In-Transit Entry (I.T.)
Allows foreign merchandise arriving at one port to be transported in bond to another port, where a superseding entry is filed.
A document required and issued by some national governments authorizing the importation of goods.
Cargo moving under Customs control where duty has not yet been paid.
A transportation line that hauls export or import traffic between ports and inland points.
A certificate issued by an independent agent or firm attesting to the quality and/or quantity of the merchandise being shipped. Such a certificate is usually required in a letter of credit for commodity shipments.
This type of insurance offers the shipper the broadest coverage available, covering against all losses that may occur in transit.
Inward Foreign Manifest (IFM)
A complete listing of all cargo entering the country of discharge. Required at all world ports and is the primary source of cargo control, against which duty is assessed by the receiving country.
Irrevocable Letter of Credit
Letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee and which cannot be revoked without joint agreement of both the buyer and the seller.
Bank that opens a straight or negotiable letter of credit and assumes the obligation to pay the bank or beneficiary if the documents presented are in accordance with the terms of the letter of credit.
Abbreviation for "Letter of Credit."
Refers to the freight shipped; the contents of a shipment.
Abbreviation for "Less than Container Load." The quantity of freight which is less than that required for the application of a container load rate. Loose Freight.
Letter of Credit (LC)
A document, issued by a bank per instructions by a buyer of goods, authorizing the seller to draw a specified sum of money under specified terms, usually the receipt by the bank of certain documents within a given time. Some of the specific descriptions are:
- Back-to-Back: A new letter of credit issued to another beneficiary on the strength of a primary credit. The second L/C uses the first L/C as collateral for the bank. Used in a three-party transaction.
- Clean: A letter of credit that requires the beneficiary to present only a draft or a receipt for specified funds before receiving payment.
- Confirmed: An L/C guaranteed by both the issuing and advising banks of payment so long as seller's documents are in order, and the L/C terms are met. Only applied to irrevocable L/C's. The confirming bank assumes the credit risk of the issuing bank.
- 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 installment basis.
- Irrevocable: An instrument that, once established, cannot be modified or cancelled without the agreement of all parties concerned.
- Non cumulative: A revolving letter of credit that prohibits the amount not used during the specific period from being available afterwards.
- Restricted: A condition within the letter of credit which restricts its negotiation to a named bank.
- Revocable: An instrument that can be modified or cancelled at any moment without notice to and 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 honored by the issuing bank. Rarely used since there is no protection for the seller.
- Revolving: An irrevocable letter issued for a specific amount; renews itself for the same amount over a given period.
- Straight: A letter of credit that contains a limited engagement clause which states that the issuing bank promises to pay the beneficiary upon presentation of the required documents at its counters or the counters of the named bank.
- Transferable: A letter of credit that allows the beneficiary to transfer in whole or in part to another beneficiary any amount which, in aggregate, of such transfers does not exceed the amount of the credit. Used by middlemen.
- Unconfirmed: A letter of credit forwarded to the beneficiary by the advising bank without engagement on the part of the advising bank.
Letter of Indemnity
In order to obtain the clean bill of lading, the shipper signs a letter of indemnity to the carrier on the basis of which may be obtained the clean bill of lading, although the dock or mate's receipt showed that the shipment was damaged or in bad condition.
A document of title (such as a draft, promissory note, check, or bill of lading) transferable from one person to another in good faith for a consideration. Non-negotiable bills of lading are known as "straight consignment." Negotiable bills are known as "order b/l's."
Ocean Bill of Lading (Ocean B/L)
A contract for transportation between a shipper and a carrier. It also evidences receipt of the cargo by the carrier. A bill of lading shows ownership of the cargo and, if made negotiable, can be bought, sold or traded while the goods are in-transit.
A notation on a bill of lading that cargo has been loaded on board a vessel. Used to satisfy the requirements of a letter of credit, in the absence of an express requirement to the contrary.
A bill of lading term to provide surrender of the original bill of lading before freight is released; usually associated with a shipment covered under a letter of credit.
Original Bill of Lading (OBL)
A document which requires proper signatures for consummating carriage of contract. Must be marked as "original" by the issuing carrier.
Itemized list of commodities with marks/numbers but no cost values indicated.
Pro Forma Invoice
An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value, and specifications (weight, size, etc.).
A Latin term meaning "In proportion."