Page 12 - Turners Shipping Glossary of Terms

GLOSSARY OF SHIPPING TERMS

TERM DESCRIPTION

Letter of Credit (a) Back-to-Back: A secondary letter of credit issued to a beneficiary on the strength of a
primary credit;
Letter of Credit (L/C) (b) Clean: A letter of credit that requires the beneficiary to present only a draft or a receipt
Letter of Indemnity for specified funds before receiving payment;
Lien (c) Confirmed: A revolving letter of credit that permits any amount not utilized during any of
Lift-On/Lift-Off (LO-LO) the specified periods to be carried over and added to the amounts available in subsequent
Line-haul periods;
Liner (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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