QUICK ANSWER Shipping terms are the working vocabulary of an import: who pays for which leg (Incoterms), what the freight itself is called (FCL, LCL, chargeable weight), what customs expects (entry, ISF, HTS code), and what the fees on your invoice mean (demurrage, per diem, THC). This glossary groups them by stage of the shipment, gives the numbers that matter, and links each term to a full guide where one exists.
Shipping terms decide real money: agree to the wrong three-letter code with your supplier and you own the freight bill; miss the meaning of "free time" and you pay demurrage by the day. This page collects the terms a US importer actually meets, in the order a shipment meets them. If you are preparing your first import shipment, start here and keep the page open.
Incoterms: who pays for which leg
Incoterms are the eleven three-letter codes published by the International Chamber of Commerce that fix, in a sales contract, where the seller's costs and risk stop and yours begin. Seven of them do most of the work in US imports. The full rule set, with the traps in each code, is in our Incoterms 2020 guide.
The seven Incoterms US importers actually see
| Term | What it means for you as the buyer |
|---|---|
| EXW (Ex Works) | You take over at the supplier's gate: export clearance, origin trucking, everything. Cheapest unit price, most work. |
| FCA (Free Carrier) | Supplier hands the goods to your carrier, export-cleared. The cleaner alternative to EXW for container freight. See the FCA guide. |
| FOB (Free On Board) | Supplier pays until the goods are on the vessel; you control the ocean leg. The default most importers should ask for. Compared in FOB vs EXW. |
| CFR (Cost and Freight) | Supplier books and pays the ocean freight; risk still passes to you at loading. |
| CIF (Cost, Insurance and Freight) | CFR plus minimum-cover insurance. The catches are in the CIF guide. |
| DAP (Delivered at Place) | Supplier delivers to your named address; you handle import clearance and duty. |
| DDP (Delivered Duty Paid) | Supplier owes delivery with duty paid. Popular and risky; the DDP guide explains who really ends up liable. |
TAKEAWAY If you remember one code from the table above, make it FOB. It keeps the ocean leg, the carrier choice and the freight cost in your hands, and it is the reference point every quote comparison starts from. The moment a supplier pushes CIF or DDP instead, price the difference before you agree, not after.
Booking and origin terms
These are the words on your booking confirmation, before the freight moves an inch.
Terms from booking to the port of loading
| Term | What it means |
|---|---|
| Freight forwarder | The company that arranges the shipment across carriers and borders on your behalf. How to compare them: choosing a freight forwarder. |
| Booking confirmation | The carrier's promise of space on a named vessel or flight, with the cut-offs that make it real. |
| Cargo cut-off | The last day the container can arrive at the terminal for its booked sailing. Miss it and the box waits for the next vessel. |
| ETD / ETA | Estimated departure and arrival. Estimates, not promises: build buffer into anything that depends on them. |
| Consolidation | Combining cargo from several shippers into one container to share the cost. |
| CFS (Container Freight Station) | The warehouse where LCL cargo is stuffed into and stripped out of containers. |
| POL / POD | Port of loading and port of discharge, the two ends of the ocean leg. |
| Pre-carriage | The trucking leg from the supplier to the port of loading. |
Ocean freight terms
Nearly every container an importer brings in crosses the water, and ocean freight has the thickest vocabulary of any leg. Transit times for the main China routings are in ocean transit times to the US.
Ocean freight terms and where the fees start
| Term | What it means |
|---|---|
| FCL (Full Container Load) | The container is yours alone. Break-even against LCL usually lands around 13 to 15 CBM: FCL vs LCL. |
| LCL (Less than Container Load) | You buy space by volume in a shared container and pay per CBM. |
| CBM | Cubic meter, the unit LCL and air freight price against. How to calculate it: what is CBM. |
| TEU / FEU | Twenty- and forty-foot equivalent units, how carriers and ports count capacity. |
| Container types | 20ft, 40ft, 40ft high cube, reefer, open top and flat rack, with dimensions and payloads in container types and sizes. |
| Blank sailing | The carrier cancels a scheduled sailing. Your booked container rolls to the next vessel unless someone is watching. |
| Rollover | Your container did not make its booked vessel, usually from overbooking or a missed cut-off. |
| Transshipment | The container changes vessels at an intermediate port instead of sailing direct. Cheaper, slower, one more place to sit. |
| Free time | The days the port and the carrier give you before storage and equipment charges start. |
| Demurrage | The port's charge when the container stays past free time inside the terminal, commonly $150 to $500 per container per day. The difference from detention: demurrage vs detention. |
| Detention | The carrier's charge when their container is out of the port past free time and not yet returned empty. |
| Telex release | The instruction that lets cargo release at destination without the paper original bill of lading. When to ask for one: telex release. |
Air freight terms
Air freight has its own pricing logic: you pay for whichever is greater, the weight on the scale or the space the cargo takes.
Air freight terms behind the rate per kilo
| Term | What it means |
|---|---|
| Chargeable weight | The greater of actual weight and volumetric weight; the number your air rate multiplies against. Worked examples: chargeable weight. |
| Volumetric weight | Volume converted to weight, at 167 kg per CBM for air. Light, bulky cargo pays on volume. |
| AWB (Air Waybill) | The air transport document. Unlike an ocean bill of lading it is not a document of title. |
| Gross weight | Cargo plus packaging on the scale, before any volumetric comparison. |
| Air consolidation | Forwarders combine shipments onto one master AWB to buy better rates per kilo. What a kilo actually costs: air freight cost. |
| Direct vs deferred | Direct flies on the next available flight; deferred waits for space and prices lower. The tradeoffs: air freight transit times. |
Customs terms on a US import
This is the vocabulary that carries penalties. The full sequence, from filing to release, is in the customs clearance process guide.
Customs terms, with the dollar amounts attached
| Term | What it means |
|---|---|
| Customs entry | The declaration filed with CBP that tells the government what arrived, what it is worth, and what duty applies. |
| HTS code | The ten-digit number that classifies your product and sets its duty rate. Getting it right: HTS and HS codes. |
| ISF (Importer Security Filing) | The data filing due 24 hours before ocean loading. A late or missing ISF exposes you to a $5,000 penalty per violation: ISF filing. |
| Importer of record | The party legally responsible for the entry, the duty and the accuracy of the declaration. Usually you, the buyer. |
| Duty | The tax on imported goods, set by the HTS code and the country of origin. |
| Section 301 | Additional tariffs on Chinese-origin goods, 7.5 to 25 percent on top of the base rate. Current lists and stacking: Section 301 tariffs. |
| Section 321 / de minimis | The former duty-free lane for shipments under $800, rolled back in 2025 and now suspended for all origins: Section 321. |
| Customs hold | CBP stops the shipment for review before release. Types and timelines: customs holds and exams. |
| Exam | CBP physically inspects the cargo, at your cost, from an X-ray to a full unload. |
| Liquidation | CBP's final settlement of the entry, usually 314 days after filing. Deadlines for refunds and protests run from it. |
| Duty drawback | The refund of duty on imported goods that are later exported or destroyed: duty drawback. |
| Country of origin | Where the goods were substantially made, which drives duty, tariffs and marking: country of origin rules. |
TAKEAWAY The expensive mistakes live in this section. A wrong HTS code compounds duty on every entry, a late ISF is $5,000 per violation, and refund claims die quietly at liquidation deadlines. If a term here touches your shipments, read the linked guide before the next booking, or have refund exposure on paid tariffs checked while the window is open.
To see these lines with your own numbers, use the import duty calculator.
Trucking and final delivery terms
The last miles have their own meter running. Costs by port and the fee mechanics are in drayage costs by port.
Terms between the port gate and your dock
| Term | What it means |
|---|---|
| Drayage | The short truck move of a container from the port or rail ramp to a nearby warehouse: what is drayage. |
| Chassis | The wheeled frame the container rides on, rented by the day: chassis fees. |
| Per diem | The daily charge for keeping the carrier's container past free days, the trucking cousin of detention: container detention and per diem. |
| FTL (Full Truckload) | The trailer is yours. Past about 12 pallets or 15,000 pounds it usually beats LTL: FTL vs LTL. |
| LTL (Less than Truckload) | You share the trailer and pay for your share of it. |
| Accessorial | Any extra service on a trucking invoice: liftgate, residential delivery, waiting time. |
| Liftgate | The tail lift for delivery addresses without a loading dock. |
| Transloading | Moving cargo from an ocean container into domestic trailers, three 40-footers into two 53-foot trailers: transloading. |
| Cross-docking | Freight moves from inbound to outbound trucks through a dock with little or no storage between. |
| POD (Proof of Delivery) | The signed confirmation that the freight arrived, the document that closes the shipment. |
Pricing and surcharge terms
Freight quotes speak in line items. The surcharges below get one line each because they have a full home in ocean freight rates, where every ocean line item is broken down.
The terms on a freight invoice
| Term | What it means |
|---|---|
| Freight rate | The base price for the main transport leg, ocean or air. |
| All-in rate | A quote with the surcharges rolled into one number. Ask what is inside it. |
| BAF (Bunker Adjustment Factor) | The fuel surcharge on ocean freight. |
| THC (Terminal Handling Charge) | What terminals charge to load and unload the container, at both ends. |
| PSS (Peak Season Surcharge) | The extra carriers add when demand spikes, typically August through October. |
| GRI (General Rate Increase) | A carrier's across-the-board rate hike, announced monthly on the transpacific. |
| Landed cost | The true per-unit cost with freight, duty, tariffs, insurance and delivery included. The full math: landed cost. |
| Cargo insurance | Covers the goods' value in transit. Without it, ocean carrier liability stops at $500 per package under COGSA: cargo insurance and COGSA. |
Import documents in one place
Every shipment travels on paper as much as on water. The documents guide shows how the set fits together; these are the four CBP and your forwarder will always ask about.
The four documents on every import
| Document | What it does |
|---|---|
| Commercial invoice | States what was sold, to whom, for how much; the basis of customs value: commercial invoice. |
| Packing list | Itemizes what is in each carton and pallet; the document exams are checked against: packing list. |
| Bill of lading | The transport contract, receipt and, in ocean freight, document of title: bill of lading. |
| Certificate of origin | Attests where the goods were made, for duty and trade-agreement claims: certificate of origin. |
How Platton helps you put the terms to work
Platton is a digital freight forwarder for companies importing into the US. The terms above are the language of our working day, and the services below are where they turn into moved freight.
Ocean freight to the US
Ocean freight bookings from China, Vietnam, India and Europe, FCL and LCL, with sailing schedules, cut-offs and free time watched so blank sailings and rollovers do not surprise you.
Air freight when the calendar is tight
Air freight with chargeable weight calculated before you commit, direct or deferred by what your deadline actually needs.
Customs clearance without the vocabulary test
Customs clearance coordination on your entries: ISF filed on time, HTS classification reviewed, documents matched against the invoice before CBP sees them.
Drayage and delivery out of the port
Drayage with 93 percent same-day port pickup, chassis arranged, and per diem clocks tracked from discharge to empty return.
Common Questions About Shipping Terms
What is the difference between shipping terms and Incoterms?
Incoterms are one family inside shipping terms: the eleven ICC codes that split costs and risk between buyer and seller in the sales contract. Shipping terms is the wider vocabulary, covering operations (rollover, transloading), customs (entry, liquidation) and billing (demurrage, GRI). Every DDP shipment involves Incoterms; a blank sailing has nothing to do with them. If a term decides who pays between you and your supplier, it is an Incoterm; if it describes how freight moves or gets billed, it is not.
How many shipping terms does a first-time importer actually need?
About fifteen will carry you through a first shipment: one or two Incoterms (FOB above all), FCL, LCL and CBM for the freight itself, ISF, customs entry, HTS code and importer of record on the customs side, free time, demurrage, detention and per diem on the fee side, and bill of lading, commercial invoice and packing list on paper. Learn those and the rest attaches naturally. The first-time importer guide walks them in shipment order.
Are shipping terms the same for ocean and air freight?
The commercial layer mostly transfers: Incoterms, customs vocabulary and document names work across both modes. The operational layer does not. Ocean prices per container or per CBM and runs on bills of lading, free time, demurrage and detention. Air prices per kilogram of chargeable weight, travels on an air waybill that is not a document of title, and has no demurrage. The costliest mix-up is quoting air by gross weight when the cargo is light and bulky, because volumetric weight takes over.
Where do these terms show up in a freight quote?
A readable import quote runs in blocks: origin charges (pickup, export handling, documentation), the ocean or air freight with its surcharges (BAF, PSS), destination charges (THC, port fees), customs-related lines (entry, duty, tariffs as estimates), and delivery (drayage or trucking, chassis, accessorials). If a quote shows one number instead, it is an all-in rate, and the questions in this glossary are how you find out what sits inside it before the extras surface as surprises.
Who decides which shipping term applies to an order?
You and your supplier do, in the purchase order or sales contract, before any freight is booked. The Incoterm written there fixes who books and pays for each leg; carriers and forwarders execute what it says, they do not choose it. That is why the negotiation matters more than the booking: agree FOB and you control the ocean leg and its cost, accept CIF and your supplier controls it, take DDP and you have handed over the whole routing, visibility included.
Related Import Guides
How to import into the US: the full sequence these terms belong to, from purchase order to delivery.
How to choose a freight forwarder: the questions that separate a quote from a capability.
Incoterms 2020: all eleven codes with the traps spelled out.
Ocean freight rates: every surcharge on a transpacific invoice, explained.
See these terms on a real quote
Send the cargo details from your next order and you get back an itemized import quote with every line named the way this glossary names it: origin charges, freight, surcharges, customs lines and delivery, so nothing on the invoice needs translating later.
