Shipping terms guide
Make the shipping language clearer
A starting point for common freight terms, the Incoterms® 2020 groups and carrier identification
01 / Freight terms
Read the details with confidence
| Term | Plain-language meaning |
|---|---|
| CBM | Cubic metres: a measure of cargo volume. Use packed dimensions for a planning calculation |
| Net weight | The weight of the goods, excluding packaging |
| Gross cargo weight | Goods plus their packaging. State whether pallets or other handling materials are included |
| Tare | The empty weight of the relevant packaging or equipment; make the measurement basis clear |
| FCL | Full container load: the shipment uses a container rather than sharing a consolidation service |
| LCL | Less than container load: shipments share container space through a consolidation service |
| ETA / ETD | Estimated arrival / departure. Confirm the event and location each estimate describes |
For package volume and conversions, use the shipping calculators. Confirm quotation units and charging rules with the provider
02 / Incoterms® 2020
Agree the rule and the named place
ICC’s 11 rules allocate delivery responsibilities, costs and risk between seller and buyer. Record the selected rule, precise place or port, and version in the sales agreement
Rules for any transport mode
| Rule | Planning focus |
|---|---|
| EXW | Goods made available at the seller’s named location |
| FCA | Handover to the buyer’s nominated carrier at the agreed place |
| CPT | Seller pays carriage; risk transfers earlier at carrier handover |
| CIP | Carriage plus seller-arranged insurance; risk transfers at carrier handover |
| DAP | Delivery at the destination, ready for unloading |
| DPU | Delivery at the destination after unloading |
| DDP | Seller handles delivery and import clearance obligations |
Rules for sea and inland waterway transport
| Rule | Planning focus |
|---|---|
| FAS | Delivery alongside the vessel at the shipment port |
| FOB | Delivery on board at the shipment port |
| CFR | Seller pays sea freight; risk transfers at shipment |
| CIF | Sea freight plus seller-arranged insurance; risk transfers at shipment |
These are short orientation notes, not the full ICC rules. The rules do not determine ownership transfer or payment terms. Read the official ICC explanation and review the chosen rule for the transaction
Questions to resolve before booking
- What exact location and handover event have the parties agreed?
- Who books each transport leg and instructs the carrier?
- Who arranges loading, unloading, clearance and any insurance?
- Which charges and services are included in the freight quotation?
03 / Carrier identification
Use the official SCAC lookup
A Standard Carrier Alpha Code (SCAC) identifies a transport provider. NMFTA issues and manages these codes, and its SCAC Verified service provides official status lookup
When a booking or document requires a SCAC, request the correct code from the relevant provider and verify it against the official record. A code is not proof of operating authority, insurance or service quality
Open NMFTA SCAC lookup (opens in a new tab)
Lookup access and any account requirements are managed by NMFTA
04 / Common questions
Clarify the terms before the shipment
Does an Incoterm replace a freight quotation?
No. Ask the provider to specify the actual services, charges and exclusions for the booking. The buyer and seller should separately agree their responsibilities in the sales contract
Can I treat an estimated arrival as a delivery appointment?
Confirm what the estimate refers to. An arrival event and final delivery appointment may be different parts of the journey; agree the receiving arrangements with your logistics team
Where do I check a carrier’s SCAC?
Use NMFTA’s official SCAC platform linked above. Confirm that the result matches the provider named on your shipment documents
What should I do if a charge is unclear?
Ask for its meaning, unit, amount or calculation basis, and the event that triggers it before accepting the quotation