The history of successful people in every industry has one thing in common, the curiosity to know and learn. A person who thrives knowledge, especially in his line of work, is the one who acquires the caliber to succeed. The international shipping industry is no exception to the popular belief, and there is a lot to learn. If you are a part of this ever-developing and growing business network, understanding shipping terms must be on your priority list. More often than not, traders get carried away with the proceedings of the work, that they forget to strengthen the roots of industry knowledge.

Shipping terms comprise numerous acronyms, phrases, groups of words that each define a set of instructions, functions, or rules of the trade industry. You will find these terms commonly used in the shipping contracts and legal paperwork. By learning all the existing and valid shipping terms, you can assure longevity and reliability in the business. It will allow you to enjoy a hassle-free experience in the international market.

The glossary of shipping terms is like the dictionary of the international trade industry.

How Are Shipping Terms Important For You?

The import and export business is not just about transporting goods from one country to another. It involves a lot of legal paperwork, formalities, rules, and regulations, etc. Most of the dealings are with people of another country who speak a different language and follow distinct laws. You should understand the shipping terms as they offer a middle ground of communication to resolve the issue of language and xparcel tracking is a trusted one. Also, most of the terms are not a part of common English, and therefore, you need to learn them for communication more efficiently.

Explains The Rules of Shipping

The shipping industry works under the surveillance of legal bodies of the countries involved in international trade. You will need to abide by these rules which are explained using the shipping terms. If you have ill-knowledge about the same, you might end up breaking a few rules which are not good for the business reputation.

• All Risks – This shipping term is used for describing the insurance contract that covers and specifies the risks involved in the trade deal.
• Re-consignment – A generally used term to explain the change of destination before the deal is complete.

Offers Description of Important Shipping Documents

You must be aware that shipping cargo through international waters requires a lot of paperwork and documentation. From shipping bill to customs clearance, there are plenty of formalities that you have to complete for successful shipping. Shipping terms also explain the significance and importance of these bills helping you understand better.

• BoL (Bill of Lading) – This document is issued by the shipping line owner confirming the details of the freight shipment. It is considered as one of the most important documents in the business.
• Shipping Bill – It is a legal document that is required for customs clearance describing all the necessary details related to the consignment.
• Sea Waybill – It is a document that the shipping company provides for every seaborne transportation.

Defines The Share of Responsibilities

You and your buyer will have to make a contract of the shipments for determining the costs and risk bearer of the process. The ICC (International Chamber of Commerce) publishes 11 shipping terms, commonly known as incoterms, for describing the roles of the buyer and seller. These terms hold immense significance in the international trade market as almost all the legal authorities and trade bodies accept these terms worldwide. All these terms are expressed in acronyms and explain the payment, delivery, and risk liabilities of the buyer and seller. Two of the 11 terms are:

• EXW (Ex-Works) – This shipping term describes that the responsibility of transporting the cargo to the port of destination falls on the buyer after the seller drops it to the defined location.
• DDP (Delivery Duty Paid) – This implies that the seller will bear the costs of all the import duties and taxes for transporting the cargo to the destination port.

Commonly Used In Official Conversations

You will need to talk to numerous professionals regularly for expanding your business network in the international market. You should have basic knowledge about all the shipping terms so that you can understand what the other person is trying to say when they use the terms. You should also use these terms to improve the quality of conversations and ensure effective communication.

After all, it is better to use a word to convey your message rather than explaining the whole thing in 3-4 lines. For instance, you can use the term “CAF” (Currency Adjustment Factor) for explaining the additional costs that the buyer needs to pay as compensation for the fluctuations in the currency rate.

Knowledge of shipping terms can get you a long way in the international market by helping you with hassle-free trade experience. The more you know, the more you grow! Keep learning the terms to become a smart and intellectual trader.

Addison

Addison is a student of the Aust Abbottabad University of Science and Technology. He started his graduation in 2016 and graduated in 2020. I’m a professional article and blog writer, has written dozens of content on different topics and worked with professionals all over the globe. Feel free to contact me for any assistance. [email protected]