A Guide to International and Domestic Freight Shipping Terminology and Terms

Posted by Port City Logistics on Apr 13, 2022 6:04:43 AM

International and domestic shipping serves as the backbone of the supply chain network. So much rides on shippers having a firm understanding of domestic freight terms, port operations, and how to manage freight logistics. Unfortunately, bottlenecks, delays, and long dwell times continue to plague the industry. To address these concerns over local port congestion and backlogs, many ports are making changes to operations, personnel, equipment, and the ports themselves. 

This took place at the Port of Savannah in Georgia where the entire harbor went through an impressive deepening project.  As highlighted by Georgia Port AuthorityDeepening the Savannah Harbor to 47 feet at mean low water (the average depth at low tide), provides ample draft for vessels carrying 16,000+ twenty-foot equivalent container units, allowing ships to transit the river with more containers each trip and during more hours of the day.”  With more ships coming in and out and longer hours of operation, cargo can get unloaded and loaded with fewer delays. Backlocks hopefully will clear out and the shipping lines, like those still filing through the Port of Savannah and other major ports, will hopefully return to some semblance of normalcy. 

Whether things get back to normal next week or next, month, shippers are dealing with freight transportation right now, and this involves navigating the often confusing list of domestic freight terms. Understanding the common domestic freight terms that get thrown around in the industry can reduce errors, expenses, and disruptions caused by poor insight and mistakes. With continued pressures from COVID shutdowns and recovery, growing e-commerce sales, and shifting market and consumer trends, it is critical that ports around the country stay productive.

Some of the common domestic freight terms shippers need to know include the following. 

Accessorial Charge

Charges that are applied to cargo loads that go above and beyond the basic fees. These can be added for excessive weight, specialized handling, or other transportation considerations and needs. 

Air Waybill

A written record of cargo that has been transported by air cargo and is used to record and report contents and value of the order.

All-in Line Haul

This domestic freight term refers to the transport of goods by land, air, or water that occurs between two specified locations. It is in line in that there are no secondary or out-of-the-way stopovers.

Amazon FBA

Also known as Fulfillment by Amazon, this service allows sellers to outsource all of their shipping needs to Amazon and lets them manage the logistics. 

Backhaul

One of the common domestic freight terms used to describe loads that are picked up and shipped during a return trip. Truckers deliver a load at one destination and then pick up a new load before starting the return trip.

Beneficial Cargo Owner

This term described an importer that assumes responsibility for a shipment and uses their own shipping and port logistics and tracking rather than anything offered by third parties or outsourced services.

Bill of Lading (BOL)

A document issued by a carrier to acknowledge receipt of cargo for shipment. It is usually applied to ocean cargo but can be found with land and air transport more often today.

Billable Weight

A specified process or formula is often used to calculate the actual weight of the cargo in order to figure out rates and costs for individual loads. 

Blockchain

Blockchain enables the digitization of vital papers and records for faster and more secure storage and sharing among team members.

Booking Confirmation

The confirmation that a booking order has been scheduled and approved. Official confirmation of the scheduling is the key aspect of this domestic freight term.

Booking Fee

Costs associated with booking and scheduling of loads and related shipping services.

Broker

This is a person or company that acts as a middle man and helps foster business relationships and orders between two or more parties. This can include shippers, carriers, forwarders, and other freight brokers.

Cargo Insurance

Insurance that is purchased to cover the expenses of cargo getting damaged, lost, or rejected. It can also help in specific cases with coverage for excess fees such as detention charges and dwell time fees.

Carrier's Lien

This is one of the domestic freight terms and refers to the type of shipping and transportation lien that provides additional security interest in shipped goods to protect carriers during the transportation of cargo.

Certificate of Origin

Important international trade documents are used to prove that all export shipment contents were legally obtained, produced, manufactured, or processed in the reported country of origin. 

Chassis Usage Fee

Fee shippers are charged for using chassis for loading and unloading cargo. The fee is levied to offset expenses and to encourage the return of the chassis sooner for use by others. It can also help encourage improved chassis tracking protocols.

Clean Truck Fund

The Clean Truck Fund (CTF) is part of the plans to improve sustainability by reducing emissions and encouraging continued efforts for truckers and shippers to transition to a zero-emissions truck fleet set up in the next decade.

Coil Racks

Specialized racks are used to secure loads on trucks to prevent movement and damage during transportation.

Commercial Invoice

This domestic freight term relates to an invoice sent to commercial businesses or entities to request payment for goods or services.

Compliance, Safety, and Accountability

A national focus on improving services that focus on better compliance, safety, and accountability within the global and international shipping industry and supply chain.

Consignee

The person or entity ordering the goods, the shipment receiver, and most commonly the owner of the shipped goods.

Consignor

The company or organization shipping goods and products and who is responsible for delivery to the final destination.

Container Chassis

A type of semi-trailer designed to securely carry an intermodal port container and is used to move containers around the docks or warehouses or from one loading dock to another.

Container Freight Station (CFS)

A freight and cargo distribution network facility where shipments slated for import or export review stay. This is where the containers will be consolidated and de-consolidated as needed.

Contract of Carriage

This domestic freight term refers to a contract established between a carrier of goods and the consignor or consignee. The terms of the shipping agreement are outlined and detailed in the document. 

Cross-docking

A domestic freight term used for a logistics procedure where products are gathered from a shipper or manufacturer directly and then distributed directly to a customer or retail chain. With the cross-docking method, there is little to no handling or storage time and no dwell time.

Customer Clearance and Clearance Fees

This term refers to special fees that are usually added to shipping and handling costs to cover customer service and clearance processes involved with the transportation of cargo.

Customs Duty

Fees or taxes are levied on goods that cross borders once they have been inspected and approved by custom agents.

Customs Entry

A document that shows cargo has been inspected and approved for import or export over borders by customs officials.

Customs Surcharges

Additional charges on import or export goods from the first mile to the final mile delivery. These usually occur due to improper taxation, reporting, and payments elsewhere during shipping. 

Deadheading

A term that describes the unfortunate practice of driving a semi-truck with an empty trailer, often on a return trip when no additional cargo is picked up after initial delivery has been made.

Declared value

Value of goods assigned and used for insurance and claims purposes among others.

Dedicated Fleet

Fleets that are made up of owner-operators, drivers for hire, and smaller shippers that can keep availability and meet capacity needs on short notice. They can be contracted to work with specific clients for short or long-term needs as dedicated fleet drivers.

Dedicated team

This domestic freight term refers to a team of drivers and shippers that are contracted with a specific client for a specified length of time. This helps ensure capacity levels remain steady and reduces disruptions and reduces the impact of ships stuck at ports and other delays. 

Dedicated Truck

The term dedicated truck options refer to carriers working to carry freight for one primary customer along the same route. They ensure routine and predictable orders can easily be made despite surges in one-off or short-term orders.

Dedicated value

A common example of domestic freight terms, this one relates to the values and estimates placed on loads that are repeated and regular to improve the speed and accuracy of transportation and billing. 

Delivery Fee

A special type of charge that gets added to the shipping costs that cover delivery and related expenses from the shipper or courier making the delivery. 

Demurrage Fees

This term means specialized fees charged when containers are not delivered back to the port at the designated time. Demurrage and related shipping drayage costs can vary and are charged per day per container so they can quickly add up.

Department of Transportation

A government organization that governs and oversees the operations of transportation and shipping and delivery modes utilized by transportation service providers.

Detention Charges

Additional fees are applied to shipments when containers or equipment are not returned after to approved period of time are known as detention fees. This fee aims to help cut down on long load times and address shipping container shortages proactively.

Dimensional Weight

This is a method of calculating weight or cargo for rates and expense reporting that is based on the size of the load rather than the actual physical weight.

Distribution Center

This is the central hub where cargo is brought in to be unloaded and organized and then repackaged and loaded for the next or final shipment in the delivery route. Cargo moved by air and sea often passes through a distribution center to aid in the process of unloading containers.

Door to Door

This shipping domestic freight term describes a shipping method where the package or goods are picked up at the door of the vendor and then directly delivered to the recipient's door.

DOT Number

This term refers to an identifying number that is given to companies that engage in interstate and intrastate shipping, Every vehicle registered gets a unique number that is used for tracking and recordkeeping. 

Double Drop

This is a term that is used to refer to dual low points in the deck between the axles of the trailer. It is a special design that makes it easier to load and unload a wider range of cargo.

Dropshipping

This domestic freight term is a form of retail business wherein the seller accepts customer orders but does not keep goods sold in stock

Duty Status

This is another domestic freight term for the records or logs that drivers keep. Status logs can include hours worked, miles driven, and other records that need to be maintained and reported by law.

Dwell Time

This is the time that drivers spend idling or not actively working. Dwell time often occurs at ports and distribution centers when delays in loading and loading occur due to scheduling conflicts, backlogs, and other delays.

ELD 

This is a term that stands for Electronic Logging Device, which is a digital tracker that can be used to automate many of the records keeping and logging requirements drivers operate under.

Escorts

A specially designated third party that accompanies and assists with shipping services provided by shippers and carriers.

Excess Value

Any goods appraised over market value are deemed to have excess value will be included in this domestic freight terms’ definition. 

Expedited Freight

Freight that qualifies for rush delivery and specialty transportation is seen as expedited freight.

Export License

Legal licenses and declarations that allows certain individuals or entities to engage in exporting goods and products.

Export Declaration

Recording of the contents of cargo containers or shipments that are used to declare contents and value during customs inspections and other stops and checks during transportation. 

FMCSA

This is the Federal Motor Carrier Safety Administration and is a legally established and recognized division within the Department of Transportation and is one of the must-know domestic freight terms.

FOB Destination

The term stands for Free On Board and means that the seller transfers any title of ownership to the buyer upon the product leaving the seller's location.

FOB Destination, Freight Collect

With this designation, a buyer does not take ownership or liability for the goods until the freight has been collected at the final destination and delivery location.

FOB Destination, Freight Collect and Allowed

This domestic freight term designated an agreement where The buyer pays for the freight costs but deducts the cost from the supplier's invoice. 

FOB Destination, Freight Prepaid

For this shipping setup, a seller pays the freight charges but sends the customer a bill for repayment at the time of delivery since the seller owns the goods until the final delivery is completed. 

FOB Origin

Referring to Free On Board origin point, this term means the buyer is at risk once the seller ships the product. 

FOB Origin, Freight Collect

These kinds of domestic freight terms mean that the buyer immediately takes on all liability and assumes full ownership when the seller loads the goods on the freight carrier. 

FOB Origin, Freight Prepaid

Here, the seller/shipper pays the cost of shipping while the buyer/receiver of goods assumes the responsibility.

FOB Origin, Freight Prepaid and Add

This shipping term means that the seller pays the freight charges to the carrier but sends a bill requesting payment to collect from the buyer after delivery has been completed.

FOB Origin, Freight Prepaid and Charged Back

This is a term highlighting the process where instead of covering the cost of shipping, the shipper adds freight costs to the original invoice and sends it to the buyer as a chargeback.

Forty-Foot Equivalent Unit (FEU)

Cargo trailers and shipping trucks that can hold that much cargo at maximum capacity. Two twenty-foot containers can be counted together and listed as one forty-foot unit.

Freight Carriers

When talking about cargo transportation, this term refers to individuals or commercial companies who are legally able to transport goods from one location to another through the use of a variety of trucks, vans, and vehicles.

Freight Class

Regulated terms that dictate characteristics, protocols, and specialized handling concerns for particular freight types. The freight class dictates handling costs and other considerations.

Freight Forwarders

In shipping and transportation, this domestic freight term refers to a person or company that organizes shipments for individuals or corporations and serves as a logistics and administrative middleman.

Freight On Board (FOB)

This term is a designation that is used to indicate when ownership and therefore the liability of a load changes hands during the transportation and delivery process. 

Fuel Surcharges

These are additional fees and charges applied to shipping costs. They aim to offset increases in fuel costs that shippers have to pay in order to keep expenses manageable. 

Full Container Load (FCL)

This is the term used for a shipment type where a cargo occupies the full size of a container. Sometimes the container may not be full volume-wise, but is at the maximum weight allowance and can be considered full and charged at the FCL rate.

Full Freight Allowed (FFA)

This term is used to indicate that the seller pays the freight bill and absorbs the costs associated with the shipping of a particular load.

Full Truckload (FT or TL)

This domestic freight term refers to shipping where one truck is responsible for a single shipment from one point to another. Rather than multiple stops being made and more than one customer having cargo on the truck, the entire load goes straight from Point A to Point B directly to the customer unlike with less than truckload orders.

General Rate Increase

As far as common domestic freight terms go, this one refers to general and expected increases in shipping rates that usually occur every year to cover rises in fuel cost, wages, and other semi-predictable or anticipated expenses.

Harbor Maintenance Fees

A fee levied on cargo that passes through major ports in the US. It is used to offset the costs of repairs and maintenance on the docks and other facilities and equipment.

Hazmat

This is a term commonly used to refer to cargo that is in some way hazardous or that could be dangerous if not properly handled. Chemicals, flammable materials, and medical supplies are common examples. 

Hot Shot

This specialized shipping mode involves hauling smaller, more time-sensitive LTL loads for short distances in a short period of time. Overnight and next-day deliveries often fall under this term.

Hours of Service

The hours which a company is operational and when orders can be placed, deliveries made, personnel contacted, and business conducted as usual. 

Incoterm, Delivered Duty Paid

This domestic freight term refers to the regulations outlined where the seller assumes all responsibilities and costs for delivering the goods to the final customer or destination.

Incoterm: Carriage & Insurance Paid to

This specialized term refers to when a seller pays freight and insurance on the goods that are being delivered. The responsibility slides with them until goods are transferred to a seller-appointed party in adherence to pre-arranged terms. 

Incoterm: Carriage Paid To

This term highlights that international commercial shippers and sellers have a pre-determined agreement where the seller incurs liability for goods during the transportation and delivery of goods.

Incoterm: Delivered at Place

This is a simple shipping term that means a seller takes on all the risks and costs of delivering goods and ensuring they are delivered successfully to the right location and recipient. 

Incoterm: Delivered at Terminal

This term simply means delivery has been made and confirmed in full at a specified destination.

Incoterm: Ex Works (EXW)

Simply put, this designation means that the buyer is the responsible party and is the one who deals with any shipping and delivery issues or expenses.

Incoterm: Free Alongside Ship (FAS)

A common shipping term, this means the seller clears goods for export and then is responsible for getting them ready for shipping and placing them alongside the vessel so they can be loaded at the appropriate time.

Incoterm: Free Carrier (FCA)

In shipments under these terms, the seller arranges the transport of goods from the seller's location to a specified place for the next phase of shipping. This location can be a terminal, distribution center, another dock, a warehouse, or other location both parties agree upon. 

Incoterm: Free on Board (FOB)

This international commercial term defines the supplier as free from responsibility for the goods once they are onboard the cargo ship. Buyers may clarify with FOB Shipping Point and FOB Destination. 

Interchange Agreement

A binding document between two carriers to transfer a trailer from one to the other to complete a delivery. This freight terminology is fundamental when working across country borders. 

Intermodal Shipping

This domestic freight term is commonly confused with multimodal shipping. However, intermodal shipping specifies multiple contracts with multiple carriers to get goods to their destination one leg at a time. 

Just in Time

A management method that keeps minimal on-site inventory by employing frequent delivery service of items to arrive precisely when needed.

Lane

A freight term meaning the route between two destinations. When this freight route is the primary route required, it is often called a dedicated lane, or dedicated route. 

Last or Final Mile

Both domestic freight terms describe the route between an item’s last stop and destination. The final mile from an e-commerce retailer might go directly to local warehousing or the customer. 

Layover

In freight terminology, a layover is an overnight or 24-hour delay when a truck driver attempts to pick up or deliver a load. This delay may cause layover fees.

Less Than Container Load (LCL)

LCL is an amount of transported materials that cannot fill a container. LCL loads are often combined with other LCL loads to maximize capacity.

Less Than Truckload (LTL)

A freight term meaning the freight is small enough to not qualify as a full truckload. A supplier or shipper may combine LTL loads to streamline the process.

Linehaul Rate

The dollar amount per mile quoted or charged for transporting items. Linehaul is separate from accessorial, equipment, environmental or other fees such as clean truck fund rate fees

Live Animal Surcharge

The live animal fee is added to the linehaul rate and other associated expenses to cover the care of live animals in transit.

Logbooks

The US DOT requires truck drivers to record all driving hours and duty status across the 24 hours of a day. Records are kept in a tangible logbook or electronically in an “elog”.

Managed Transportation

Often called transportation as a service within freight terminology, managed transportation describes when all logistics and shipping responsibility has been passed onto a 3PL to complete.

Master Bill of Lading

A  cargo shipowner or operator prepares this document to include all cargo and transportation data between shippers and carriers. See the above stated definition of a bill of lading for additional clarity. 

Material Safety Data Sheet (MSDS)

An MSDS is a document required to transport hazardous materials detailing the items' physical, chemical, explosive, and radioactive properties.

Merchandise Processing Fee

Among domestic freight terms, this specific fee is the amount charged to importers by customs at a cargo’s US destination to offset US Customs and Border Patrol operational costs. 

Motor Carrier Number

The Federal Motor Carrier Administration assigns these numbers to all licensed commercial drivers. This is also commonly understood as the U.S. DOT Number among domestic freight terms. 

Multimodal Shipping

Distinct from intermodal transportation, multimodal shipping is when one contract covers the transportation of goods, even if a carrier subcontracts with other carriers along the way. 

National Motor Freight Classification

This freight term meaning rests in the 18 class ranking used to evaluate the transportability of materials interstate, intrastate, and globally. 

Non-Vessel Owning Common Carrier (NVOCC)

An NVOCC arranges the shipment of materials without personally owning any transport assets. Among domestic freight terms, an NVOCC is interchangeable with a freight forwarder. 

Owner-Operator

An owner-operator is a truck driver who owns and operates their truck and trailer, whether outright or via loan. They might directly negotiate their routes or utilize a load board or freight broker. 

Packing List

A document produced by the original exporter, or a forwarder at any other moments of repackaging to include important shipping and inspection information that travels with the products.

Parcel

A parcel is a package under 150 pounds commonly transported by couriers in e-commerce shipping within freight terminology. 

Partial

This form of transportation defines a truck filled with multiple small orders that will take multiple stops to deliver to separate locations. 

Per Diem Charges

Per diem fees are a domestic freight term to importers as ocean carriers implement them to ensure containers are returned to the port at a reasonable time for new cargo to get unloaded. 

Permits

A permit is required for carriers to transport cargo that exceeds the weight and size limitations instituted by the state. 

Placard

A placard sign is located on all four sides of a commercial carrier vehicle to warn fellow drivers of the hazardous materials inside. 

Proof of Delivery

A Proof of Delivery is a document to sign when a shipment has arrived at its destination. This document may be the Bill of Lading or a separate document such as a delivery receipt.

Rail

Rail is the word within freight terminology to express contracted transportation by train. 

Ramps

A ramp is an item used for loading and unloading items onto a trailer, particularly when transporting live animals or driveable objects. Shippers may see this on an invoice’s itemized equipment charges. 

Rate Confirmation

A necessary document confirms the monetary rate agreed for freight transportation between shippers and carriers.

Reconsignment

The domestic freight term to explain when freight is redirected to a new location when it is already in transit, also defined as a diversion.

Removable Goose Neck

An RGN is a flatbed trailer customized with a ramp for driveable objects and an attachment that simplifies the trailer’s raising, lowering, or removal.  

Sea Waybill

The sea wyabill is a simplified house bill of lading without the authority of a document of title. See domestic freight terms above for further clarity.

Shipping Quote

This document is also known as a freight quote and is provided by a carrier with the financial breakdown of the cost to transport freight.

Software-as-a-Service

A purchasable subscription to software that provides managerial tools to succeed in business transactions and customer relations.

Through Rates

A freight term meaning the joint cost of a freight’s transportation across multiple legs of the journey. 

Twenty-Foot Equivalent Unit (TEU)

A TEU is a shipping container measuring twenty feet long, eight feet high, and 8 feet wide. This domestic freight terms measurement calculates capacity and rates.

UN Number

The UN Number is a four-digit code within domestic freight terms created for an MSDS that denotes the hazardous nature of items in transport.

Volume Rate

A volume rate is a mathematical process of quoting the cost of a shipment that is larger than most LTL shipments but smaller than FT. 

Waybill

A freight term meaning the document commonly called a bill of lading that contains all relevant shipping information during transport and invoicing. 

Know the Full View of All International and Domestic Freight Terms to Thrive, and Partner With Port City Logistics to Stay in Tune 

The inner workings of domestic and international shipping are unfortunately a mystery to many, even those within the transportation industry today. These vital services keep the local and global supply chain moving and are the backbone of many markets and industries. Much of the ongoing growth and recovery of the shipping and transportation industry relies on shippers having a firm understanding of domestic freight terms, and how they impact day-to-day operations and impact shipping services for not cust shipping clients but everyday consumers as well. 

As bottlenecks, delays, rising costs, continued capacity challenges, endless driver shortages, and long dwell times continue to plague the industry, it is up to shipping companies to make the most of every opportunity available to them. Partnering with industry experts makes it easy to get a full view of the common domestic freight terms and regulations that impact the supply chain network.  Partner with the experts by contacting Port City Logistics today to get an expert in freight logistics by your side now and in the future as recovery and growth continues across the market.

Topics: freight terminology