Page 11 - Glossary of Shipping Terms

SHIPPING TERMS

TERM DESCRIPTION
LCL - NVO
LCL/FCL More often known as “Consolidator”. Their business focuses on providing services related to consolidate
LCL/LCL parts or smaller consignments, LCL (Less than Container Load) cargoes into larger unit. They derive
profit by paying the vessel operating carrier the lower consolidated rate.
Letter of Credit
See CFS/CY.
Letter of Credit (L/C)
Letter of Indemnity See CFS/CFS.
Lien
Lift-On/Lift-Off (LO-LO) a. Back-to-Back: A secondary letter of credit issued to a beneficiary on the strength of a primary credit;
Line-haul b. Clean: A letter of credit that requires the beneficiary to present only a draft or a receipt for specified
Liner
funds before receiving payment;
c. Confirmed: A revolving letter of credit that permits any amount not utilized during

any of the specified periods to be carried over and added to the amounts available
in subsequent periods;
d. Deferred Payment: A letter of credit issued for the purchase and financing of merchandise, similar
to acceptance-type letter of credit, except that it requires presentation of sight drafts payable on an
instalment basis;
e. Irrevocable: An instrument that, once established, cannot be modified or cancelled without the
agreement of all parties concerned;
f. Non-cumulative: A revolving letter of credit that prohibits the amount not used during the specific
period to be available in the subsequent periods;
g. Restricted: A condition within the letter of credit which restricts its negotiation to a named bank;
h. Revocable: An instrument that can be modified or cancelled at any moment without notice to an
agreement of the beneficiary, but customarily includes a clause in the credit to the effect that any
draft negotiated by a bank prior to the receipt of a notice of revocation or amendment will be
honoured by the issuing bank;
i. Revolving: An irrevocable letter issued for a specific amount; renews itself for the same amount
over a given period;
j. Straight: A letter of credit that contains a limited engagement clause addressed to the beneficiary;
state that the issuing bank promises to pay upon presentation of the required documents at its
counters or the counters of the named bank;
k. Transferable: A letter of credit that allows the beneficiary to transfer in whole or in part any amount
of the credit to one or more third parties provided that the aggregate of such transfers does not
exceed the amount of the credit.
l. Unconfirmed: A letter of credit forwarded to the beneficiary by the advising bank without
engagement on the part of the advising bank.

American term for documentary credit. In the United States, the terms D/C can often be confused for
documentary collection.

Guarantee from shipper or consignee to indemnity carrier for costs and/or loss, if any, in order to obtain
favourable action by carrier, e.g. sometimes, it is used to allow consignee to take delivery of goods
without surrendering B/L which has been delayed.

A legal claim upon goods for the satisfaction of some debt or duty.

A container ship onto which and from which containers are lifted by crane.

Transportation from one city to another as differentiated from local switching service.

Vessel plying a regular trade/defined route against a published sailing schedule.

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