In the export trade selling on credit is usually the worst term of payment. After the buyer has taken possession of the goods it depends only on him when and how much he will pay. It is difficult for the seller to force him to do so often even by legal action. Therefore before the buyer is granted credit the seller must get a complete Credit Report. It is information about his financial standing, yearly turnover, regularity of payments to other sellers. If the seller does not find the buyer reliable enough, he either insist on another tem of payment or he asks for banker’s guarantee.
Commercial Terms to be memorized
Advice note – a document describing the condition of cargo/goods.
Agent– one who represents a principal, or buys or sells for another. For example in insurance terms, a person who provides advice on the appropriate policy but does not generally provide the same service as a broker. An Agent may be employed by one insures or by someone such a shipper.
Average (general) – damages sustained due to intentional and reasonable contributions and expenses made for the purpose of saving the ship, freight and cargo from general danger and distributed between contracting parties in particular proportion.
Bare Boat Charter – an agreement about leasing of a ship for a long period of time when the Charterer employs the Captain and the crew and operates a ship himself.
Bill of Lading (B/L) – a document acknowledging the receipt of cargo for shipment. It is issued by the Carrier to the Shipper. It is an evidence of the contract of affreightment and a document of title.
Boat Note – an advice of goods delivered to the ship and signed by the Cargo Officer.
Booking list – an enumeration of goods intended for shipment for one particular voyage.
Booking note – an advice for shipment of goods.
Carrier – a Shipowner or a Charterer. It is a company (Operator) which undertakes to deliver the goods to the point of destination in due time either by his own ship or by the ship chartered.
Carrier’s lien - Carrier’s option to detain all cargo fully or partly on board until freight is paid.
Charter Party B/L – Bill of Lading containing reference to an appropriate charter.
Charterer – a person who employs a ship to carry particular cargo between specified ports and for an agreed period of time.
Clause Paramount – an item in Ch/P or in B/L under which all disputes shall be settled according to Hague or Hague-Visbu Rules.
Clean Bill of Lading – Bill of Lading without any stipulations of cargo damage certifying the reception of cargo for shipment in apparent good order and condition.
Deadfreight - freight for shortshipment.
Demurrage - an amount to be paid to the Shipowner for indemnity of all damages resulted from ship’s detention in the port.
Despatch days – difference between estimated number of days assigned to carry out cargo operations and days actually spent for this.
Dirty B/L (foul, unclean) – Bill of Lading which contains Master’s remarks.
Disbursments – Shipowner’s expenses connected with ship’s stay in the port.
Endorse a Bill of Lading – to pass an entitlement to reception and possession of goods by endorsement.
Forwarding Agent – person responsible for exporting/importing cargo arrangements on clients behalf. Often reffered to as Freight Forwarder.
Freight – money paid to the Shipowner for carriage of goods.
Freight Rate - money paid by the Charterer to the Shipowner for carriage one cargo unit expressed in tons, cubic meters, feet, containers.
Hague – Visbu Rules – amendments to Hague Rules adopted in 1968 in connection with increase of container carriage and directed to limitation of Carrier’s responsibility.
Hague Rules – rules which state the Carrier’s rights and responsibilities and bind him to exercise due diligence as to making the ship seaworthy and saving cargo during the voyage.
Incoterms – delivery terms in sales contracts drawn up by the Chamber of Commerce in Paris in 1936 to avoid any disagreements. Each of Incoterms determines which party is to bear the various costs involved in transportation and the point at which the risks are to pass from the Seller to the Buyer.
Invoice – a document which contains detailed description of goods, their marking, value and other data.
Lay Days (Lay Time) – a number of days stipulated by the Charter for cargo operations and for docking.
Lump Sum Charter – a Voyage Charter under which payment for transportation of goods is fixed as a whole for a consignment but not for a cargo unit.
Negotiable B/L – one capable of being negotiated by transfer or endorsement.
Non negotiable B/L – a copy of Bill of Lading without any characteristics of an original.
Open Charter – contract of affreightment in which ports of call and cargo carried are not stipulated.
Order B/L – a document which can be made out by the Shipper or Consignee’s order or can be negotiated by endorsement.
Shipping Note – Shipper’s advice to the agent about particulars of cargo shipped.
Short delivery – shortage of cargo delivered against amount stated in a Bill of Lading.
Short shipment – shortage of cargo shipped by various reasons, for example, lack of full cargo in warehouse prior to ship’s departure.
Slot Charter – hiring a ship without any choice when there is only one ship to make a voyage.
Spot – ship ready to load and make a voyage and which is at the same port with cargo to be carried by this ship.
Stuffing – loading goods into containers.
Suit – claim of loss of or damage to cargo during voyage.
Through B/L – Bill of Lading which covers entire transit of goods by road and sea transport. It means that the goods are transported by more than one carrier.
Time Bar – period of limitation (èñêîâîé äàâíîñòè) upon expiration of which proceeding or arbitration can’t take place.
Time Charter – employment of ship for a round trip voyage for a stated period of time.
Received B/L – is issued when the goods have been inspected but not loaded onto the ship.
Straignt B/L – is issued when the goods can be delivered only to the Consignee stated on the B/L.
To bearer B/L – is issued when the goods are delivered to that person who will produce the original first.