International Chemical Business Terms
Below is a list of export and import related terms to help you navigate the international chemical business. All terms are listed alphabetically.
A
Accommodation Ladder (gangway)
The ladder attached temporarily to the side of a ship so that people can get on and off. A trap. A gangplank.
Actual Total Loss (actual total loss, absolute total loss)
A total loss/damage that can actually be proven, such as in cases when the insured cargo is totally destroyed, lost its shape and deteriorated to the extent that it is evidently useless for the original purpose. Also called total loss.
Additional Tax for Deficient Declaration (additional tax for understatement)
A 10% additional tax imposed upon the increased amount of tax to be paid in cases when, after the import declaration of the cargo, a revised tax return or a reassessment is carried out because an understatement in the amount of tax is found during the customs inspection. The additional taxation is not imposed in justified cases or in cases of voluntarily filing, however not when anticipating that a reassessment will be made due to the customs inspection.
Air Freight Forwarder
A forwarder specialized in air transportation.
Air Waybill (AWB, Air Waybill)
A document representing the shipping contract for the air cargo, serving as documentary evidence that a transportation agreement has been concluded, as a receipt of the transported goods and as a detailed statement of the shipping charges. It is the equivalent to a bill of lading (B/L) in maritime transportation, however whereas the bill of lading (B/L) is a valuable paper, the Air Waybill is not a valuable paper, therefore the receipt of the cargo is possible even without submitting the original to the forwarding agent.
For the air cargo transportation, each consignor entrusts the transportation to a consolidator and the consolidator signs a transportation contract with the airline operating aircrafts, considering those freights as one large consolidated shipment. On that occasion, the document issued by the airline to the consolidator is a Master Air Waybill. The consolidator issues a House Air Waybill to each consignor from his position as a forwarding agent.
For the air cargo transportation, each consignor entrusts the transportation to a consolidator and the consolidator signs a transportation contract with the airline operating aircrafts, considering those freights as one large consolidated shipment. On that occasion, the document issued by the airline to the consolidator is a Master Air Waybill. The consolidator issues a House Air Waybill to each consignor from his position as a forwarding agent.
Aircraft’s Stores (aircraft goods)
The goods used on aircrafts. Consumable supplies such as fuel, foods and drinks.
All Risks (A/R, All Risks Clause, Against All Risks)
The insurance condition most commonly used in marine cargo insurance, securing against the danger of a wide range of accidents. However, as far as there is no special contract, damage caused by war, civil war, strike, delay in transportation, radioactive contamination, defective packing, the nature of the freight and intentional damage are not covered. The All Risks Clause is an insurance clause mentioned in the old Institute Cargo Clause created in 1963 and the “Institute Cargo Clause A” of the new Institute Cargo Clause (ICC) 2009 is most similar to the All Risks Clause.
Amendment
The act of modifying the clauses of the letter of credit (L/C) after its issuance. Amendments are made in cases when it is necessary to perform corrections or revisions regarding the differences with the original contract, errors in writing, items that cannot be included while creating the negotiation documents. All of the letters of credit generally issued are irrevocable (irrevocable L/C), therefore even in case there is a clear error in the letter of credit, without an agreement of the beneficiary of the letter of credit (usually the exporter) the applicant (usually the importer) cannot correct or revise it unilaterally. In case there is any inadequacy in the content of an already obtained letter of credit, to ensure that the exporter collects the export price, it is necessary to request that the importer make amendments to the points concerned before loading.
Arrival Notice (notice of arrival)
The document through which the shipping company or its agent informs the Notify Party mentioned on the bill of lading (B/L) and the Consignee about the day of arrival in the port of the cargo ship and the freight details.
At Sight (at sight payment)
A merchandise price settlement method through which the payer has to pay a certain sum immediately upon being presented with the bill of exchange. In principle, if the importer doesn’t pay, he cannot receive the shipping documents including the bill of lading (B/L) from the bank and cannot obtain the goods.
Authorized Exporter
The exporter who has obtained the approval of the head of customs office that he has met the requirements for having a satisfactory security management and compliance systems, and who is permitted a simplified customs clearance procedure for export. By being able to receive the export authorization at the company’s warehouse or factory without carrying the cargo for export to the customs area, reduction in customs clearance time and distribution cost can be achieved.
B
B/L (Bill of Lading)
The document that the exporter (consignor) receives in exchange of the cargo delivered to the shipping company at the place of loading, a receipt that certifies that the cargo was delivered for transportation to the shipping company. At the place of discharge, the importer (consignee) submits the bill of lading (B/L) received from the exporter to the shipping company and receives the cargo. The bill of lading is a voucher (certificate enabling ownership of the cargo) necessary when the importer receives the cargo from the shipping company, and a valuable paper transferable by endorsement. It also has the quality of a transportation contract that proves the shipping agreement between the owner of the goods and the shipping company.
The content of the Bill of lading (B/L) is written according to the instructions of the exporter, based on the shipping instructions submitted to the shipping company through a customs broker.
The main entries of a bill of lading (B/L) are as follows:
The content of the Bill of lading (B/L) is written according to the instructions of the exporter, based on the shipping instructions submitted to the shipping company through a customs broker.
The main entries of a bill of lading (B/L) are as follows:
| Shipper: | Consignor. Usually the exporter. |
|---|---|
| Consignee: | Recipient. The document having mentioned the importer and the bank who issued the L/C is called straight bill of lading, and the document that has mentioned “To Order” or “To Order of Shipper” is called order bill of lading. The exporter must always do the endorsement when sending the order bill of lading to the bank or to the importer. |
| Notify Party: | A party who receives notification of arrival. The party that the shipping company notifies when the cargo has arrived at the place of discharge. If it is the same as the Consignee (recipient) in the straight B/L, “Same as Consignee” may be written on it. |
| Place of Receipt: | The place of receipt. The place where the shipping company receives the cargo from the consignor side. Mentioned as Kobe CY or Yokohama CFS. The shipping company’s range of responsibility for the transportation is from this Place of Receipt to the Place of Delivery. |
| Vessel Name: | The vessel’s name. The voyage number is also indicated. |
| Port of Loading: | The port of loading. The port where the cargo is loaded onto the ship. |
| Port of Discharge: | The port of discharge. The port where the cargo is unloaded from the ship. |
| Place of Delivery: | The place of delivery. The place where the shipping company delivers the cargo to the consignee side. Mentioned as Shanghai CY, New York CFS, etc. The shipping company’s range of responsibility for the transportation is from the Place of Receipt to this Place of Delivery. |
| Marks & No.: | The cargo mark (shipping mark) and the number (NO.1-10, etc.) mentioned on the cargo. When there is no cargo mark (shipping mark) on the cargo, it will be mentioned as N/M (No Mark), etc. |
| Container No.: | The number of the container to be transported. All of the containers are given different individual numbers that are mentioned outside of the container’s door |
| Seal No.: | The number mentioned on the seal that prevents the container’s door from opening during transportation. |
| Description: | Details of the cargo. |
| Gross Weight: | Gross weight of the cargo. (Including the weight of the packaging containers and pallets.) |
| Measurement: | Capacity of the cargo. |
| Freight: | Mentioned as Freight Prepaid, Freight Collect, etc. When the ocean freight amount is not mentioned, it is mentioned as “Freight as Arranged”, etc. |
| On Board Date: | Mentions the date of loading at the port of loading. Mentioned such as Laden on Board Date Aug. 15, 2014. The date becomes the day of loading. |
B/L fee
Charges that have to be paid to the shipping company for issuing the bill of lading (B/L). A consumption tax has been levied from 2014.
Barge
A flat-bottomed boat for carrying transported goods from large ships to land. Because it is usually not equipped with an engine and cannot move by itself, it is moved by a tugboat.
Basel Convention
An international treaty was created to regulate the cross-border movement of hazardous waste. Adopted in 1989 at Basel, Switzerland, it took effect in 1992. Japan joined in 1993. On its background there was the 1980’s worsening problem of causing local environmental pollution by moving and dumping hazardous waste from developed countries including European countries to developing countries including African nations.
Berth
A facility where the ship comes alongside at the wharf or dock of the harbor.
Berth Congestion
The situation when a number of ships have to wait their turn to enter the port and lay at anchor in the offing because there are too many ships wanting to enter the port at the same time. Attention must be paid to the fact that the scheduled date of the B/L may be postponed due to berth congestion.
Blank Endorsement
When the holder of a negotiable instrument, such as a bill of lading (B/L), makes an endorsement in order to transfer the instrument to another party, it makes the endorsement without specifying the endorsee in whose favor the transfer is made. The fact of endorsing by mentioning the endorsee in whose favor the transfer is made is called a full endorsement.
Regarding the B/L on which “To Order” or “To Order of Shipper” is mentioned in the Consignee (recipient) column, the B/L is sent to the bank negotiating the letter of credit (L/C) and to the importer, usually after the consignor (shipper) has made a blank endorsement.
Regarding the B/L on which “To Order” or “To Order of Shipper” is mentioned in the Consignee (recipient) column, the B/L is sent to the bank negotiating the letter of credit (L/C) and to the importer, usually after the consignor (shipper) has made a blank endorsement.
Bonded Manufacturing Warehouse (Bonded Factory, BMW, Customs Warehouse)
A place where a cargo imported from overseas can be stored long-term without passing through the customs clearance (without paying the import duties and the import consumption tax) and which was granted authorization by the head of the customs office for processing and manufacturing operations. This is a system made for the promotion of processing trade, through which the raw materials and intermediate products imported from overseas are processed or manufactured in bonded manufacturing warehouses without paying customs duties, and then such products can be exported overseas. The system is used by makers of petrochemical products, ships, automobiles, steels, fibers, precision instruments, etc.
Booking
The owner of the goods makes a reservation with the shipping company and the forwarder for the bottom of the ship (freight space) for the cargo to export, from the port of loading to the port of discharge.
Bunker
Fuel oil supply for ships, such as heavy oil.
C
C/R (Crate, Crate Packaging Specifications)
A method of packing using a wooden frame that makes the goods visible from the outside and allows people to see the contents even after packing. Together with the case packing, it is used for heavy goods that cannot be packed using cartons. Because less materials are needed compared to the case packing, the packing cost can be reduced and the final weight can be lighten, however attention needs to be paid to the damages made through the transparent part and to waterproofing.
C/S (Case, Case Packaging Specifications)
The method of packing by putting the goods in wooden boxes and sealing them up. Same as the crate packing, it is used for packing heavy goods. Besides wooden materials, steel and tri-wall (reinforced cardboard) are also used. It has an anti-theft effect because of the sealing packing, and it can also protect the goods from damages caused by rain and dust.
CAF (Currency Adjustment Factor, YAS, Yen Application Surcharge)
In marine transportation, the extra fee demanded by the shipping company to the owner of the goods on top of the usual ocean freight, for the expenses resulted from fluctuations in currency exchange rates. It was introduced because the ocean freight is usually in US dollars, the yen-based incomes decrease due to an increase in the yen exchange rate. Increase of the usual fares triggers owners’ protest, however, strong yen can easily convince cargo owners as a factor other than shipping companies’ marketing efforts.
Cargo (Goods)
The articles subject to transportation.
Cargo Sublet
The act of renting space from another shipping company in order to fulfill the contract with the owner of the goods, in cases when a shipping company finds it difficult to secure necessary ship space.
Carrier
An operator who receives the goods from the owner and carries it by ship or plane.
Carton (carton packing)
A method of packing using cardboard boxes, used usually for packing relatively light articles.
Catch-All Controls
The system introduced in April 2002 with the purpose of regulating the development of weapons of mass destruction.
Even when handling articles others than the specific goods and technologies that might be used for the development of weapons of mass destruction and other conventional weapons (such articles are listen as regulated articles in the Control List), if these might be used for development, production, usage and storage of weapons of mass destruction (nuclear, radioactive, biological and chemical weapons, missiles, unmanned planes, etc.) and for development, production and usage of conventional weapons, authorization of the Minister of Economy, Trade and Industry is necessary.
Therefore, when an exporter exports goods or provides technology, it is necessary to verify usage and users. Excluding a few exceptions such as foods, animals and plants, most things are within the scope of this regulation.
As a result of having confirmed the usage and users, in case the exporter finds that the articles might be used for development, production, usage or storage of weapons, and in case it is informed (inform notice) by the Minister of Economy, Trade and Industry that it should apply for an authorization, the permission of the Minister of Economy, Trade and Industry is necessary for export of the goods or for providing the technologies. Because it is complemented with a Control List, it is also called Complementary Export Regulation. Regarding export of goods and providing technology to the white-listed countries in the Schedule 3 of Japan’s Export Trade Control Order (27 countries listed as of 2013: Argentina, Australia, Austria, Belgium, Bulgaria - added in July 2012, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Republic of Korea, Luxembourg, Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, United Kingdom, United States of America). These countries are exempted from the regulations of Catch-All Controls. When doing exports of goods overseas or providing technologies, an exporter needs to confirm from the viewpoint of both the Control List and the Catch-All Controls.
Even when handling articles others than the specific goods and technologies that might be used for the development of weapons of mass destruction and other conventional weapons (such articles are listen as regulated articles in the Control List), if these might be used for development, production, usage and storage of weapons of mass destruction (nuclear, radioactive, biological and chemical weapons, missiles, unmanned planes, etc.) and for development, production and usage of conventional weapons, authorization of the Minister of Economy, Trade and Industry is necessary.
Therefore, when an exporter exports goods or provides technology, it is necessary to verify usage and users. Excluding a few exceptions such as foods, animals and plants, most things are within the scope of this regulation.
As a result of having confirmed the usage and users, in case the exporter finds that the articles might be used for development, production, usage or storage of weapons, and in case it is informed (inform notice) by the Minister of Economy, Trade and Industry that it should apply for an authorization, the permission of the Minister of Economy, Trade and Industry is necessary for export of the goods or for providing the technologies. Because it is complemented with a Control List, it is also called Complementary Export Regulation. Regarding export of goods and providing technology to the white-listed countries in the Schedule 3 of Japan’s Export Trade Control Order (27 countries listed as of 2013: Argentina, Australia, Austria, Belgium, Bulgaria - added in July 2012, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Republic of Korea, Luxembourg, Netherlands, New Zealand, Norway, Poland, Portugal, Spain, Sweden, Switzerland, United Kingdom, United States of America). These countries are exempted from the regulations of Catch-All Controls. When doing exports of goods overseas or providing technologies, an exporter needs to confirm from the viewpoint of both the Control List and the Catch-All Controls.
Certificate of Origin
The document attesting the place of production and manufacturing of the goods. It is a document necessary in order to get approval of the application of customs duties lower than the normal statutory rates (preferential duties, EPA/FTA rate, etc.) when making an import declaration. In order to get the approval of application of preferential duties when importing to Japan, the document needs to be in a format called FORM A, issued by the Chamber of Commerce having the authority or by the customs authorities of the country of origin, and its validity is one year from the date of issuance. For purposes other than the duties reduction, it may be used according to necessity of import bans on specific domestic goods, such as the Middle East countries’ boycott of Israel.
Certificate of Origin under Economic Partnership Agreement
The Certificate of Origin issued based on the EPA (Economic Partnership Agreement). It is a document necessary to receive the application of EPA rates, which are lower than usual customs rates, at the importing country’s customs, for goods exported from Japan. In case the goods to be exported meet the originating status established in the EPA, the issuance of the certificate can be done at the Japan Chamber of Commerce and Industry, which is the issuing authority appointed by the Minister of Economy, Trade and Industry. The purpose of use differs from general Certificate of Origin (Non-Preferential Certificate of Origin) issued by the local Chambers of Commerce, and it is necessary to obtain a certificate each time, for each shipping.
CFS (Container Freight Station)
A facility in a container terminal, the place where a shipping company loads less-than-carload cargo (LCL cargo) in containers for different destinations, or unloads less-than-carload cargo (LCL cargo) from containers. The discharge rates practiced here are calculated according to the volume (M3) and weight (MT) of the cargo, and the shipping company charges the owner of the goods or the consignee (CFS charge). The CFS charge for exports is a part of FOB charge not included in the freight fare.
Clean B/L (Clean bill of lading, bill of lading without accident)
The bill of lading (B/L) issued when the goods are loaded without apparent damages and there is no excess or deficiency in quantity. In contrast, in case the goods are in bad condition a foul bill of lading (Foul B/L) is issued. When settled, the letter of credit (L/C), the negotiating bank accepts only a clean bill of lading for payment.
Clean Letter of Credit
The letter of credit that promises payment and acceptance of the bill, even without having the shipping documents, such as an invoice or bill of lading (B/L) attached. Because it is not accompanied by the guaranteeing shipping documents, it carries a certain risk, therefore it is rarely used in import/export trade and used more often in import/export trade, such as in fares, insurance premium payments and loan payments.
Clock Wise Stowage
A basic stowage method for transporting right-hand drive cars on a car carrier ship, through which the cars are stowed in a clock wise order around the slope where the cars are coming in and out. Because the cars are parked back in, it is possible to unload by simply driving the cars forward. The left-hand drive cars are placed counter clock wise. Nippon Yusen introduced this system in 1977.
Co-Load
In marine transportation, the consolidator (forwarder) collects the less-than-carload cargo (LCL cargo) that only partially fulfills a container from various owners and transports it to each destination in one container, however there are cases when not enough goods to be loaded together can be collected with good timing for one company. In such a situation, the goods are co-loaded in the container of a different operator who collects a large amount of goods with the same destination. In this case, the consolidator who co-loads in another operator’s container is called Co-loader. In cases a co-load is performed, the co-loader may charge the owner or the consignee with a co-load fee in addition to the usual fare.
Collection
One of the methods to negotiate when discrepancies are found between the content of the export documents and the letter of credit, in the transaction of the letter of credit (L/C). The negotiating bank first sends the shipping documents to the issuing bank, waits for the payment by the issuing bank and pays the price to the exporter. Situations of transactions without a letter of credit (L/C), such as D/P (Document against Payment) or D/A (Document against Acceptance) may also be handled as collection. If the exporter can financially afford, it can venture to choose the collection method, being able to use it to reduce the burden of the interest cost.
Collection (Cable Negotiation)
In the transaction of the letter of credit (L/C), a method of transaction for cases when discrepancies have been found between the export documents and the content of the letter of credit. The negotiating bank inquires that content through a Swift to the bank by issuing the letter of credit, and after obtaining confirmation for accepting the undertaking of those documents from the bank issuing the letter of credit, accepts the transaction of the documents from the exporter.
Confirmed L/C (Confirmed Letter of Credit)
The letter of credit (L/C) guarantees the payment by the issuing bank, however when there are uncertainties regarding the issuing bank itself, the confirmed letter of credit is a letter of credit through which the payment guarantee is confirmed again by a bank from the exporting country (usually, the exporter’s bank). The exporter pays the confirmation fee to the confirming bank (the bank who confirms in the letter of credit that payment is guaranteed) according to the price provided in the letter of credit and the risk rate of the issuing bank. If the credit standing of the issuing bank itself is good (including the country risk of the issuing bank’s country), a discount rate applies to the confirmation fee the exporter pays to the confirming bank.
Consignee (Recipient)
The recipient of the goods at the freight destination, mentioned on the bill of lading (B/L) in marine transportation, and on the Air Waybill in air transportation. Usually, the consignee is the importer in most of the cases, however sometimes it may vary, such as in the L/C (letter of credit) settlement the bank issuing the L/C becomes the consignee.
Consolidation
In marine transportation, the transportation service done when, in order to be able to reserve one container, goods with the same destination are collected and consolidated into one container. Also, the operator providing this service.
Constructive Total Loss (Total Constructive Loss, Presumed Total Loss, Financial Total Loss)
One of the concepts of total loss besides the actual total loss. The case when a total loss is authorized even though the insured cargo is not completely damaged, because the repair and transportation cost exceeds the value of the cargo and not doing restoration is considered advisable. This is also called presumed a total loss.
Container
A case for transportation aimed to provide a standardized unit of cargo, made of iron or aluminum. The most common cargo container worldwide is the marine cargo container standardized by ISO (International Organization for Standardization), available in two types: 20 feet (about 6 meters) long and 40 feet (about 12 meters) long. The width is 8 feet (about 2.4 meters) and the height is 8.6 feet (about 2.6 meters), however there is also the high cube container, a 40-feet type container with a height of 9.6 feet (about 2.9 meters), one foot higher than usual. (All sizes are external diameters.) According to the Road Traffic Act, the maximum payload for land transportation in Japan varies according to the number of axles on the trailer chassis pulling the container (the same as the number of tires when looking from just beside at the chassis, which is the platform truck under the container), and when using a three-axle chassis heavier goods can be loaded than when using a two–axle chassis. If transportation is done using a three-axle chassis, on a 20-feet container the max payload is [container gross weight 24,000kg - the container’s weight about 2,300kg (Iron container example. The weight of the containers varies.) = about 21,700kg] and for a 40 feet container the maximum payload is [container gross weight 30,480kg - the container’s weight about 3,800kg (an example of iron container) = about 26,680kg].
The usual marine transportation container is called a dry container, and beside this there are also special containers, such as the reefer container for transporting refrigerated cargo, the tank container for transporting liquid cargo, and the open top container suitable for transporting lengthy and oversized cargo.
The usual marine transportation container is called a dry container, and beside this there are also special containers, such as the reefer container for transporting refrigerated cargo, the tank container for transporting liquid cargo, and the open top container suitable for transporting lengthy and oversized cargo.
Container Seal
The seal attached to the locking part after finishing loading the cargo for export in the container (after finishing vanning) so that the container’s door cannot be opened. It is useful for the prevention of loss or theft of the goods inside the container and for avoiding the mixture of goods from a different cargo. The seal is numbered. The same number is always written in the manifest and the bill of lading.
Container Ship
The cargo ship transporting 20 feet (about 6 meters) long and 40 feet (about 12 meters) long marine cargo containers standardized by ISO (International Organization for Standardization).
Traveling mainly on international routes with a speed of about 40-50 km per hour (about 20-30 knots), it has a high service speed for a cargo ship. Because it doesn’t have a stevedoring equipment, it loads and unloads the cargo with the gantry crane at the wharf.
Traveling mainly on international routes with a speed of about 40-50 km per hour (about 20-30 knots), it has a high service speed for a cargo ship. Because it doesn’t have a stevedoring equipment, it loads and unloads the cargo with the gantry crane at the wharf.
Container Terminal
A port facility that becomes the point of contact between the sea and the land, such as for loading on a ship the containers transported on land with a trailer, or loading on a trailer the container unloaded from a container ship. It consists of facilities such as the wharf where the container ship comes along the dock for loading and unloading the containers, the gantry crane that loads and unloads the containers, the container yard (CY) where the containers are gathered and the container freight station (CFS). Also called the container berth.
Container Yard
The place inside the container terminal designated by each shipping company for the delivery and reception of the container. Here the containers are gathered, stored, and also loaded and unloaded on the chassis.
When making the import, the containers unloaded from the container ship with a gantry crane are moved with straddle carriers or trailers in the container yard, which is a bonded area, and wait for the import authorization from the customs. When exporting, the containers with the goods are carried with trailers to the container terminal and loaded onto a container ship with a gantry crane.
When making the import, the containers unloaded from the container ship with a gantry crane are moved with straddle carriers or trailers in the container yard, which is a bonded area, and wait for the import authorization from the customs. When exporting, the containers with the goods are carried with trailers to the container terminal and loaded onto a container ship with a gantry crane.
Containers Load Plan
A document with a detailed description of the goods loaded in the container. In a FCL cargo (CY cargo) usually the marine cargo carrier (forwarder), who is the representative of the goods’ owner, prepares the document when the goods are loaded in the container and submits it when carrying the container loaded with the export goods to the shipping company’s container yard (CY). Besides the cargo details, the container number, container seal number, container type, ship name, port of loading, port of discharge, exporter’s name and importer’s name are also mentioned.
Conventional Rate of Duty
The customs tariff to impose customs duties at a less than a certain rate regarding particular articles based on the treaty with a foreign country. In Japan, only the WTO conventional rates of duties based on the World Trade Organization (WTO) Convention exist, and in principle these duty rates are applied between the WTO member countries. The same duty rates ought to be applied unconditionally to all the WTO member countries, and it is forbidden to set lower duty rates or to do preferential treatment only for certain countries, or conversely, to impose high duty rates. However, by signing a Free Trade Agreement (FTA) or an Economic Partnership Agreement (EPA) between two or more countries, duty rates lower than the WTO conventional rates of duty can be set.
Conventional Vessel (Break Bulk Vessel, Cargo Ship, Bulk Carrier Ship, Conventional Ship)
A cargo ship that transports large goods or goods of a special shape that cannot be loaded on a container ship. Because it is equipped with a crane, it can do stevedoring in any port. It has the meaning of a conventional ship commonly used before the container ship was invented.
Correspondence
Originally, it meant communicating through written documents, however as a trading term, it refers to business documents for transactions in English with foreign countries. Correspondences used to be made via telex and fax, however presently the e-mail is mainly used. It is important to write correspondence text in a concise and easy-to-understand manner.
Correspondent Arrangement
A representation agreement for foreign exchange transactions made between domestic banks and major foreign banks, used for international settlements such as overseas money remittance, bill collection or acceptance of letters of credit. The bank who has signed a correspondent arrangement is called the correspondent bank.
Courier Cargo Service
The overseas delivery of small cargo such as urgent documents and samples by airmail, done by private enterprises. Excluding some exceptions, such as dangerous articles for certain areas, delivery can be made door to door to the destination. International courier service.
CuPES (Customs Procedure Entry System)
The system for electronic applications to the customs. In 2010 the operations were transferred to NACCS and the system was abolished.
Custom Business Act
The law that specifies the necessary matters regarding the customs brokers.
Customs Broker
The company acts as a professional agent and carries out the necessary procedures in order to receive the export/import authorization based on the request (a power of attorney must be submitted) of the person who intends to export or import a cargo.
It has been recognized to perform, on behalf of the client (as a representative), the export/import declarations to the customs, the payment of the import tariffs and consumption tax and the filing of objections. According to the Customs Business Act, in order to conduct the customs brokerage, the customs broker has to fulfill requirements such as employment of a registered customs specialist, and to receive the authorization of the head of customs office having jurisdiction over that place.
It has been recognized to perform, on behalf of the client (as a representative), the export/import declarations to the customs, the payment of the import tariffs and consumption tax and the filing of objections. According to the Customs Business Act, in order to conduct the customs brokerage, the customs broker has to fulfill requirements such as employment of a registered customs specialist, and to receive the authorization of the head of customs office having jurisdiction over that place.
Customs Clearance
The person who wants to export or import a cargo, makes the necessary declarations to the customs and receives the export or import authorization from the customs.
Customs Duty
The tax imposed upon the cross-border transactions of products. Formerly, many export taxes and transit duties existed, however today it refers mainly to the import customs duties imposed by the government of the importing country when importing. There are two main purposes: to increase the national income and to protect domestic industries.
Customs Inspection
At customs, the act of verifying if the cargo intended for export or import corresponds to the content of the declaration, if the cargo meets the standards established by law, or if the item classification and the customs duty amount are correct. Depending on the place the inspection, customs inspection on the spot or customs inspection at an examination site is performed, and depending on the target of the inspection, sample inspection, sampling inspection or whole inspection is done. In the case of the whole inspection, costs will be expensive including the cost of carrying the goods to the examination site. In the past, the inspection was done by unpacking the cargo, however recently inspection using X-rays is mainly performed.
Customs Inspection in the Examination Site
When the customs examine the import or export cargo, the inspection is performed by carrying the cargos to the customs’ examination site.
Customs Inspection on the Spot
The inspection having a customs officer go to the storage place of the cargo when the customs examines the import or export cargo. In most cases the inspection is usually performed at the customs’ examination site, however in cases when carrying the goods is difficult, the inspection is performed with this method.
Customs Tariff Schedules
The table mentioning the tariff rates established for each item after classifying various goods by item according to a fixed procedure. Japan’s customs tariff schedules is based on the Harmonized Commodity Description and Coding System (H.S. Code).
D
D/A (Documents against Acceptance)
One of the trade settlement methods. With the condition of making promises to accept payment (Acceptance) on the settlement date (after 30 days, after 90 days or after 180 days), the importer can receive one set of the shipping documents including the original bill of lading (original B/L) sent to the bank from the importing country (the importer’s bank) by the exporter through a bank from the exporting country (the exporter’s bank), making possible the receipt of the cargo (at this point, the fee is not paid). When the settlement date agreed beforehand (after 30 days, after 90 days or after 180 days) comes, the importer must do the settlement at the bank, however unlike the case of a bill with letter of credit (L/C), the bank has no obligation to collect the price. Therefore, this is a settlement method carrying a high risk for the exporter and it is generally used for settlements with importers with a high credit worthiness.
D/O (Delivery Order)
The document issued by the shipping company to the consignee (importer) when importing, by which the consignee can receive the cargo in exchange for the delivery order. Basically, it is issued after presenting the bill of lading (B/L) to the shipping company, however, if the bill of lading has not been delivered to the consignee, submitting the letter of guarantee (L/G) to the shipping company makes possible to receive the delivery order and get the cargo.
D/O Fee (Delivery Order Fee)
The fee the shipping company charges for issuing the delivery order. Usually, the consignee (importer) pays the fee to the shipping company. A consumption tax is levied since 2014.
DAF (Delivered at Frontier)
The seller (exporter) delivers the cargoes that have completed the export customs clearance at a specified border, and the cost and risk generated afterwards will be borne by the buyer.
DDC (Destination Delivery Charge)
Regarding the cargo for the U.S., the surcharge that appears under the name of fees for handling at the container yard of the port of destination. It is called THC (DTHC) in countries other than the U.S. Basically the shipper doesn’t have to pay, however, prior confirmation is necessary especially regarding the U.S.
Demurrage
The extra charges that occur at the import of the cargo, when the container or goods carried from the ship to the container yard (CY) or container-freight station (CFS) are not picked up even after exceeding a fixed free storage period (free time). It is set so that the shipping company can facilitate an early delivery of the container or goods.
Detention (Container Detention Charge)
The detention charge that incurs at the import of goods by container units, after taking out the goods from the loaded container (the container with goods inside) taken from the container yard (CY), when the number of days (free time) allowed for returning an empty container to the container yard or vanpool (VP) specified by the shipping company exceeds the specified number of days. The extra charge per day of delay is set by each shipping company.
Devanning (Stripping, Devan, Unstuffing)
The removal of cargo from a container. Also called unstuffing.
Discrepancy
Inconsistencies between the content of the shipping documents submitted by the exporter to the bank and the content of letter of credit (L/C). The letter of credit transaction is a very strict documentary transaction, and because there is a risk of refusing to make the bill payment, even inconsistencies such as minor spelling errors should not be allowed. When discrepancies have occurred, measures such as those listed below are usually taken: (1) request to modify the content of the letter of credit (amendment) to the importer, (2) cable negotiation (see cable negotiation), (3) undertake through L/G Negotiation (see L/G Negotiation), (5) forward the documents to the issuing bank through collection (see Collection).
DOC Fee (Documentation Fee)
The fee the shipping company charges for issuing documents such as the bill of lading (B/L). A consumption tax is levied since 2014.
Dock Receipt (D/R)
The document mentioning the details of the cargo made by the forwarder on behalf of the consignor (shipper) and submitted to the shipping company when carrying the cargo to the shipping company’s container yard (CY) or container-freight station (CFS).
The shipping company prepares the bill of lading (B/L) based on the dock receipt.
The shipping company prepares the bill of lading (B/L) based on the dock receipt.
Documentary Draft (Documentary Bill)
The document with the shipping documents attached, such as the bill of lading (B/L), on the bill of exchange issued by the exporter. The exporter sends the bill of exchange and the shipping documents to the importer through the exporter’s and importer’s banks. In that case, if the importer doesn’t make the payment of the bill or doesn’t accept the bill (confirm the payment of the bill), it cannot obtain the shipping documents starting with the bill of lading and cannot possess the cargo. By using this arrangement, the exporter is able to reduce the risk that the importer doesn’t make the payment despite having received the cargo. There are cases when a letter of credit (L/C) is included and cases without a letter of credit (L/C), such as the D/P (Document against Payment) and D/A (Document against Acceptance).
Domestic cargo
The cargo before receiving the export authorization or the cargo arrived from abroad after receiving the import authorization.
Draft
A term related to a ship: the vertical distance between a ship’s waterline and the lowest point of its hull. It is the depth of the water to which the ship sinks, therefore if the draft is bigger than the water depth the ship will be stranded on the bottom of the sea. If the load increases the draft will be deepened. It changes also according to salt density of seawater and the draft increases due to differences in specific gravity between seawater and fresh water in the vicinity of a river or river mouth.
Draft (Bill of Exchange)
The certificate mentioning that the drawer of the bill entrusts a third party, which is the drawee (payer), with the payment of money to a payee (recipient), a type of bill similar to the promissory note. The abbreviated name is tamete. The obligation to pay is not on the drawer, but on the drawee. Whereas the promissory note is a transactions between two parties, drawer (payer) and drawee (recipient), the bill of exchange is a transaction between the three parties as follows.
In trade settlements, in cases of sending documents via a bank after loading the cargo according to the purchase agreement between the exporter and the importer, instead of sending cash directly, the exporter draws a bill of exchange having the importer or the importer’s bank as the drawee (payer) and the exporter’s bank as the payee (recipient). The conventional bill of exchange consists of a two-sheet set, and the general items mentioned in a bill of exchange with a letter of credit attached are: (1) the bill number, (2) the amount of the bill, (3) the place and date of drawing the bill, (4) the term of the bill (At Sight, etc.), (5) the payee of the bill (negotiating bank), (6) the actual payer (the importer), (7) information regarding the letter of credit (the name of the issuing bank, the number and date of issue of the letter of credit (after “Drawn Under”)), (8) the drawee of the bill (the bank issuing the letter of credit or the importer (after “To”)) and (9) the drawer of the bill (the exporter) and its signature.
| A) | Drawer: Draws the bill of exchange. The drawer of the bill of exchange is usually the exporter. In the case of the promissory note, the drawer has the obligation to pay, however in the case of the bill of exchange, the drawer neither pay the bill it nor receive it. |
|---|---|
| B) | Drawee = Payer: Pays the bill. The importer or the importer’s bank. |
| C) | Payee = Recipient: Receives the payment of the bill. The negotiating bank. |
Drayage
In marine transportation, it usually refers to the land transportation of the container filled with goods.
Dry Container
A normal container for marine cargo that is not a special container such as a reefer container or a tank container.
Duty Exemption for Goods for Scientific Research or Education
The system of duty exemption for the import of goods for scientific research in Japan with the goal of promoting the development of education and academics.
E
E.I.R. (Equipment Interchange Receipt, Container Equipment Interchange Receipt)
The document that proves the transfer when the shipping company lends the container equipment to the owner of the goods, in which information regarding the container, including the presence or absence of abnormalities at the time of transfer is recorded.
Emergency Tariff
The extra duty imposed in cases when the import of specific goods increases suddenly due to a fall in prices of overseas markets, in order to prevent severe damages to the domestic industries producing the same kind of competing goods. Regulated by the Customs Tariff Act (Article 9). See Safe Guard.
EPA (Economic Partnership Agreement)
An international agreement that aims at strengthening relationships by stipulating a wide range of rules regarding not only trade, but also traveling of human resource, freedom of investment and protection of intellectual property rights. In contrast to this, the Free Trade Agreement (FTA), is an international agreement aiming at the development of free trade transactions through the elimination of customs duty and other trade barriers between specific countries and regions.
Ex-Godown (Ex-Godown terms)
One of the sales terms often used in the transaction of goods for export. The seller bears the fares and risk up to the warehouse specified by the buyer (usually near the port of origin), and the arrangements for export customs clearance are made by the buyer. The meaning of “godown” is warehouse. For example, Ex-Godown Kobe is a condition that the seller carries the cargo in a warehouse in the Kobe area.
Ex-Works (EXW, Ex-Works Price)
One of the Incoterms trade terms. The seller (exporter) delivers the cargo to the buyer at its own factory or warehouse, and the cost and risk from there on are to be borne by the buyer.
When Japan is the seller, the buyer appoints the Japanese forwarder as the customs manager, and the export declaration procedures at customs are carried out under the name of the buyer. Because in Europe, basically a resident performs the export and import declaration, if a party in Europe is the seller, export customs clearance formalities are carried out under the seller’s name. If a party in the U.S. is the seller, it is necessary to specify an American forwarder as the export representative of the buyer.
When Japan is the seller, the buyer appoints the Japanese forwarder as the customs manager, and the export declaration procedures at customs are carried out under the name of the buyer. Because in Europe, basically a resident performs the export and import declaration, if a party in Europe is the seller, export customs clearance formalities are carried out under the seller’s name. If a party in the U.S. is the seller, it is necessary to specify an American forwarder as the export representative of the buyer.
Exchange Risk
The risk that occurs due to fluctuations in the foreign exchange rate. In the case of export, when concluding an export contract for the goods in foreign currency, if the value of the yen rises at the time of settlement a foreign exchange loss will occur, however if the value of the yen decreases profits will be gained. In the case of import, the effect is contrary to the case of export. In order to minimize the exchange risk, carrying out foreign exchange contracts and establishing a settlement rate beforehand is effective.
F
Fair Trade
A movement for continuously purchasing and consuming agricultural products and other goods made in developing countries at fair prices, in order to promote improvement of quality of life and the independence of producers and workers in those countries, who are in a weaker position under free trade.
Feeder Service
A large container ship transporting small container ships or trucks from major ports of call to local ports.
FIFO (First In, First Out)
In the manufacturing industry, the system to always store new articles in a warehouse by taking out raw materials and products that were stocked first.
Flag Certificate (Ship’s Registry Certificate)
A certificate mentioning the ship’s registry, which is the country of registration of the ship (country name). Issued by a shipping company.
Foreign cargo
The cargo that has already obtained the export authorization or the cargo arrived from abroad, before obtaining the authorization for import.
Foreign Cargo Working
The work involving a foreign cargo in bonded areas such as bonded manufacturing warehouses.
Foreign Exchange
A method of making the settlements for international hiring through bills of exchange or check remittance, without cash transportation. Formerly, there were restrictions to transactions stipulated by law (Foreign Exchange Control Law), however, the foreign exchange has presently become completely free, making various transactions possible.
Foreign Exchange Rate
The exchange rate for each currency. For Japan, a fixed rate exchange of 360 yen for one U.S. dollar was set in 1949, and it was changed to a floating exchange rate system in 1973, the one in use presently. The system varies greatly by country, and the currencies using a perfect floating exchange rate system are limited to some currencies, such as those of the developed countries.
Form A
One of the formats of the Certificate of Origin certifying the origin of a cargo. In order to apply general preferential duties and to import the cargo, it is necessary to submit the original form to customs when making an import declaration. The form must be in accordance with the regulations of the customs or chamber of commerce in the country of origin. Because discrepancies between the shipping documents such as the commercial invoice or bill of lading (B/L) and the content of Form A may cause problems, for example the customs’ refusal to approve preferential duties for import, it is necessary to check the content beforehand.
Formal Objection
According to the provisions regarding The Customs Law of Japan or another taxation law, when there are objections to the dispositions of the Chief Customs Inspector, the objection that can be claimed within two months from the receipt of the disposition. The Chief Customs Inspector who receives the formal objection analyses whether the disposition was correct and notifies the petitioner of the result by sending a transcript of the decision.
Forwarder
The operator who undertakes duties related to international transportation, such as the transportation of international cargo and customs clearance. Without having its own transportation means, it uses ships or planes owned by another party and transports the shipper’s cargo.
Foul B/L (Dirty B/L)
The bill of lading (B/L) issued by the shipping company when abnormalities in the appearance and quantity of goods are recognized when loading the cargo. In contrast, if the cargo is loaded without abnormalities in appearance and in adequate quantity, a clean bill of lading (Clean B/L) is issued. When doing the settlement of the letter of credit (L/C), the negotiating bank accepts undertaking of a clean bill of lading only.
Free Time
FTA (Free Trade Agreement)
An international agreement aiming at the development of free trade transactions by eliminating customs duty and other trade barriers between specific countries and regions. In contrast to this, the Economic Partnership Agreement (EPA) is an international agreement that aims at the strengthening of comprehensive relationships by stipulating a wide range of rules regarding not only the trade, but also traveling of human resource, freedom of investment and the protection of intellectual property rights.
Full Endorsement
When the holder of a negotiable instrument, such as a bill of lading (B/L), makes an endorsement in order to transfer the instrument to another party, it makes the endorsement without specifying the endorsee in whose favor the transfer is made.
The fact of endorsing without mentioning the endorsee in whose favor the transfer is made is called a Blank Endorsement.
The fact of endorsing without mentioning the endorsee in whose favor the transfer is made is called a Blank Endorsement.
Fumigation
Sterilizing wooden materials used for packing (pallets, wooden boxes, wooden frames, etc.) with heat and methyl bromide. As evidence that the materials are sterilized after processing, it is necessary to display the approval mark required by international standards or by the importing country.
Regulations regarding the fumigation of wooden packing materials for import are enforced in the U.S., Canada, Mexico, Cuba, Jamaica, Dominican Republic, Panama, Brazil, Argentina, Chile, Peru, Ecuador, Colombia, Paraguay, Venezuela, Bolivia, Australia, New Zealand, EU member countries, Switzerland, Norway, China, Taiwan, South Korea, Philippines, Singapore, Malaysia, India, Sri Lanka, Indonesia, Turkey, Israel, Jordan, Omar, Egypt, Kenia, South Africa, etc.
Regulations regarding the fumigation of wooden packing materials for import are enforced in the U.S., Canada, Mexico, Cuba, Jamaica, Dominican Republic, Panama, Brazil, Argentina, Chile, Peru, Ecuador, Colombia, Paraguay, Venezuela, Bolivia, Australia, New Zealand, EU member countries, Switzerland, Norway, China, Taiwan, South Korea, Philippines, Singapore, Malaysia, India, Sri Lanka, Indonesia, Turkey, Israel, Jordan, Omar, Egypt, Kenia, South Africa, etc.
G
Gang
In the marine transportation industry, it refers to one group unit of workers who load/unload goods to and from a ship. In most cases, on the container ship one gang consists of 7 to 12 people. They are great people.
Gantry Crane
A crane for stevedoring the containerized cargo, also called container crane or bridge crane. Although sometimes it may be mounted on a ship, it is usually installed at the wharf and it is used for unloading the containerized cargo from the container ship to the wharf or for loading on the ship. The average traffic per one gantry crane in each terminal in Japan is about 35 containers per hour.
General Average
The system of proportionally sharing the loss between the interested parties and jointly bearing the damage, for the reasonable payment of damages and expenses in case the ship suffers an accident. If losses and expenses are incurred because of tossing overboard a part of the cargo to avoid the danger of sinking, the general average is declared by the shipping company. When the general average is declared, the shipping company that was able to avert the sinking of the ship as well as the owner of the goods whose sinking was avoided must contribute a portion to the compensation and expenses of the sacrificed goods, according to the value of the cargo. The principles and settlement methods of the general average are established by the York-Antwerp Rules. In principle, being covered by a cargo marine insurance, if the cargo has a cargo marine insurance, the general average cost will be paid by the insurance company.
General Rate of Duty
A rate established by the Customs Tariff Law, a basic customs tariff applied over a long period as long as there is no special change in circumstances. Set based on a long-term perspective, it takes into consideration the situation of the domestic industry, the differences between domestic and foreign prices and the proper protection of the domestic industries. It is one of the statutory tariffs together with the temporary rate and the preferential rate.
General Terms and Conditions
Terms of contract to apply to all the transactions of a company.
In most cases mentioned on the back side of contracts such as purchase orders or confirmation orders, sometimes having mentioned on the front side: “The contents on the back are prerequisites for the contract. They are integral parts of the contract together with the back side”.
In most cases mentioned on the back side of contracts such as purchase orders or confirmation orders, sometimes having mentioned on the front side: “The contents on the back are prerequisites for the contract. They are integral parts of the contract together with the back side”.
Generalized System of Preference (GSP)
An international system that promotes industrialization and economic development of developing countries, providing a solution to the North-South problem by applying rates lower than the usual customs tariff (preferential rates) for specific agricultural/fishery and industrial goods imported by developed countries from developing countries. The framework was agreed in 1970 at the United Nations Conference on Trade and Development (UNCTAD), and in Japan the system has been implemented since August 1971.
GSP–LDC (Generalized System of Preference-Least Developed Countries, Special Preferential System)
The system of eliminating customs duty for the products from those least developed countries (LDC) among the countries receiving preferential tariffs which are appointed to be suitable for receiving special preferential treatment. The system applies to an unlimited quantity, except in respect of certain exceptional items. Duty-free and quota-free arrangements for LDCs.
H
H.S. Code (Harmonized Commodity Description and Coding System, Tariff Code, Import/Export Harmonized System Code, Customs Duty Number, international standardized system for the classification of traded products, a standardized system for the names and categories of traded products, commodity codes)
Giving a unique identification number to every existing product, it is a code number system commonly established for all of the countries of the world in order to make possible to identify the goods when international trading. Used to establish the customs tariffs and in foreign trade statistics in over 200 countries and regions. The numbers shared around the world consist of 6 digits, however, an even more segmented subdivision method from the 7th digit onwards, based on the domestic legislation of each country, is also used (Japan uses 9-digit numbers). The code is revised regularly about every 5 years according to the changes in actual trends.
High Cube Container (HC)
In contrast to the common cargo container, which usually has a height of 8.6 feet (about 2.6m), the high cube container is one foot (about 30cm) higher, having a height of 9.6 feet (about 2.9m).
Also called tall container or kunroku container.
Also called tall container or kunroku container.
House B/L
The bill of lading issued by the forwarder (NVOCC).
I
IATA (International Air Transport Association)
A trade association of the world’s airlines operating on international routes. Founded in April 1945 as the successor of the former International Air Traffic Association and headquartered in Montreal, Canada, with executive offices in Geneva, Switzerland. It aims at the development of the airline industry, promotion of a safe, reliable and economical air transportation, strengthening the partnership between airlines and offering environmental solutions. Airfares and transportation regulations are established upon discussion between the member airlines. It consists of about 230 airlines, including three Japanese companies, Japan Airlines (JAL), All Nippon Airways (ANA) and Nippon Cargo Airlines (NCA) as members. It usually reads “iata”, but it may also read “aiata”.
IATA Dangerous Goods Regulations (Dangerous Goods Regulations manual)
Japanese translation of Dangerous Goods Regulations revised and published every year by IATA in order to provide handling procedures for safe transportation of dangerous goods by airmail.
Regulations regarding goods with restrictions on air transportation, classification of dangerous goods, packing regulations, labeling methods and necessary documents are mentioned. For transportation of dangerous goods via airmail, it is necessary to become familiar with the latest regulations.
Regulations regarding goods with restrictions on air transportation, classification of dangerous goods, packing regulations, labeling methods and necessary documents are mentioned. For transportation of dangerous goods via airmail, it is necessary to become familiar with the latest regulations.
IBC Code (International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk)
International regulations regarding the construction and equipment of ships used to transport dangerous chemicals.
IGC Code (International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk)
International regulation regarding the construction and equipment of ships used to transport liquefied gas.
IMDG Code (International Maritime Dangerous Goods Code)
The International Maritime Dangerous Goods Code adopted by the Maritime Safety Committee (MSC) within the International Maritime Organization (IMO) in order to ensure safety transportation of international dangerous goods. It establishes definition, classification and list of dangerous goods, containers regulation, transportation procedure, regulations for examination of containers, transportation standards, etc.
IMO (International Maritime Organization)
A specialized agency of the United Nations that addresses various issues for implementation of international rules regarding shipping and the ocean, such as maintenance of marine safety, prevention of marine pollution and effective shipping. In 1958 the Inter-governmental Maritime Consultative Organization was founded, and in 1982 it changed its name to the current name. Headquartered in London.
Importer
The importer of the goods.
Incoterms
The international regulations regarding the standards for the interpretation of trade terms, established by the International Chamber of Commerce (ICC) in 1935 in order to prevent conflicts and misunderstandings that occur in transactions due to differences in trade practices between countries. The official name is “International Rules for the Interpretations of Trade Terms”. Being arbitrary rules they are not compulsory in themselves, however if the parties have an agreement based on Incoterms, it has the effect of a binding agreement for the parties involved. After repeated revisions, the 2010 version (Incoterms 2010) defining terms divided into four categories and 11 rules is presently the latest edition. However, the former editions did not become invalid, therefore it is preferable to mention which version applies when signing the contract.
The below table shows terms and conditions divided into two categories and 11 articles as stipulated in “Incoterms 2010”.
Incoterms 2010 Terms and Conditions
The below table shows terms and conditions divided into two categories and 11 articles as stipulated in “Incoterms 2010”.
Incoterms 2010 Terms and Conditions
| Abbreviation | Terms and Conditions | ||
|---|---|---|---|
| (1) (Rules for Any Mode or Modes of Transport) | EXW | Ex Works | Ex-Factory, delivered at factory |
| FCA | Free Carrier | Delivered at a specified place, delivered by the seller to the carrier at a specified place of delivery | |
| CPT | Carriage Paid To | Transportation costs included (delivered to the carrier), specified place of destination | |
| CIP | Carriage and Insurance Paid To | Transportation and insurance costs included (delivered to the carrier) | |
| DAT | Delivered at Terminal | Delivered free of costs at the terminal | |
| DAP | Delivered at Place | Delivered free of costs to a specified destination | |
| DDP | Delivered Duty Paid | Delivered free of costs to a specified destination, customs duties supported by the seller (customs duties included) | |
| (2) (Rules for Sea and Inland Waterway Transport) | FAS | Free Alongside Ship | Delivered alongside the vessel |
| FOB | Free On Board | Delivered onboard the vessel | |
| CFR | Cost and Freight | Cost of freight included (delivered onboard the vessel) | |
| CIF | Cost Insurance and Freight | Cost of freight and insurance included (delivered onboard the vessel) |
Inland Depot
The physical distribution base, a bonded area situated inland in areas other than the vicinity of ports or airports. Maintained by local governments with the goal of promoting trade and economic globalization of inland regions. Because it provides facilities for bonded warehousing and customs clearance, the imported container can be bonded transported and de-vanned here without de-vanning it beforehand.
Inspection of Storage in the Container
Inspection of Storage of Dangerous Goods in Containers
The inspection done by national registration agencies such as Japan Marine Surveyors and Sworn Measurers’ Association and Shin Nihon Kentei Kyokai before loading, when transporting specific dangerous goods (explosives, high-pressure gases, some inflammable liquids, organic peroxide, some toxic substances, radioactive substances and some corrosive substances) provided in the Regulations for the Carriage and Storage of Dangerous Goods (Dangerous Goods regulations) on a container ship. Aiming to enhance the safety of dangerous goods transportation by sea, the inspection of the storage method of dangerous goods in containers is carried out during vanning. For transportation with tank containers, an inspection is not required.
Insurance Policy (Insurance Certificate)
The certificate issued by the insurance company as proof of the provisions included in the insurance contract.
Insurance Premium
The amount of money the party that purchases a marine insurance (the insurance contractor) pays to the insurance company (insurer). The insurance premium is calculated by applying an insurance rate to the insurance price (usually 110% of the CIF price of the cargo), however the insurance rate is decided by the insurance company based on the past performance of the insurer, the nature of the cargo, the place of destination, etc.
Integrator
One of the international transportation or distribution operator who performs integrated door-to-door transportation from collection of cargo to international transportation and delivery, using only the company’s managerial resources. Because it builds a wide-area transportation network, a large-scale capital investment in such as airplanes, collection and delivery cars and picking terminals is necessary. FedEx (U.S.), UPS (U.S.), DHL (Germany), TNT (the Netherlands) fit into this category.
Interbank Transaction (foreign exchange)
The foreign currency transactions between banks made in foreign exchange markets.
The exchange rate applied here is called the “interbank rate”.
The exchange rate applied here is called the “interbank rate”.
International Multimodal Transport
Performing an integrated transportation from the point of collection of the cargo to the final destination using two or more means of transportation by the same carrier. Combining ship, railway, trucks, airplanes, etc.
Interports
A near port. For Japan, it refers to the ports within the Far East and Southeast Asian countries or their coastal waters.
Invoice
The document that serves as both a detailed statement and a bill, mentioning the name, quantity, price, terms of contract and contract unit prices of the cargo. In trade transactions, it is the most important document together with the bill of lading (B/L). A document indispensable in the customs clearance procedure of the cargo. There are the following types of invoice:
| Commercial Invoice |
|---|
| The document mentioning details of the cargo, issued by the seller (exporter) to the buyer (importer), serving as an advice of dispatch, statement of delivery, inventory of goods, price calculation statement and invoice. Name of the articles in the cargo, quantity, unit price, amount, ship name, shipping date, shipping port, destination port, etc. are mentioned. |
| Proforma Invoice |
| In general business situations it refers to the document mentioning the price and other contract terms, issued by the seller (exporter) after the receipt of the written order and the notification of order from the buyer (importer). After confirming this document, the buyer arranges a bank remittance and opening of a L/C. Accordingly, interpretation in Japanese would be closer to a confirmation of order rather than a quote. |
| Customs Invoice |
| The invoice issued for the customs in order to make the declaration of export during the export customs clearance. |
| Consular Invoice |
| In order the prove the validity of the price of exported goods, the consulates of the importing country located within the exporting country issues a visa on the invoice or certificate of origin prepared by the exporter. It is used for a fair collection of customs duties in importing countries and for preparing statistic materials. Although there is tendency to abolish it recently, there still are countries in the Middle East, Africa and South America where this invoice is required for the customs clearance when importing. Because the consular visa is costly and time consuming, when there are modifications in the content of the documents, such as those caused by change of loading date, it becomes a troublesome problem. |
ISO (International Organization for Standardization)
A private nonprofit organization founded in February 1947 for development of international standards in industrial fields (mining and manufacturing, agriculture, pharmaceuticals industries etc. excluding electronic equipment) and promotion of their utilization. Headquartered in Geneva, Switzerland, with over 150 member countries. The participation is limited to representatives of each country’s national standards organizations, and from Japan the Japanese Industrial Standards Committee (JISC) is participating. The standards established by the International Organization for Standardization are ISO Standards, for example there are international standards for industrial products such as the ISO screw thread, but also international standards regarding mechanisms of quality control, such as ISO 9001. The ISO standards are the consumers’ criteria for product selection and recently, obtaining ISO standards sometimes becomes a condition of transaction.
ISO Container (Tank Container, Tanktainer, Isotainer)
A type of container for marine cargo, used mainly for transportation of liquid cargo. Manufactured according to ISO (International Organization for Standardization) standards, it is also called ISO container (ISO tank). The interior is usually made of stainless steel fixed in a metallic frame. Different from the dry container, the 40 feet-size type is not available, but only the 20 feet type. Transportation with a tank container is typically requested to a specialized operator.
J
Japan Customs
An administrative body under the jurisdiction of the Ministry of Finance of Japan. It performs inspections during exports and imports, supervision, customs duty collection, preparation of trade statistics, etc. There are nine regional customs established in Hakodate, Tokyo, Yokohama, Nagoya, Osaka, Kobe, Moji, Nagasaki and Okinawa.
JETRO (Japan External Trade Organization)
An Incorporated Administrative Agency supervised by the Ministry of Economy, Trade and Industry involved in research and support of developing countries, support for the overseas business expansion of Japanese companies, promotion of attracting foreign companies to Japan and collecting information regarding foreign economy, with the goal of promoting trade and investment between Japan and other countries.
K
Knockdown Export
The method of exporting parts and semi-products to the areas of demand, to be assembled into finished products and sold locally.
L
L/C (Letter of Credit)
In trading, it usually refers to the commercial letter of credit used in the settlement of the commodity price. It is a price payment warranty for the exporter, issued by the bank from the importing country (the bank issuing the letter of credit) based on the request of the importer, in order to have a smooth price settlement during trade transactions. The exporter sends the documents requested in the letter of credit (bill of exchange, bill of lading, invoice, etc.) to the bank issuing the letter of credit (L/C Opening Bank) through the bank from the place of loading (the negotiating bank). If the content of the letter of credit corresponds to the other documents submitted, the bank will undertake the bill of exchange. Basically, an irrevocable letter of credit (Irrevocable L/C) is issued, which cannot be modified without the agreement of the exporter.
L/C Advising Bank
The bank that receives the letter of credit written by the bank issuing the letter of credit (L/C Issuing Bank) and forwards it to the importer, which is the beneficiary of the letter of credit. Usually, it is a bank in the exporter’s country.
L/G (Letter of Guarantee, L/I, Letter of Indemnity, LG)
In trade transactions, the letter of guarantee used when an activity carrying a certain risk for one party is performed, by which the other party promises to compensate for the eventual damages.
It is submitted when requesting the shipping company to modify the content of the bill of lading (B/L), when requesting the bank to undertake a letter of credit (L/C) despite the discrepancies between the content of the shipping documents and the letter of credit (L/G negotiation) in export transaction involving letter of credit (L/C) settlement, or when requesting to take the cargo from the shipping company before the arrival of the original bill of lading (B/L)in import transaction involving letter of credit (L/C) settlement.
It is submitted when requesting the shipping company to modify the content of the bill of lading (B/L), when requesting the bank to undertake a letter of credit (L/C) despite the discrepancies between the content of the shipping documents and the letter of credit (L/G negotiation) in export transaction involving letter of credit (L/C) settlement, or when requesting to take the cargo from the shipping company before the arrival of the original bill of lading (B/L)in import transaction involving letter of credit (L/C) settlement.
L/G Negotiation
A method of transaction done by submitting a letter of guarantee (L/G) to the bank that undertakes the letter of credit when the exporter requests the bank to undertake it despite existing discrepancies between the content of the shipping documents and the letter of credit in export transaction involving letter of credit (L/C) settlement. In the case of the L/G negotiation, because the bank issuing the letter of credit doesn’t have the obligation to pay, it is possible to use this document when, from the point of view of the bank that undertakes the letter of credit, the exporter has enough credit capability and the discrepancies are comparatively minor. In cases other than when the importer is sufficiently reliable from the exporter’s point of view, the L/G negotiation should be avoided as much as possible, and the documents should be prepared as mentioned in the letter of credit (L/C).
Lashing
The method of fixing the goods with lashing belts or wires when transporting the container, so that the goods don’t move inside the container during transportation.
Lashing Belt (Gatcha)
The cargo tightening belt used for preventing the collapse of cargo. Gatcha.
Latest Shipping Date
The final day until when the loading of the ship must be finished, specified in the letter of credit (L/C). When receiving the letter of credit it is necessary to check whether loading the ship can be finished until that date, and if it’s not, it is necessary to request the buyer to extend the period of the letter of credit (L/C). If loading the ship is done after the latest shipping date, this becomes a discrepancy and the bank will not accept normal undertaking, therefore the documents will have to be brought to the bank through a cable negotiation, L/C negotiation or collection.
LCL Cargo (Consolidated Cargo)
In marine transportation using containers, it refers to loading and transporting in the same container the less-than-carload cargo that is not suitable for reserving a whole container for the reasons of cost, etc., together with a different owner’s less-than-carload cargo that has the same destination. Because the work of loading and unloading the container is carried out at the container freight station (CFS), it is also called CFS cargo.
List Control
Fifteen items including weapons and specific goods that might be used for the development of weapons are listed in the List Control, and for exporting these goods the prior authorization of the Minister of Economy, Trade and Industry is necessary, regardless of the destination country, users or usage. Not only the goods, but also the export of technologies used in planning, manufacturing and usage of these goods are subject to the control.
When an exporter exports goods or provides technologies overseas, it is necessary to check in advance whether the things it plans to export are subject of the List Control.
See http://www.meti.go.jp/policy/anpo/matrix_intro.html (Items subject to the List Control)
When an exporter exports goods or provides technologies overseas, it is necessary to check in advance whether the things it plans to export are subject of the List Control.
See http://www.meti.go.jp/policy/anpo/matrix_intro.html (Items subject to the List Control)
Loaded Container
The container with goods inside.
M
Manifest (M/F)
In marine transportation, a detailed statement of the goods loaded on the ship prepared by the shipping company. Submitted to customs by the shipping company at the port of discharge.
Marine Insurance
A casualty insurance to compensate for the damages caused by accidents to the goods loaded on a ship during marine transportation. Unlike fire insurance or car insurance, which are based on time policy (for example, two years), basically marine insurance is based on voyage policy (transportation section: a period of insurance from point A to point B). Usually it is roughly classified as hull insurance and cargo insurance.
The hull insurance provides coverage for the ship, and in addition to the damages caused to the ship itself, it also covers losses such as food or fuel occurred during accidents and compensations due to collisions.
The cargo insurance covers the damages to the goods transported by ship on international routes. The cargo insurance is classified in three types: the “partial loss free from average” type called FPA (Free From Particular Average), the “with particular average” type called WA (With Average) and the “against all risks” type called AR (All Risks). Among these, the “against all risks” type (All Risks) is the insurance term generally used.
The insurance price (the amount insured) is usually 110% of the CIF price, and this is because an extra 10% is usually added as expected profits.
Regarding the CIF contract, the seller concludes a contract with the insurance company, and regarding the FOB or CFR contract, the buyer concludes a contract with the insurance company.
The hull insurance provides coverage for the ship, and in addition to the damages caused to the ship itself, it also covers losses such as food or fuel occurred during accidents and compensations due to collisions.
The cargo insurance covers the damages to the goods transported by ship on international routes. The cargo insurance is classified in three types: the “partial loss free from average” type called FPA (Free From Particular Average), the “with particular average” type called WA (With Average) and the “against all risks” type called AR (All Risks). Among these, the “against all risks” type (All Risks) is the insurance term generally used.
The insurance price (the amount insured) is usually 110% of the CIF price, and this is because an extra 10% is usually added as expected profits.
Regarding the CIF contract, the seller concludes a contract with the insurance company, and regarding the FOB or CFR contract, the buyer concludes a contract with the insurance company.
Marine Insurance Policy
The certificate the insurance company writes and issues to the insurer as evidence of completion of a cargo marine insurance contract and its content.
Master B/L
The bill of lading issued by the shipping company.
MFN (Most Favored Nation Treatment)
With commercial treaties, permanently granting the most advantageous terms of trade to a country through preferential measures, such as customs duty. It is stipulated that all the WTO member countries should accord the Most Favored Nation Treatment equally to all the WTO member countries. A temporary Safe Guard, the Economic Partnership Agreement (EPA) and the Free Trade Agreement (FTA) are accepted as exceptions.
Minimum Charge (M/M)
In trade, the minimum charge set by the shipping company or the airline company. For example, for a freight of 50 dollars per ton, if the minimum charge is 100 dollars, at least a freight equivalent to 2 tons (100 dollars) will be paid regardless of how small the quantity is.
N
Negotiating Bank
The bank that undertakes the shipping documents together with the export bill of exchange issued by the exporter based on the letter of credit (LC).The negotiating bank agrees to pay after confirming that the bill and shipping documents correspond to the terms of the letter of credit and also that there are no inconsistencies between the documents. Usually the negotiating bank pays the face amount of the bill to the exporter immediately and it receives the export price from the exporter’s bank (the bank issuing the letter of credit) only after that. The interest rate up to the actual date of remittance paid in advance by the importer’s bank to the negotiating bank will be charged to the exporter later. When undertaking an export bill of exchange without a letter of credit (L/C), such as for a D/P (Document against Payment) or D/A (Document against Acceptance), the risk of transaction is high as long as there is no payment guarantee from the bank in the importing country, and there are cases the exporter’s negotiating bank refuses to undertake it.
Non-Calling Certificate (Routing Certificate)
Related to the Middle East countries’ boycott of Israel, a document proving that the ships or aircrafts headed for Middle East don’t have a record of calling at Israeli ports. Issued by shipping companies, airlines or their agents.
Notify Party
One of the items mentioned in the bill of lading (B/L) representing the party that the shipping company notifies when the cargo has arrived at the port of discharge.
NVOCC
The forwarder specialized in handling the marine cargo.
O
Ocean Freight
The charge for the marine transportation of cargo. Paid to the shipping company. Also referred to as sea fare. The market prices are formed mainly according to supply and demand situations, and the ocean freight might become the reason of fluctuations in commodity prices. Similar to the air freight, in addition to the basic freight, extra charges called surcharges (BAF, CAF, etc.) may also be applied.
Offer
The quote that the seller submits to the buyer ahead of the export contract. The buyer requesting the seller a quote is referred as inquiry, and usually the seller submits the offer upon the receipt of the inquiry.
On board B/L (Shipped B/L)
Regarding the bill of lading, the bill of lading (B/L) issued after the goods were actually loaded on the ship. In contrast to this, the bill of lading issued when the cargo was transferred at the shipping company’s container yard (CY) or container freight station (CSF) is called received bill of lading (received B/L). In general, it can be assumed that if the text written in English in small letter starts with “Shipped”, the document is an on board bill of lading.
On Deck
Loading on the deck the goods that cannot be loaded in the ship’s hold. Especially for conventional ships, because the goods have an increased risk to be damaged through jettison or washing overboard than the ones loaded in the hold, usually the marine cargo insurance doesn’t provide coverage unless the goods are not covered by a special contract.
Open Top Container
A special container having a removable sheet fixed on its roof. Stevedoring is possible through the upper part of the container and it is suitable for transportation of lengthy and oversized goods difficult to carry in and out through the side door of the container. It is also possible to load goods taller than the container.
Order B/L
One type of bill of lading (B/L). “To Order” or “To Order of XXXX” is mentioned in the Consignee column. The XXXX in “To Order of XXXX” refers to the payee. The bill of lading (B/L) in which “To Order” or “To Order of Shipper” is mentioned in the Consignee column is called simple order B/L or payee order B/L, and regarding this type of bill of lading, the consignor (Shipper) sends the B/L to the negotiating bank issuing the letter of credit (L/C) after making the blank endorsement.
P
Packing List (Detailed Packing List)
Detailed packing list prepared by an exporter, an important document necessary during customs clearance. The information regarding the exporter and importer, ship name, port of departure, port of loading, port of destination, cargo details, quantity, packing unit, net weight, gross weight, capacity, shipping mark, etc. are mentioned.
Pallet
A board for loading cargo used for transporting, storing, loading and unloading goods. While carrying goods, they are put on this board and lifted using a forklift. The slatted wood pallets are the most common, however resin pallets are also often used for exports. In order to export using pallet packing, palletizing should be properly done to avoid cargo shift during transportation.
Panamax
The size of the ship that can tightly traverse the Panama Canal that links the Caribbean Sea to the Pacific Ocean. The ships authorized to pass through the Panama Canal are ships less than 294 meter in total length and 32 meter in total width.
Particular Average
A provision regarding damages and expenses caused when a ship suffers an accident, under which the owner is the sole bearer. On the other hand, proportionally sharing and supporting the damages and expenses between the parties involved is called general average.
Port of Destination
The port where the cargo is finally unloaded.
Port of Discharge
The port where the international transportation cargo is unloaded.
Port of loading
The port where the cargo is loaded on the ship. Mentioned in the bill of lading (B/L).
Port of Origin (Port of Exit)
The port where the cargo was initially loaded on the ship.
Preferential Rate
A tax rate established by the Act on Temporary Measures Concerning Customs. It is one of the statutory tariffs together with the general rate of duty and the temporary rate, a solution to the North-South problem by which rates lower than the usual customs tariffs are applied to goods imported by developed countries from developing countries.
Price Term
Incoterms such as the CIF or FOB terms, and terms regarding which currency is used.
Prior Instruction System by Japan Customs
The system by which the person planning to import the cargo can inquire and receive a response from the customs before actually importing, regarding the customs duty classification and tariff rates at the time the cargo will actually be imported. When the inquiries are submitted in a written form, in most cases a written response from the customs is received within a few days to a few weeks. As for the content of this response, it is highly appreciated during the examination of the import declaration, within three years after the response is issued by customs.
Processing Deal Trade
A form of trade by which a consignor offers materials, a contractor processes them and then processed products are imported. When the contractor is in Japan (the products are exported from Japan) it is called a processing deal, and when the consignor is in Japan (the products are imported into Japan) it is called a reverse processing deal.
Processing Trade
A form of trade by which raw materials and semi-processed products are imported, processed and exported, the resulting margin becoming the profit.
R
Reassessment
In trade, the situations when the Chief Customs Inspector modifies the amount of tax, in general when an understatement of the amount of customs duty reported in the import declaration is found. In case of overstatements of the amount of tax, the importer (the taxpayer) can also request a reassessment to the Chief Customs Inspector.
Received B/L
Regarding the bill of lading, the bill of lading (B/L) issued when the cargo was transferred at the shipping company’s container yard (CY) or container freight station (CSF) in the port of loading. In contrast to this, the bill of lading (B/L) issued after the goods were actually loaded on the ship is called on board bill of lading (Shipped B/L or On Board B/L). In general, it can be assumed that if the text written in English in small letter starts with “Received”, the document is a received bill of lading. After the cargo is actually loaded, the shipping company mentions this fact (On Board Notation or On Board Endorsement) adding the loading date and signature, by this being considered to have the same effect as the on board bill of lading.
Registered Customs Specialist (Licensed Customs Specialist)
The person who after having passed the examination for Registered Customs Specialist which is a national qualification, has submitted the necessary items to the Chief Customs Inspector and is engaged in custom-house business. According to the Customs Law, the use of the Registered Customs Specialist title by persons who don’t have this qualification is forbidden. Recently, the Registered Customs Specialist examination pass rate is about 10%.
Regulations for the Carriage and Storage of Dangerous Goods in Ships (Dangerous Goods regulations)
Establishes standards for transportation of dangerous goods by ship, regarding container’s durability, labeling, storage method, etc. It successively implements the international standards provided in the SOLAS convention from 1974, such as the International Maritime Dangerous Goods Code (IMDG Code), the International Code for the Construction and Equipment of Ships Carrying Dangerous Chemicals in Bulk (IBC Code) and the International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk (IGC Code). It is necessary to be familiar with the latest rules regarding the transportation of dangerous goods by ship.
Restricted L/C
The letter of credit (L/C) that appoints a certain bank to undertake the bill. If the appointed bank is not the exporter’s bank, in case the exporter submits the documents (bill of exchange, bill of lading, invoice, etc.) upon undertaking or collection, it is necessary that the negotiating bank sends the documents to the importer’s bank (the bank issuing the letter of credit) through the appointed bank. As a result, this operation leads to an increased cost.
In case the importer brings the documents directly to the bank appointed in the letter of credit (L/C), it is necessary to negotiate the terms of the transaction with the bank.
In case the importer brings the documents directly to the bank appointed in the letter of credit (L/C), it is necessary to negotiate the terms of the transaction with the bank.
Revenue Ton (R/T, Chargeable Weight)
When transporting consolidated cargo (LCL Cargo or CFS Cargo) by ship, the consolidator (forwarder) considers either the weight or volume of the cargo, whichever is higher as the standard for the freight calculation, therefore the revenue ton refers to the weight or volume, whichever is higher in terms of freight. For example, if the freight per one revenue ton is 100 dollar and the cargo has a weight of 1 ton and a volume of 2m3 (cubic meter), the volume being double the weight, the freight will be “100 dollars x 2= 200 dollars”. In this way, when the volume is higher than the weight it is called “yoseki-gachi” (volume basis), and conversely when the weight is higher it is called “juryo-gachi” (weight basis).
Regarding air transportation, the volume (length x width x height in cm) divided by 5000 or 6000 is compared with the weight (kilograms) and the higher number is used.
Regarding air transportation, the volume (length x width x height in cm) divided by 5000 or 6000 is compared with the weight (kilograms) and the higher number is used.
Revolving L/C
A type of letter of credit (L/C) by which, when the importer continuously imports the same product from the same customer, a letter of credit for the amount of one loading is first issued, and when the loading and settlements are completed, a letter of credit with the same amount is automatically renewed. It is used to reduce the cost and burden required for the issue of the letter of credit.
S
Safe Guard
Regarding specific products that face a rapid increase in imports, the measure the government takes by imposing extra duties and restricts the amount of imports, from the perspective of protecting domestic industries. See Emergency Tariff.
Sai
A unit of measurement in the traditional Japanese system of measurement. 1 sai equals 1 cubic shaku (1 shaku = 30.3cm), therefore 30.3 x 30.3 x 30.3 = about 27,818cm³ (about 0.0278m²).
Sales Contract (Sales Note)
In trade, the contract note exchanged when a contract has been concluded. The description of articles, shipment method, delivery date, price terms, terms of payment and other items including the general terms and conditions are mentioned.
Sea Waybill
A document representing the shipping contract for the marine cargo, serving as a documentary evidence that a transportation agreement has been concluded, having the role of receipt of the transported articles. Whereas the bill of lading (BL) is a valuable paper, the sea waybill is not a valuable paper, therefore endorsement by transfer is not possible. Receipt of the cargo is possible even without a consignee (importer) submitting the original to the forwarding agent, which leads to reduced paper work, therefore it is used mainly with ongoing transactions with trustworthy partners. Same as the Surrender B/L, in order to certainly deliver the cargo to the legitimate consignee (importer) at the port of discharge, it is basically a registered form specifying the consignee.
Seasonal Duty
The custom duty with rates that vary according to the season of import. Regarding fruits and vegetables that don’t preserve well, being partial regarding the season with a period of abundant supply of domestic products on the market, high customs duties are imposed only for that season on imported products that enter into competition with the domestic products, in order to protect domestic producers. Applied to oranges, bananas, etc.
Shed
Mainly in harbors, the warehouse for sorting and providing a temporary storage for the import/export cargos. Unlike warehouses that are mainly used for storage, the shed’s storage period is up to one month.
Shipper (Consignor)
A consignor mentioned in the bill of lading (B/L). Usually it is an exporter.
Shipping Advice (S/A, Shipper’s Letter of Instruction)
A document by which the exporter notices an importer about loading completion after finishing loading an export cargo. Usually, it is sent together with the invoice, packing list and other shipping documents.
Shipping Conference (Freight Conference)
An international cartel within which shipping agents who operate ocean liners on the same route hold discussions regarding the freight, in order to limit and regulate reciprocal competition and to maintain mutual profits. Ships of the shipping companies who are members of the Shipping Conference are called conference ships, and the ships that are not members are called non-conference ships. Recently, there is a tendency to decide the freight based on negotiations between shipping companies and owners of goods, without applying the restrictions of the Shipping Conference.
Shipping Instruction (S/I)
The document created by an exporter and sent to a customs broker when requesting customs clearance, mentioning matters based on the content of the bill of lading (B/L) used for exporting a cargo. Usually, the invoice and packing list are sent together.
Shipping Mark (Cargo Mark)
The alphanumeric characters or marks displayed on the exterior of commercial cargos. Basically, it is necessary to mention an easy-to-understand mark for each packing unit for identification of cargos, especially when transporting less-than-carload cargos (LCL).
Shoring
In trading, a method of fixing goods with square timbers or plywood, in order to avoid cargo shift inside the container during transportation. The shoring fee paid by the owner of goods to a forwarding agent is called a shoring fee.
Short Drayage
In marine transportation, it usually refers to overland transportation on a relatively short distance of a container filled with goods, such as from a container yard (C/Y) to a bonded warehouse.
Simplified Duty Rate
A simplified duty rate established for accompanied personal effects or unaccompanied articles of tourists and other persons entering Japan.
Skid (S/D, Skid Packing)
A simple packing method which consists of stacking goods on a base made of square timbers.
SOLAS Convention (International Convention for the Safety of Life at Sea)
The international convention for ensuring safety of ships, established in response to the Titanic disaster in 1912. The “International Convention for the Safety of Life at Sea” held in 1914 with the participation of main European and the U.S. maritime transportation countries, adopted equipment of lifeboats and Morse radio system, and abolition of lifesaving order based on passenger classes. However, due to the outbreak of the World War I, the revision could not come into force.
After that, the revised convention was concluded in 1929 and took effect in 1933. The actual convention is the SOLAS Convention from 1974 in its successively revised forms. Recently, a revision was made in 2002, following the terrorist attacks to the U.S. on September 11, 2001, by which counterterrorism policy to reinforce security measures for ships and harbors became a mandate.
After that, the revised convention was concluded in 1929 and took effect in 1933. The actual convention is the SOLAS Convention from 1974 in its successively revised forms. Recently, a revision was made in 2002, following the terrorist attacks to the U.S. on September 11, 2001, by which counterterrorism policy to reinforce security measures for ships and harbors became a mandate.
Stevedore (Steve)
An operator who loads a cargo for export on a ship and unloads an imported cargo.
Stevedoring (Loading and Unloading, Handling the Cargo)
Work of loading and unloading a truck or cargo.
Straddle Carrier
A transportation device for containers. A self-propelled, vertically long vehicle running on rubber tires, providing space for storage of maximum four containers stacked vertically in its rectangular body. After an imported container is unloaded from a ship with a gantry crane brought along a wharf, it is carried to a container yard with a straddle carrier, and when carrying the container out of container yard, the container is moved to a chassis using also a straddle carrier. Conversely, the straddle carrier moves the container for exporting from a container yard to the gantry crane at wharf. Because the device must be able to be moved and operated freely to the place of the container, the driver’s seat is installed not in the running direction, but in a position that allows lateral sight.
Surcharge
In marine or air transportation, regarding expenses caused by the exchange rate or fuel prices, extra fees demanded by the shipping company or airline to the owner of the goods on top of the usual freight. Because increase in usual fares triggers the owners’ protest, given that the cause of these price fluctuations is a factor that doesn’t depend on each company’s marketing efforts, the surcharge is charged separately from the usual freight.
Some examples are Fuel Surcharge (BAF, Bunker Adjustment Factor), CAF (Currency Adjustment Factor), Peak Season Surcharge (PSS), Port Congestion Surcharge (PCS), etc.
Some examples are Fuel Surcharge (BAF, Bunker Adjustment Factor), CAF (Currency Adjustment Factor), Peak Season Surcharge (PSS), Port Congestion Surcharge (PCS), etc.
Surrender B/L
One of the ways of processing a bill of lading (B/L). Through an endorsement made by an exporter in all of the original bills of lading (Original B/L) issued by the shipping company from the place of loading, the shipping company collects all of the bills of lading emitted in the same time from the exporter. A bill of lading with the stamp SURRENDER (or TELEX RELEASE) is handed to the exporter, however this is just a copy and not a valuable paper as the original bill of lading. The exporter sends the copy of the bill of lading stamped with SURRENDER to the importer via e-mail. The shipping company from the place of loading announces the shipping company of the importer that the bill of lading is treated as a surrender bill of lading, and the importer receives the cargo without presenting the original bill of lading to the shipping company. Surrender means that the exporter surrenders the ownership rights of the cargo (the shipping company collects them). In the case of Chinese and South Korean coasting routes, on which ships arrive at the import ports in few days from departure, because the arrival of the cargo is faster than the time it takes to send the original B/L to the importer, a surrender B/L is used. Same as the sea waybill, in order to certainly deliver the cargo to the legitimate consignee (importer) at the port of discharge, the surrender B/L is, basically, a B/L specifying the consignee, in the form of a straight bill of lading (Straight B/L).
T
Tariff (Rate of Duty)
The ratio used to calculate the amount of tax. According to the type of tax, the base of taxation, which becomes the base for the tax amount calculation, may be determined by price or by quantity.
Tariff Code (H.S. Code, Harmonized Commodity Description and Coding System Import/Export Harmonized System, Customs Duty Number, international standardized system for the classification of traded products, a standardized system for the names and categories of traded products, commodity code)
See H.S. Code
Temporary Rate
The temporary tax rate established by the Act on Temporary Measures concerning Customs for about 500 articles. It is one of the statutory tariffs together with the general rate of duty and the preferential rate, always applied with priority over the general rate of duty.
THC (Terminal Handling Charge, CY Charge, Empty Container Handling Charge, ECHC, Container Handling Charge)
Surcharge paid by an owner of the goods to a shipping company under the name of work charges, for handling the goods in the container yard managed by the shipping company. The charge varies according to the destination.
The Customs Law
The law that provides necessary matters for proper enforcement of customs procedure regarding the determination, payment, collection and refund of customs duty, and importing and exporting of goods. Along with the Customs Tariff Law, it is a basic law of the customs duty system. The law took effect in 1954.
The Customs Tariff Law
The law that provides matters regarding customs duty tariff rates, base of taxation, tax reductions and exemptions, etc. The law took effect in 1911.
The List of Suspicious End Users (Foreign Users List)
The information including names of foreign companies and organizations who are suspicious of developing mass destruction weapons, provided from the Ministry of Economy, Trade and Industry of Japan to exporters. Listed on the website of the Ministry of Economy, Trade and Industry and frequently updated. As of 2013, organizations from Afghanistan, United Arab Emirates, Israel, Iran, India, North Korea, Syria, Taiwan, China, Pakistan and Hong Kong are listed. Exporters have an obligation to confirm that the user of the exported goods is not mentioned in the list in advance, and basically, for exporting to organizations mentioned in the list, authorization of the Minister of Economy, Trade and Industry is required.
Through Bills of Lading (Combined Bill of Lading, Through B/L)
A type of B/L by which transportation from a place of receipt of goods to the final destination is covered by a single B/L (bill of lading), despite the fact that transportation of the cargo is done by several carriers. By concluding a special contract between each carrier beforehand, the carrier who first receives the goods from the owner can issue a B/L valid up to the final destination.
Tractor Head
A vehicle that attaches and pulls a chassis. Head. (See Trailer.)
Trailer
The rear part of a type of motor-truck (traction vehicle) with which the front power unit where a driver sits and the rear unit to accommodate the cargo can be separated. The front towing part with the driver’s seat is called tractor. With normal trucks, the front unit with the driver’s seat (cab) and the back unit are connected and cannot be separated. However, the motor-truck type with which front power unit equipped with an engine (tractor) and back unit carrying the cargo (trailer) can be separated is called tractor-and-trailer. It is also called chassis or towed vehicle. Because the front and back units can bend at curves, the radius of rotation is small, making possible a U-turn on roads that have four traffic lanes for each direction. Because the front and rear units can be separated, when unloading the goods (stevedoring) there is advantage that the front power unit is not necessary. Because both of tractor and trailer are legally considered vehicles, each of them have different license plates.
Transit Time
The time spent transiting. In marine transportation, the number of days from departure from the port of loading to arrival at the port of destination.
Transshipment (T/S, Transhipment)
Transferring the cargo on another ship in a port on the way, so that not only one ship is used for transportation from the port of loading to the port of destination. Ports where transshipment is often performed are Singapore, Hong Kong, Pusan, etc.
Triangular Trade (Intermediary Trade, Intermediary Trade, Third-Country Trade)
Intermediating trade from a foreign country to another foreign country. For example, a transaction in which a Japanese company buys goods from China and sells them in the U.S. In such cases, the cargo is exported from China directly to the U.S., but the settlement is intermediated by the Japanese company. Also called a third-country trade.
Triaxle-Chassis
A type of chassis with three axles for transporting containers (the same as the number of tires when looking from just beside at the chassis, which is the platform under the container). There are also two-axle chassis.
When using a triaxle chassis, heavier goods can be loaded than when using a two–axle chassis. If transportation is done using a triaxle chassis, on a 20-feet container the maximum payload is [〓container gross weight 24,000kg - the container net weight about 2,300kg (an example of an iron container. The weight of the containers varies.) = about 21,700kg] and for a 40 feet container the maximum payload is [container gross weight 30,480kg - the container net weight about 3,800kg (an example of an iron container) = about 26,680kg].
When using a triaxle chassis, heavier goods can be loaded than when using a two–axle chassis. If transportation is done using a triaxle chassis, on a 20-feet container the maximum payload is [〓container gross weight 24,000kg - the container net weight about 2,300kg (an example of an iron container. The weight of the containers varies.) = about 21,700kg] and for a 40 feet container the maximum payload is [container gross weight 30,480kg - the container net weight about 3,800kg (an example of an iron container) = about 26,680kg].
U
UCP (The Uniform Customs and Practice for Documentary Credit)
Regulations that provide definitions of technical terms and instructions regarding handling of letters of credit (L/C) for smoother trade transactions. Formally, it is called Uniform Customs and Practice for Documentary Credit. Established by the International Chamber of Commerce in 1993, the latest version available presently is the UCP600 revised in 2007.
UN Number
The four-digit numbers assigned to hazardous elemental substances (for example: Arsenic UN No. 1558) mentioned in the list of hazardous goods specified by the UN Committee of Experts on the Transport of Dangerous Goods, established within the UN. Or, the four-digit numbers assigned to groups of dangerous substances with similar properties (for example: alcohols, not otherwise specifies, UN No. 1987). Presently, numbers from No. 0004 to No. 3506 are assigned. Numbers are not assigned to non-hazardous goods, therefore the articles having assigned the UN numbers can be considered hazardous.
The hazardous goods are classified in the nine categories below:
The hazardous goods are classified in the nine categories below:
- Explosives
- Gases
- Flammable Liquids
- Flammable Solids
- Spontaneously Combustible Solids
- Dangerous When Wet
- Oxidizing Agents
- Organic Peroxide
- Toxic Substances
- Infectious Substances
- Radio Active Substances
- Corrosive Substances
- Miscellaneous
V
Value for Customs Duty
The commercial value of the cargo that becomes the basis of calculating the amount of tax such as customs duty or consumption tax. Under the WTO Customs Valuation Agreement, each member country establishes the standards in CIF or FOB. Japan, EU, China, South Korea, India, ASEAN, etc. use the CIF value as a standard, and the U.S., Australia, Canada, New Zealand, etc. use the FOB value as a standard.
Vanning
Filling goods in an empty cargo container.
Vanpool (VP, Empty Container Depot, ECD)
The place for storing empty containers in ports.
W
WCO (World Customs Organization)
An international organization founded in 1952, aiming to provide an effective administration of the customs systems of member countries.
Headquartered in Brussels, Belgium, with 179 countries and regions member as of 2014.
Headquartered in Brussels, Belgium, with 179 countries and regions member as of 2014.
Weighing Machine
It is called Kankan in Japanese. The process of weighing the weight of the cargo or the weighing machine.
White countries
Complementary Export Regulation. See Catch-All Controls.
Wholly Obtained or Produced Goods
The goods whose production is completed in a single country. For example, harvested agricultural/fishery products, extracted mineral goods, hunted animals, scrap and waste resulted during production or items collected after that, and goods produced using only wholly obtained materials as resources. Attention needs to be paid to point that the scrap and waste resulted during production process are specified as Wholly Obtained or Produced Goods.
WTO (World Trade Organization)
An international organization that regulates international trade rules for promotion of free and fair trades. Headquartered in Geneva, Switzerland. Founded in 1995 as the successor of the former GATT (General Agreement on Tariffs and Trade). One of the WTO agreements, DSU (Understanding on Rules and Procedures Governing the Settlement of Dispute) regulates the means of settling disputes regarding trade between the member countries, handling a large number of issues. The main non-member countries as of 2014 are North Korea, Somalia, East Timor, Eritrea, Tuvalu, Kosovo, South Sudan, Turkmenistan, Palau, Monaco, San Marino, Kiribati, Micronesia, Cook Islands, Marshall, Nauru, etc.