Air Cargo - Buyers Guide

Air Cargo Terminology

Unsure about what some of the air cargo lingo means? Below are the definitions of the common terms used in the industry.

ATA: Actual Time of Arrival, or Airport-To-Airport, or Air Transport Association of America.
 
ATD: Actual Time of Departure.
 
Air WayBill: Basically a receipt that describes what contents of the shipment, where it is heading, from where it left, the name and address of the shipper, the name and address of the recipient, the weight, any pertinent details of the shipment, insurance information and tracking number. In essence it is a bill of lading and a contract between the shipper and the cargo company.
 
Aircraft Container: A large storage device used for aircraft cargo.
 
Allotment: The word used by forwarders/shippers that refers to the space the airlines reserve for their use.
 
Bonded Warehouse: The place where shipped or manufactured goods are kept until they enter the customs territory. No duties have to be paid on the goods while they are in these warehouses. If the goods are shipped out to another country again without entering the customs territory, then no duties are charged at all.
 
Break Bulk (B/B): The term refers to many air cargo shipments that are sent together. Generally many goods are moved under one master air waybill (MAWB) and each batch of goods are further designated to a specific recipient or consignee under a house air way bill (HAWB). When the shipment reaches the freight forwarder, they will “break the bulk” according to the air waybills and takes the goods through customs.
 
CAF (Currency Adjustment Factor): International carriers can sometimes add a freight surcharge in order to compensate for foreign currency fluctuations. Generally the surcharge is a percentage of the freight.
 
Carnet: A specific document issued by customs that will allow the holder to carry or send goods to a certain foreign countries temporarily for display, demonstration or other such purposes without having to pay duties or posting bonds.
 
Clean Bill of Lading: A receipt that states the carrier received the goods in decent condition without damages or irregularities.
 
Combi Aircraft: An airplane that can carry both passengers and cargo.
 
Commercial Invoice: A bill for the goods from the seller to the buyer.
 
Consignee: The recipient to whom the goods in a freight shipment are being sent.
 
Consignment: The merchandise that is being shipped from the consignor (exporter) to the consignee (agent) with the agreement that the agent will sell the goods on behalf of the exporter. Until the merchandise is sold the exporter retains the title to the goods sold. The agent gets a commission of the sale and returns the net proceeds to the exporter.
 
Customs: The agency responsible for collecting the duties charged on a goods entering a country.
 
Customs Broker: A person or business holding the proper license to clear shipments through customs.
 
Customs Clearance: The process of getting cargo released by customs.
 
Customs Invoice: Required by some foreign custom’s departments. It is a documents verifying the value, quantity, and nature of the shipment.
 
DDP: Deliver Duty Paid.
 
DDU: Deliver Duty Unpaid.
 
Dangerous Goods: A classification given by IATA describing the characteristics and nature of certain goods. The designation is for the safety of the carrier.
 
Dimensional Weight: The size of the shipment calculated by total square feet by 6000. Cost is determined either on dimensional weight or the actual weight of the consignment – whichever is higher.
 
Duty: A tax imposed on imports by the customs authority of a country based on the value of the goods being shipped.
 
ETA: Estimated Time of Arrival.
 
ETD: Estimated Time of Departure
 
FCL or CY: Full Container Load, also known as CY. CY is the abbreviation of Container Yard.
 
Free On Board (FOB): Term used to mean that the seller is responsible for the cost of goods until the point that it is loaded onto the aircraft’s loading deck.
 
Freight Forwarder: A company specialized in exporting shipments. The forwarder takes care of all the details of getting the goods from point A to point B.
 
Gateway: Refers to a major airport.
 
HAWB: House Air waybill issued by carrying airlines' agent, normally freight forwarder.
 
IATA: International Air Transport Association (IATA) promotes safety, standardization in forms (baggage checks, tickets, weigh bills), and aids in establishing international airfares.
 
IATA Designator: Two-character Airline identification assigned by IATA in accordance with provisions of Resolution 762. It is for use in reservations, timetables, tickets, tariffs as well as air waybill.
 
Import License: A document required and issued by some national governments authorizing the importation of goods.
 
Import Restrictions: Applied by a country with a poor trade balance or for other reasons for which the government wants to control the goods being brought into the country. Restrictions can include tariffs, quotas, surcharges or prohibition.
 
Insurance Certificate: Document given to consignee to prove that insurance has been provided in case of loss or damage to the cargo while in transit.
 
Integrated Carriers: Carriers that have both air and ground fleets.
 
Intermediate Consignee: An intermediate consignee is the bank, forwarding agent, or other intermediary (if any) that acts in a foreign country as an agent for the exporter, the purchaser, or the ultimate consignee, for the purpose of effecting delivery of the export to the ultimate consignee.
 
Intermodal: Shipments moved using more than one form of transportation.
 
Irrevocable Letter of Credit: A guarantee by the issuing bank that the payment will be covered if all of the terms and conditions are met by the person requesting the letter of credit.
 
LCL: Less than Container Load, consolidated container load.
 
LD3: Lower deck type 3 container. This is the most commonly used container in passenger aircraft.
 
Letter of Credit: A financial document issued by a bank at the request of the consignee guaranteeing payment to the shipper for cargo if certain terms and conditions are fulfilled.
 
NVD: No Value Declared.
 
POD: Proof Of Delivery.
 
Packing List: A list containing the details of the shipment. It is given by the person shipping the goods to the carrier.
 
Pro Forma Invoice: The invoice sent by the supplier to the buyer before the shipment goes out, detailing the contents of the shipment.
 
Project Cargo: Refers to cargo that is not standard size, height, weight, etc.
 
Shipping Mark: The letters, numbers or other symbols placed on the outside of cargo to facilitate identification.
 
Shipping Weight: The gross weight of shipments.
 
TACT: The Air Cargo Tariff.
 
ULD: Unit Load Device.
 
Ultimate Consignee: The ultimate consignee is the person located abroad who is the final recipient of the merchandise being shipped.