Basic terminologies used in the shipping industry you must know!
In today’s world, we are always on the lookout for quick and convenient options. This is mainly due to the pace at which the world is growing these days. It is not necessarily a bad thing as this is pushing us to become better at what we do.
All industries today use unique terms that are specific to just them nowadays. They do it to help differentiate themselves better and to make learning a more efficient practice overall. For the same reason, the shipping industry also adapted to this trend but terminologies involved in the shipping industry are not as simple as they appear to be.
In a quick overview, it has been observed that the shipping industry today contributes to up to 70% of the world trade happening around the globe. So, to understand how things function within the shipping industry and to understand the jargon and lingos better, let’s dive deeper into the “Shipping language” glossary.
Let’s begin with the common shipping terms that are used more frequently in the industry, categorized further for better understanding.
Shipping terms relating to pre-shipment
- Incoterms- This term stands for International Commercial Teams that have pre-defined commercial terms that are decided on by the International Chamber of Commerce (ICC) for the shipping industry.
- Bulk Cargo- This shipping term refers to the commodity of goods that are usually transferred in big quantities and often do not require proper packaging. Examples of such goods include different seeds, grains, etc.
- Charter rate- This refers to the freight rate of shipping that is mutually agreed upon by both the owner of the container and shipment as well as the charterer.
- Freight Rates- Just as the name suggests, this is the charge that the shipping company takes against their ships’ transportation from one place to another.
- International Convention for the Safety of Life at Sea (SOLAS)- This shipping term is responsible for all the safety procedures and measures of the ships. This includes the number of lifeboats that are required and all other safety equipment that need to be present at the container ship at all times.
Move over internet lingo and sound smarter with new shipping terms
Shipping terms relating to container ships
- Maiden Voyage- This term refers to the first complete journey a container ship makes after it is received from the shipyard.
- Vessel- Under shipping terms, this term is just another word for a container ship or boat.
- FCL (Full Container Load)- This is a payment clause as it determines the capacity of the container ship being utilized by a singular commodity. The seller is then charged accordingly.
- LCL (Less than Container Load)- Just like FCL, LCL is also a payment term clause which states that only a part of the container capacity is being utilized. This way the remaining parts are set up for other shipments.
- Container terminal- Just like airports have separate terminals for specific flights. Similarly, docking ports have specific areas that are designed to support the container ships with their sizes and other needs.
- Hazmat- This shipping term’s full form is “hazardous materials”. These are usually materials that can cause potential harm to the surroundings or anyone that comes in contact with it. To ship such commodities, special permission has to be taken before shipment.
- Reefer- This term is used for a container that is temperature-controlled and is used to maintain the quality of goods/commodities like food items or fresh produce during transit.
Shipping terms specifically in relation concerning and its documentation
- Commercial Invoice- This is a bill copy that works as proof of sale. This is very important for custom clearance.
- Bill of Lading (B/L)- This is an official document that is required to prove ownership of the cargo and also acts as a negotiable document to receive the cargo and the goods in it. It also states the contractual terms binding the carrier and shipper/seller.
- Booking Confirmation- This is required for the main journey of the container ship as it acts as a receipt.
- Fumigation Certificate- This specific document is only required if natural products like wood are being shipped in transit. It is also required for customs clearance.
- CIF- This shipping incoterm is the cost, insurance and freight of a shipment. Such terms are usually a part of the contract between a buyer and seller before the container ships leave the home base.
Now, with the help of the above shipping industry lingo glossary, you will be able to communicate in the “shipping language” better. All the shipping terms that you have read about above are all used daily in the shipping industry. It seems like the shipping industry is limited to just containers and ships. However, there is much more involved in the entire process of shipping goods from one port to another.