Lear the most common shipping terms – Part 2
If you are new to the shipping industry, terms like FCL, COD, DM and DT will sound gibberish. But for a sea freight forwarder these are everyday communication terms. If you are part of this international freight industry, you are expected to know these terms as these are extremely important when transporting goods across the globe. Here is a quick reference guide whenever you fall short of your memory. By understanding the importance of these terms, you can actually get the transaction done quickly as well as avoid errors and misunderstanding in the supply chain.
Incoterms (International Commercial Terms): In international shipping, consignment is moved from origin to their respective destination. While negotiating the clauses of the transactions, both the parties need to be on the same platform, speak the same language, and settle on the same terms. This is when Incoterms can help communicate both the parties to settle on the same terms regarding costs, risks, tasks and delivery of goods. These are published by the International Chamber of Commerce.
CYCY – Container Yard to Container Yard: CYCY is a short term for Container Yard to Container Yard. A container yard is a facility provided by the port wherein the containers are stored before they are stuffed and loaded onto a ship or after unloading from the ship. The term describes that the accountability of the carrier originates and finishes at the container yard
Rollover: What’s rollover, it means that the container could not be loaded to the vessel or ship. Sometimes due to issues like customs, vessel omissions or overbooking, the container is not loaded to the ship and is called container rollover.
In such cases, the carrier will reschedule and place the container on the next departing ship.
COD–Change of Destination: Sometimes it might happen, even though the paperwork is over, and the ship has left the origin port and on its way to its destination, but you have to change the destination because of some unavoidable reason. This is when the COD term can be used, change of destination. This term will allow you to request the container ship to release your container and transport it to another destination than what was actually booked.
DM – Demurrage charges: Demurrage charge is a fee charged by container lines when the containers have not been picked up from the shipping line. There is actually a grace time given to remove the container, if the containers are not picked up during that time, you will be charged for the number of days your containers were lying in the port.
DT – Detention charges: Detention is also a fee that is charged when a container is picked up but didn’t return it to the container line in the given time. You will have to pay for those extra days it took for returning the containers.
Port storage: Your containers have been unloaded from the ship, moved to a container yard now it is your responsibility to take it out from there. The yard provides you a free period to store the container, and during this time you have to complete the customs procedures and get your goods transported to the warehouse or the final delivery destination. In case if the containers are not moved on time, the port can charge you with some charges, called port charges.
FCL & LCL: FCL is Full Container Load that means that you have enough goods to fill-up the entire container. On the other hand, LCL (Less than container load) is just the opposite, which means not enough goods to stuff the container and have to share it with other shippers as well. In LCL, at the port of destination, the consignments are separated into individual consignment.
LCL is suitable for small or mediocre businesses that don’t transport large items and can adjust with the delivery deadlines. It saves them freight costs and is also an eco-friendly alternative.
Stuffing & Stripping: It’s very simple, stuffing means loading the container with goods prior to shipment and stripping is unloading or de-stuffing a container as it arrives at the port.
All these terms mentioned above are frequently used in international trade, being in logistics supply management, it’s important to know them. Knowing the terms will make your work easier, swifter and accurate.