act of 1906) specified that, in the absence of instruction, the insuring party need only organize cover to the value plus 10% (i.e. the commercial invoice plus an additional 10%).

Much has changed since 1906 and certainly the ratio of freight-costs to freight-value is substantially different. To simply add 10% to the invoice is perhaps underplaying the true cover required. The Seller’s Commercial Invoice will be for the goods and further, the invoice may include some, none or all of the cost of transport to get the goods onto the Buyer’s shelf from the Seller’s point of manufacture. It is therefore required that Cover is calculated by firstly determining the costs of moving the cargo onto the Buyer’s shelf from where the Seller’s freight charges included in the sales invoice, end.

Dependent on the specifics of the transaction, this may embrace freight, transport, duties and all disbursements (although generally excluding recoverable taxes such as VAT), with the addition of margins for profit and exchange fluctuation in accordance with allowances made by the insurer.

These additional costs over and above the Seller’s invoice are then totaled and expressed as a percentage of the Seller’s invoice.

Roughly speaking, there is a sliding scale between value and freighting cost percentages. This is to say that the higher the value of the cargo, the lower the total movement costs as a percentage of that value (provided that the freight costs are not raised in relation to the value of the goods, a system that is uncommon but not impossible). Normally freight movement costs are related to the size of a product rather than the value of it. Small traffic of high value will normally result in the charges for the movement of the freight being a low percentage of the overall cargo value whereas bulky traffic of low value would have the reverse effect, with the freight percentage forming a substantial part of the landed costs.

It should be emphasized that the 1906 standard of values plus 10% is still given as a guideline in the absence of instruction. The intention behind the Act was to allow Sellers to proceed even if they were unable to obtain direction from the Buyer, i.e. the Buyer’s failure to notify the Seller of the correct freight or other costs to be included in the calculation would not inhibit the movement of the cargo.

However, Sellers have a vested interest in ensuring that the insurance cover they undertake is adequate as they are owners of the cargo until such time as they are paid and in the most extreme example should the Buyer fail (become insolvent) then the Seller would retain the insurable interest irrespective of the Commercial Terms employed. In an age of mass communication the modern Seller should have no need to default to the minimum cover of value plus 10% due to a lack of instruction or information.I n many countries, in the absence of instruction, insurance brokers will normally offer insurance cover to the value calculated to be CFR plus 10% (Note. Do not confuse the use of the term CFR with the Incoterm CFR. These identical expressions have two different meanings one in the context of the Sales Contract, one in the context of the Insurance Contract). In the context of insurance, this term means the addition of the freight to the destination point of entry on to the cost or value of the commercial invoice.

This calculation stems from the common formula used in insurance claims when determining values for General Average liabilities, the base figure used to calculate the percentage contribution being expressed as CFR plus 10%.

LASH - Lighter aboard Ship
A ship containing equipment to load/unload itself.
L/C - Letter of Credit
Bank contract for guarantee of payment. See UCP500 rules for boilerplate.
LIFO - Liner In, Free Out
This is a qualification to a freight rate and should not be confused with, or used as, a term of sale. The expression Liner In Free Out, means that the port to port freight rate offered by the Carrier is inclusive of the costs of loading on to the ship but excludes the costs for the discharge of the goods at the port of arrival.

Terms such as these and there are many that you will come across are a throwback to the past in many respects. Frequently they are used with different definitions in different countries. In many cases the variation is subtle often differing in some slight detail between ports in the same country and you should exercise great caution when working with terms like this to the point where you might consider calling for an exact definition from the party you are in discussion with. This holds particularly true if that party is based in a foreign country.

CAUTION: The word free can be very confusing in a trade context. For example: In the above expression the word ‘free’ means ‘free from inclusion of’. So, Free Out means that the freight rate given does NOT include the costs of discharge from the ship. However, in the sales term FOB (Free on Board) the expression "free" means inclusive of the costs to achieve the underlying condition, so the purchase price under FOB includes all of the charges to achieve a condition (in this case loading on board.)

LINER TERMS - or full liner terms
This is an ocean freight expression. Liner terms are the opposite of Free terms. When you ship liner terms, the carrier is responsible for the loading and unloading of the cargo. If you ship LINER-IN, FREE-OUT, then the carrier is responsible for loading, and the shipper is responsible for unloading. FREE-IN, LINER-OUT means the shipper pays for loading, and the carrier pays for the unloading.
MLB - Mini Land Bridge
The same as IPI except the origin is a port instead of an inland point. If the origin is New Orleans, but the vessel sails out of Los Angeles, the NOLA -> LA transport is MLB.
Microbridge
FMC 514.2 "Intermodal transportation means continuous transportation involving more than one mode of service (e.g., ship, rail, motor, and air), for pickup and/or delivery at a point beyond the area of the port at which the vessel calls."
NDNC - No Deal, No Contract
The context is when the seller/agents/brokers have sealed a deal, prior to the final contract between buyer and seller. NDNC is a agreement contingent upon a contract between the seller and all agents in the deal. No Contract, No Deal.
NLR - No License Required
The code that replaced G-DEST on the SED.
NOS - Not Otherwise Specified
 
NVOCC - Non-Vessel Owning Common Carrier
An indirect ocean carrier who does not operate vessels, but accomplishes carriage via sub-contract with vessel operating carriers.
NVO or NVOCC (Non-Vessel Owning Common Carrier)
Although this is a common expression used by Sea freight Forwarders in many countries, the expression NVOCC has legal definition in the USA only. Sometimes, outside of the USA, they may be given as Non Vessel Owning Or Cargo Carrier rather than Common Carrier. As there is no formal definition outside of the USA, these variations abound. What the expression is trying to convey is the concept of the "Contractual Carrier" that is to say, someone who will issue a transport document as though they are the Carrier, although they themselves do not own or operate the vessel.

Essentially, a Freight Forwarder (Ocean Transportation Intermediary) in all but name. Forwarders who choose to use the expression NVOCC to describe themselves outside of American operators who have legal obligation to do so in many circumstances are confusing the issue unnecessarily, and might be further attracting unwanted risks. For example, to use the variation Non Vessel Owning Common Carrier is rash. The last thing a non-American Forwarder wants is to be held accountable as a Common Carrier etc in America, the legal status of the Common Carrier varies from other countries, where such status is vigorously to be avoided, because of the legal burden it places on the Carrier. The exact American legal definition NVOCC means a common Carrier that does not operate the vessel by which ocean transportation is provided, and is a shipper in its relationship with the Ocean Common Carrier. Note that the "Ocean Common Carrier" is the actual shipping line.

OCP - Overland Common Point
Similar to IPI, but the shipper is responsible for moving the container/cargo from the loading point to the port.
On Board
An ambiguous term on a B/L. On Board followed by a date usually means received for shipment, and not necessarily Laden On Board Vessel. The fine print on the back of the B/L should explain.
On Carriage
Transportation beyond the port of discharge. This can also be another accessorial charge.
OTI
Ocean Transportation Intermediary. A Freight Forwarder or an NVO according to the Shipping Act of 1998.
Overweight Container Law
Since April 9, 1997 any container or trailer in intermodal commerce weighing over 29,000 lbs must provide all parties with: actual gross weight, reasonable description of the cargo, identity of the certifying party, the trailer or container no., and the date of certification.
P.D. - Per Diem
Per day.
Phytosanitary Certificates
Phyto means plants. Under international (WTO) treaty, a competent government authority can issue a certificate based on inspection of goods confirming that a plant(s), seeds, or plant products are free of insects and disease which the destination country specifies.
Pro-Forma
Latin phrase meaning "in the form of". A pro-forma invoice based on a sales contract should be issued to help a buyer open a letter of credit. A pro-forma invoice is not a demand for payment of money, but a preliminary copy to aid documentation.
RORO - Roll On, Roll Off
Ships specially fitted so entire trucks can drive onboard.
S/D - Sight Draft
 
SED - Shipper's Export Declaration
A declaration required by Census, Customs, and the Department of Commerce, giving all the details of who shipped what to whom, and the value of the goods. Our firm is approved to provide SED's electronically via AES.
SHinc - Sundays and Holidays included
 
SHex - Sundays and Holidays excepted
 
Short Shipped (or Shut Out)
In Sea freight, this condition arises when the cargo is not taken on board the vessel. The Cargo is booked, documents are issued and the cargo is placed in the port, however it fails to be loaded.

Traditionally, the main reason for this problem was over-booking. Such over-booking arose because of poor communication or rolled-over cargo rather than as a consequence of incompetence or greed (which was frequently the common and incorrect assumption). (Note that ‘Rolled Over cargo is cargo that was previously short-shipped from a prior vessel).

In the modern era, short shipments usually come about because of scheduling or weather problems. Vessels have limited time under the lifting equipment in a modern port and need to maintain schedules. If a tidal action is needed to facilitate the departure of the vessel, it might have to sail at a given time regardless of what it has or has not taken onboard.

The on-board stamp on a sea freight document details the actual vessel that the cargo was loaded on. It is therefore important to see if the on-board endorsement indicates a different vessel than that for which the document was issued. If cargo is found short-shipped from a vessel for which ‘on board’ bills have been issued, the merchant has every right to complain.

S.L.&C. - Shipper's Load and Count
 
STC - Said To Contain
On the body of a Sea freight Transport document, there will be a broad description of the cargo. The detail in this section will be prefixed STC, meaning Said To Contain i.e., the stated number and type of package in the previous columns are Said to Contain (followed by a description of the goods.)

Under most laws, the Transport Document is a receipt for Packages, not a receipt for the cargo. This is to say that the law recognizes that if the Carrier is recording the receipt of cargo, the cargo condition (other than its outward appearance) quality, value and sometimes even mass and volume are unknown to the Carrier.

The Carrier can tally that he has been given so many cartons, but he cannot see what is in those cartons. He relies on the Seller’s declaration as to what they are "said" to contain. This is particularly important when dealing with Full Containers when the document given is a receipt for One Package (the container). These issues are relevant to insurance claims and Carrier’s liabilities that are normally linked to the number of packages involved in the claim and not the total value of the claim itself.

This matter is normally the province of the ruling convention applicable to the transport document. Some allow the Carrier the protection described above when working with Full Containers, whereas some do not. (You may care to look at the difference in this particular point between the Hague-Visby and Hamburg Rules)

TEU - Twenty foot Equivalent Unit
A 20’ container. This is an Americanized measurement. A TEU is about six meters long. It is a standard box or container.

One FEU = two TEUs.

Telex Release
In those countries where Waybill or Express Release documents are not readily acknowledged as customary to the trade, there is still the option to operate a ‘waybill’ transaction by the Seller’s surrender of one or more original Bills of Lading back to the Carrier. The Carrier then notifies their destination representative that the Buyer need not produce a further original to obtain release. Although most modern communication is by Email, or at least by Fax, Carriers generally still refer to this process of notification as being a "Telex Release".

Every Bill of Lading is claused in such a manner that, on surrender of one original of the Document of Title, any and all other originals fall void. The Carrier issues more than one original as a necessity of trade, but obviously that Carrier must then protect themselves from the fact that several ‘original’ receipts have been issued.

But, it is important to note that this surrender need not always be in the country of destination. For example cargo moving from the Country A to Country B involving a Document of Title may be released to the Buyer in Country B on presentation of one original of that Document of Title to any office in the world owned or operated or associated to the said Carrier. This could be in the countries of Origin or Destination, but equally it could be in any other third location.

In certain countries where Waybills are not acknowledged (the Far East mainly) this is an equally easy system for removing the need to generate, transmit and produce Documents of Title, should they not be required by the Seller.

(It should be noted that this type of release often requires all originals to be surrendered simultaneously i.e. 1, 2 or 3 dependent on how many were issued).

THC - Terminal Handling Charge
Another accessorial charge.
TOFC - Trailer on Flat Car
Intermodal trailer or container with wheels.
TWRA - Transpacific Westbound Rate Agreement
A Conference of several ocean carriers allowed to meet and establish rates and schedules.
Tariff
A published listing containing actual rates, classifications, charges, rules, etc. A tariff is the distinguishing feature of a common carrier consisting of its offer to the public to provide transportation between published points/routes of service based on a common set of rules, at specified costs.
Transshipment
When a shipment from point "A" to "C" must be handled through "B" or other intermediate points.
UCP 500
Uniform Customs and Practices for Documentary Credits, is a document published by the International Chamber of Commerce setting forth standard rules and conditions under which Documentary Letters of Credit are to be drafted, issued, notified, amended, negotiated, interpreted and paid by commercial banks. These rules reflect general consensus among banks worldwide, and provide a common basis on which to conduct business.
USDA - United States Department of Agriculture
US Government agency in charge of regulating agricultural plants & animals. USDA oversees the import/export of agricultural products, and issues animal health certificates, (plant) phytosanitary certificates, and (meat & dairy) sanitary certificates on products within its jurisdiction, as required by foreign governments for exports. This is done respectively, through the USDA veterinary service for live animals, the Animal Plant Health Inspection Service (APHIS) for non food animal products, plants, and plant products, and the Food Safety Inspection Service for meat & dairy products. Comprehensive & current information on destination country documentation requirements for agricultural products is maintained on the USDA sponsored EXCERT system.
U.S. Customs
A division of the Department of Treasury is in charge of controlling the admissibility of goods into the country, and collecting duty and taxes thereon. Customs also enforces laws and regulations otherwise applicable to imported goods.
Waybill
This is a term for a non-negotiable "straight" bill of lading. It represents a contract for carriage.
Y/A - York/Antwerp Rules

 


 

 

 

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