Glossary of International Trade Terms

A List of the Most Commonly Used International Trading Terms

Agent : A foreign representative who sells your product in the target market. The agent does not take possession of and assumes no responsibility for the goods. Agents are paid on a commission basis

All-Risk Insurance : The broadest form of coverage available, providing protection against all risk of physical loss or damage from any external cause. Does not cover loss or damage due to delay, inherent vice, inadequate packaging, or loss of market

Bill of Lading : A contract prepared by the carrier or the freight forwarder with the owner of the goods. The foreign buyer needs this document to take possession of the goods

Bill of Lading, On Board - A bill of lading acknowledging that the relative goods have been received on board a specified vessel

Bonded Warehouse : A warehouse authorized by customs for storage of goods on which payment of duties is deferred until the goods are remove

Bulk Carrier : There are two types of bulk carriers, the dry-bulk carrier and the liquid-bulk carrier, better known as a tanker. Bulk cargo is a shipment such as oil, grain, or one which is not packaged, bundled, bottled, or otherwise packed and is loaded without counting or marking

CAD—Cash Against Documents : A method of payment for goods in which documents transferring title are given to the buyer upon payment of cash to an intermediary acting for the seller

CAF—Currency Adjustment Factor : A surcharge on freight charges by a carrier to offset foreign currency fluctuations

Carnet : A customs document permitting the holder to carry or send merchandise temporarily into certain foreign countries without paying duties or posting bonds. All of the goods traveling under aCarnet must be returned to the origin country to avoid penalties

Carrier : Any person who, through a contract of carriage, undertakes to perform or procure the performance of carriage by rail, road, sea, air, inland waterway, or by a combination of modes

Certificate of Manufacture : A document used under a letter of credit containing an affidavit that goods have been manufactured and are being held for the account and risk of the buyer

Certificate of Origin : A document that certifies the country where the product was made. A common export document, a certificate of origin is needed when exporting to many foreign markets

CIF—Cost, Insurance and Freight : The exporter pays the cost of goods, cargo and insurance plus all transportation charges to the named port of destination

C&F—Cost and Freight : The exporter pays the costs and freight necessary to get the goods to the named destination. The risk of loss or damage is assumed by the buyer once the goods are loaded at the port of embarkation

Commercial Invoice : A document prepared by the exporter or freight forwarder, and required by the foreign buyer, to prove ownership and arrange for payment to the exporter. It should provide basic information about the transaction, including description of goods, address of shipper and seller as well as delivery and payment terms. In some cases, the commercial invoice is used to assess customs duties

Consignment : Delivery of merchandise to the buyer or distributor, whereby the latter agrees to sell it and only then pay the exporter. The seller retains ownership of the goods until they are sold, but also carries all of the financial burden and risk

Consignor : A term used to describe any person who consigns goods to himself or to another party in a bill of lading or equivalent document. A consignor might be the owner of the goods, or a freight forwarder who consigns goods on behalf of his principal

Consolidator : An agent who brings together a number of shipments for one destination to qualify for preferential rates

Consular Invoice : A document required by some countries describing a shipment of goods and showing information such as the consignor, consignee, and value of the shipment. Certified by a consular official, a consular invoice is used by the country's customs officials to verify the value, quantity, and nature of the shipment

Contract : A written or oral agreement which the law will enforce

Customs Declaration : A document that traditionally accompanies exported goods bearing such information as the nature of the goods, their value, the consignee and their ultimate destination.  It accompanies all controlled goods being exported under the appropriate permit

Customs Invoice : A document used to clear goods through customs in the importing country by providing documentary evidence of the value of goods. In some cases, the commercial invoice may be used for this purpose