Freight and Logistics Glossary

AD/CVD: Antidumping or countervailing duties are punitive duties applied to imports that are perceived as being sold in the United States for less than fair market value or when a country is unfairly subsidizing a whole industry. Whether goods are subject to AD/CVD is one of the most important questions an importer should ask when sourcing a product because the duties can range from a few percent to more than the invoice value of the goods themselves. Importers will also have to deposit these duties in escrow, taking away valuable cash flow from a business while the cases are open for years or, in some cases, decades.

Bond: An amount of money posted with a surety as a guarantee to an entity, in this case Customs, to insure that any duties and taxes which are due for an import are paid. There are two types of bonds: Continuous, which are good for one calendar year from the date of issuance, and single transaction, which are affixed to the entry documents and issued on a shipment by shipment basis.

Cargo Insurance: Coverage which assures that if there is damage, loss or theft to goods in transit that remuneration can be made to the claimant provided the premium has been paid and terms are met. Cargo insurance is especially useful because the different participants to the supply chain (freight forwarder, steamship line, airline, cartman) have limits of liability and depending upon the value of cargo, the value could outstrip the carrier’s liability.

Carnet: A document issued by the U.S. Council for International Business which allows for the duty-free and relatively easier clearance of goods in transit between multiple countries. Goods traveling under a carnet cannot be consumed or sold while overseas. A good example of merchandise which would be eligible for a carnet are theatre scenes and costumes or machinery or equipment taken abroad for a trade show or exhibition.

Cartman: Cartman is another term for a trucker, or the person who delivers cargo. A cartman could be someone delivering in a vehicle (messenger service, taxi) all the way up to someone delivering a full container with a tractor trailer.

Customs and Border Protection (CBP): The government entity formerly known as United States Customs. CBP now combines legacy Customs, INS (Immigration and Naturalization Service) and APHIS (Animal, Plant, Health Inspection Service). Customs is charged with collecting, protecting and defending the revenue of the United States government, as well as border security and, in some cases, cargo security. Customs used to be in the Treasury Department but is now housed under the Department of Homeland Security.

Customs Broker: An individual or firm licensed by Customs and Border Protection to transact Customs business. To become a licensed Customs Broker, an individual must pass a test given twice annually by Customs and also pass a rigorous background check. A Customs Broker is allowed to act on behalf of importers and collect a fee.

Duty drawback: The refund of up to ninety nine percent of paid Customs duties upon exportation of product which had duty paid at the time of importation. The cargo must meet strict criteria to qualify for drawback benefits.

Freight forwarder: An individual or firm engaged in the business of moving cargo from one point to another. Any modality can be used to accomplish this purpose (air, water, rail or truck). Freight forwarder is the generic term for any of a host of specific entities (air freight forwarder, NVOCC, indirect air carrier).

Incoterms®: Put forth by the International Chamber of Commerce and most recently revised in 2010, Incoterms® are a series of pre-defined commercial terms that will dictate whether the shipper or consignee is responsible for charges that occur between the factory and the ultimate destination. Incoterms explicitly details who is responsible for inland haulage, international transportation, Customs duties and final delivery, based on the agreed-to terms between the buyer and seller.

Indirect Air Carrier (IAC): An individual or firm granted authorization by the Transportation Security Administration (TSA) to tender cargo to airlines for shipment on a passenger or cargo aircraft. Also known as an air freight forwarder.

NVOCC: An abbreviation for “non-vessel owning common carrier.” This individual or firm is licensed by the Federal Maritime Commisson (FMC) and has a surety bond in place to book and move cargo by sea between the United States and foreign countries (both inbound and outbound). An NVOCC will also issue their own bills of lading for the transaction, whereas a firm operating as only a freight forwarder will use the bill of lading of the underlying carrier.

Prior Notice: A requirement imposed as part of the FDA Bioterrorism Act of 2002 that imports of ingredients, food products and chemicals or other food precursors be reported to FDA prior to their arrival at the first US port of entry. This advance notification must be given not less than eight hours prior to the arrival of a vessel, four hours for an aircraft and two hours for a train or truck arriving at the US border. Failure to file prior notice can lead to a penalty as well as refusal of entry of the shipment.

Shipper’s Letter of Instruction (SLI):A form which authorizes an air or ocean freight forwarder to export a shipment on behalf of an exporter and contains the details necessary to make the booking with the carrier and declare the cargo to the Census Department or other applicable government entities prior to departure.

Solid Wood Packaging Materials (SWPM): A type of packaging which will require a certification from the shipper, whether for import or export, that the wood used was either heat treated or fumigated to prevent infestation. Examples of solid wood packing materials are pallets, crates and dunnage used inside of a container. Particle board and other reconstituted or “slurry” type woods do not require this certification and the packing materials will not need to be marked by the manufacturer.

Other Resources

The Camelot Company

Introduction to the CBP Import Process

To help new and existing importers learn the process of importing goods and merchandise from foreign countries into the United States, CBP has developed an informational video that addresses the Import Process. The video addresses everything from examples of commercial goods to formal and informal entries, as well as categorization in the HTS and liquidation.

The Camelot Company

Calculators and Conversion Charts

While the United States operates on the Imperial system, the rest of the world is metric. Need help converting inches to millimeters? We've got a handy resource for that. Trying to calculate how much volume a shipment takes up and whether or not to go LCL or FCL is important for determining landed cost. Click the link for our useful container resource chart to compare container sizes and to determine the correct size container for your shipment. Remember, a 20' container doesn't cost half as much to ship as a 40' container - so it is important to choose wisely when ordering and calculating shipping costs.