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TERMINOLOGY In Brief

Learn the language of the logistics business

Puzzled by the language used by your freight forwarder and customs broker?

Check out the following In Brief explanations of terminology and acronyms that often appear in the paperwork for Canadian and U.S. imports and exports.

Universal's IncoTerms 2010


3PL, Third Party Logistics: A third-party logistics provider is a company that provides outsourced logistics services to a client for part or all of their supply chain management functions.

4PL,Fourth Party Logistics: A fourth-party logistics provider is a company that acts as a single interface between the client and multiple logistics service providers. A 4PL provides broader scope in managing the entire supply chain.

ACE, Automated Commercial Environment: US Customs' automated system through which the trade community reports imports and exports and CBP determines shipment admissibility.

ACI, Advance Commercial Information: The Advance Commercial Information (ACI) program introduces more effective risk management processes and tools by providing CBSA officers with electronic pre-arrival information so that they are equipped with the right information at the right time to identify health, safety and security threats related to commercial goods before the goods arrive in Canada.

ARL, Accounts Receivable Ledger: The Accounts Receivable Ledger (ARL) will become the system of record for Commercial Accounting and Payment on January 25, 2016, replacing daily and monthly K84s with Daily Notices (DNs) and monthly Statements of Account (SOAs). ARL is the first phase of the CARM project.

ACROSS, Accelerated Commercial Release Operations Support System: A Canada Customs system to speed the release of shipments by allowing electronic transmission of data to and from Canada Customs 24 hours a day, 7 days a week.

Ad Valorem Duty: A duty calculated as a percentage of the shipment value.

AMPS, Administrative Monetary Penalty System: A Canada Customs system of monetary penalties that will be imposed against violations of Canada Customs regulations.

Anti-Dumping Duty: An additional import duty imposed in instances where imported goods are priced at less than the "normal" price charged in the exporter's domestic market and cause material injury to domestic industry in the importing country.

B/L, Bill of Lading: A written document issued by a common carrier, acknowledging the receipt of the goods named and setting forth the terms of the contract of carriage. When in original form, it is negotiable.

Bonded Warehouse: A warehouse authorized by Customs authorities for storage of goods on which payment of duties is deferred until the goods are removed.

CADEX, Customs Automated Data Exchange System: A Canada Customs system that allows for the electronic transmission of import data for goods that have already been released. Additional information such as accounting data and release notifications are also accessible.

Cargo Insurance: A type of insurance policy that protects a buyer or seller against the risks of loss or damage to goods in transit via any mode of transportation – sea, rail, road or air.  In Depth definition

CARM, CBSA Assessment and Revenue Management: CARM is a large, multi-year project to transform how the CBSA assesses, collects, manages and reports on import revenue and trade information. It will replace aging, and non-integrated revenue and cash management systems. CARM will be implemented in phases by 2020. The first phase of CARM is the Accounts Receivable Ledger (ARL), which is being implemented in January 2016.

Carnet: A Canada Customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries without paying duties or posting bonds.

CBP, U.S. Customs and Border Protection (US Customs)

CBSA, Canada Border Services Agency (Canadian Customs)

Certificate of Origin: A certified document as to the origin of the goods, used in foreign commerce.

CETA, Canada-European Union: Comprehensive Economic and Trade Agreement: Canada's most ambitious trade initiative, broader in scope and deeper in ambition than the historic North American Free Trade Agreement.

CFIA, Canadian Food Inspection Agency

CFR, Cost and Freight: Under CFR Incoterms, the seller pays to bring the goods to the named port of destination, but the risk of loss or damage and any costs relating to the goods while in transit pass to the buyer once the goods are on board the vessel.(For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

Chassis Detention: The fee charged by a container haulage company, once free time expires after a container has been collected from a container terminal, and the container remains on the carrier's chassis. Normally, carriers allow 24 to 48 hours free time after a container has been collected. After this free time expires, daily chassis detention fees are charged (on average CA$45.00 - $60.00 per day). In the case of reefer containers, normally there is no free time (as in the case when delivery cannot be made upon collection) and the fee per day is higher than standard containers (on average CA$150.00 - $200.00 per day). The charge ceases once the container is returned to the terminal and removed from the carrier's chassis.

CIF, Cost, Insurance and Freight: Under CIF Incoterms, the seller pays to bring the goods to the named port of destination, but the risk of loss or damage and any costs relating to the goods while in transit pass to the buyer once the goods are on board the vessel. Seller must also contract for insurance against the buyer's risk of loss of or damage to the goods during carriage. (For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

CIP, Carriage and Insurance Paid: Under CIP Incoterms, the seller pays to bring the goods to the named place of destination, but the risk of loss or damage and any costs relating to the goods while in transit pass to the buyer once the goods are handed over to the carrier. Seller must also contract for insurance against the buyer's risk of loss of or damage to the goods during carriage. (For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

Consignee: The individual or company to whom a seller or shipper sends merchandise.

Consumption Entry: An official Canada Customs form used for declaration of reported goods, also showing the total duty due on such transaction.

Continuous Bond: A bond used by importers that have multiple importations annually into the USA and want to take advantage of the cost savings versus a single entry bond. In Depth definition

Countervailing Duties: An additional import duty imposed to offset Government subsidies in the exporting country, when the subsidized imports cause material injury to domestic industry in the importing country.

CPT, Carriage Paid To: Under CPT Incoterms, the seller pays to bring the goods to the named place of destination, but the risk of loss or damage and any costs relating to the goods while in transit pass to the buyer once the goods are handed over to the carrier. (For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

CSA, Customs Self Assessment: The Customs Self Assessment (CSA) program is designed for low-risk, pre-approved importers, carriers and registered drivers.

C-TPAT, Customs-Trade Partnership Against Terrorism: A cooperative program between private industry and US Customs and Border Protection aimed at enhancing border and trade chain security.

DAP, Delivered At Place: Under DAP Incoterms, the seller delivers the goods to the buyer at the named place of destination, not cleared for import and not unloaded from any delivering means of transport. (For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

DAT, Delivered At Terminal: Under DAP Incoterms, the seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal at the named port or place of destination. The seller bears all risks and costs involved in bringing the goods to and unloading them at the terminal at the named place of destination. (For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

DDP, Delivered Duty Paid: Under DDP Incoterms, the seller delivers the goods to the buyer, cleared for import, and not unloaded from the arriving means of transport at the named place of destination. Seller bears all risks and costs including any duty or customs formalities at destination. (For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

Demurrage: The fee charged by steamship lines for use of a container, once free time at a destination terminal expires. Free time normally begins one working day after a container arrives at destination and the typical free time period is five working days. After free time expires, the steamship line will charge a fee per calendar day (on average US$100.00 to $150.00 per day). This rate typically increases after five days. In regards to reefer containers, the normal free time period is less, normally three days, and the rate per day is higher (on average US$200.00 to $300.00 per day). This rate also typically increases after three days. The charge ceases once the empty container is returned to the steamship line.

Drawback: A refund of duties paid on importation of goods which are further processed and then re-exported.

E-Manifest: The electronic transmission of pre-arrival cargo and conveyance data from carriers in the highway and rail transport modes to CBSA within the prescribed advance time frames. E-Manifest is the third and final phase of CBSA's Advance Commercial Information (ACI) program.

EIN, Employer Identification Number: Declaration of the physical consignee's identification number is required by US Customs and Border Protection for all shipments entering the USA.

EXW, Ex Works: Under EXW Incoterms, the seller delivers when they place the goods at the disposal of the buyer at the seller's premises or another named place (i.e: ex works, factory, warehouse, etc.) not cleared for export and not loaded on any collecting vehicle. (For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

FAS, Free Alongside Ship: Under FAS Incoterms, the seller delivers when goods are placed alongside the vessel at the named port of shipment, cleared for export. (For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

FCA, Free Carrier: Under FCA Incoterms, the seller delivers the goods, cleared for export, to the carrier nominated by the buyer at the named place. If delivery takes place at the seller's premises, the seller is responsible for loading. If delivery takes place at any other location, the seller must deliver the goods to the named place but is not responsible for unloading. (For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

FCL, Full Container Load, Full Car Load

FEU, Forty Foot Equivalent Unit

FOB, Free On Board: Under FOB Incoterms, the seller delivers the goods on board the vessel nominated by the buyer at the named port of shipment, cleared for export. (For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

GATT, General Agreement on Tariffs and Trade: A multilateral treaty intended to help reduce trade barriers and promote tariff concessions.

GRI, General Rate Increase: Freight rate increases imposed by the steamship lines in response to current market conditions.

GST, Goods and Services Tax: The Goods and Services Tax (GST) is a federal consumption tax in Canada. The tax applies to most goods and services (imported and domestic) payable at a rate of 5.0%.

HST, Harmonized Sales Tax: The Harmonized Sales Tax (HST) is a consumption tax in Canada. It is used in provinces where both the federal Goods and Services Tax (GST) and the regional Provincial Sales Tax (PST) have been combined into a single value added sales tax.

Harbor Maintenance Fee: A fee assessed by U.S. Customs and Border Protection (CBP) on marine cargo imports arriving into the United States. It is assessed on an ad valorem (according to value) basis at a rate of 0.125% of the entered value. In Depth definition

Harmonized Code: An internationally accepted and uniform description system for classifying goods for Customs, statistical and other purposes.

IID, Integrated Import Declaration: IID is a release service option that expands the ability of importers/brokers to submit and obtain electronic release for goods regulated by Participating Government Departments and Agencies (PGAs).

Incoterms, International Chamber of Commerce Terms of Sale: Incoterm rules explain a set of three-letter terms reflecting business-to-business practice in contracts for the sale of commercial goods (internationally and domestically). Incoterm rules outline the transfer of tasks, costs and risks in the delivery of goods from seller to buyer. (For a complete list of Incoterm definitions including a chart of buyer and seller responsibilities, see Universal's Incoterms 2010.)

In-Bond: A Customs program for inland ports that provides for cargo arriving at a seaport to be shipped under a Customs bond to a more conveniently located inland port where the entry documents have been filed. Customs clears the shipment there, which normally is close to the inland port.

LCL, Less than Container Load; Less than Car Load

L/C, Letter of Credit: A method of payment for goods in which the buyer establishes his credit with a local bank, clearly describing the goods to be purchased, the price, the documentation required, and a time limit for completion of the transaction. Upon receipt of documentation, the bank is either paid by the buyer or takes title to the goods themselves and proceeds to transfer funds to the seller.

LVS, Low-Value Shipment Program: A Canada Customs program to speed up the release process for commercial imports by approved carriers valued at less than $2,500 CAD.

Manifest: A list of the goods being transported by a carrier.

MPF, Merchandise Processing Fee: A fee imposed by U.S. Customs and Border Protection (CBP) to offset costs incurred to process imports and release of merchandise into the United States. Effective January 1, 2018, the minimum will be $25.67, a $2.67 increase, the maximum will be $497.99, a $12.99 increase. In Depth definition

NAFTA, North American Free Trade Agreement: A free trade agreement, implemented January 1, 1994, between Canada, the United States and Mexico.

NPA, Notice of Penalty Assessment: A Notice of Penalty Assessment (NPA) is issued by CBSA for the purpose of assessing an Administrative Monetary Penalty System (AMPS) monetary penalty resulting from contraventions of the Customs Act, the Customs Tariff and/or the Special Import Measures Act (SIMA) and the regulations made thereunder.

NRCan, Natural Resources Canada : NRCan governs Canada's Energy Efficiency Act and Energy Efficiency Regulations which prohibit the importation of certain energy-using products unless specific requirements are met by importers/dealers. In Depth definition

NRI, Non-Resident Importer: A non-resident importer (NRI) is a company or individual who does not reside in Canada, but elects to act as the Importer of Record (IOR) for a shipment, or shipments, imported into Canada

OGD, Other Government Departments: This term refers to all government agencies, aside from Customs, that regulate the import or export of shipments. In Depth definition

Open Policy: A cargo insurance policy that is an open contract; i.e. it provides protection for all of an exporter's shipments afloat or in transit within a specified geographical trade area for an unlimited period of time, until the policy is cancelled by the insured or by the insurance company. It is 'open' because the goods that are shipped are also detailed at that time. This is usually shown in a document called a marine insurance certificate.

PAPS, Pre-Arrival Processing System: A US Customs and Border Protection (CBP) system that allows shipment release information to be transmitted and processed by US Customs before the goods arrive in the United States. Information can be transmitted to US Customs up to 30 days prior to shipment arrival.

PARS, Pre-Arrival Review System: A Canada Customs system that allows shipment release information to be transmitted and processed by Canada Customs before the goods arrive in Canada. Information can be transmitted to Canada Customs up to 30 days prior to shipment arrival.

PGA, Participating Government Departments and Agencies

Nine Canadian departments and agencies will participate in the SWI along with the CBSA:

  1. Canadian Food Inspection Agency
  2. Canadian Nuclear Safety Commission
  3. Environment Canada
  4. Fisheries and Oceans Canada
  5. Foreign Affairs, Trade and Development Canada
  6. Health Canada
  7. Natural Resources Canada
  8. Public Health Agency of Canada
  9. Transport Canada

Phytosanitary Inspection Certificate: A certificate issued by the US Department of Agriculture indicating that a shipment has been inspected and is free of harmful pests and plant diseases.

PIP, Partners in Protection: A cooperative program between private industry and the CBSA aimed at enhancing border and trade chain security.

Port of Discharge: Port where vessel is off loaded.

Port of Entry: A port at which foreign goods are admitted into the receiving country.

Port of Loading: Port where cargo is loaded aboard the vessel.

PST, Provincial Sales Tax: Provincial Sales Tax (PST) is a regional retail sales tax that applies when a taxable good or service is purchased or acquired. In specific provinces it is combined with the federal Goods and Services Tax (GST) to form the Harmonized Sales Tax (HST)

RNS, Release Notification System: A Canada Customs electronic system which notifies importers, brokers, warehouse operators, and carriers of customs releases.

Shipper's Load, Stow & Count: A clause inserted on an ocean bill of lading by the steamship line when a container is positioned at the shipper's premises for loading. This simply means the Steamship Line did not load the container, therefore, they cannot be held accountable for the contents.

SIMA, Special Import Measures Act: An act to protect Canadian producers and manufacturers against unfair competition from imports of low-priced dumped or subsidized goods.

Single Entry Bond: A bond that guarantees payment to U.S. Customs for one importation or ISF filing. In Depth definition

Specific Duty: A duty calculated as a rate per unit of measure (e.g. number, volume, weight, etc.).

SWI, Single Window Initiative: A portal for traders to provide all required import information electronically to the CBSA.

Tare Weight: The weight of packing and containers without the goods to be shipped.

Tariff: A customs duty that is payable on imported merchandise.

Tariff Rate Quota:A two-stage tariff, which imposes a lower rate of duty on imports up to the quota level and a higher rate of duty on imports over-quota.

TEU, Twenty Foot Equivalent Unit.

Terminal Storage: The fee charged by destination terminals, once free time expires after a container has arrived. Free time varies between terminals across Canada. In some cases, it is as little as one day after arrival, after which a daily storage fee is charged (on average CA$200.00 - $300.00 per day). Certain terminals also charge a higher rate per day for reefer containers. Many terminals also increase the daily terminal storage fee for both standard and reefer containers after a set number of days. The charge ceases once the container is collected from the terminal.

TPP, Trans Pacific Partnership: A trade agreement among twelve Pacific Rim countries concerning a variety of matters of economic policy, which was reached on 5 October 2015 after 7 years of negotiations.

TSCA, The Toxic Substances Control Act: Administered by the U.S. Environmental Protection Agency (EPA) to regulate most chemical goods being imported into the U.S

U.S. Surety Bond: A bond that guarantees payment to U.S. Customs if a required act is not performed by an importer. In Depth definition

WTO, World Trade Organization: An organization established on January 1, 1995, replacing the previous General Agreement on Tariffs and Trade GATT that forms the cornerstone of the world trading system.

Wharfage: A charge assessed by a pier or dock owner against the cargo or a steamship company for use of the pier or dock.




Quick Tips

Tip #52 – Ensure your shipping/receiving warehouse staff is available to receive delivery of your shipments quickly

Once advised your shipment is available for local delivery, take delivery at the earliest opportunity.



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