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Recognizing Freight Terminology: A Guide to Understanding Shipping Jargon

Recognizing Freight Terminology: A Guide to Understanding Shipping Jargon

In the expansive world of logistics and shipping, understanding the intricate language of freight terminologyis akin to possessing a compass in a vast ocean. From “bill of lading” to “demurrage,” the jargon can seem like a labyrinth to the uninitiated. However, fear not, for this guide aims to serve as your beacon, illuminating the murky waters of shipping jargon and providing clarity on essential freight terms.

What is freight terminology?

Freight terminology

includes a wide range of phrases used in the shipping and logistics industries to describe many parts of the transportation process. These terms improve communication among stakeholders such as shippers, transporters, freight forwarders, and customs officials. Mastery of this vocabulary is critical for guaranteeing smooth operations and preventing misconceptions that could result in delays or extra costs.

Decoding Freight Terms: A Comprehensive Guide

Bill of Lading (BOL):

The Bill of Lading is a crucial document issued by the carrier to the shipper, acknowledging receipt of the goods for shipment. It serves as both a receipt of cargo and a contract of carriage, outlining the terms and conditions of transportation.

Freight class:

Freight Class is a recognized shipping jargon guide that assigns shipments based on density, stowability, handling, as well as liability. This classification influences shipping charges, with lower classes often implying lower rates for smaller and easier-to-handle material.


Demurrage refers to the fees imposed by carriers for keeping cargo containers or boats at a port or terminal for longer than the authorized time. It acts as an incentive for prompt cargo pickup and improves port efficiency.

FOB (Free On Board):

FOB is a shipping phrase that means the seller is responsible for the goods and their related costs until they are loaded aboard the vessel at the designated port. Once the products are loaded, ownership and liability are transferred to the purchaser.

LTL versus FTL:

The two most common freight terminology,LTL and FTL, refer to two common ways of freight transportation. LTL shipments usually occupy a section of a truck and are mixed with other shipments, but FTL shipments take up the entire vehicle and are devoted to a single customer. Recognizing the differential is critical in identifying the most cost-effective delivery option.


Incoterms, or International Commercial Terms, are a set of standard trade terms released by the International Chamber of Commerce (ICC) that specify the roles of buyers and sellers in international commercial transactions. They clarify important issues like delivery, risk transfer, and transportation costs.

Accessorial charges:

Accessorial charges are additional fees collected from carriers for services other than ordinary transportation, such as liftgate, inside delivery, or residential surcharges. To effectively budget for shipping expenses, you must be aware of these charges.

Customs broker:

A customs broker is a certified professional who helps importers and exporters clear their goods through customs by filing and submitting papers on their behalf. They are knowledgeable about customs regulations and ensure that all applicable laws are followed to accelerate the clearance procedure.


A tariff is another

decoding freight term, which is a set of levies or fees collected from carriers to transport goods. It defines the costs for specific services, allowing shippers and carriers to reach transparent pricing agreements. Tariffs must be reviewed to understand the costs of shipping specific items.

Tare weight:

Tare weight refers to the weight of a container or truck without payload. Tare weight is used by shippers to establish the net weight of the products being transported, and shipping costs are calculated based solely on cargo weight.

Bottom line

Understanding freight terminologyis essential in the fast-paced world of shipping and logistics. Understanding these words is critical for efficient and cost-effective cargo transportation, whether you’re a skilled industry professional or a beginner travelling the seas for the first time. By learning the freight language, you’ll be better prepared to manage the complexity of global trade and assure the smooth movement of commodities from origin to destination.

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Q: What is freight terminology, and why is it important for shippers and logistics professionals to understand?

A: Freight terminology refers to the specialized vocabulary and terms used within the freight transportation industry to describe various aspects of shipping, handling, and logistics operations. Understanding freight terminology is crucial for shippers, carriers, freight forwarders, and logistics professionals to communicate effectively, navigate regulations, and execute successful transportation transactions. By familiarizing themselves with key terms such as FOB (Free On Board), LTL (Less Than Truckload), CIF (Cost, Insurance, Freight), and INCOTERMS (International Commercial Terms), stakeholders can ensure clarity and accuracy in their interactions and transactions.

Q: What are some common freight terminology terms used in international shipping?

A: In international shipping, several terms and acronyms are commonly used to define responsibilities, costs, and risks between buyers and sellers. Examples of international freight terminology include EXW (Ex Works), FCA (Free Carrier), FOB (Free On Board), CFR (Cost and Freight), CIF (Cost, Insurance, Freight), DAT (Delivered at Terminal), DAP (Delivered at Place), and DDP (Delivered Duty Paid). These terms, known as INCOTERMS, specify the obligations of parties involved in international trade and help facilitate smooth transactions across borders.

Q: Where can I find resources to learn more about freight terminology and industry standards?

A: Several resources are available to help individuals expand their knowledge of freight terminology and stay up-to-date with industry standards and practices. Industry associations, such as the International Air Transport Association (IATA), International Chamber of Commerce (ICC), and National Customs Brokers and Forwarders Association of America (NCBFAA), offer educational materials, training programs, and publications covering freight terminology, regulations, and best practices. Additionally, online platforms, trade publications, and professional networks provide valuable insights and resources for those seeking to enhance their understanding of freight terminology and excel in the logistics field.