As in any industry, there is a specific terminology used in the field of international transportation in business communication, contract drafting, determining delivery terms, and other important processes.
Any participant of the logistics process must understand the meaning of specific terms. Of course, it's not easy to memorize the meanings of all abbreviations. We created this short reference guide so that you can refer back to it if you can't remember the meaning of any of the most important terms used in international transportation.
These terms help to avoid misunderstandings and minimize errors in the supply chain.
1. Incoterms – International trade rules
When drafting a foreign trade contract, the sender and the receiver determine the delivery terms. It's important for both parties, as well as all other participants in the transportation, to speak the same language to avoid misunderstandings and confusion. To achieve this, international Incoterms rules were developed. Incoterms stands for “International Commercial Terms”. These are a summary of rules prepared by the International Chamber of Commerce that determine the degree of responsibility of the sender and recipient of goods during transportation.
2. COD – Change of destination
Imagine that your goods have been loaded onto a container ship and are now on their way to the destination. Suddenly, for some reason, you need to change the destination – don't panic. You must remember that you have the option to request COD, meaning a change of destination. This is a request sent to the shipping line stating that the container needs to be unloaded at a destination other than the one specified in the bill of lading.
3. CYCY – Container yard to container yard
CYCY stands for “Container Yard to Container Yard”. A container yard is a port facility where containers are stored before being loaded onto a vessel or after being unloaded from one. The term CYCY means that responsibility transfers to the carrier at the container yard at the loading port and ends at the container yard at the unloading port.
4. Demurrage
Demurrage is a fee charged by container lines if you do not pick up your containers from the port on time. After the containers are unloaded from the ship, you are given some free time for storage at the port. You must pick up your containers before the end of this free period. Otherwise, you will be charged for the number of days your containers remained at the port.
5. Rollover
Rollover means that your container wasn't loaded onto the ship. This can happen due to customs problems, rebooking, or the absence of a ship. The carrier usually places the container on the next departing vessel.
6. Detention
Detention is a fee for the excessive usage of a marine container after it has been removed from the port. It is charged until the empty container is returned to the port.
7. Port storage
Port storage occurs when your containers are unloaded from the ship and moved to a container yard. The port provides a free storage period (not to be confused with the free demurrage period provided by container lines). During this period, you have time to complete customs clearance and transport your goods to a warehouse or other final destination. Port congestion may affect productivity, so if you do not remove your cargo on time, the port may demand payment for storage.
8. FCL and LCL
FCL (Full Container Load) refers to a fully loaded container, which is filled with goods from a single shipper. This method is not suitable for transporting small batches of goods, but is commonly used for delivering cars (for example).
LCL (Less than Container Load) refers to a partial container load, shipped as part of a consolidated cargo. This method allows you to combine your small batch of goods with other shippers' cargo in one container, so as not to pay for an FCL shipment if the cargo is not voluminous enough to fill the entire container.
9. Bill of lading
A bill of lading is a legal document used for transportation. It contains information about the goods being transported, the point of origin and destination, the recipient, and the shipper. The document also represents an agreement between the parties involved in the transportation.
10. Stuffing & stripping
Stuffing is the process of loading a container, while stripping is the process of unloading a container when it arrives at port.
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