In this lesson, we’ll learn all about binding business terms, these are necessary for correspondence with customers so both know the international laws.
The most used Business Terms are below
1 ETA = Estimated Time of Arrival
When the importer party wants to inquire about the shipment’s time of arrival or the date then it uses the term like “What is ETA?” ETA means the date of arrival of the shipment in the importer’s country.
2 ETD = Estimated time of Departure
Under this term, the exporter party informs the importer of the date when the goods are loaded on the ship or vessel or in the plane. The importer party only Writes this term as “What is ETD?” to know when the shipment will depart from the exporter’s country and by air, by sea, by truck, or by train on which date and time.
3 AWB = (Air Way bill)
The Document acknowledges the receipt by an air transport company of goods dispatched by air. It usually is completed in triplicate with a copy of each for the consignor, consignee, and carrier.
An airway bill is not a document of title to goods in the same manner as a bill of lading. The freight charges would be collected by weight vise by the importer or exporter as mentioned in the in this bill with these words as “collect” or “prepaid” respectively. This is a non-negotiable instrument of air transport that serves as a receipt for the Shipper, indicating that the carrier has accepted the goods listed and obligates itself to carry the consignment to the airport of destination according to the specified conditions.
4 B/L = Bill of Lading
A document prepared by a carrier or freight forwarder that acts as received for the goods, as evidence of a contract between the carrier and the exporter, and as a document of title. A foreign buyer needs this document to take possession of the goods.
The freight charges would be collected by volume vise by the importer or exporter as mentioned in this bill with these words as “collect” or “prepaid” respectively. it is also called “Occasion B/L”. A bill of lading that covers both domestic and international flights transporting goods to a specified destination. Compare inland bill of lading, Occasion bill of lading, and through bill of lading.
5 TR = Truck Receipt
When the exporter exports consignment with the help of any truck Transport Company, the truck company issues the truck receipt for the collection of freight of the goods and for the importer to take the goods from the truck company by the presentation of this receipt and freight if the responsibility of the freight has to pay by the importer.
6 RR = Railway Receipt
When the consignment is export with the help of any train, the railway line issues the railway receipt for the collection of freight of the goods and for the importer to take the goods from the railway company by the presentation of this receipt and freight if the responsibility of the freight has to pay by the importer.
7 PR = Post Office Receipt
When the consignment is exported with the help of any post office, the post office issues the post office receipt for the collection of Freight of the goods and for the importer to take the goods from the post office, the presentation of this receipt and freight if the responsibility of the freight has to pay by the importer.
8 Shipments = (Exporting Goods)
Importing OR Exporting goods is called the “shipment” “consignment” or “cargo”
9 Shipper = ( Exporter Party)
The name of the exporter party can be written as “shipper” or “consignor” or “drawer” or “beneficiary” and or “payee”
10 Shipper
It sends the shipment to the importer party so it is called the shipper.
11 consigner
It exports the consignment so it is called the consignor.
12 Drawer
It draws the bill of exchange so it is called the drawer.
13 Beneficiary
The person whose favor a letter of credit is issued or a draft is drawn. A payee or recipient, usually of the money. a party in whose favor a documentary credit is established, usually the exporter party. it gets the profit by exporting the goods so it is called the beneficiary.
14 Payee
One who received the payment from the payer is called the payee.
15 Bill Of Exchange
Its definition in the UK bills of exchange act 1882, it is an unconditional order in writing addressed by one person to another, Signed by the person giving it requiring a person to whom it is addressed to pay on the demon, or at a fixed or determinable future time as a sum certain in money to order Or the order of a specified person Or bearer. The obligation to pay is unconditional and independent of the underlying contract, and can therefore be used as a negotiable instrument.
16 BR = Bill Receivable
Bills that are financed by the receiving branch, whether drawn under a DC or not are treated as BRs by both remitting branch and the receiving branches –see/bills receivable.
17 BC = Bill for Collection
Documents Or a Cheque is submitted through a bank for collection of payment from the drawee to the exporter party is called the BC.
18 Consignee (Importer Party)
The name of the importer party can be written as “applicant” or “consignee” are “drawee” and or “payer”
19 Applicant
When the importer applies to open the L/C called the applicant.
20 Consignee
It receives the consignment so it is called a consignee.
21 Drawee
When import applies to open the LC is called the applicant.
22 Payer
The importer pays the payment to export through his bank so it is called the payer.
23 LCL = Less Cargo Loading Loose Container Loading
When any shipment is to export in short quantity instead of full container loading is called the LCL. It can be exported by air, by sea, by truck, or by train. But when the exporter exports the shipment by air then he pays the freight of that shipment weight vise and when the exporter by the sea the freight charges would be pay by volume vise. The freight charges have to pay by the exporter Or importer according to the settled incoterm in the shape of US dollar only Or equally in Pakistani currency.
the formula for the volume is given below:
CMB/M3/= (Length x Width x Height x No. of Cartons) /
61023 or 61023.7
24 FCL = (Full Cargo Loading) Full Container Loading
When any shipment is to export in full container loading is called the FCL. it can be exported by air, by sea, by truck, or by train. But when exporter exports Shipment by air than he pays the Freight of that shipment Weight vise and when he export by sea the freight charge would be paid by volume vise. The freight charges have to pay by the exporter Or importer according to settled incoterm them in shape of Pakistani currency.
25 20 Feet Container
One 20 ft container has a measurement is as length of 20 feet, the width of 8.50 feet, and a height of 8.50 feet, the capacity of a container is 26 M3 to 28 M3.
26: 40 Feet Container
One 40 ft container has a measurement is as length of 40 feet with 8.50 feet and a height of 8.5 feet. the capacity of a container is 56 m3 to 58 M3.
27: 40 High Cube Container
One 40 ft container has a measurement is as length 40 feet with 8.5 feet and height 9.50 feet . the Capacity of a container is 62 M3 to 64 M3.
28 Open Top Container
This container’s measurement is also as length 40 feet with 8.5 feet and height 8.5 feet but the top of the container is open it is used for the exporter of heavy machinery.
29 Freight
The cost of transporting goods Or the charges for the transportation of the shipment are called the freight.
30 Freight Prepaid
An agreement between the seller and the Buyer that the seller will pay for the transportation charges before delivery to the transportation carrier.
31 Freight Collect
An agreement between the Seller and the Buyer That the Buyer will pay for the transportation charges before delivery to the transportation carrier.
32 Sea Freight
The transportation charges of that consignment OR the shipment which is to exporter or import by the sea in a ship Or in the vessel is called the sea freight. The Sea Freight is given to the shipping line by the volume vise according to the formula defined by the shipping lines. The payment is given in the shape of an international currency like the US dollar or equally US dollar in Pakistani currency,
33 Air Freight
The transportation charges of that consignment OR the shipment which is to export are imported by air in an airplane is called air freight. The air freight is given to the shipping lying by the weight vise but when the dimension of the cartoons is greater than according to the formula Defined by the airlines then the freight of the good is received by the volume vise. The payment is given in the shape of Pakistani currency.
34 Free Sample Invoice
According to this invoice an exporter party sends free sample to importer to check the quality of goods and the exporter party is the bill for the free item for the courier company or for the forwarder agent.
The cost of the free sample would not be charged by the importer as well as the freight charges of these samples are usually paid by the exporter party only. But in case of some costly samples, the sample charges would be collected from the Importer.
35 Proforma Invoice
It is an invoice provided by a supplier prior to the shipments of merchandise, informing the buyer of the kind and quantity of the goods to be sent, their value, and specification (weights, size, incoterms, payment terms, etc).
These invoices are sent at the beginning of a Sale transaction, usually to enable the Buyer to obtain and import permit Or a foreign exchange permit, or both. The Performa invoice gives a close approximation of the weights and values of a shipment that is to be made.
36 Custom Invoice
It is necessary to custom the goods before exporting to the consignment to the buyer. Custom means where the goods have to export the shipment and by which means of transportation are adopted as well as the quantity, detail of goods, and rates of the goods .
Goods are also tally with the invoice and packing list accordingly that may tally with the document or not. the concern of the custom invoice is also with the export party only not the buyer.
37 Bank Invoice or Commercial Invoice
The bank of the importer and the exporter works like an agent of both parties. it is a formal demand note for the payment issued by the exporter to Importer for the goods sold under a sales contract. it should give details of the goods sold, payment terms, and trade terms. it is also used for the custom clearance of goods for importers and sometimes for foreign exchange purposes by the importing party.
In other words that it is the bill of the shipment is sent to the importer so it is called the bank invoice. Secondly, it is used to release a shipment from the customs authorities at the time of receiving the shipment by the presenting this invoice and some other documents like B/L, certificate of origin, GSP form, bill of exchange, and some others. There is no difference between the custom invoice and the commercial invoice; the custom invoice is used for the custom purpose and the commercial invoice is used for payment recovery and to release the shipment from the destination.
38 Packing List
it is a list with detailed packing information of the goods shipped. it is necessary to pack the goods in cartoons or boxes of wood or any other according to the goods Or the demand of the importer party. Usually, in it, the details are given as the weight, quantity, packing style, cartoon numbering, and the address of both parts like seller and buyer.
At the time of packing the goods in cartoons, it will keep in mind that a single cartoon would be as that a single person can carry it easily. A packing list would be prepared before packing the goods in cartoons. each cartoon has been written in the following detail as given below:
1 The name and address of both parties,
2 The name of the seaport is the airport are dry port of both parties,
3 Size and Colour of goods packed in the same cartoon number and also shipping marks.
