Commercial Terms - USA / Australia

A

B

C

D

E

F

G

H

I

J

K

L

M

N

O

P

Q

R

S

T

U

V

W

X

Y

Z


A

ABS (Australian Bureau of Statistics)
Federal Government Department responsible for collecting and disseminating statistical information.
ABOVE PAR
A stock exchange term. Shares are said to be above par when their trading price is above their nominal value.
ACCEPTANCE
When a contract is made there must be both offer and acceptance, unless it is a contract by deed. If one person offers to do something for another, the contract is not completed until the offer is accepted. Acceptance must be in the same terms as the offer and must be communicated to the offeror. A conditional acceptance is equivalent to an offer and is not an acceptance.
ACCI (Australian Chamber of Commerce and Industry)
Peak employer body representing in excess of 500,000 businesses, predominantly small and medium sized enterprises.
ACCOUNT, CREDIT
Commonly, this means an account kept by a business for the benefit of a customer, whereby the customer can obtain goods and/or services on credit subject to payment at a later date, normally as stated at the time of sale.
ACCOUNT, PROFIT & LOSS
This shows the gross profit and net profit made by a trading enterprise. It normally commences with gross profit on trading and, after adding exceptional items of income and deducting operating and administrative expenses, shows profit before taxation, profit after taxation, dividends, etc.
ACOS
Australian Chamber of Shipping.
ACS
Australian Customs Service.
ACT OF GOD
A loss arising from a direct, irresistible act of nature. Contracts frequently exclude liability arising from an Act of God. See also FORCE MAJEUR.
ACTUAL TOTAL LOSS
An insurance, especially marine insurance, term where the subject matter is completely destroyed. No notice of abandonment is required by the insurers in normal circumstances.
ACTUARY
A person normally employed in insurance who is skilled in the complicated task of assessing and calculating risks and premiums.
AD VALORUM
According to the value. Customs and Stamp duties are often calculated according to the value of the subject matter, e.g.: goods valued at $1000.00, the rate of customs duty is 10% ad valorum, hence the customs duty payable is $100.00.
ADJUSTMENT
Settling the amount due by an insurer in a marine insurance claim.
AFFIDAVIT
A declaration in writing made on oath before a person entitled to administer oaths, e.g.: Justice of the Peace, Notary Public, Commissioner for Oaths). See also STATUTORY DECLARATION.
AFP
Australian Federal Police
AG
Attorney Generals Department (Australia).
AGENT
A person with express or implied authority to act for another person (the principal), the object being to establish a contractual relationship between the agent and third parties.
AGENT, GENERAL
An agent with unrestricted authority to contract on behalf of his principal in all matters concerning a particular trade or profession, e.g.: customs agent (customs broker).
AGENT, SPECIAL
An agent with authority to do one particular act or represent his principal in one particular transaction.
AGENT, UNIVERSAL
An agent with unrestricted authority to contract on behalf of his principal, e.g.: a person holding a Power of Attorney.
AIEx (Australian Institute of Export)
The peak professional body of exporters, both individual and corporate, in Australia. It provides education from introductory courses through to diploma levels. Members may be Associates (AAIEx), Members (MAIEx), Fellows (FAIEx) or Corporate.
AIMS (AQIS Import Management System (Australia))
An AQIS electronic system that enables lodgement and processing of imported consignments based on data entered manually or via the COMPILE System. See also COMPILE.
ALIGNED DOCUMENTATION
A system devised by the ICC whereby all international trade documents are designed to a common standard, printed on A4 size paper with each item of information always appearing in the one location.
ALL RISKS (AR)
A marine insurance term meaning that the subject goods are insured against all generally accepted risks, i.e.: risk of a fortuitous nature. The Institute of London Underwriters All Risks clauses, now know as the A Clauses, is added to a standard marine policy to cover such risks, amongst other things.
APCA (Australian Port Charges Additional)
The name for a charge made by shipping companies in addition to some freights to cover Australian port charges that have not been included in the freight, e.g.: wharfage, stevedoring. See also BSRA.
AQIS
Australian Quarantine Inspection Service. A division of the Federal Government Department of Primary Industry. Responsible for policing and controlling quarantine matters in respect of imports to and exports from Australia.
ARBITRATION
Method of settling disputes which is usually binding on parties.
ASAP
As soon as possible.
ASUG
Australian Shipping Users Group.
ATO
Australian Taxation Office.
AWA
Australian Workplace Agreement (Australian). An industrial agreement negotiated directly between an enterprise and its employees, certified by the Federal Industrial Commission, covering employment conditions and rates of pay. See also EBA.
AWB
Air Way Bill. a document of affreightment used to cover the movement of goods by air. See also HAWB.
 

Top of Page Home

B

BACKLETTER
Where a seller/shipper issues a 'letter of indemnity' in favour of the carrier in exchange for a clean bill of lading. May have only a limited value. Example: P & I problems.
BAF
Bunker Adjustment Factor. An adjustment factor representing variations in the price of bunkers, expressed as a plus/minus percentage which is applied to freight calculations. See also CABAF.
BILL OF LADING (B/L, BL)
A document by which the Master of a ship acknowledges having received in good order and condition (or the reverse) certain specified goods consigned to him by some particular shipper, and binds himself to deliver them in similar condition, unless the perils of the sea, fire or enemies prevent him, to the consignees of the shippers at the point of destination on their paying him the stipulated freight. A bill of lading specifies the name of the master, the port and destination of the ship, the goods, the consignee, and the rate of freight.
BONDED WAREHOUSE (BOND)
A privately owned warehouse which is licensed by the Customs Authorities in which goods subject to the control of Customs may be stored without the payment of duties. The owners of the warehouse must normally give a bond to Customs for the duty on the goods held in the store, hence the common name, BOND. See also FREE STORE.
BSR
Basic Service Rate. The basic freight rate (generally European).
BSRA (Basic Service Rate Additional)
The name for a charge made by shipping companies in addition to BSR (freight) to cover Australian port charges that have not been included in the freight, e.g.: wharfage, stevedoring. See also APCA.

Top of Page Home

C

CABAF (Currency and Bunker Adjustment Factor)
An adjustment factor representing variations in the price of bunkers and exchange rates, expressed as a plus/minus percentage which is applied to freight calculations. See also BAF, CAF.
CACCI
Confederation of Asian Cambers of Commerce and Industry.
CAF (Currency Adjustment Factor)
An adjustment factor representing variations in exchange rates expressed as a plus/minus percentage which is applied to freight calculations. See also CABAF.
CBCA (Customs Brokers Council of Australia)
The peak body of customs brokers in Australia. Members may be Licentiates (LCBCA), Associates (ACBCA), Senior Associates (SACBCA), Fellows (FCBCA) or Corporate.
CBF
Cubic feet
CBM (or M3)
Cubic metres
CERTIFICATE OF ORIGIN
Certificate issued by an approved body in the country of origin which attests to the origin of goods. Chambers of Commerce are normally approved bodies.
C & F (Cost and Freight)
A trading term used in the sale of goods to denote that the price includes the main freight to the named port of destination.
C & I (Cost and Insurance)
A trading term used in the sale of goods to denote that the price includes the costs to the port of export and marine insurance to the destination.
C.I.F. (Cost, Insurance and Freight)
A trading term used in the sale of goods to denote that the price includes the main freight and marine insurance costs to port of destination.
COA
Contract of affreightment
COMMON CARRIER
One who holds himself out for hire to the general public. Must post rates and cannot discriminate against customers whose cargo he is equipped to carry.
COMPILE - Customs On-line Method of Producing from Invoice Logeable Entries (Australia).
An Australian-wide computer network run by ACS and subscribed to by most Customs Brokers whereby the Customs Brokers can directly enter details of imported goods into the Australian Customs Service (ACS) and Australian Quarantine Inspection Service (AQIS) systems, pay customs duties and other charges by EFT and receive clearance of the cargo. Some brokers, using their own computer systems, interface COMPILE with document data, including EDIFACT standard documents. See also EDIFICE.
CONSIGNEE
The person to whom cargo is consigned.
CONSIGNOR
The person named in a freight document as the one from whom the goods have been received for shipment.
CONTRACT OF AFFREIGHTMENT (COA)
A service contract under which a ship owner agrees to transport a specified quantity of fuel products or specialty products, at a specified rate per ton, between designated loading and discharge ports. This type contract differs from a spot or consecutive voyage charter in that no particular vessel is. specified.
CPI Consumer Price Index.
CUSTOMS BROKER
A broker, or agent, who acts on behalf of importers and exporters in the clearance of imported goods through Customs, Quarantine, shipping and other requirements.
CUSTOMS TARIFF ACT
Australian Act of Parliament imposing customs duties on imported goods.
CUSTOMS VALUE
The value of imported goods as assessed by the Customs Authorities according to the legislation of the importing country. This may be based on the actual value but, in certain cases, may be a notional value. In many countries this value relates to the CIF cost of the goods, but some (E.G.: Australia) relate to point of export or FOB costs.

Top of Page Home

D

DFAT
Department of Foreign Affairs and Trade (Australia).
DELIVERY ORDER
A document issued by a shipping company of freight forwarder authoring delivery of cargo from is place of landing and storage.
DELIVERY ORDER FEE
A charge for issuing a delivery order.
DEMURRAGE
1. A fee levied by the shipping company upon the consignee for not returning a shipping container within the specified time after taking delivery.
2. A fee levied by Australia Post upon the consignee of imported parcel post articles which are not cleared through Customs and delivered within the specified time, normally 5 days.
DIST
Department of Industry, Science & Resources (Australia).
DOD
Department of Defense.
DUNNAGE
A term applied to loose wood or other material used in a ship's hold or in a shipping container for the protection of cargo.
 
 

Top of Page Home

E

EBA
Enterprise Based Agreement (Australia). An industrial agreement between an enterprise and its employees, involving the representative Union and certified by the Federal Industrial Commission, covering employment conditions and rates of pay. See also AWA.
EC
European Community. Formerly known as the European Economic Community.
EDIFICE - EDI For the Input of Customs Entries (Australia).
An Australian-wide computer network run by ACS and subscribed to by Customs Brokers whereby the Customs Brokers can batch process and enter details of imported goods into the Australian Customs Service (ACS). It can be interfaced with document data, including EDIFACT standard documents. See also COMPILE.
EFIC
Export Finance and Insurance Corporation (Australia). A Federal agency that aids in financing exports of Australian goods and services through loan guarantees, and insurance.
ENTRY
A customs form used for the clearance of ships or merchandise. See also COMPILE, EDIFICE.
ETA
Estimated time of arrival
ETD
Estimated time of departure
EXPRESS WAYBILL
See OCEAN WAYBILL.
EXW (Ex Works)
A trading term used in the sale of goods to denote that the price includes only the cost of the product at the warehouse/factory gates before any transport costs are included. In USA this is normally referred to as
 

Top of Page Home

F

FAC
1. Fast as can
2. Federal Airports Commission (Australia).
FAS (Free Along Side of ship)
A trading term used in the sale of goods to denote that the price includes the costs to the port of export.
FHEX
Fridays, holidays excluded (USA).
FHINC
Fridays, holidays included (USA).
FIFO
First in, first out.
FIO
Free in and out.
FIOST
Free in and out, stowed and trimmed
FOB (Free on Board)
1. Export trading term in which the price quoted by the exporter does not include the costs of ocean transportation, but does include loading on board the vessel. Not generally used in USA, where the term FAS is more common.
2. USA: Cost of a product before transportation costs are figured in. Other countries tend to use the term Ex Works.
FOF
Fix on failure.
FORCE MAJEURE
Clause limiting responsibilities of charterers, shippers and receiver of cargo, due to forces beyond the control of man - Act of God.
FREE STORE
A store in which goods not subject to the control of Customs are stored, as opposed to a bonded store.
FREIGHT
Money payable on delivery of cargo in a mercantile condition.
FREIGHT FORWARDER
A business or person who arranges shipments for customers usually break bulk and issues a HBL (sea) or HAWB (air). The freight forwarder then consolidates a number of shipments under one BL or AWB. The freight forwarder does not actually carry the cargo or conduct business for the ship.
FREIGHT RATE
The charge made for the transportation of freight. See also BSR.
FRONT LINE
An Australian Customs initiative whereby the ACS forms partnerships with approved importers, customs brokers, shipping companies and the like to jointly detect and report smuggling, especially narcotics and other dangerous goods, false declarations, etc.
FUMIGATION
Quarantine treatment using a fumigant gas (Note: methyl bromide, previously commonly used, is now prohibited in certain countries, e.g.: USA) to kill and/or prevent infestation by insects, etc.

Top of Page Home

G

GATT
General Agreements on Tariffs and Trade. Now known as WTO - World Trade Organization.
GDP
Gross Domestic Product: The total of goods and services produced by a nation over a given period, usually 1 year.
GNP
Gross National Product: GDP plus the net income accruing from foreign sources.
 

Top of Page Home

H

HARD CURRENCY
A currency which is sound enough to be accepted internationally and which is usually fully convertible. See also SOFT CURRENCY.
HAWB
House Air Way Bill. A document of affreightment issued by an air freight forwarder used to cover the movement of goods by air. The air freight forwarder consolidates a number of HAWB's under one AWB fro transport by an airline. See also AWB.
 

Top of Page Home

I

IATA
International Air Transport Association - the peak body for airfreight.
INCOTERMS
A Set of internationally accepted, fully defined trading terms, devised by the ICC in order to minimize differences of interpretation of such terms, for use by any company, person, etc. When used in a Contract of Sale it normally is followed by the revision date to ensure the parties are aware of the correct edition (E.G.: FAS Rotterdam Incoterms 1995). Includes EXW, FAC, FAS, FOB, CFR, CIF, CPT, DAF, DES, DEQ, DDU, DDP.
ICC
International Chamber of Commerce.
ILO
International Labor Organization; Based in Geneva, it is one of the oldest components of the UN system of specialized agencies and has been involved over the years in appraising and seeking to improve and regulate conditions for seafarers. In its unusual tripartite way, involving official representatives of government, employer and employee interests, its joint Maritime Commission have had in hand moves on the employment of foreign seafarers to urge the application of minimum labor standards, on crew accommodation, accident prevention, medical examination and medical care, food and catering and officers competency.
IMDG
International Maritime Dangerous Goods Code. See also HAZCHEM.
IMF
International Monetary Fund.
IMO
International Maritime Organization: Formerly known as the Inter-Governmental Maritime Consultative Organization (IMCO), was established in 1958 through the United Nations to coordinate international maritime safety and related practices.
INTERIM RECEIPT
Given when the goods are received by the ship prior to the issue of a bill of lading. It used to be given by on on behalf of the Mate and is sometimes called a Mates Receipt.
INTERMODALISM
The concept of transportation as a door-to-door service rather than port-to-port. Thus efficiency is enhanced by having a single carrier coordinating the movement and documentation among different modes of transportation. See also TRADE FACILITATORS.
ISO
International Standards Organization.
ITF
International Transport Workers Federation (Trade Unions)
 

Top of Page Home

J

Top of Page Home

K

Top of Page Home

L

L/C (Letter of credit)
A banking document (usually) whereby a bank guarantees payment of a bill of exchange (draft)
LCL
Less than Container Load. A consignment of cargo which is inefficient to fill a shipping container. It is grouped with other consignments for the same destination in a container at a container freight station.
LIEN
Retention of property until outstanding debt is paid
LIFT-ON/LIFT-OFF (LO/LO)
A charge made, usually by a container freight station or depot, for lifting a container onto and/or off of a vehicle (e.g.: truck).
LOGISTICS, INTEGRATED GLOBAL LOGISTICS
Person of enterprise that facilitates trade, especially international trade, from the seller to the buyer by arranging and/or providing all necessary services including all or some of: ordering, order tracking, packing, domestic & international freight forwarding and shipping, customs clearance, warehousing and distribution, domestic delivery, landed into store costing (unit costing), etc. See also TRADE FACILITATORS.
LOI
Letter of indemnity.
LONG TON (LT, L/T)
Imperial ton of 2,240 pounds = 1016 kg.

Top of Page Home

M

M3 (or CBM)
Cubic metres
MARINE INSURANCE
Specialized insurance of ships and/or cargo against risks incidental to a marine adventure. Usually covered by a marine insurance policy with extra clauses to deal with specific risks.
MATES RECEIPT
See INTERIM RECEIPT. MFN
Most Favored Nation.
MILLENNIUM BUG
Many systems, especially computers and equipment with embedded computer chips, are likely to fail on 01/01/2000. This is because such equipment stores years by the last 2 numbers (e.g.: 1999 = 99, 2000 = 00) and many computers, etc., are programmed to understand the year 00 to be 1900, etc. See also Y2K.
MIRAID
Maritime Institute for Research and Industrial Development (USA).
MOA
Memorandum of agreement.
MORTGAGE
Loan issued against some security
M/T
1. Empty Container
2. Metric tons (1000kg = 2,204 lbs.)

Top of Page Home

N

NONCONTIGUOUS
A country which has no access to a port.
NVO, NVOCC
Non-vessel-operating common carrier, a ships agent, conducts business for the ship but does not operate the vessel.
NUW
National Union of Workers (Australia). Replaces, in part, the former Stormen and Packers Union (SPU).
 

Top of Page Home

O

OCEAN WAYBILL
A document, issued by a shipping line to a shipper which serves as a receipt for the goods and evidence of the contract carriage.
OECD
Organization for Economic Cooperation and Development. The Maritime Transport Committee is part of this organization.
 

Top of Page Home

P

PALLET
A flat tray, generally made of wood but occasionally of steel, on which goods particularly those in boxes, cartons or bags, can be stacked. Its purpose is to facilitate the movement of such goods, mainly by the use of forklift trucks. Note that were goods are presented for shipment packed onto a pallet, then the number of packages = 1, not the number of packages on the pallet.
PER CONTAINER RATE
Rates and/or changes on shipments transported in containers or trailers and rated on the basis of the category of the container or trailer.
PI
Professional Indemnity Insurance.

Top of Page Home

Q

Top of Page Home

R

Top of Page Home

S

SAECCI
South Australian Employers Chamber of Commerce and Industry. Peak employers body in South Australia representing in excess of 3,500 businesses.
SBC
Small Business Coalition of Australia.
SHEX
Sundays, holidays excluded (USA)).
SHINC
Sundays, holidays, included
SHIP'S AGENT
A person or firm who transacts all business in a port on behalf of shipowners or charterers. Also called shipping agent; agent.
SHIPPERS
Individuals or businesses who purchase transportation services or commodities.
SHIPPER'S COUNCIL
An organization of shippers formed to collectively and services with the conferences of ship operators.
SHORT TON
2,000 pounds (USA)
SIDE-LIFTER
A skeletal road trailer, normally drawn by a prime-mover, which is fitted with lifting equipment (cranes) to lift an ISO shipping container on/off itself. t may be of either 20' or 40' configuration of be adjustable for either.
SKELETAL TRAILER
A road trailer, normally drawn by a prime-mover, which has no floor but only struts fitted with locks to hold ISO shipping containers in either 20' and/or 40' configurations.
SME
Small to medium size enterprises. Used to describe businesses with up to about 100 employees.
SOFT CURRENCY
Currency which is not fully convertible to all currencies but only to some other soft currencies. See also HARD CURRENCY.
STACKING AND HANDLING
A charge, usually made by a stevedoring authority, for handling cargo being unloaded from a ship (Australia).
SUBJECT TO
Depending upon as a condition

Top of Page Home

T

TBN
To be named/to be nominated
TEMPERATURE-CONTROLLED STORAGE
A storage facility in which the temperature is controlled to a required level for the storage of temperature-sensitive commodities, which may include freezing through to cool.
TEU
Twenty Foot Equivalent Unit - shipping containers. 1 x 20' container = 1 TEU, 1 x 40' container = 2 TEU, 2 x 40' containers = 4 TEU, etc. See also FEU.
TIME BAR
Time after which legal claims will not be entertained.
TONNE
Metric: 1 tonne = 1,000Kg.
TRADE FACILITATOR
Person of enterprise that facilitates trade, especially international trade, from the seller to the buyer by arranging and/or providing all necessary services including all or some of: ordering, order tracking, packing, domestic & international freight forwarding and shipping, customs clearance, warehousing and distribution, domestic delivery, landed into store costing (unit costing), etc. See also LOGISTICS.
TRADING TERMS
A term used in a contract of sale to indicate what the sale price includes and excludes e.g.: EXW, FOB, CIF. These terms are often interpreted differently between the various trading nations and, sometimes, between various trades. Accordingly, the ICC has devised a set of internationally accepted, fully defined trading terms in order to minimize these differences of interpretation of such terms, for use by any company, person, etc. When used in a Contract of Sale it normally is followed by the revision date to ensure the parties are aware of the correct edition (E.G.: FAS Rotterdam Incoterms 1995). Includes EXW, FAC, FAS, FOB, CFR, CIF, CPT, DAF, DES, DEQ, DDU, DDP.
TWU
Transport Workers Union (Australia).

Top of Page Home

U

UTLC
United Trades and Labour Council. The peak body of trade unions in Australia.
 

Top of Page Home

V

VALUE ADDED
A term for the increment added by each partry involved in the manufacture of a particular item, becoming part of its price.
VENDOR
A person selling goods
VERTICAL INTEGRATION
The linking of a number of business concerns, each operating at a different stage in the same industry. This is opposed to horizontal integration, being the linking of a number of business concerns at the same stage.
VESTED INTEREST
Interest now in being, as opposed to interest anticipated. It is a term frequently used with regard to the title of goods or land. Property is said to vest when the absolute owner is finally established and that owner's interest is in no way capable of being terminated by anyone but that owner.
VISIBLE IMPORTS AND EXPORTS
Goods actually shipped or otherwise sold as opposed to invisible imports or exports which are services earning or costing foreign exchange, e.g.: freight, insurance, etc.

Top of Page Home

W

WARRANTY
A statement of fact in a contract, either expressed or implied. If it is unfulfilled the injured party cannot repudiate the contract but may be able to claim damages. The difference between a warranty and a condition is that a condition is fundamental to a contract, whereas a warranty is not.
WITHOUT RECOURSE
When added to a Bill of Exchange (Draft), these words indicate that the holder has no recourse to the person from whom he took the Bill, should it not be paid. It often appears after an endorsement.
WHARFAGE
A charge, usually made by a port authority, for cargo being unloaded from a ship. See also APCA, BSRA.
WORK STUDY
A study concerned with improving work methods and deciding how long particular jobs should take. Its aim is to reduce effort involved in various operations, to organize labour in the most economical manner and to provide data for planning, estimating and financial incentive schemes.
WORKING DAYS
Days on which work is normally done. In Australia this normally means Monday - Friday.
WORKING DIRECTOR
A Company Director who works for the company in a full or part-time capacity. This term is mainly used for taxation purposes.
WORLD BANK
International Bank for Reconstruction and Development
WRIT
A legal document summoning a person to attend at a certain place or to perform a certain act. There are penalties for failure to comply.
WRITTEN DOWN VALUE
An accounting term for the cost or valuation of an asset, less the written -off depreciation. It is no indication of the present selling price or true valuation of that asset.

Top of Page Home

X

Top of Page Home

Y

Y2K
Year 2000. Many systems, especially computers and equipment with embedded computer chips, are likely to fail on 01/01/2000. This is because such equipment stores years by the last 2 numbers (e.g.: 1999 = 99, 2000 = 00) and many computers, etc., are programmed to understand the year 00 to be 1900, etc. See also MILLENNIUM BUG.

Top of Page Home

Z

Top of Page Home