Glossary
Plain English explanations of trade, shipping and sourcing terms used in international trade.
A
A statistical sampling threshold used to decide whether an inspected production lot is accepted or r...
Payment made before goods are produced or shipped.
A non-negotiable transport document and cargo receipt issued for air freight.
Policies and controls designed to prevent bribery, facilitation payments and corrupt business practi...
An additional import duty imposed after an investigation finds dumped imports causing injury to dome...
An organisation's controlled list of suppliers authorised for specified purchases.
A private dispute-resolution process in which one or more arbitrators issue a decision, often bindin...
A traceable record of actions, decisions, approvals and changes relating to a transaction or process...
B
An order or quantity that cannot be supplied immediately and is scheduled for later fulfilment.
A bank commitment to pay the beneficiary if its customer fails to meet a specified obligation, subje...
A unique identifier assigned to goods produced or handled together under similar conditions.
A natural person who ultimately owns, controls or benefits from a legal entity under applicable rule...
A supplier's formal response offering to fulfil a tender or sourcing requirement under stated condit...
The structured assessment of supplier bids against commercial, technical and risk criteria.
A written order directing one party to pay a specified amount to another at sight or on a future dat...
A carrier-issued sea transport document that acts as a receipt and evidence of the carriage contract...
A scheduled vessel sailing that a carrier cancels or omits, sometimes skipping selected ports.
A purchase order covering repeated purchases from one supplier over a defined period and value limit...
An authorised facility where imported goods may be stored under customs control before duties and ta...
The amplification of demand variability as orders move upstream through a supply chain.
A documented plan for maintaining or restoring critical operations after disruption.
C
An Incoterms 2020 rule where the seller pays sea freight to the destination port but risk transfers ...
An Incoterms 2020 rule where the seller pays sea freight and minimum required insurance to the desti...
An Incoterms 2020 rule where the seller pays carriage and specified insurance to the destination whi...
An Incoterms 2020 rule where the seller pays carriage to the named destination but risk transfers wh...
An order placed for a specific quantity under an existing framework or blanket agreement.
The maximum output a supplier, facility or transport resource can produce or handle over a defined p...
Insurance covering physical loss or damage to goods during specified transport risks.
A company that undertakes the physical transport of goods by sea, air, road, rail or parcel network.
A strategic approach that manages related areas of spend as business categories using market, demand...
A document reporting test results for a specific batch of material or product.
A document certifying the country in which goods originate under applicable origin rules.
A formal process for assessing, approving and recording changes to products, processes, materials or...
The weight used to price freight, based on actual weight or dimensional weight according to the carr...
The seller's final invoice describing the goods, value, parties and agreed sale terms for payment an...
A jurisdiction-specific customs classification code that extends or applies the Harmonized System fo...
Activities used to demonstrate that a product, process or service meets specified requirements, such...
The party named to receive goods at destination.
The party sending or tendering goods for transport, often the seller or shipper.
The combining of several smaller shipments into one larger transport unit.
The transport of goods in standardised intermodal containers that transfer between ship, rail and ro...
The formal decision to select a supplier and enter into an agreement following evaluation and approv...
An arrangement in which one company manufactures products to another company's specification or bran...
Action taken to eliminate the cause of a detected non-conformance and prevent recurrence; CAPA may a...
An additional duty imposed to offset certain foreign government subsidies that injure domestic indus...
The country legally regarded as the origin of goods under applicable origin rules, not simply where ...
The transfer of incoming goods directly to outbound transport with little or no storage.
The risk that exchange-rate movements change the home-currency value of a payment, cost or receivabl...
A financial guarantee securing payment or compliance obligations owed to customs.
A specialist authorised to prepare and submit customs declarations on behalf of importers or exporte...
The process of submitting required information, paying liabilities and obtaining customs release for...
An official submission describing goods, value, origin, procedure and parties for customs control.
The value accepted for customs purposes under applicable valuation rules and used to calculate certa...
D
An Incoterms 2020 rule where the seller delivers goods ready for unloading at the named destination ...
An Incoterms 2020 rule where the seller bears transport and import-clearance responsibility to the n...
Delivered Duty Paid. The seller is responsible for delivering goods to the buyer's location, coverin...
An Incoterms 2020 rule where the seller delivers and unloads goods at the named destination, while t...
Materials or articles regulated in transport because they can present health, safety, property or en...
A shipper's declaration identifying hazardous cargo and confirming it is classified, packed, marked ...
A supplier or manufacturer statement declaring that a product meets specified regulatory requirement...
The proportion of inspected or delivered units that fail defined quality requirements.
An estimate of future customer or operational demand over a specified period.
A charge for keeping a carrier's container inside a port or terminal beyond the allowed free time.
The checking of transaction parties against government restricted or denied-party lists.
A charge for keeping a carrier's container outside the port or terminal beyond the allowed free time...
The risk that goods, software or technology are redirected to an unauthorised user, destination or u...
A payment method in which banks handle trade documents and release them against payment or acceptanc...
A documentary collection instruction allowing documents to be released when the buyer accepts a time...
A documentary collection instruction requiring the buyer to pay before the bank releases the trade d...
The use of two suppliers for the same or comparable requirement.
Goods, software or technology with both civilian and potential military or security applications.
E
The currently expected date and time a shipment or vessel will reach a specified location.
The currently expected date and time a shipment, vessel or transport service will leave a specified ...
An Incoterms 2020 rule where the seller makes goods available at its premises and the buyer takes mo...
Ex Works. The buyer takes full responsibility for collecting goods from the seller's premises and co...
A modelled order quantity that balances ordering cost and inventory holding cost under stated assump...
A government restriction or prohibition on trade with a country, territory, party or category of goo...
The final application for which a product, software or technology will be used.
The final person or organisation that will use a product, software or technology.
An arrangement where an independent party holds funds until agreed release conditions are satisfied.
A tax applied to specific goods such as alcohol, tobacco, fuel or certain regulated products.
Laws and regulations controlling the export, transfer, brokering or use of specified goods, software...
Insurance protecting an exporter against specified commercial or political non-payment risks.
Official authorisation permitting a controlled export to specified parties, destinations or uses.
The party legally responsible for export formalities and compliance in the country of departure.
F
An Incoterms 2020 rule where the seller delivers export-cleared goods alongside the nominated vessel...
An Incoterms 2020 rule where the seller delivers export-cleared goods to the buyer's nominated carri...
A container shipment booked for one shipper's cargo, whether or not the container is physically full...
An Incoterms 2020 rule where the seller delivers export-cleared goods on board the nominated vessel ...
Free On Board. The seller delivers goods to the named port of shipment. Risk transfers to the buyer ...
The proportion of customer demand or order quantity fulfilled immediately from available supply.
A contractual provision addressing extraordinary events beyond a party's reasonable control that pre...
An agreement to exchange currencies at a fixed rate on a future date.
A lead logistics integrator that manages and coordinates multiple providers and supply-chain activit...
An agreement establishing terms for future purchases over a period without necessarily guaranteeing ...
The number of days allowed before demurrage, detention or storage charges begin.
An agreement between economies that reduces selected trade barriers and sets rules for eligible trad...
A logistics intermediary that arranges transport, documents and related services across one or more ...
An additional transport charge applied on top of the base freight rate for specified costs or condit...
The process of receiving, storing, picking, packing and dispatching customer orders.
G
A maritime principle requiring cargo interests to share extraordinary costs or sacrifices made to sa...
The approved reference sample against which future production is judged.
A system record confirming that ordered goods were received, including quantity, date and sometimes ...
The legal system chosen to interpret and govern a contract.
The total weight of goods plus all packaging, pallets and containers included in the stated measure.
H
An internationally standardised product classification code maintained through the Harmonized System...
I
Value-added tax charged on imported goods under the importing country's rules.
A tax charged by customs on imported goods, usually based on classification, origin and customs valu...
Official permission required to import specified goods under defined conditions.
The party legally responsible for the import declaration and meeting import obligations in the desti...
Standard ICC trade rules that define selected delivery costs, risks and responsibilities between sel...
International Commercial Terms. A set of 11 rules defined by the ICC that clarify the responsibiliti...
A contractual obligation for one party to compensate another for specified losses or liabilities.
A document confirming that specified goods were inspected and stating the inspection findings.
A document providing evidence that cargo insurance has been arranged for a shipment.
A seller's request for payment describing supplied goods or services, amounts, taxes and payment det...
K
Checks used to verify a company's legal identity, ownership, activity and risk before doing business...
A defined measure used to track performance against an objective.
L
Sea freight in which cargo from multiple shippers shares a container.
The total cost of getting goods to the required destination, including product, freight, insurance, ...
The final transport stage from a hub or local depot to the delivery destination.
The time between placing an order and the goods being ready or delivered, depending on the agreed de...
A bank undertaking to pay a beneficiary when compliant documents are presented under the credit's te...
A contract clause limiting the amount or types of loss for which a party may be responsible, subject...
A pre-agreed amount payable for a defined breach, commonly late delivery, where enforceable under th...
M
The smallest quantity or order value a supplier is willing to accept.
Minimum Order Quantity. The smallest number of units a supplier will accept in a single order.
Purchasing made outside approved suppliers, contracts or procurement processes.
Checks and actions used to identify and address forced labour, human trafficking and severe labour e...
The movement of goods using two or more transport modes under a coordinated journey or contract.
N
A transport intermediary that sells ocean freight and issues its own bills of lading without operati...
The precise location or port written after an Incoterms rule to identify where delivery or cost resp...
A credit term requiring full invoice payment within 30 days of the agreed starting event, commonly i...
The weight of the goods excluding packaging and transport equipment.
A failure to meet a specified requirement, often recorded in a non-conformance report.
Origin used for general trade measures such as quotas, marking, statistics or anti-dumping where no ...
The party the carrier should inform when cargo is approaching or available at destination.
O
A manufacturer that designs and produces a product which another company may brand and sell.
A manufacturer that produces goods or components to another company's design or specification.
A measure of orders delivered by the required date and with the complete required quantity.
The percentage of deliveries received by the agreed date under a defined measurement rule.
A payment arrangement where goods are supplied and payment is due later under agreed credit terms.
P
A shipment document detailing package count, contents, dimensions, net weight and gross weight.
The contractual rules stating when, how and in what currency payment must be made.
A guarantee or bond securing a supplier's performance under a contract.
An official plant-health document confirming regulated plants or plant products meet the importing c...
The port where cargo is unloaded from the main vessel.
The port where cargo is loaded onto the main export vessel.
An inspection performed before goods leave the supplier or export location to check agreed quantity,...
Origin status that allows eligible goods to receive reduced or zero duty under a trade agreement or ...
A product made by a third party and sold under the buyer's own brand.
A preliminary invoice showing expected goods, values and terms before shipment or payment.
Structured organisational knowledge built from past suppliers, quotes, negotiations, decisions and o...
Independent or authorised confirmation that a product meets defined standards or scheme requirements...
Evidence that a shipment was delivered, usually recording date, location, recipient and condition.
A buyer-issued document confirming the products, quantities, prices and agreed terms of an order.
An internal request seeking approval to buy goods or services before a purchase order is issued.
Q
Planned systems and processes intended to prevent quality problems and ensure requirements are consi...
Operational checks, measurements and tests used to identify whether products meet requirements.
A limit on the quantity or value of goods that may be imported, exported or receive a particular tar...
A supplier's formal offer stating price, specification, validity and commercial terms.
The process of converting supplier quotations into a consistent basis for comparison, including unit...
R
A request used to collect supplier, capability or market information before asking for prices.
A structured request asking suppliers to propose a solution, approach and price for a complex requir...
A formal request asking suppliers to quote for clearly specified goods or services.
The retention of trade, customs, sourcing and compliance records for required periods in an accessib...
The inventory level that triggers replenishment, commonly based on expected demand during lead time ...
Products whose import, export, possession or transport is limited by law or carrier rules.
The movement and management of returned, reusable, repairable, recyclable or end-of-life goods back ...
The point at which loss or damage risk passes from seller to buyer under the agreed delivery rule.
Cargo that was booked for one vessel or service but is moved to a later departure.
Rules used to determine the economic nationality of a product for customs and trade-policy purposes.
S
A document describing a chemical's hazards, handling, storage, transport and emergency measures.
Extra inventory held to protect against demand or supply uncertainty.
A small initial order used to inspect, test or approve a product before committing to larger volumes...
The checking of parties, vessels, countries and other relevant data against applicable sanctions res...
A non-negotiable sea transport document that allows cargo release to the named consignee without pre...
A document or contract section defining measurable service standards, responsibilities and remedies.
A deliberate decision to buy a requirement from one supplier even though alternatives may exist.
A situation where only one supplier is capable or authorised to meet a requirement.
A managed procurement exercise for a defined requirement, from preparation and supplier engagement t...
A documented statement of the technical, functional, quality, packaging or performance requirements ...
The collection, cleansing, classification and analysis of purchasing data to understand where money ...
A structured review of a supplier's facilities, systems, records and practices against defined crite...
A risk-based investigation of a supplier's ownership, finances, reputation, compliance and operating...
Structured, continuously updated insight about a supplier's capability, behaviour, risk, pricing and...
The process of collecting, validating and setting up a new supplier's information, documents and sys...
A periodic meeting or assessment covering results, issues, risks, improvement and future requirement...
The assessment of whether a supplier meets required commercial, technical, quality and compliance st...
A structured approach to managing supplier relationships, performance, risk, collaboration and value...
The possibility that a supplier or its supply network causes disruption, loss, non-compliance or rep...
A structured summary of supplier results across measures such as quality, delivery, cost, service an...
The process of identifying suppliers able to meet a defined business requirement.
The process of confirming that a supplier is genuine and that key claims and credentials are valid.
The connected network of organisations, activities, information and resources involved in producing ...
Financing arrangements that optimise working capital using transaction and buyer-credit information ...
The ability to access timely information about orders, inventory, shipments, suppliers and relevant ...
T
A standard measure of container capacity based on one 20-foot container.
The large number of relatively low-value purchases that together form a material but fragmented shar...
The weight of an empty container, vehicle or package.
A schedule of customs duty rates and trade measures applied to classified goods.
A formal competitive purchasing process in which suppliers submit bids against defined requirements ...
An external provider that performs logistics activities such as warehousing, fulfilment and transpor...
A control comparing the purchase order, goods receipt and supplier invoice before payment.
A supplier that sells directly to the buying organisation.
The full lifetime cost of buying, operating, maintaining and disposing of a product or service.
The ability to follow the history, location and movement of a product, batch or component through re...
The systems and activities used to meet customs, sanctions, export-control and related cross-border ...
Supplier-provided financing that allows a buyer to pay after receiving goods or services.
A situation where a country imports more goods and services by value than it exports over a period.
Financial products and structures that support payment, funding and risk management in domestic or i...
A recurring route or corridor used for trade between defined origins and destinations.
A situation where a country exports more goods and services by value than it imports over a period.
The price actually paid or payable for imported goods, adjusted as required, when it can be used as ...
The elapsed time goods spend moving between defined origin and destination points.
The transfer of cargo from one vessel or transport service to another during its journey.
V
The verified total mass of a packed sea container required before loading under applicable maritime ...
The central system record containing approved supplier identity, payment, tax and purchasing data.
W
A contractual promise about product condition, performance or remedy for a stated period.
A standard product produced for resale by multiple businesses under their own brands.
Short-term funds tied up in inventory, receivables and payables and used in daily operations.