| ABOUT RITA | CONTACT US | PRESS ROOM | CAREERS | SITE MAP |
|
|
|
Intermodal Cargo Transportation: Industry Best Security Practices Previous Section | Table of Contents Appendix D: Defining TermsTo clarify the terms used in this report, this section provides definitions and descriptions to support improved understanding of findings and recommendations. As used in this report, the transportation infrastructure assurance concept is applied to cargo terminals exclusively. To avoid the confusion that occasionally hinders dialogue between multiple modes, the following definition of cargo terminal was used to guide all project activities:
There are hundreds of cargo terminals throughout the United States. Regardless of variations in location, design, and operation, all cargo terminals perform similar functions: cargo transfer operations, cargo staging, modal staging (trailers/tractors/cars/trains), gate operations, storage, and security. In the United States, cargo transportation is often characterized as a hub and spoke system with cargo terminals providing the vital hubs that concentrate loads for long haul, transfer bulk or break-bulk goods from ship to other modes, or prepare received shipments for local delivery. There are several types of terminals that support cargo operations:
Within cargo terminals, transfer facilities manage the actual movement of cargo from one mode of transportation to another. In the case of container cargo, standardized containers expedite this process, with quick, simple adjustments to release them from one mode and connect them directly to another (either a rail flatbed, truck chassis, ship, barge, etc.). Requirements for drayage and storage can be minimized by precision delivery scheduling (assuring that the next mode is in place to receive the cargo of the previous one). Roll on - Roll off cargo is simply driven from one mode to the next. Bulk cargoes (liquid or solid) generally are transferred from an intermediate facility such as a tank farm, silo, or storage yard or from a vessel. Break bulk cargo is the most labor intensive and requires removal from one mode, usually by crane or lift, drayage to staging for the next mode (or intermediate storage), and final handling to load the cargo to the next transportation mode. Definitions for other terms used in industry and government within the transportation and law enforcement areas include the following: ACCOUNT PARTY: The party instructing the bank to open a letter of credit on whose behalf the bank agrees to make payment. In most cases, the account party is an importer or buyer, but may also be a construction contractor or a supplier bidding on a contract. AD VALOREM: "According to the value" Used for customs duties that are fixed as a percentage value. ADVISED CREDIT: A letter of credit that has been advised by another bank without engagement on the part of that bank. An advising bank has the obligation to take reasonable care to check the apparent authenticity of the credit, which it advises. ADVISING BANK: A bank, operating in the exporter's country, that handles letters of credit for a foreign bank by notifying the export firm that the credit has been opened in its favor. The advising bank fully informs the exporter of conditions of the letter of credit without necessarily bearing responsibility for payment. ADVISORY CAPACITY: A term indicating that a shipper's agent or representative is not empowered to make definitive decisions or adjustments without prior approvals of the group or individual represented. AGENCIES: The right given by an individual, body, or firm to another person or company to act on its behalf. An agency may be classified as:
AGENT: A person or company acting as an AGENCY, authorized to act on behalf of its principal. The agent is very important in that he will be the owner's representative who has to act promptly and effectively to deal with problems. The agent is duty bound to follow the owner's instructions and may indicate on whose authority he is acting. There are many levels of representation characterized as agent, including managing agent or MANAGING OWNER, which may actually be the owner of the ship. Typically the agent handles all formalities for a ship's entry into port, during customs clearance, and up to time of sailing. The agent arranges with the authorities for the allocation of berthing space, advises cargo owners of the availability of the ship or cargo (depending on whether the cargo is for export or import), organizes loading and unloading, and provides for provisioning through a ship CHANDLER. AIR WAYBILL: A document issued by an air carrier or fright forwarder that gives evidence of the shipment and/or delivery of goods for shipment by air. It is non-negotiable and is generally consigned to the buyer, the buyer's agent, or to the seller's local agent. ARREST: An official order enforced as a matter of law against a ship for actions against the laws of the government ordering the arrest, or as a means of enforcing a maritime LIEN. AUTHORITY TO PAY: (Often mistaken for letter of credit) An authority to pay is an advise stemming from a buyer, addressed through the buyer's bank to the seller, by way of the correspondent bank to pay the seller's drafts for a stipulated amount. The Authority to Pay may be canceled or modified before the drafts are presented. Once the drafts drawn on the correspondent bank are paid by it, the seller is no longer liable as drawer. Usually not offered by U.S. Banks. AUTHORITY TO PURCHASE: This document, while similar to the Authority to Pay, differs in that under an Authority to Purchase the drafts are drawn directly on the buyer. They are purchased by the correspondent bank with or without recourse against the drawer. Usually not confirmed by the US bank. Authority to purchase is used primarily in the Far East. AWAITING ORDERS: A ship is awaiting orders when it has not been instructed where it is to discharge its cargo, or when its next employment is undetermined. A ship legitimately DECLARING that it is awaiting orders may be underway (but usually near a discharge port), at anchor in a holding area, or adrift on the high seas outside normal shipping lanes. BACK-HAUL: The return movement of a vehicle from original its destination to original origin. BACK-TO-BANK LETTERS OF CREDIT: A letter of credit supported by ("backed by") a separate letter of credit having nearly identical documentary requirements, but with four features normally differing:
BALLAST, IN-BALLAST: A ship is in ballast when it is empty of cargo, but has an amount of (usually) sea water in ballast tanks. This serves to keep the propeller and rudder effectively submerged, and to keep the bows in the water to improve handling and prevent slamming. A ship in ballast may or may not be evenly TRIMMED fore and aft, but will never normally be ballasted so deeply as to approximate the loaded condition; LOAD LINE at or near the water line, A merchant ship on a long voyage will not normally ballast down to replace fuel consumed. Tankers and bulk carriers will normally sail either in an obviously light (ballasted) condition or down to the load line. However, chemical tankers and those carrying refined products will often sail partially loaded. Tankers out of Red Sea ports may sail less than full in order to meet draft. BANK DRAFT: A check drawn by a bank on another bank. This is customarily used when it is necessary for the customer to provide funds which are payable at a bank in some distant location. BANKER'S ACCEPTANCE: A form of credit created when a bank acknowledges in writing on a time draft its obligation to pay face amount to the holder at specific time in the future. BANKER'S BILL: A bill of exchange drawn by an exporter on the importer's bank. BAREBOAT CHARTER: Also known as demise charter. A charter for a long period, where the charterer assumes responsibility for the normal functions of a ship owner; i. e. manning and appointment of officers, payment of running expenses, dry docking, painting, and repair. In some cases, the registry and name of the ship will also be changed. In a bareboat charter, the powers of ownership have been assumed by the charterer, regardless of the registered or beneficial owner of record. In many instances the bareboat charterer becomes the outright owner at the end of the charter period. In others, the owner of the ship through a foreign "paper" company will bareboat charter the ship back to himself, gaining the benefits of control over a ship without having to comply with his own national rules regarding manning and operations. This form of bareboat charter is most common with German owners using Cypriot or Filipino front companies. BENEFICIARY: The party who receives payment upon the conditions stipulated in a letter of credit. This party is usually a seller or an exporter. The person in whose favor a letter of credit is issued or a draft is drawn. BILL OF LADING: The title document issued by a carrier (railroad, steamship, or other common carrier) which serves as a receipt for the goods and is a contract to deliver the goods to a designated person or to his or her order. The bill of lading describes the conditions under which the goods are accepted by the carrier and details the nature and quantity of the goods, name of vessel (if shipped by sea), identifying marks and numbers, designation, etc. The person sending the goods is the shipper or consignor, the company or agent transporting the goods is the carrier, and the person to whom the goods are designated is the consignee. Bill of lading maybe negotiable or non-negotiable. BLOCKED ACCOUNTS: Deposits maintained in a country that does not allow conversion into another currency or removal of the deposits from the country. BONDED WAREHOUSES: A warehouse authorized by customs authorities for storage of goods on which payment of duties is deferred until the goods are removed. BOOKING: An arrangement with a steamship company for the acceptance and carriage of freight. Generally, the first point of contact between the shipper and carrier. Acts as a reservation to hold space on a vessel. BOOT TOPPING: Technically, the area of a ship's hull between the light and full load waterline. Typically, the paint in the area of the ship's hull, which is alternately immersed and exposed as state of loading changes. The boot topping need not stop at, or near, the LOAD WATERLINE, and the amount of exposed boot topping, alone, cannot provide an accurate measure of the state of ship's loading. BROKEN UP: Said of a ship when it has been reduced to scrap metal. Ships may be removed from service and DISMANTLED but remain in existence as floating storage or in service as barges. Ships sold to be broken up may continue in service for indefinite periods of time. It is very common for a ship to carry a final cargo, often of scrap metal, on its delivery to the breakers. BROKER: An intermediary who negotiates terms for charters, insurance, sales and purchase of ships, and/or generation of cargo. Not normally the owner of a ship nor of the cargo being negotiated. BUNKERS: Fuel consumed by the engines of a ship, or the, compartments in which such fuel is carried. BUYER CREDIT: A credit arrangement established for financing of imported products with the buyer carrying the credit obligation. Recourse is to the buyer and the strength of the credit rests on the credit worthiness of the buyer. Export guarantee and insurance programs from the country are often available to facilitate such transactions. CABLE TRANSFER: A type of remittance using electronic transmission to move funds from one bank to a named party at another bank. CAMBER: Curvature of a deck such that it is highest fore and aft along the centerline and curves downward at the sides. Provides strength and facilitates rue-off of waves. CAPTIVE REGISTER: A REGISTER of ships maintained by a territory, possession, or colony primarily or exclusively for the use of ships owned in the parent country, Also referred to as an OFFSHORE REGISTER, and the "offshore" equivalent of an INTERNAL REGISTER. Ships on a captive register will fly the same flag as the parent country, or a local variant of it, but will be subject to the maritime laws and taxation rules of the offshore territory. Although the nature of a captive register makes it especially desirable for ships owned in the parent country, like the internal register the ships may also be owned abroad. The captive register then acts as a flag of convenience register, except that it is not the register of an independent state. CARGO: Traditionally defined as "freight loaded unto a ship or vehicle," cargo is frequently classified as either containerized or non-containerized. Containerized cargo:
Non-containerized cargo includes three categories of shipped goods:
Neo-bulk cargo, though historically classified as general cargo, moves in volume, usually on specialized or dedicated vessels or vehicles. Examples include automobiles, steel, logs, and cattle. CARNET: A customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries (for display, demonstration, or similar purposes) without paying duties or posting bonds. CARRIER: Any person or entity who, in a contract of carriage, undertakes to perform or to procure the performance of carriage by rail, road, sea, air, inland waterway or by a combination of such modes. Also, the issuer of a Bill of Lading (BOL). CASH AGAINST DOCUMENTS (CAD): Payment for goods in which a commission house or other intermediary transfers title documents to the buyer upon cash payment. CASH IN ADVANCE (CIA): Payment for goods in which the price is paid in full before a shipment is made. This method is usually used only for small purchases or when goods are built to order. CASH WITH ORDER (CWO): Payment for goods in which the buyer pays when ordering and in which the transaction is binding on both parties. CELLULAR VESSEL: Ship specially designed and arranged for the carriage of containers. Holds or cells are arranged so that the containers are lowered and stowed in a vertical line and restrained at all four corners by vertical posts. Normally stowed containers sit up to seven high below decks and three to four high above decks. CERTIFICATE OF INSPECTION: A document that notes the condition of the merchandise immediately prior to its shipment. CERTIFICATE OF MANUFACTURE: A statement (often notarized) in which a producer of goods certifies that manufacture has been completed and that the goods are now at the disposal of the buyer. CERTIFICATE OF ORIGIN: A document in which the exporter certifies to the place of origin (manufacture) of the merchandise to be exported. Sometimes these certificates must be legalized by the consul of the country of destination, but more often they may be legalized by a commercial organization, such as a Chamber of Commerce, in the country of manufacture. Such information is primarily to comply with tariff laws. CGS - CONTAINER FREIGHT STATION: A warehouse facility, either on-dock or off-dock, where less-than-containerload (LCL) shipments are consolidated into full container load shipments. CHANDLER: A merchant who supplies ships with stores and provisions. CHARTER: The hiring of a vessel or part of its capacity. Chartering activity is one of the least reported of legitimate maritime operations; most deals being made on a private and confidential basis. Only approximately 50% of charters are ever reported in commercial shipping sources. Charters of less than a full ship (SPACE CHARTER, SLOT CHARTER) are almost never reported. CHARTER PARTY: The basic document between vessel owner and charterer setting forth the type charter, duration, and rates of payment, tonnage, capacity and condition of the vessel course it is to pursue, loading and discharge ports, redelivery port, responsibility for bunkering, insurance, manning, end operations. CHARTERED SHIP: A vessel under lease by its owner to others. CHARTERING TERMINOLOGY: See individual entries for:
CHASSIS: A trailer constructed to accommodate containers which are moved over-the-road. CHIPS: An acronym for the Clearing House Interbank Payments System, a computer system operated by New York banks to settle international payments. Using CHIPS, checks are cleared, other instruments are exchanged and net balances are settled among banks. CLEAN BILL OF LADING: One in which the goods are described as having been received in "apparent good order and condition" and without qualification. CLEAN COLLECTION: A collection in which a check or draft is present for payment without additional attached documentation. CLEAN CREDIT: A letter of credit payable upon presentation of a draft, not requiring any other payment. CLEAN DRAFT: A draft to which no documents have been attached. CLIP ON UNIT: A piece of refrigeration equipment which can be attached to an insulated (refrigerated) container or hung on the underside of a chassis to supply power to a container which does not have its own self sustaining refrigeration unit. COLLECTING BANK: A bank that acts as an agent for the remitting bank. The collecting bank demands payment from the buyer and handles the funds received as instructed: generally, the funds are sent back to the remitting bank. COLLECTION: A financial transaction in which a bank acts as an intermediary between two parties, (usually a buyer and seller located in different geographic areas), to facilitate the collection of a payment. COMMERCIAL ATTACHE: The commerce expert on the diplomatic staff of his or country's embassy. COMMERCIAL BILL: A bill of exchange drawn by an exporter directly on the importer. COMMERCIAL VESSEL: Any MERCHANT SHIP that is engaged in trading for cargo carrying purposes. COMMON CARRIER: A transportation company operating under a certificate of convenience and necessity for the purpose of providing services to the general public at published rates. CONFIRMED LETTER OF CREDIT: A letter of credit, issued by a foreign bank, the validity of which has been confirmed by a US bank. An exporter whose payment terms are a confirmed letter of credit is assured of payment by the US bank even if the foreign buyer or foreign bank defaults. CONSIGNEE: The party for whom the cargo is destined. The receiver of a CARGO. In a BILL OF LADING, not necessarily the end user. CONSIGNOR: The SHIPPER of a CARGO. CONSULAR INVOICE: A document, required by some foreign countries, describing a shipment of goods and showing information such as the consignor, consignee, and value of the shipment. Certified by a consular official of the foreign country, it is used by the country's customs officials to verify the value, quantity, and nature of the shipment. CONTAINER FREIGHT STATION (CFS): The physical facility where goods are received by carrier for loading into containers or unloading from containers and where carrier may assemble, hold, or store its container or trailers. CONTAINER TERMINAL: An area designated for the stowage of cargoes in container; usually accessible by truck, railroad, and marine transportation. Here containers are picked up, dropped off, maintained, and housed. CONTAINER: A truck trailer body that can be detached from the chassis for loading into a vessel, a rail car, or stacked in a container depot. Containers may be ventilated, insulated, refrigerated, flat rack, vehicle rack, open top, bulk liquid, or equipped with interior devices. A container may be 20 feet, 40 feet, 45 feet, 48 feet, or 53 feet in length, 8'0" or 8'6" in width, and 8'6" or 9'6" in height. CORRESPONDENT BANK: A bank that, in its own country, handles business of a foreign bank. COST AND FREIGHT (CFR): A shipping term under which the seller quotes a price including the cost of transportation to the named point of destination. COST INSURANCE AND FREIGHT (CIF): A shipping term under which the seller quotes a price including the cost of goods, the marine insurance, and all transportation charges to the named point of destination. Commonly used commercial practice, especially for import to Third World countries, The cost of cargo includes the costs of transportation and insurance to the delivery port. A ship involved in a CIF delivery will thus normally be on charter to, or under the control of, the exporter. Although the CIF method involves higher cost, the importer need not charter a ship or deal with the myriad of brokers involved in moving and insuring a cargo, and his risk begins only when the cargo leaves the ship, over which he exercises no control. COUNTRY RISK: Financial risk base on the evaluation of political, economic, and social conditions of a country. CREW LEASING: A term which probably describes the managerial function of agreeing to supply an entire "turnkey" crew for a given ship. This term would imply that the crewing management firm which gathered, and certified as competent such a crew, would probably pay them, while collecting its fee from the owner/operator, In this case, then, the crew would work for the crewing manager and not for the ship owner or charterer. CUBED OUT: Said of a ship when it is full by volume without being loaded down to its LOAD LINE and not carrying the full DEADWEIGHT TONNAGE to which it is entitled. CUSTOMS INVOICE: A document that contains a declaration by the seller, the shipper, or the agent of either as to the value of the goods covered. CONTAINER YARD (CY): Point forest for a container. This can be a part of the terminal where vessels are loaded or can be an "off dock" facility which is not apart of the terminal loading area. DEADWEIGHT TONNAGE (DWT): The total carrying capacity of a ship in metric tons. This figure includes the weight of fuel and stores as well as cargo. Current rules of thumb for estimating cargo capacity of a ship (cargo deadweight) are: 95% of deadweight for large tankers and 85& of deadweight for dry cargo/container ships. Smaller, older ships will have lower cargo deadweight as a result of less efficiency in design and higher bunker requirements to support less efficient engines. When military cargo is being carried it is normal for a ship to sail partially loaded, or for the ship to be full by volume before it reaches its limit in weight. The ship is then said to be CUBED OUT. This is partly due to the nature of much military equipment which will not permit stacking, leading to waste of volume. DECLARATION: Statement from a ship on leaving port or passing a reporting station as to its next port of call. Ultimate ports of call can be given and intermediate ports omitted and the presence of a declaration is not, of itself, proof of where a ship intends to proceed. When used legitimately, the declaration that a ship is bound for a given port "for orders" or "AWAITING ORDERS" indicates that the ship is not carrying cargo beyond that port. DEMISE CHARTER: See BAREBOAT CHARTER DISMANTLED: Normally and accurately used to describe the removal of a ship's engines or otherwise having been rendered incapable of self-propelled navigation. Can also be less accurately used interchangeably with SCRAPPED or BROKEN UP. DISPOSAL: Normally the deletion from a fleet or group of ships (such as a company) of an individual ship or group of ships. Ships sold to be BROKEN UP or sold to another registered owner/operator would be referred to as disposed of by the loosing firm. Ships for which charter arrangements are terminated will leave the fleet of a given operator or a service. They would not normally be referred to as having been disposed of, however. A ship may be listed by an owner as "for disposal" when it has been designated as being for sale. The ship can continue to operate or can be laid up, at the owner/operator's discretion, while awaiting the disposal. Ships listed for disposal for scrapping often continue to exist for long periods of time without operating while the owner waits for scrap prices and other conditions to be favorable. DATE DRAFT: A draft that matures in a specified number of days after the date that it is issued, without regard to the date of acceptance. DEPOT: Locations where empty containers are held in storage. DISHONOR: The refusal of a drawee to accept a draft or pay for it when due. DOCK RECEIPT: A receipt issued by an ocean carrier to acknowledge receipt of a shipment at the carrier's dock or warehouse facilities. DOCUMENTARY COLLECTION: A collection in which a draft is accompanied by shipping or other documents. DOCUMENTARY CREDIT: A letter of credit that requires documents to accompany that draft of demand for payment. DOCUMENTARY DRAFT: A draft to which documents are attached DOCUMENTS: Items presented along with the draft. These may include the bill of lading, the commercial invoice, the marine insurance policy or certificate of origin, the weight list, the packing list, and the inspection certificate (or certificate of analysis). Under a letter of credit, the documents must be examined for compliance before the draft is paid. DOCUMENTS AGAINST ACCEPTANCE (D/A): Instructions given by a shipper to a bank indicating that documents transferring title to goods should be delivered to the buyer (or drawee) only upon the buyer's acceptance of the attached draft. DOCUMENTS AGAINST PAYMENT (D/P - Draft: A sight or time draft to which documents are attached. The documents are surrendered to the drawee only when the drawee has paid the corresponding draft. DRAFT (BILL OF EXCHANGE): An instrument, much like an ordinary check in appearance, which is used as a formal demand for payment in a business transaction. DRAWEE: The individual or firm on whom a draft is drawn and who owes the stated amount. DRAWER: The issuer or signer of a draft. DRAWING: Presentation of the draft and documents required by the terms of a letter of credit. DRAYAGE: Trucking which is performed to/from the shipper's location to an interchange point inland or to/from a container yard. Drayage is usually performed by the shipper's trucker, or the carrier's contract trucker. EDI: Electronic Data Interchange. ENDORSEMENT: A signature on the back of a negotiable instrument made primarily for the purpose of transferring the rights of the holder to some other party. It is a contract between the holder and all parties to the instrument. EQUIPMENT INTERCHANGE RECEIPT (E.I.R.): A form used by the parties delivering or receiving containers and container equipment. It is used for equipment control and damage purposes-Synonymous with T.I.R (TRAILER INTERCHANGE RECEIPT). EXPORT BROKER: An individual or firm that brings together buyers and sellers for a fee but does not take part in actual sales transactions. F.A.K.: Freight all kind. F.C.L.: Full container load. The maximum permissible weight for the value of the cargo carried in a container. FEEDER SERVICE: Coastal movements of loaded/empty containers on board smaller container vessels which coordinate with a mother ship for the ocean voyage. FEU: Forty-foot equivalent unit. Term indicating capacity of container vessel or terminal. FLAG OF CONVENIENCE REGISTER: A national register offering registration to a merchant ship not owned in the FLAG STATE, The major flags of convenience (FOC) attract ships to their register by virtue of low fees, low or non-existent taxation of profits, and liberal manning requirements. True FOC registers are characterized by having relatively few of the ships registered actually owned in the flag state. Thus, while virtually any flag can be used for ships under a given set of circumstances, a FOC register is one where the majority of the merchant fleet is owned abroad. Also referred to as an OPEN REGISTER. FLAG STATE: The nation in which a ship is registered and which holds legal jurisdiction as regards to operation of the ship, whether at home or abroad. Differences in Flag State maritime legislation determines how a ship is manned and taxed, and whether a foreign owned ship may be placed on the register. FOREIGN DRAFT: A draft drawn by a bank on a foreign correspondent bank and sent to the payee. FOUL BILL OF LADING: A receipt for goods issued by a carrier with an indication that the goods were damaged when received. FREE ALONGSIDE (F.A.S.): A shipping term under which the seller quotes a price including delivery of the goods alongside the vessel and within reach of its loading tackle. FREE ON BOARD (FOB): The term used when the buyer of the goods being shipped assumes ownership, responsibility, and financial risk when the cargo is on board the ship (legally, when it passes over the ship's rail.) A ship on charter to carry a cargo on a FOB basis will therefore, normally, be on charter to the purchaser of the cargo, and not the exporter. This is typically the method used in Third World countries to generate payments quickly (when the cargo is loaded) and to avoid the financial risk associated with having to deliver the cargo to its destination. FREEBOARD: Vertical measurement taken amidships from the Load Waterline, or LOADLINE, to the underside of the FREEBOARD DECK. FREEBOARD DECK: Uppermost watertight deck or deck having weather openings capable of being hermetically sealed. FREIGHT: Transportation charges for CARGO carried by a ship. FREIGHT FORWARDER: A carrier that collects small shipments from shippers, consolidates the small shipments and uses a basic mode to transport these consolidated shipment to a destination where the freight forwarder delivers the shipment to the consignee. A person whose business is to act as an agent on behalf of the shipper. A freight forwarder frequently makes the booking reservation. An independent business that handles export shipments for compensation GROSS TONNAGE (GRT): A statutory measure of permanently enclosed volume in a merchant ship. Originally 100 cubic feet of space equaled one gross ton, and there has never been a way to convert GRT to weight of ship or cargo. A 1969 convention resulted in international agreement on a formula yielding a pure number that relates neither to space nor to weight. The convention also eliminated a situation in which differences in national rules resulted in sometimes-radical changes in a ship's GRT when it changed flag. The GRT, and numbers derived from it, such as Net Registered Tonnage (NRT), form the basis for national registration fees and port and canal dues. While it gives a good approximation of relative size of two ships of the same type, it is a misleading measure of carrying capacity. When cited in reports, GRT is most useful as a means of differentiating a ship from other possible ships of the same name. HOG, HOGGING: A ship is said to be hogged when the ends of the ship are depressed below the center. This may result from improper cargo stowage, with too much weight at the ends. It is a naturally occurring tendency when a ship is suspended at the crest of a wave with each end relatively unsupported. May cause strain and buckling of hull plates, and in extreme cases, breaking in two. A ship without SHEER will give the impression of being hogged. HOUSE CARRIER: A trucking company that has a contractual relationship with a carrier. IDLE: A merchant ship may be idle between periods of employment carrying cargo. Nevertheless, the ship will be fully provisioned and manned, as opposed to when it is in a LAYUP status. IMO NUMBER: A seven-digit number allotted to every merchant ship hull which is its internationally recognized identity number, introduced by International Maritime Organization (IMO) resolution to assist registration and combat fraud. For ships of all Flags and registries this is the same as the Lloyd's Register Number or LRN. INLAND BILL OF LADING: A bill of lading used in transporting goods overland to the exporter's or from the importer's international carrier. A through bill of lading is many times substituted for an inland one. INLAND CARRIER: A transportation line that hauls export or import traffic between ports and inland points. INTERMODAL: Used to denote movements of cargo containers interchangeable between transport modes, i.e. motor, water, and air carriers, and where the equipment is compatible within the multiple systems. INTERMODAL TRANSPORT: The capability of interchange of freight containers among the various transportation modes. The fact that the containers are of the same size, and have common handling characteristics, permits them to be transferred from truck to railroad to air carrier to ocean carrier, in a complete origin-to-destination movement. INTERNAL REGISTER: A register of ships maintained as a subset of a national register. Ships on the internal register fly the national flag and have that nationality, but are subject to a separate set of maritime rules from those on the main national register. These differences may include lower taxation of profits, manning by foreign nationals, and ownership outside the flag state (when it functions as a flag of convenience register), The Norwegian International Ship Register and Danish International Ship Register are the most notable examples of an internal register. Both have been instrumental in stemming flight from the national flag to flags of convenience and, to an extent, in attracting foreign owned ships to the Norwegian and Danish flags. IRREVOCABLE LETTER OF CREDIT: A letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee. INSPECTION CERTIFICATE: A certificate usually issued by an independent third party when inspection is called for in the merchandise contract. JOINT VENTURE: A venture or business activity undertaken by two or more people or firms in a merger or partnership, For purposes of maritime joint ventures, the individual ships participating need not be jointly owned, but rather could be contributed to a joint service. Management and operation of ships in a joint venture could be by the original owner(s), by the joint venture company, or by a third party manager hired for this purpose. None of these arrangements would affect ownership, per se, and would not therefore be subject to our routine scrutiny LAYUP: An idle merchant ship will be placed in layup when no immediate employment seems in prospect. Layup will normally involve partial preservation of engineering spaces and removal of all or most of the crew. A laid up ship cannot, therefore, be immediately reactivated. This is different from the case of a ship being DISMANTLED which renders the ship incapable of reactivation without installation of propulsion equipment. LEASE : Not correctly used as the equivalent of CHARTER. A ship may be leased to an operator by the PARENT COMPANY which is not a ship operator. For example, banks frequently become the owners of ships, either intentionally as part of a speculative new building, or unintentionally as part of a repossession. The effect of a lease arrangement will be essentially the same as that of a BAREBOAT CHARTER. LEGAL TERMINOLOGY - See individual entries for: LETTER OF CREDIT: An instrument, issued by a bank upon request by a customer, that states the bank will pay an obligation of its customer's to a third party when certain stated conditions have been met. The two most frequently used letters of credit are the commercial letter of credit, which is used to finance the buying and selling of merchandise, and the standby letter of credit, which is used to support a customer's obligations to perform under a contract. An international business document that assures the seller that payment will be made by the bank issuing the letter of credit upon fulfillment of the sales agreement. LIEN: A legal right by which a person (or company) is entitled to obtain satisfaction of a debt by means of property belonging to the person indebted to him. Maritime liens attach to a ship, its cargo, or the payments received or pending, and are normally enforced by ordering the ARREST of the ship or its cargo. LIGHTERING: The discharge or, more rarely, loading of cargo while at anchor. This is done where port facilities are inadequate, where a port is overcrowded, or where several small cargoes are being consolidated into one. This operation is most common with tankers or with bulk carriers carrying grain, and least common with container ships and roll-on/roll-off ships. LINE: Although often used interchangeably with ship OWNER, the term line correctly refers to a service, usually of regularly scheduled ships over an advertised route. The ships need not, and often do not belong to a single owner. LINE OF CREDIT: A commitment by a bank to a borrower to extend a maximum amount of credit in a series of transactions. A line of credit, acceptance and/or discounting of drafts, multiple loans of drafts, multiple loans of advances and other forms of credit. LLOYD'S REGISTRY NUMBER (LRN): See IMO NUMBER. LOAD LINE: The mark permanently inscribed and painted on the side of a ship, amidships, which designates the greatest depth to which it can be legally loaded. The mark consists of a circle bisected by a horizontal bar. When the circle is half submerged the ship is at its full DEADWEIGHT capacity. Also known as the Plimsoll Mark. The painted BOOT TOPPING of a merchant ship hull does not have to stop at the load WATERLINE and may continue beyond or stop short. The only reliable indicator of whether a ship is loaded or in BALLAST is the relation of the load line to the waterline. MAIN DECK: The uppermost continuous deck of a ship, running fore to aft. Normally, the FREEBOARD DECK. MANAGER: A company which specifically manages (crews, operates, finds cargo for, insures, performs accounting functions for, etc.) a ship or group of ships. May also, in fact own the ships, either as a registered owner or as a parent company (MANAGING OWNER), The manager and charterer, if any, exercise more day-to-day operational control over a ship than does the registered owner or parent company, under normal circumstances. MANAGING OWNER: One, usually of several co-owners, to whom the others have delegated management of the ship or ships. The term managing owner at least implies that the ship is owned by more than one firm or set of partners. MANIFEST: A full list of a ships cargo, extracted from BILLS OF LADING. A copy, known as the outward manifest, is lodged with the customs authorities at the port of loading, Another, the inward manifest, is lodged at the discharge port, with a copy for the ship's agent (now frequently transmitted electronically) so that unloading may be planned in advance. MERCHANT MARINE: All ships engaged in the carriage of goods. All commercial vessels (as opposed to all non-military ships) which excludes tugs, fishing vessels, offshore oil, etc. Also, a grouping of MERCHANT SHIPS by NATIONALITY or REGISTER. MERCHANT SHIP: A vessel that carries goods against payment of FREIGHT. Commonly used to denote any non-military ship, but accurately restricted to commercial vessels, only. NATIONALITY: For a ship this is provided by the flag flown as a result of having been legally entered onto the REGISTER of a country which maintains such a shipping register. All legal jurisdictions over the ship resides with the flag state which grants nationality to the ship, regardless of the nationality or location of the vessels actual owner. NEGOTIABLE INSTRUMENT: Any written evidence of an obligation which may be transferred by Endorsement or by delivery, and of which the transferee may become a holder in due course. Examples include: checks, bills of exchange, drafts, promissory notes and some types of bonds or securities NEGOTIABLE LETTER OF CREDIT: The letter of credit which allows the beneficiary to present the documents and draft to a named bank (the nominated bank) or to any bank willing to negotiate them on or before the expiration date. NEGOTIATE (LETTER OF CREDIT): Giving of value for draft(s) and/or document(s) by the bank authorized to negotiate. NON-VESSEL-OWNING COMMON CARRIER (NVOCC): A firm that consolidates and disperses international containers that originate at or are bound for inland ports. OPEN ACCOUNT (O/A): Open account, no draft drawn. Transaction payable when specified, i.e., RJM: return mail, E.O.M. - end of month; 30 days - 30 days from date of invoice, 2/10/60 - 2% discount for payment in 10days, net if paid 60 days from date of invoice. If no term is specified, O/A usually implies payment by return mail. OPENING BANK: The bank that issues the letter of credit and that makes payment according to the conditions stipulated (also known as Issuing Bank). OPEN REGISTER: See FLAG OF CONVENIENCE REGISTER. ORDER BILL OF LADING: Usually, "To Order" bills of lading are to the order of the shipper and endorsed in blank, thereby giving the holder of the B/L title to the shipment. They may also be to the order of the consignee or bank financing the transaction. Order Bills of Lading are negotiable (whereas Straight Bills of Lading are not). OWNER- (see also MANAGING OWNER, REGISTERED OWNER, PARENT COMPANY), Ambiguous term, which can mean either the registered owner or the parent company which actually controls such matters as the purchase and disposal of the ship. In all cases, the owner is the individual or firm with financial equity or which is considered to be at risk if the ship is lost or libeled. In practical terms, the owner would be the beneficiary of any insurance policy on the ship, but we are rarely in a position to know who those entities are. Owner of ships need not be firms or individuals, at all, but can be countries or ministries of countries. Thus, the REGISTERED OWNER of a Cuban flag-of-convenience ship could be Rose Islands Steamship Company. The PARENT COMPANY might then be Empresa Mambisa. The true OWNER is the Government of Cuba because it owns Mambisa, which owns Rose Islands. PACKING LIST: A list prepared by the manufacturer, detailing the particulars of the merchandise to be sold, including the containers in which the goods are packed, their contents, and the total number of containers. PARENT COMPANY (also referred to, somewhat inaccurately, as BENEFICIAL OWNER) The ultimate ship-owning level in a string of firms, the lowest of which owns individual ships. Thus, properly used, a PARENT COMPANY owns other companies. The parent company may be owned by larger conglomerates which have shipping as subsidiary interests, or by the Government of Countries. PERFORMANCE BOND: A bond issued at the request of contractors to support their commitment to perform under contract. PERFORMANCE CLAUSE: Part of the TIME CHARTER party specifying performance the ship shall be able to attain. If the ship is too slow, or burns too much fuel, the charterer is entitled to recover the cost of time lost or excess fuel consumed. PIRACY: An assault on a vessel, cargo, passengers, or crew, usually from another vessel while at sea by persons acting for personal gain and not acting on behalf of any recognized flag or International authority. Also includes acts of rioters who attack a ship from the shore for the purpose of theft or of passengers who attack the ship and its personnel from on board. PRO FORMA INVOICE: An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value, and important specifications. PROVISIONS: Food and beverages supplied to a ship for its crew and passengers. Included in the meaning of STORES. RAILBILL OF LADING: A document exchanged between a shipper or shipper's agent and a railroad, which describes the required movement of a container via rail. RANGE OF PORTS: A series of ports at which a charter party will permit a ship to discharge, one of which is to be nominated by the charterer by a specific date. Generally expressed by the names of the ports at either end of the range, e. g. the Hamburg Antwerp range. The ship will frequently be underway before the discharge port is known, and could appear to be describing an erratic track or to have given a false DECLARATION as a result. RE-CONSIGNMENT: The act of changing the Bill of Lading as to consignee or destination, while the shipment is in transit. REEFER CONTAINER- Refrigerated container. RE-FLAG: To transfer the registry of an existing, registered, ship from one national authority to another. The normal procedure is to first "sell" the ships to a new REGISTERED OWNER under the jurisdiction of the country to which the ship is being re-flagged. That new registered owner then registers the ship under the new flag and may, or may not, depending on the requirements of the maritime laws of the countries involved, terminate the old register. At the most basic legal level, re-flagging changes the set of national laws and jurisdictions under which the ship operates. Under international law and practice the ship has the nationality of the political entity whose flag it is entitled to fly. Suits brought against the owner of the ship, for non-payment of mortgages, etc., have to be in accordance with the law of the flag state. REGISTER: The record of a ship's ownership and nationality as listed with the maritime authorities of a country. Also, the compendium of such individual ships, registrations within a country. Registration of a ship provides it with a nationality and makes it subject to the laws of the country in which registered (the FLAG STATE) regardless of the nationality of the ship's ultimate owner. REGISTERED OWNER: The owner of record of an individual ship that is listed on the registration documents (filed with a national authority). REGISTRATION TERMINOLOGY: see individual entries for:
REMITTANCE: A transfer of funds from one place to another. REMITTING BANK: The bank that sends the draft to the overseas bank for collection. REVOCABLE LETTER OF CREDIT: A letter of credit that can be canceled or altered by the drawee (buyer) after it has been issued by the drawee's bank. REVOLVING LETTER OF CREDIT: A letter of credit that provides for specified payments on shipments of goods that take place on a regular basis over a period of time. A revolving letter of credit may be issued on a revolving-by-amendment basis or an automatic revolving basis. SAG, SAGGING: A ship sags when its fore and aft ends are bent upward. This can be caused when there is too much weight in the center of the ship, or when its weight is supported at the ends, and not in the middle. This occurs naturally when bow and stern are in a wave, but the amidship section is in a trough. The upper deck edge of a ship may appear to be sagging due to the ship's SHEER, or lack of it, but it is the shape along the concealed keel that governs use of the term. SALE: Change of owner of a ship corresponding to an agreement which usually involves transfer of funds. The actual, transfer of funds could be "on paper" only, and the only change of owner required to generate a typical sale report would be that of the REGISTERED OWNER, Since a sale does not automatically result in a change of manager or charterer, it does not automatically follow that a sale will result in a shift of control of a ship. SEIZURE: In marine law includes capture or seizure by revenue customs officers of a foreign state and covers every act of taking possession of a ship. The word seizure has a stronger meaning than ARREST as it may be interpreted to be a forcible possession by an overpowering force or authority of the state. SHEER: The upward curve of a deck and lines of a ship from amidships toward bow and/or stern. A convex curve, whereas the camber will be concave. SHIPPER: Person offering the goods for transportation. A person or company which engages ship owners or operators to carry cargo. SHIP'S MANIFEST: An instrument in writing, signed by the captain of a ship, that lists the individual shipments constituting the ship's cargo. SIGHT CREDIT: A letter of credit under which drafts are payable upon presentation or on demand if the documents meet the terms and conditions of the letter of credit. SIGHT DRAFT (S/D): A draft so drawn as to be payable on presentation to the drawee (or within a brief period thereafter, known as "days of grace"); also referred to as a Demand draft. Custom, in certain areas, has in effect made an Arrival Draft out of a Sight Draft because buyers often will pay a Sight Draft until the arrival of the carrying vessel. SLOT CHARTER: Typically used to denote hiring of space (slots) aboard a container ship by a shipper who can generate a fixed amount of cargo but one insufficient to justify taking an entire ship on hire. This type of charter will not give the charterer any control over the movement and employment of the ship. Also, less typically, used to designate a specific voyage charter to replace a temporarily unavailable ship. SPACE CHARTER: The taking on hire of part of ship's capacity. Unlike a SLOT CHARTER, the space charter does not necessarily imply a long-term relationship. This type of charter will not give the charterer any actual control over the employment and movement of the ship. STALE BILL OF LADING: A bill of lading which is not presented to the bank within the time frames specified in the letter of credit. Or, if no date is specified, within 21 days following the date of shipment in accordance with UCP 500. STANDARD INTERNATIONAL TRADE CLASSIFICATION (SITC): A standard numerical code used to classify commodities used in international trade. STANDBY LETTER OF CREDIT: A letter of credit issued at the request of the bank's customer ensuring payment by the bank to the beneficiary in the event the customer does not fulfill the underlying obligation and the beneficiary complies with the terms of the letter of credit. STIFF: Said of a ship having a tendency to roll quickly or with a "snap" roll. Normally caused by stowage of heavy or dense material low in the ship. STORAGE VESSEL or STATION VESSEL: A merchant ship that is in use at a port to consolidate part cargoes for transfer to similar or larger ships. A storage ship can normally also get underway to carry cargo if so desired, but usually acts in a stationary capacity over a long period. Can function as a spare parts warehouse for visiting ships in addition to its primary function providing cargo storage, Provides a stationary function similar to the mobile one of LIGHTERING. STORES: Supply of fresh and dry provision and the supplies for the running of the ship, such as lubricating oil, line, and spare parts. STOWAGE FACTOR: The ratio of a cargo's cubic measurement to its weight, expressed in cubic feet/meters to the ton. Used in conjunction with the GRAIN or BALE capacities to determine how much total cargo may be loaded. STOWAGE PLAN: A plan in the form of a longitudinal cross-section of the ship, which shows the location in the ship' of all consignments of cargo, frequently color coded to highlight the various ports of discharge. The stowage plan is used by the Chief Mate (or First Mate) who draws it up to plan discharging of the cargo. In modern container ships the stowage plan will be a computerized document, normally prepared ashore by the ships operations office. STRAIGHT BILL OF LADING: A nonnegotiable bill of lading in which the goods are consigned directly to a named consignee. STRIPPING: A term often used to denote the process for removing cargo from a container. STUFFING: Denotes the process of loading cargo into a container. SUPERCARGO: A person employed by a ship owner, charterer of a ship, or shipper of goods to supervise cargo handling operations and/or the security of the cargo in transit, During Desert Shield/Storm military personnel often accompanied shipments of weapons and ammunition to the Kuwait Theater of Operations. S.W.I.F.T.: An acronym for Society for Worldwide Interbank Financial Telecommunications. This international system has been established to move funds and information more efficiently among member banks. TARIFF- A customs charge on imported goods. In reality, tariffs are a form of tax.The back-to-back letter of credit is generally used in international trade when the exporter, a) is not the supplier, b) does not have ready funds to pay the supplier, and c) does not want the supplier to know the price of the goods or the name of the importer. It is an extension of the terms and conditions of the backing credit. The party instructing the bank to open a letter of credit on whose behalf the bank agrees to make payment. In most cases, the account party is an importer or buyer, but may also be a construction contractor or a supplier bidding on a contract. TENDER: Said of a ship with a tendency to roll slowly, or to hang on the outer edges of a roll. Normally caused by stowage of heavy or dense material high up in the ship. Although a tender ship has a more comfortable roll than one that is stiff, it is the stiff ship, which has the greatest stability, as demonstrated in its ability to right itself. TEU: Twenty-foot equivalent unit. The common unit used indicating capacity of a container vessel or terminal. THROUGH BILL OF LADING: A single bill of lading converting both the domestic and international carriage of an export shipment. TIME CHARTER: Hire of a ship and its crew for a set period. Subject to any restrictions within the CHARTER PARTY the charterer will determine what cargo will be carried, and to which ports. The charterer is responsible for the ship's bunkers, payment o cargo handling and port charges. The owner continues to pay the crew, and hull and machinery insurance and remains responsible for the navigation and technical operation of the ship. TIME DRAFT: A draft maturing at a certain fixed time after presentation or acceptance. Maturity may be a given number of days after sight (acceptance) or a given number of days after date of draft. TRADE ACCEPTANCE: A draft drawn by the seller of goods on the buyer and accepted by the buyer. It often includes a statement indicating that the acceptor's obligation arises out of the purchase of goods from the drawer of the draft. TRANSACTION STATEMENT: A document that delineates the terms and conditions agreed upon between the importer and exporter TRANSFERABLE LETTER OF CREDIT: A letter of credit addressed to the beneficiary "and/or transferee (or transferees)," enabling the beneficiary to transfer the credit to another party. TRANSSHIP: To transfer goods from one transportation line to another or to transfer goods from one vessel to another. TRANSSHIPMENT: A term used when shipment to a destination is best reached by reshipping the goods from another port. TRIM (1): The relationship between a ship's draught forward and aft. If a ship cannot be maintained level on an even keel it is safer to trim the ship down slightly by the stern. This serves to keep waves from breaking over the forepart of the ship, and more fully submerges the propeller and rudder, increasing their effectiveness. The term "trimmed by the bow (or head)" and "trimmed by the stern" mean that the bow or stern are lower in the water, respectively.TRIM (2): To move cargo or adjust ballast to affect the ships trim. To level a bulk cargo in a ship's hold to maximize its stability while at sea. UNCLEAN BILL OF LADING: One in which a notation has been made by the carrier of any defects found in the goods when they are received for transporting. For example, such phrases as "3 hogsheads broken" or "4 sacks torn" may be inserted. UNIFORM CUSTOMS AND PRACTICE FOR DOCUMENTARY CREDITS: The rules and guidelines agreed to by representatives of the private sector engaged in international trade, for the conduct of trade covered by letters of credit. Generated under the sponsorship of the International Chamber of Commerce, the rules have been published as the "Uniform Customs and Practice for Documentary Credits (1993 Revision) International Chamber of Commerce Publication No. 500." The effective date is January 1, 1994. USANCE (TIME) CREDIT: A letter of credit that calls for payment against drafts at some specified date in the future. Usance letters of credit allow buyers payment terms of a specified number of days usually not longer than six months. VOYAGE CHARTER: Contract of carriage for use of a ship (or part of a ship's capacity) for one or more consecutive voyages here the shipowner remains in full control of the ship agreeing to carry a set cargo from a port, or area, to a port, area, or range of delivery ports. The shipowner pays all costs, while collecting from the charterer a fee based on tonnage carried, or a lump sum irrespective of the amount of the ships capacity used. This form of charter leaves maximum control of the ship in the hands of its owner, as opposed to the BAREBOAT CHARTER, which transfers all essential control to the charterer. WAREHOUSE RECEIPTS: In general, a receipt for commodities deposited with a bonafide warehouseman which identifies the commodities deposited. A warehouse receipt on which it is stated that the commodities referred to thereon will be delivered to the depositor or to any other specified person or company is a non-negotiable warehouse receipt; a warehouse receipt on which it is stated that the commodities will be delivered to the "bearer" or to the order of any specified person or company is a negotiable warehouse receipt. Endorsement (without endorsement if issued to the order of "Bearer") and delivery of a negotiable warehouse receipt serves to transfer the property covered by the receipt. There is no difference between a warehouse receipt and a bill of lading in this respect. WAYBILL: A document prepared by a transportation line at the point of origin of a shipment, showing the point of origin, destination, route, consignor, consignee, description of shipment, and amount charged. WEATHER DECK: Uppermost continuous deck of a ship; does not include forecastle, superstructures, or poop. Not necessarily the MAIN or FREEBOARD DECK. WEIGHT LIST: A list showing the weights of either individual parcels, bales or, in the case of bulk commodities, an entire cargo. WITHOUT RECOURSE: A phrase followed by the signature of a drawer or endorser of a negotiable instrument, including a bill of lading, where the signer disclaims liability to subsequent holders in the event of non-payment or non-delivery. Nonetheless, such an endorsement constitutes certain warranties such as the genuineness of the instrument, and the endorser cannot waive liability if any prior signature is proved to be a forgery. WITHOUT RESERVE: A term indicating that a shipper's agent or representative is empowered to make definitive decisions and adjustments abroad. |
|
