Air Freight Service Terminology

Air Waybill

An AWB is an air waybill that covers both domestic and international flights that deliver cargo to a specified destination. It is formally a non-contestable instrument of air transport, which is a receipt for the shipper, indicating that the carrier has accepted the goods specified therein and undertakes to transport the cargo to the destination airport in accordance with the specified conditions. The AWB generally refers to an air waybill issued by air carriers, also called a general air waybill (MAWB), which contains three-digit airline identification codes issued by IATA for airlines located outside the United States and by the Air Transport Association of America for airlines located in the United States. However, air cargo carriers also issue HAWBs (House Air Waybills) to their customers for all shipments.

Aircraft Container

A unit load device (ULD) which links directly with the airplane cargo handling and restraint system.

Allotment

A term used to describe blocked space by airlines on behalf of forwarders/shippers.

ATA

Actual Time of Arrival, or Airport-To-Airport, or Air Transport Association of America.

ATD

Actual Time of Departure.

Bonded warehouse.

The Customs Service authorizes the establishment of bonded warehouses for the storage or production of goods for which the payment of fees is deferred until the goods enter the customs territory. Goods are not subject to dues when re-dispatched to foreign points.

Break Bulk (B/B)

When consolidated air cargo is shipped, it is cleared under one MAWB, and each shipment addressed to a specific shipper or consignee is cleared under one HAWB. When the freight forwarder accepts the consolidated cargo from the carrier, he splits it into parts according to the HAWB, and then clears it together with the appropriate shipping and import documents. These Break-Bulk are usually performed by airlines or their ground handling contractors.

Carnet

A customs document authorizing the holder to temporarily carry or ship goods to specific foreign countries for display, demonstration, or other purposes without payment of import duties or bond.

Combined Aircraft

An aircraft equipped to carry passengers and cargo on board.

Consignment

Delivery of goods from an exporter (consignor) to an agent (consignee) under an arrangement whereby the agent sells the goods at the exporter’s expense. The consignee retains ownership of the merchandise until it is sold. The consignee sells the goods for a commission and remits the net proceeds to the consignor.

Consolidation

In order to handle a small shipment efficiently and on favorable terms, a freight forwarder usually forms many shipments into one shipment and then sends it to the carrier for forwarding. In such cases, each shipment will be sent one HAWB and they will all be under one general AWB.

Customs

The government agencies are authorized to collect the country’s duties on imports and exports.

Customs broker

An individual or company licensed by the government to transport and clear goods. The U.S. Customs Service refers to a customs broker as any person licensed under 19 C.F.R. Part III (Customs Regulations) to conduct customs business on behalf of others. Customs business is reduced to activities involving transactions with customs authorities concerning the importation and suitability of goods, their classification and valuation, the payment of duties, taxes or other charges imposed or levied by customs authorities on goods in connection with their importation, and their return, refund or seizure.

Customs clearance

Procedures to have a shipment cleared by Customs using established formalities, such as providing an import license/permit, payment of import duties, and other required documents depending on the nature of the shipment, such as FCC or FDA approval.

Customs Invoice.

A document required by customs authorities in some foreign countries to determine the value, volume, and type of cargo, containing a description of the cargo and information about the shipper, consignee, and value of the cargo.

Dangerous Goods

Cargo classified by IATA according to its type and characteristics in terms of its impact on the safety of the carrier’s flights.

DDP

Shipment with payment of duty.

DDU

Duties-free shipment.

Dimensional Weight

A carrier’s delivery charge based on the gross weight of the shipment or the actual gross weight, whichever is greater.

Direct shipment

Shipment without consolidation and under one MAWB, i.e. no consolidation.

Drawback

Drawback is a full or partial reimbursement by the government for customs duties levied on imported goods that are subsequently exported. The rules and procedures for refunding customs duties depend on the country.

Duty

A tax imposed on imports by a country’s customs authorities. The duty is usually calculated based on the value of the goods, a number of other factors such as weight or quantity (specific duties), or a combination of value and other factors (combined duties).

EDI

EDI (Electronic Data Interchange for Administration, Commerce, and Transportation) is an international standard used to exchange electronic data. Customs uses EDI to exchange data with the trade community of importers.

ETA

Estimated Time of Arrival. Generally, carriers need 3 hours to unload a shipment and hand it over to freight forwarders along with a customs clearance notice.

ETD

Estimated Departure Time. Carriers’ end of ramp processing time is usually two hours less than ETD. However, the time of termination of cargo processing by freight forwarders may vary depending on the activity of each freight forwarder respectively.

Freight Carriage … paid to

Like C & F, “Freight/Carriage Paid to …” means that the seller pays for the transportation of the goods to the specified destination. However, the risk of loss or damage to the goods, or any increase in value, is transferred from the seller to the buyer, after the goods have been handed over to the first carrier for safekeeping, not to the ship’s rail. This term may apply to all modes of transportation, including multimodal operations and container or “roll-on, roll-off” trucking on trailers and ferries. Where the seller is required to furnish a bill of lading, consignment note or carrier’s receipt, he fulfills this obligation accordingly by submitting such document issued by the person with whom he has contracted for transportation to the specified destination. (Also see Incoterms)

Freight Carriage … and Insurance paid to

This term is identical to Freight/Carriage Paid to…, but with the difference that the seller must insure the goods against risk of loss or damage to the goods during the carriage. The seller must make arrangements with the insurer and pay the insurance premium.

Gateway

Within the tourism industry, a gateway is defined as a major airport or seaport. Internationally, a gateway may also refer to a port where customs clearance takes place.

Harmonized system

The Harmonized Commodity Description and Coding System (or Harmonized System, HS) is a system for classifying goods in international trade established under the direction of the Customs Cooperation Council. Since January 1, 1989, new HS numbers have replaced the former tables in more than 50 countries, including the United States.

HAWB

A home air waybill issued by an airline carrier’s agent, usually a freight forwarder.

IATA

The International Air Transport Association (IATA), formed in 1945, is a trade association serving airlines, passengers, shippers, travel agents and governments. The association promotes safety, the standardization of forms (baggage receipts, tickets, weight waybills) and contributes to setting international airfares. IATA is headquartered in Geneva, Switzerland.

IATA designation

A two-character airline identifier issued by the IATA in accordance with the provisions of Resolution 762. It is used in reservations, schedules, tickets, fares and air waybills.

Import Certificate

An import certificate is a document through which the government of the country of transit exercises legal control over the domestic destination of goods covered by the import certificate.

Import license

A document required and issued by the governments of some countries authorizing the import of goods. It is also called an import permit. With this documentation, customs clearance can be done.

Import Restrictions

An import restriction imposed by a country with an unfavorable balance of trade (or for other reasons) indicates a desire to control the amount of goods entering the country from other countries, may include imposing tariffs or import quotas, limits on the amount of foreign currency available to cover imports, requiring import deposits, imposing import surcharges, or prohibiting various categories of imports.

Incoterms

Supported by the International Chamber of Commerce (ICC), this system of terms is used in foreign trade contracts to establish which parties cover costs and at what specific point they arise. (Also see Incoterms)

Certificate of Insurance

This certificate is designed to assure the consignee that he has insured the shipment against loss or damage during transportation.

Intermediate Consignee

An intermediate consignee is a bank, freight forwarder or other intermediary (if any) who acts in a foreign country as agent for the exporter, buyer or final consignee to deliver the export cargo to the final consignee.

Intermodal Transportation

Transportation of goods by more than one mode of transportation, i.e., airplane, truck, rail, and ship.

LD3

A container with a bottom deck of type 3. This is the most common container used in passenger aircraft.

Lower Deck.

A compartment below the main deck (also synonymous: lower hold and lower lobe).

Main deck

The deck that houses the bulk of the payload, generally known as the upper deck of an aircraft. On cargo aircraft, the entire upper deck is equipped with main deck containers/pallets, while Combi aircraft use the rear portion of the upper deck to load cargo. Passenger aircraft do not have an upper deck or main deck for containers/pallets.

NVD

No declared value.

Packing List.

Cargo document issued by the shipper to the carrier, customs and consignee for the purpose of identifying details of the number of packages, quantity of goods, measurement of each package, weight of each package, etc.

POD

Proof of Delivery, or a receipt for a shipment/package signed by the consignee. This term has gained widespread use in the courier and express industry, as well as increasing attention and use in the air cargo industry.

Pro Forma Invoice

An invoice prepared by a supplier prior to shipment of goods, informing the buyer of the types and quantities of goods to be shipped, their value, and important specifications (weight, size, and similar characteristics). When the importer uses the letter of credit as a means of payment, the issuing bank of the letter of credit requires an invoice from the beneficiary of the letter of credit, usually the exporter.

Shipment Mark.

Letters, numbers, or other symbols applied to the outside of a shipment for easy identification.

Shipping Weight

Weight of shipment means the gross weight in kilograms of cargo, including the weight of moisture, wrapping, crates, boxes, and containers (other than cargo vans and similarly significant outside containers).

TACT

TACT stands for The Air Cargo Tariff. It is published by IAP – International Airlines Publications, an IATA company.

Tare Weight

The weight of the ULD and fasteners excluding the weight of the cargo it contains.

Temporary Importation under Bond

If an importer imports goods and claims that they are exempt from duties under chapter 98, subchapter XIII, of the Harmonized Tariff Schedule of the United States, a bond is posted with Customs to guarantee that the goods will be exported within a certain period of time (usually one year from the date of importation). If the importer fails to export these goods, the importer must pay a forfeit for violating the terms of the bond.

Transshipment

Transshipment is the operation of sending exported goods through a transit country before they are shipped to the country intended for their final destination.

ULD

A unit load unit, any type of container, a container with an integrated pallet, an aircraft container, or an aircraft pallet.

Ultimate consignee.

The ultimate consignee is the person stationed overseas who is the true stakeholder receiving the export for the designated end use.

Value for Customs Purposes Only

The U.S. Customs Service defines “value for customs purposes only” as the value declared by the importer on the importation documents, which may or may not include information from the manufacturer, but in no case reflects the customs valuation of the goods.

Without Reserve

A term indicating that the shipper’s agent or representative has the authority to make final decisions and adjustments overseas without the approval of the group or individual it represents.