Glossary of Shipping, Insurance and Commercial Terms
The right a marine assured has to abandon property in order to establish a constructive total loss. An underwriter is not obliged to accept abandonment, but if he does he accepts responsibility for the property and liabilities attaching thereto, in addition to being liable for the full sum insured.
From the beginning.
A bill of exchange signed by the party upon whom it is drawn in token of acceptance of responsibility for its Payment.
Act of God:
An inevitable event occurring without the intervention of man - such as flood, tempest, or death - operating in case of certain contracts, such as those of insurers or carders.
Actual Container Gross Weight:
Total weight of a container, i.e. the weight of the payload plus empty container weight, together with any loose internal fittings.
Actual Pay Load:
The difference between the actual gross weight and the gross tare weight of a container.
Actual Total Loss:
This relates to an insurance policy and can occur in any of four ways:
The property is completely destroyed;
The owner is irretrievably deprived of the property;
Goods change their character to such a degree that they can be said to be no longer the thing insured by the policy;
The subject matter of the insurance, be it ship or goods on board the ship, is recorded as "missing" at Lloyd's.
Ad Valorem (Lat.):
According to the value. An ad valorum stamp on deeds or documents is one fixed in proportion to the amount of rent reserved or other element of value expressed in the deed.
A draft on a shipowner for wages, given to a seaman on signing Articles of Agreement and redeemable after the ship has sailed with the seaman on board.
A document which is receipt for cargo received by an airline and is evidence of a contract between the consignor and airline.
A written declaration on oath.
A contract to carry goods by ship. Charter parties and Bills of Lading are contracts of affreightment.
Vessel designed to carry containers only and no other cargo. (see Cellular Vessel)
An attachment to a bill of exchange for carrying additional endorsements after the back of the bill has been filled with names.
An insurance term which means that the policy covers the insured property for loss caused by any fortuity. The policy does not cover inevitable loss.
The temperature of a substance surrounding a body. Thus the ambient temperature of a container would be the temperature of the air to which it is exposed outside.
A term relating to return of premiums on a hull policy. The ship must be safe at expiry of the. policy; otherwise no return of premium will be paid.
The submitting of matters of controversy to judgment by persons selected by all parties to the dispute.
The detention of a vessel until the purpose of the arrest has been fulfilled.
A person who officially estimates the value of goods for the purpose of apportioning the sum payable in the settlement of claims.
The documentary transfer of title to the contents of a container when signed over to an interested party.
Australian Zone Charge (AZC):
This is that portion of the Through Service' which applies to the Land leg delivery in Australia. Either in the collection of goods for export, or the delivery of goods which have been imported.
Loss or damage at sea. The distribution of loss among underwriters.
Partial loss of the whole adventure deliberately made to prevent total loss of the whole adventure. It may be sacrifice of property or expenditure incurred to save the adventure. Parties who benefit from a general average loss are required to make good that loss by contributing in the proportion that the saved value of the party's property bears to the saved value of all interest involved in the adventure.
A fortuitous partial loss of insured property proximately caused by an insured peril, but which is not a general average loss.
A person appointed by a shipowner to collect data, guarantees, etc., in relation to general aver- age, and to calculate contributions due from the parties concerned to make good general average losses. The adjuster may also adjust claims on hull insurance policies on behalf of underwriters.
An agreement signed by all interested parties acknowledging their liability to pay a share of the loss under General Average.
Expenditure incurred by the shipowner in connection with a general average act or an act of salvage. Such expenditure, when properly incurred, is recoverable from the G.A. or salvage fund created by the average adjuster, not from hull underwriters.
The right of an underwriter to avoid a contract of marine insurance. This can occur in the event of a breach of good faith by the assured or by his broker or, in the case of a voyage policy, where the voyage does not commence within a reason- able time after acceptance of the risk by the underwriter.
The decision given by an arbitrator, to whom a matter in dispute has been referred. An arbitrator states only the effect of his decision, without reasons - thus differing from a judge, who usually states the grounds of his judgment.
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Payment due to the shipowner for the carriage of goods beyond the contract port owing to circumstances beyond the control of the shipowner.
Bandwidth of a communications channel refer to the width of the frequency spectrum that can be transmitted over it. Therefore, it is one of the factors that determine the channel's capacity (or speed) to carry information. The unit of bandwidth is the Hertz (Hz).
Banker's Indemnity or Guarantee:
A form which may be required in the following circumstances:
By a shipowner to be completed by the consignee and countersigned by the consignee's bank, when release of goods is required without production of the Bill of Lading (e.g. if the BIL has been lost).
When a clean BIL is called for on the Documentary Credit and the shipowner, for various reasons, wishes to clause the BIL.
By the Chamber of Commerce and Industry when issuing an ATA Carnet for goods to be temporarily exported from Australia.
Bare Boat Charter:
Charterer hires a vessel for a long period, appoints the master and crew, and pays all running expenses.
An illegal or fraudulent act committed by the master or crew to the prejudice of the owner or charterer.
Basic Service Charge (BSC):
Amount arrived at by the multiplication of freight in tonnes, by the Basic Service Rate (BSR).
Basic Service Rate (BSR):
Costs of ocean liner freight, wharfage and other port charges (at both port of departure and port of entry).
A windscale and sea disturbance table by which mariners grade the force of wind and height of waves, thus communicating the general condition of the sea to others by the use of a wind force number.
Bill of Exchange:
An order in writing from one person or firm to another requiring them to pay a certain sum to a person named.
Bill of Lading:
A document which is a receipt for cargo received on board and is evidence of the contract between shipper and shipowner. It is also evidence of title to the goods described on it.
Imported goods deposited in a Government warehouse until duty is paid.
An organisation that is prepared to undertake an agreement to make good a financial guarantee on behalf of another responsible for such guarantee. Owners of "arrested" vessels may obtain such a bond to satisfy a court and to obtain release of the vessel.
Bottomiry Bill or Bond:
The pledge of a ship, or of her cargo, as security for repayment of money advanced to the master in an emergency, and of no avail if the ship be lost.
A propeller used to provide a transverse thrust to the bow of a ship and to assist movement in confined spaces.
A national electronic bill payment service operated by the major Australian banks.
Bits per second - telecommunications term, the measure of information transfer rate in digital transmission systems - with kilo (1000; k), Mega (1 000 000; M) and Giga (1 000 000 000; G) as the commonly used multipliers (that is kbps, Mbps. Gbps)
Break Bulk Cargo:
An assembled variety of shipments in a vessel, or one hold of a vessel, to be sorted (disseminated) after discharge. The opposite to bulk cargo where one shipment occupies the hold, or the ship alone.
The initial opening of hatches on entering port and the commencement of discharge of cargo.
An agent employed (at a customary or an agreed rate of commission or remuneration) to buy or sell goods, merchandise or marketable securities, or to negotiate insurances, freight rates or other matters, for a principal; the sales of transactions being negotiated not in his own name but in that of the principal
Front wall of container.
Vertical separation between the holds of a ship (now extended to cover all vertical panels).
Berths with facilities for mechanical loading or unloading of bulk products such as oil, grain, coal or mineral ores.
Bunker Adjustment Factor (BAF):
Surcharge, either as an addition or subtraction from the total freight rate, according to variation in the cost of ship fuel oil.
Eight bits (see above) grouped together to form a unit of information. Used as a measure of capacity of information storage media, with kilo (1 000; k), Mega (1 000 000; M) and Giga (1 000 000 000; G) as the commonly used multipliers (that is kB, MB, GB)
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Coastal navigation, also used for reservation of transport within a country to its own shipping
Holding sheds, next to shipping berths, where goods are held prior to or after loading.
A temporary exportation/importation customs clearance document issued by Chambers of Commerce.
Carriage of Goods by Sea Act 1991:
Act of Commonwealth parliament which came into force in 1991, repealing the Sea Carriage of Goods Act 1924 and giving force to the Hague Rules as amended by the Visby and SDR (Special Drawing Rights) Protocols for export of goods by sea from Australia. The Act also makes provision for entry into force of the Hamburg Rules on a date to be proclaimed.
The right to retain possession of goods pending payment of overdue freight charges.
Cars Knocked Down, completely Knocked Down (CKD):
i.e. Cars completely unassembled and packed into cases. Part knocked down (PKD) i.e. cars partly assembled and packed into cases.
Cash against documents (DIP):
Full shipping documents are sent to a bank or an agent at the port of destination with instructions that they are to be handed over to the consignee only in exchange for the sum due.
The cause of a cause of loss.
The guidance system enabling containers to be carried in a vertical line in the ship, each container supporting the one above it. . The position on board a vessel in which a cargo container is stowed; designated by Bay- Column-Height in stow.
Ship specialised for container transport. The holds have vertical guides into which containers are lowered to form secure stacks restrained at all four corners.
Certificate of Origin (CO):
A document to prove the place of growth, production or manufacture of goods specified thereon.
An agreement wherein the shipowner hires his vessel to the charterer subject to certain conditions
A clause in a cargo insurance contract which specifies the minimum class of vessel required to carry the insured goods. If the carrying vessel is below the class specified, an additional premium is charged by underwriters for the additional risk involved.
Clause in Bill of Lading stating that the Hague Rules are amended by the Visby/SDR Protocol apply to the contract of affreightment as per the Carriage of Goods by Sea Act 1991.
Clean Bill of Lading:
One in which there is nothing to qualify the admission that the goods are shipped in good order and condition.
Denotes that a vessel has complied with all the regulations for clearance outward. It is attached to the Victualling Bill by the Customs officer who clears the vessel, and is then known as Outward Clearance.
A separate refrigeration unit which can be clipped on to an insulated container.
The sharing of an insurance risk between two or more parties, other than a contract of reinsurance.
Container with hinged sides, top etc. designed to be folded down to a small proportion (mostly about one quarter) of its erected volume.
The term may also denote freight container, the major components of which can be diss,-m- bled and later reassembled for use.
Means the carriage of goods by at least two different modes of transport, from a place at which the goods are taken in charge situated in one country to a place designated for delivery situated in a different country.
A ship designed to carry both conventional and containerised cargo.
Comité Maritime International (CMI):
The international agency of national maritime law associations, authors of the Hague Rules.
A fixed short term (up to 180 days) finance facility at a fixed interest rate. An alternative to floating rate overdraft finance.
A document which provides details of the con- tract of sale between buyer and seller.
A mixture of two or more cargoes which cannot be separated into the relevant consignments.
One who carries any type of goods, other than a carrier of special goods.
A ship operated by a signatory to a shipping conference agreement.
The firm or persons authorised to receive the cargo and to whom it is consigned.
A transport contractor, carrier, or forwarder who undertakes the transportation of small shipments (see LCL) in groupage. The consolidator assembles such LCL shipments in a container which will be stripped by his receiving agent in the destination area.
Number of shipping companies who have combined their vessel facilities and capital resources in order t offer a shipping service for the carriage of containers.
Constructive Total Loss:
Right of marine assured to claim a total loss on the policy because of either 1. the property has been lost and recovery is unlikely; or 2. an actual total loss appears to be unavoidable; or 3. to prevent an actual total loss it would be necessary to incur an expenditure which would exceed the saved value of the property. To establish a claim for constructive total loss the assured must abandon what remains of the property to underwriters and give notice of his intention to do so.
An invoice, prepared on a special form and legalised by the Consul of the importing country, usually required by the Customs of that country to confirm details and origin.
Container Freight Station (CFS):
Other names: containerbase; consolidation depot; depot; - where parcels of cargo are grouped and packed into containers.
Container Load (CL):
See FCL. A shipment sufficient in size to 'fill' a container either by cubic measurement or weight, depending upon governing tariff to meet the provided minimums.
Container Part Load:
See LCL. Consignment which does not occupy the full capacity of a container nor equals the maximum payload and will, therefore, allow the inclusion of another or other part-loads.
System whereby ship-owners, manufacturers or operators create a container pool for common use and maximum utilisation.
Vessel specially fitted out for carrying containers. The hold consists of wells into which the containers can be lowered and stacked in up to eight layers. Containers may be stowed on deck up to four high on top of any one hatch.
Specially constructed cylindrical container for the carriage of bulk liquids, powders or gases, being supported within a frame Sft x Sft lattice construction and in lengths 20, 30 and 4Oft with corner castings and normally fitted with a bottom pick-up device.
Container Terminal (CT):
Area where large-scale container handling parking and storage facilities are available and used for transfer of containers between at least two different transport media (rail, road, sea, barge, air).
Ship designed to carry ISO (International Standards Organisation) containers, in vertical cells within the holds. The container vessel is designed for maximum speed and efficiency, with a minimum of labour necessary for loading and unloading.
A clause providing for the continuation of a hull policy beyond the natural expiry date.
An alternative to the Deferred Rebate System. Shippers sign a contract in advance, either for yearly or indefinite periods, in which they under- take to confine all their shipments to Conference Line vessels.
The value of property saved by a general salvage or salvage act, on which the contribution by each interest to the loss is calculated.
Berth suitable for conventional ships, either employing the ship's own derricks or supplementing with shore-based equipment.
Ship designed with its own on-board derricks for the loading of goods into the holds.
Any currency other than sterling, U.S. dollars or Canadian dollars.
An undertaking given by a cargo assured to an underwriter agreeing to reimburse the underwriter in the event that the issue of the underwriter's guarantee to pay a general average contribution results in payment in excess of the amount properly due under the policy.
Programs that search for key words or terms on published web sites on the Internet.
Means Combined Transport Document which is a document evidencing a contract for the performance andlor procurement of performance of combined transport of goods.
Combined Transport Operator. A person (including any corporation, company or legal entity) issuing a combined transport document.
When the volumetric capacity of the container has been reached in advance of the permitted weight limit.
Currency Adjustment Factor (CAF):
A charge levied by the 'Ocean Carrier' over and above the ocean freight rate to cater for fluctuations over a period in actual currency exchange rates as compared to those exchange rates set by the conferences as applying to various sailings.
Current Domestic Value (CDV):
Price at which the supplier is prepared to supply to any purchaser for home consumption in the country of export and at the date of export, similar goods in the usual wholesale quantities.
New for old deductions made by an average adjuster from the cost of repairs for general average damage to a ship over 15 years old.
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Freight rate which is paid on empty space in the vessel when the charterer is responsible for the freight rate of a full cargo. It should be paid before sailing.
This is the actual number of tons of cargo, bunkers, stores, etc., that can be put on board a ship to bring her down to her "marks". Deals: Lengths of timber between 5ft. and 3Oft. in length and between 2 inches and 9 inches thick.
Ship's log recording general details concerning the running of the ship including accidents concerned with ship or cargo.
Department of Employment, Education, Training and Youth Affairs
An insurable interest that ceases during the transit of goods.
A system allowing the shipowner to pay his annual premium by instalments.
An agreement whereby the charterer takes over control costs and responsibilities of the vessel for an agreed period.
The sum agreed by charter to be paid as damage for delay beyond the stipulated time for loading or discharging. It should be collected daily by the master or agent.
Storage building where goods are stored and where containers are packed, or unpacked, before:
containers are transported to shipping terminals.
goods from containers are transported to importer's warehouse.
A receipt given in respect of a general average deposit payment.
A vessel that has been abandoned by the crew but has not sunk.
Where demurrage is paid for an agreed number of days, any further delay is termed "detention".
Removal of contents from a container (some. times called stripping or discharging).
A departure by a ship from the agreed customary route of the voyage, with the intention of returning to that route to complete the voyage. Where the ship deviates without lawful excuse the underwriter, unless the policy provides otherwise, is discharged from all liability from the time the vessel deviates, and insurance cover does not reattach if and when the vessel regains her original course. Disbursements: Expenses incurred by the shipowner in connection with running a ship.
When so agreed in the charter-party, this is paid by the shipowner to the charterer as a result of the vessel completing loading or discharging before the stipulated time.
This term is chiefly used when referring to warships and is the actual weight of water displaced by the vessel when floating at her loaded draught.
Documents against Acceptance (DIA):
The shipper forwards shipping documents attached to a draft for the sum due, to a bank or agent at the port of estimation to present to the consignee who, upon acceptance of the draft, receives the documents to obtain release of the goods before payment for them.
Documents against Payment (DIP):
See cash against documents.
Documentary Credit: (see Letter of Credit)
Documents of Title:
Documents produced by a consignee as evidence of right to take delivery of goods (e.g. Bill of Lading and Export invoice).
Through transport of containers from consignor to consignee without any discharging or reload- ing of goods, except possibly at Customs control.
Bank draft or Bill of Exchange. See Bill of Exchange.
A repayment of duty on the exportation of goods previously imported.
A type of drilling rig used in oil exploration at sea.
A barge that has no means of propulsion.
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Electronic Funds Transfer.
Electronic Funds Transfer at Point of Sale.
Similar in kind to others stated previously. Relates to the peril insured against in a marine policy.
The reporting of the vessel's arrival in port by the master at the Custom House. Permission to commence discharging is obtained.
A place of transhipment.
Report of the intention to commence a new voyage by the master at the Custom House. Permission to commence loading is obtained.
A clause in a builder's risk policy allowing the insured value to increase as the construction proceeds.
An amount that is deducted from a partial loss before the claim is applied to the policy.
Excess Value Insurance:
A policy effected to cover the shipowner's liabilities attaching to the difference between the insured value and the contributory value where the latter is higher than the former. Without this such excess liabilities would be uninsured.
Detailed statement made by the master of a vessel concerning an accident which has become the subject of a court case.
Expenses incurred in connection with a claim under a policy.
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An agent employed to sell in his own name (at an agreed commission) goods or merchandise belonging to his principal; his acts being binding on the principal at the instance of third parties. Compare with Broker.
FAK (Freight all Kinds):
A uniform rate or tariff applicable irrespective of commodity. (FAD rates are the opposite of commodity rates or class rates).
Where the load carried in a container equals one of the two operating maxima - in a weight or volume.
The load in a container if the shipper was assured of a separate container exclusively for his cargo. - A shipper packed container.
Vessel used in short sea trade to serve ports at which deep-sea container ships do not call.
Harbours, piers, buoys, etc., with which a ship might come into contact.
The temperature at which a liquid produces enough vapour to form an inflammable mixture with air.
A form of cargo policy to cover many individual voyages. Seldom used today, having been replaced in practice by the open cover and open policy.
Cargo cast or lost overboard and recoverable by reason of its remaining afloat.
An occurrence outside human control (e.g. earth- quake), a superior power.
Raised part at the bow of the ship. Forty-foot Unit: ISO container 40-ft long by 8-ft by Sft 6-in (about 6m long by 2.4m by 2.5m).
Forward Exchange Contract:
A contract between a bank and a customer under which the bank agrees to set the exchange rate now to purchase from or sell to the customer a fixed amount in a foreign currency at a future date.
Agent who handles all shipping matters for the exporter.
A Bill of Landing (see Unclean Bill of Lading) that has been claused to show that the goods were not received in a sound condition.
A percentage shown in a cargo policy which has to be attained before a partial loss claim is to be paid. However, once the franchise is attained the claim is paid in full.
This is the height between the deck line and the Plimsoll (or Load) line.
Free in and out:
Cargo to be loaded and discharged free to the vessel.
An opening to allow water from the deck of a ship to flow over the side.
Free of Particular Average:
A policy term excluding partial loss claims.
Free of Capture and Seizure:
The war risks exclusion clause that forms part of all marine insurance policies. .cc on board: Goods delivered on board the vessel free of extra charge to the purchaser.
A term in a hull policy whereby the underwriter waives his right to freight earned or to be earned by a ship that is the subject of a total loss claim.
Freight of all kinds (FAK):
Denotes container loads, packed by the shipping company, with several or more smaller consignments. Such a container will contain at least three different consignments and at least five different items, with no one item exceeding 6000 kilos.
Article of transport equipment of a permanent character designed to facilitate the carriage of goods by one or more means of transport without intermediate rehandling of the goods them- selves. This article shall be fitted with devices permitting its ready handling, be designed in order for easy filling and emptying and have an overall volume of 8 cu.m. (282 cu.ft.) or more. The term excludes vehicles and conventional packing.
The insurable interest of a consignee who has paid freight on goods when delivered over the ship's side, but where the goods are still subject to peril until they arrive at the final destination.
One who arranges the shipping of goods overseas.
The charge for transporting goods by water.
Frustration of Adventure:
A circumstance whereby a ship or goods cannot reach the contemplated destination but remain undamaged and are not lost to the owner. This peril is normally excluded from policies covering war risks.
Full Container Load (FCL):
A container, generally shipped under one bill of lading, which is packed by the shipper and unpacked by the consignee. Basically, this is just a container (not necessarily full) which is not being shared by more than one shipper.
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An internationally accepted rule of the sea. When a ship is in danger of total loss the master has the right to sacrifice property and or incur reasonable expenditure to prevent the total loss. Measures taken for the sole benefit of any particular interest are not general average. On successful completion of the adventure, or if it is abandoned in a place of safety, on successful attainment of such place the ship is declared as entering "under average". Security in the shape of deposits or guarantees is taken from each cargo interest and an average adjuster is appointed. 'Re adjuster calculates the value of the saved interest and each interest is required to contribute a rateable proportion to make good the general average loss. Underwriters are liable only if the peril leading to the general average act was an insured peril, and their liability is limited to the insured value of sacrificed insured property and to their proportion of the general average contribution payable by the assured.
General Average Bond:
An agreement signed by all parties involved in a general average act.
General Average Contribution:
The proportion payable by one of the parties involved in a general average act to make good the loss suffered in that act.
General Average Deposit:
A deposit paid by a cargo in return for delivery of the goods where such goods are subject to a general average contribution.
General Average Disbursements:
Expenses paid by the shipowner as part of a general average act. Such expenses are recovered by the shipowner from the general average fund.
General Average Fund:
The total arrived at by adding together general average expenditure and the value of property sacrificed in a general average act, plus costs of its adjustment.
General Average Guarantee:
An undertaking by a financial house or an underwriter to pay the contribution due towards a general average fund.
General Average in Full Clause:
A clause in a cargo policy whereby the under- writer agrees to pay general average contributions in full even though the contributory value may be greater than the insured value.
Total weight of goods and packing.
Term used in various Asian countries for warehouse.
Gold Clause Agreement:
An agreement between parties concerned with the carriage of goods by sea, whereby they agree to increase the limits imposed by law for ship owners' liability in respect of cargo.
A certificate to show that the regulations have been complied with when carrying a grain cargo.
This is the volume of the interior of the vessel including all spaces which are permanently closed in (but excluding the double bottom), expressed in tons of 100 cubic feet. cross Weight: Total weight of goods and packing.
Global System for Mobile Communications.
GUI: Graphical User Interface.
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Short container, half the normal 8 ft in height.
Cargo comprising especially heavy pieces which may require:
special care in loading and unloading;
special equipment for handling;
special care and attention during transit.
An agreement by underwriters to extend the terms of the insurance in specified circum- stances subject to an additional premium.
Maritime areas outside the jurisdiction of any state.
The opening page of a web site.
Linkage from one web page to another, enabling direct switching between non-adjacent pages.
House Air Waybill:
A special air waybill used for consolidated air freight shipments.
Marked word or phrase in an electronic document that provides an automatic link to another document.
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International rules for the interpretation of trade terms used in international trade, formulated by the International Chamber of Commerce.
Liability of an insurer for loss under a policy.
Instructions for certain goods to be purchased and despatched, given by an overseas buyer to a confirming house, agent or merchant.
Damage caused by an insured peril but not proximately caused thereby.
A quality in a cargo that gives rise to a loss, generally, without any other peril operating. The perishable nature of fruit is an example.
Legal action against a person.
Legal action against an object or the owners thereof (e.g. action naming the ship).
Institute Cargo Clauses:
Standard insurance conditions for policies covering goods in transit overseas.
Institute of London Underwriters:
An association representing company underwriters and interest in the London insurance market.
Institute Time Clauses:
Standard insurance conditions for policies covering ships for a period of time.
A set of express warranties for use in policies covering ships. Mainly these are navigational warranties restricting the ship's navigational areas. Breach of the warranties is held covered subject to payment of an additional premium and change of policy conditions, if required by the underwriters.
The interest one has in relation to property exposed to peril whereby one may lose financially by the loss of, or damage to, such property or may incur a liability in respect thereof A person who effects a marine insurance contract without an insurable interest or a reasonable expectation of acquiring such interest is guilty of an offence under English law.
The value of property as expressed in a policy of insurance.
Refrigeration unit which is built into the reefer (refrigerated container).
International Sale of Goods (Vienna Convention) Act 1989:
See Vienna Sales Convention.
A decentralised, international computer network, comprising thousands of individual networks linked by common set of technical protocols.
Communications network, solely for intra-company use.
A document setting out in detail the goods consigned, marks and numbers, cost, any charges, and name of consignee.
Pilotage and other expenses incurred on entering port.
Irrespective of Percentage:
When shown in a policy this means that particular average is not subject to the franchise expressed in the standard S.G. policy form.
Internet Service Provider
Information Technology and Telecommunication
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A clause in a contract of affreightment relating to liability of the shipowner under the U.S. Harter Act in disputes concerning general average.
A document given to the master by the Customs after the inward cargo is discharged and the vessel has been rummaged.
Cargo or goods which sink when jettisoned. The term applies also to such goods when washed ashore.
The act of throwing cargo and stores overboard in order to save the vessel.
Joint Cargo Committee:
A group of London company underwriters and Lloyd's underwriters who meet to discuss matters relating to cargo insurance and to make recommendations to the cargo insurance market.
Joint Hull Committee:
A group of London company underwriters and Lloyd's underwriters who meet to discuss matters relating to hull insurance and to make recommendations to the hull insurance market.
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Knocked Down Condition:
Goods (e.g. vehicles) dismantled for transit.
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Cargo thrown overboard, but buoyed so that it may be recovered.
A vessel specially constructed for navigation in the waterways of the Great Lakes and canal systems of North America.
Descriptive term for an overland transit coming between two ocean passages during a container's journey from starting point to destination.
Includes the CIF price, plus the cost of unloading, storage (if necessary); customs duty an, any other costs involved in clearing goods for entry into the customer's country. Equivalent to the DDP price (Delivered Duty Paid - 1991 Incoterrns).
LASH vessel ('lighter aboard ship'):
A vessel used for off-loading at difficult port where berthing is not possible. Ship carries loaded lighters (barges) which can he lowered into the sea and towed to a suitable area for unloading.
A defect in the construction of a ship or machinery that is not readily discernible to a competent person carrying out a normal inspection. Discovery of a latent defect does not give rise to a claim on the ordinary hull policy, but damage caused thereby is usually covered.
Days allowed by charter for loading or discharging cargo.
A return of part of the annual premium on a ship time policy paid back to the assured by the underwriter because the ship has been laid up and not exposed to full navigational risks for a period of not less than 30 consecutive days. Such return is not paid until the natural expiry date of the policy, and is forfeit if the vessel becomes a total loss before such date.
The cost of transporting coal from colliery to place of shipment.
The combining of several consignments, which were too small to fill a container, into one container. There may be several consignees each with a separate bill of lading.
Letter of Credit:
A document authorising payment to the person named, subject to fulfilment of certain specified conditions on the part of the person authorised to receive the money (e.g. evidence that goods have been shipped). Also known as Documentary Credit.
Lien: A legal right over goods, to hold them until the claim against the owner has been settled.
A Customs receipt for the payment of light dues.
Moneys collected by the Customs on behalf of Trinity House for the maintenance of lighthouses and buoys. Dues are levied on vessels according to their net registered tonnage.
The price paid for loading or unloading ships by lighters or barges.
A drainage hole in a ship.
An insurance expression meaning that the policy gives less cover than a policy on full conditions (e.g. total loss only).
Limited per Bottom:
The maximum amount or cargo insured by a policy in any one vessel.
A ship on a regular schedule calling at specified ports.
Service that sends email to a list of intended recipients.
Persons appointed by the Corporation of Lloyd's and stationed in all major world ports. Their function is to safeguard Lloyd's interests and report all movements and losses of ships.
An intermediary who negotiates insurance contracts with Lloyd's underwriters on behalf of his client, the assured. For a broker to be admitted as a Lloyd's broker he must satisfy the Committee of Lloyd's that he is a suitable person to become a Lloyd's broker. Only Lloyd's brokers are permitted to enter the underwriting room at Lloyd's to transact business with underwriters.
Lloyd's Register of Shipping:
An independent non-profit-making Society, controlled by the various sectors of the shipping industry. It undertakes surveys, classification of all vessels, and produces various annual publications, including Construction Rules for Steel Ships.
The Load Line, sometimes called the Plimsoll Line, or "marks", indicates the depth in the water down to which a ship may be loaded; the position of these marks is governed by international convention.
A clause in a cargo insurance contract limiting insurance cover at any place prior to loading on to the vessel.
Loss of Specie:
A change in the character of cargo which, in insurance terms, is effectively an actual total loss.
Lump Sum Freight:
A fixed freight rate, regardless of how much cargo is loaded.
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Machinery Damage Co-insurance:
A clause in a hull policy which applies a 10 per cent deductible to claims for damage to ship's machinery which is attributable to negligence on the part of the master, officers or crew. This deductible is applied to the net claim after applying any other deductible expressed in the policy.
The sums paid to a general average fund to make good losses incurred by the general average act.
Program that organises the sending and reception of electronic mail.
A document containing the passenger list and details of all stores and cargo on board the vessel.
The claim a master and crew has on the vessel for the payment of wages due.
The maximum amount an insured market can absorb as liability to its policy holders while maintaining a proper solvency margin.
Any circumstance that would affect a prudent underwriter in deciding whether or not to accept an insurance contract and in assessing the correct premium to charge.
A receipt signed by the mate to say the cargo has been received on board in good order and condition.
A condition expressed at the foot of the S.G. policy form applying an F.P.A. warranty to certain specified cargoes and a franchise to particular average claims for other interest. In modem practice it applies only to cargo policies.
Payment of a very small amount, made over the Internet.
A ship is deemed to he "missing" when, following extensive enquiries, she is officially posted as "missing" at Lloyd's. She is then considered to be an "actual total loss" and policy claims for both hull and cargo are settled on that basis.
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An underwriting member at Lloyd's.
Netscape is an Internet browser company.
Packing hollow-ware cargo (e.g. earthenware bowls) so that one item nests within another. Paper or straw is used to separate each item and avoid damage.
This is the gross tonnage less the machinery, boiler and bunker, crew and stores spaces.
New for Old:
When new material or parts replace damaged material or parts during repairs to a ship. Under- writers are entitled to make a deduction from the claim as a result of betterment but they waive this right in practice. Average adjusters may apply the principle in general average for vessels over 15 years old.
No Cure - No Pay:
The principle of pure salvage whereby the salvager who fails in his task receives no reward for his efforts.
An official certified to take affidavits and depositions from members of the public.
Notice of Abandonment:
The initial action to be taken by an assured who wishes to claim a constructive total loss. Notice to underwriters must be given with reasonable diligence as soon as the assured is aware of the circumstance. Its purpose is to give the underwriter the opportunity to take action to prevent or minimise the loss.
Not to Inure Clause:
A clause in a cargo policy stating that the policy shall not inure to the benefit of a carrier or other bailee. The intention is to deny the right of carriers to benefit from the insurance when they claim such right in their contracts of carriage.
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A registered number given to all merchant vessels and cut in on the vessel's "main beam", together with the net registered tonnage.
A clause in a hull policy extending liability cover to embrace, in addition to the assured's legal liability, the liability of other organisations who are connected with the ship. It usually excludes liability of shipyards, repair yards and others to whom underwriters do not wish to extend cover.
Goods shipped with payment made to the shipper as the goods are sold at destination. The shipper retains ownership.
Where the charter-party specifies neither the kind of cargo nor the ports of destination.
A container with sides and/or ends of bars, grilles, mesh or entirely left open, with or without roof.
A form of long term cargo insurance contract. It has no aggregate limit but, subject to a limit to the amount at risk in any one vessel, and often a limit to the amount at risk in any one location prior to shipment, the contract covers all shipments forwarded by the assured during the currency of the open cover. Underwriters have the right to cancel at any time by giving the requisite notice of their intention to cancel, but shipments that have commenced transit before the notice period expires continue to be covered until final delivery within the terms of the transit clause.
A cargo insurance policy designed to cover all consignments forwarded by the assured subject to a limit in any one vessel and, usually, a time limit during which declarations must attach. Unlike the floating policy it does not have an aggregate limit, but the underwriter can invoke a cancellation clause if he wishes to withdraw cover.
Open Top Container:
Van size container with soft roof (tarpaulin) or detachable hard roof, for vertical loading of cargo.
Ordinary Breakage: Breakage of fragile cargo which by its regularity has become accepted as inevitable loss during transit.
Lowest deck of a ship.
Depot location of Skippers Transport carrier parcel & administration divisions.
The quantity of cargo discharged from a ship.
An additional premium applied to a cargo which is carried by a vessel that is over 15 years old or is outside the limits set down in the classification clause.
Oxter Plate: A plate fitted to the top of a rudder post.
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P. & I. Club:
A mutual association formed by shipowners to provide protection from large financial loss to one member by contribution towards that loss by all members. The P. & I. club covers liabilities not insurable in the ordinary marine insurance market and other expenses incurred by the ship-owner in the running of his ship, such as cost of defending claims made by cargo owners.
Vessel capable of transiting the Panama Canal.
A fortuitous partial loss to the subject matter insured, proximately caused by an insured peril but which is not a general average loss.
An expense incurred by an assured in relation to an insured loss. This can be a means of preventing further loss in transit (e.g. sue and labour charges), of assessing loss (e.g. a survey fee) or of making good a loss at destination (e.g. repacking); sometimes referred to as an "extra charge" when it is the subject of a claim on the policy.
Percentage of Depreciation:
The proportion of the total value of cargo that is the subject of loss from an insured peril. This percentage is applied to the sum insured by the policy to determine the amount of claim payable.
Perfecting the Sight:
Adding necessary details to a Bill of Lading when such had been previously omitted.
An assault on a vessel cargo, crew or passengers at sea by persons owing no allegiance to a recognised flag and acting for personal gain. It also includes acts of rioters who attack a ship from the shore and of passengers who mutiny.
The loadline mark on the side of a vessel.
A contract of insurance.
Policy Proof of Interest:
A policy wherein the underwriter agrees to waive proof that an insurable interest is enjoyed by the assured as a condition of claim payment. In other policies the underwriter is not liable for any claim where the assured is unable to prove that his interest in the subject matter of the insurance exists at the time of loss. P.P.l. policies are invalid in a court of law, but are not illegal except where no interest exists or where there was no reasonable expectation that it would exist at the time the policy was effected.
A bill giving the statement of wages of each member of the crew at the end of a voyage.
Power of Attorney:
A document which empowers one person to act for another.
Permission to land crew and cargo after the vessel has satisfied the port doctor as to the state of health on board.
A specimen invoice - often requested by the buyer for the purpose of applying for an import licence or foreign-exchange allocation before contract of sale is concluded.
A note promising to pay a certain person a stated sum on a specified date.
Policy in which the underwriter agrees to waive proof that an insurable interest is enjoyed by the assured as a condition of claim of payment. In other policies the underwriter is not liable for any claim where the assured is unable to prove that his interest in the subject matter of the insurance exists at the time of loss. Such policies are invalid in a court of law, but are not illegal except where no interest exists or where there was no reason- able expectation that it would exist at the time the policy was effected.
A written declaration by the master and witnessed before a Notary Public.
The most effective cause of a loss in a chain of events leading to the loss. A basic principle of insurance in that, unless the policy provides otherwise, the underwriter is not liable for any loss that is not proximately caused by an insured peril.
An official certified to take affidavits and depositions from members of the public.
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The charge for using a berth alongside a wharf.
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A Bill of Lading marked to indicate that goods have been received for shipment, but does not indicate that they have been shipped in fact.
The person appointed to "receive" and administer the rents and profits, or other moneys, accruing to an estate or business undertaking which is administered or wound-up under the supervision of the court. Official Receivers are officials permanently employed to act in that capacity in bankruptcy proceedings or the winding-up of joint-stock companies.
Receiver of wreck:
An official who is responsible to the Dept. of Trade for all wreckage that is salved on the coastline, or found at sea and brought to a British port.
A container specially constructed to carry refrigerated cargo.
The submission of a matter in dispute to ai arbitrator for his award.
Roll-on, Roll-off (RO-RO) Facility:
Berth which allows for handling RO-RO vessels.
Ship constructed to allow cargo to be driven directly on board with trucks, forklifts and other equipment.
Registry, Certificate of:
A document giving all particulars of the vessel including the names of the owner and the master.
Running Down Clause:
A clause extending a hull insurance policy to cover legal liability amounts paid by the assured consequent upon collision of the insured ship with another ship or vessel.
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Cards issued by shipbrokers to their customers, giving particulars of the ship, or ships they are about to load, the loading berth, date of departure, etc.
Sale of Goods Act:
An Act of 1893 which codified the law relating to the sale of goods in relation to formation, effect and performance of the contract, rights of seller and breach of contract.
This may mean;
money paid to those who assist in saying a ship or goods from the dangers of the sea;
the goods so saved;
property saved from a fire on land.
An association, based at and closely connected with Lloyd's, whose function is to take instructions from interested parties (e.g. underwriters) to investigate casualties and to make recommendations for the preservation and protection of property; also to determine the extent and proximate cause of loss when required.
A compromise settlement on a cargo policy, usually when the adventure has been terminated short of destination and damaged goods are sold at the intermediate port. The underwriter pays the difference between the sum insured by the policy and the proceeds of the sale.
Scraping the Bottom:
Removing weed and incrustation from the underside of a ship.
The fitness of a ship to encounter the hazards of the sea with reasonable safety. In addition to having a sound hull the ship must he fully and competently crewed and be sufficiently fuelled and provisioned for the contemplated voyage. All her equipment must be in proper working order and, if she carries cargo, she must he cargoworthy. The right to claim under a hull policy is prejudiced if the ship puts to sea in an unseaworthy condition.
A term used in marine insurance to define the insurers with whom a policy has been effected.
A market loss of goods brought about by fear that goods may have suffered a casualty whereas no such loss exists in fact.
The holding by various persons of defined shares in a piece of land or other property.
Person or company which ships goods; consignor; exporter.
Company, retained by the shipowner, or the shipping company, to deal with the exporter, freight-forwarder, customs broker or importer. The shipping agent handles the administration and marketing functions on behalf the ship- owner.
The agreement between the master and his crew, giving details of conditions and terms.
Company which owns, or charters, transport ships, offering spaces on such ships for the carriage of goods.
Starts when the cargo is on the inboard of ship's rails. It terminates as soon as cargo is over ship's rail on discharge. If cargo is damaged in transit from wharf to the ship's rail or vice versa, the ship will normally refuse liability.
Shipped on Board Bill of Lading:
A Shipped Bill of Lading is one which acknowledges that the goods mentioned have been placed on board, in distinction to a Bill of Lading which merely acknowledges receipt of the goods by the carrier.
An association of shipping companies who have an agreement to establish freight rates and te rationalise sailings on a regular and adequate basis to service particular ports.
The quantity of cargo delivered is less than the Bill of Lading quantity.
When the full amount intended to be shipped has not been shipped.
Weight measurement of 2,000 Ibs.
Cargo not loaded.
West Australia's truly regional airline.
Family owned & operated West Australian distribution company since 1961.
Sighting the bottom:
Examining the underside of a ship for damage following an accident.
Impact of water on the bows of the ship.
Cargo lost by failing from ship's lifting tackle during loading or unloading.
Is the space in a cellular container vessel which can be taken up by one standard I.S.O. twenty foot container used as a mathematical unit for allocation purposes.
A term used to denote a part charter arrangement whereby one container consortia has the use of an agreed number of slots on vessels owned by another container consortia.
A credit-card like object with embedded intelligence.
A method of refrigerating goods in an insulated container by blowing CO2 through the top vent in the container under pressure which takes the form of 'snow'.
Sending huge quantities of email to 'choke-up' particular email accounts.
Describes system of packing hollow-ware cargo whereby wooden supports hold the goods rigid during handling.
Valuable cargo such as money, precious metal, jewellery, etc. (See also Loss of Specie).
The remedy sought by a plaintiff who, instead of damages for a breach of contract, seeks the enforcement of the terms of the contract.
Statement of Claim:
The first step in the pleadings to an action, in which the plaintiff particularises his claim, and the legal grounds on which it is based.
Debts the claim to which is barred by lapse of time under the Statutes of Limitation.
A propeller set in the stem of a ship and positioned to give a sideways thrust to assist ma- noeuvring in a confined space.
Stoppage in Transition:
Right of a seller to give instruction to a carrier or other bailee to withhold delivery to the buyer, usually due to non-payment for the goods.
A vehicle specially constructed to lift and move containers in a dock area or container terminal area.
Expenses incurred as a result of a strike, such as forwarding costs for goods that cannot be discharged at the scheduled destination port or extra freight charged for overcarriage to another port when the scheduled discharge port is strikebound. These expenses are not covered by the marine policy with the standard strikes clauses attached.
Placing goods into a container.
The right enjoyed by an underwriter to take over the rights and remedies available to an assured, following payment of a claim on the policy, in order to recover up to the amount of the claim from another party who was responsible for the loss.
Expenses incurred in place of loss or expense which would be allowed as general average (e.g. cost of removal of a ship, with general average damage, to a place where repairs would cost less).
Sue and Labour Charges:
Expenses incurred short of destination by a marine assured to prevent or minimise loss for which underwriters would have been liable.
Damage caused to cargo by condensation, usually due to lack of ventilation in a ship's hold.
Loss suffered by cargo following damage to other goods in the same ship. An example would be taint arising from odour given off by another cargo which has been damaged by seawater.
An association of two or more persons, constituted for carrying out a projected commercial or public undertaking.
A group of underwriting members at Lloyd's whose acceptances and liabilities are handled jointly by an underwriting agency acting on their behalf, while each member remains legally liable solely for his/her own share of the syndicate's liability.
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Insurance term referring to the last package to be discharged which total an insufficient number to reach the agreed "series" for application of a franchise or deductible.
Extreme section at the aft end of a ship's propeller shaft.
A tank in a standard ISO 2Oft by 8ft by 8ft 6in (about 6m by 2.4m by 2.5m) frame, designed to be carried on board container vessels.
A cylindrically-shaped container intended for transport of liquid cargo.
Upper Plating of a double bottom.
The weight of a container, box or other carrier of goods when empty.
Technical and Clauses Committee:
A group of marine underwriters, Lloyd's and company underwriters who meet to discuss, formulate and amend marine insurance clauses which are then recommended to the London market for general use.
Twenty-Foot Equivalent Units (intermodal shipping container)
Third Party Liability:
Legal liability to anyone other than another party to contract (eg. liability of one ship to another consequent upon a collision).
Through Bill of Lading:
Bill of Lading covering receipt of goods at the place of acceptance of the cargo for delivery to the ultimate destination, embracing transport by more than one means.
Extension of normal port-to-port services, where, by use of combined transport, the shipping contract includes pickup of goods at exporter's warehouse and delivery to consignee's address in foreign country.
The charterer has the use of the vessel for a specified period. The shipowner supplies the crew and provisions.
Using wedges between cargo and the ship's side or a bulkhead to prevent movement of the goods during transit.
The uppermost continuous deck in ships having less than three decks, or the second continuous deck from below.
Abbreviation for "Tanker Owners' Voluntary Agreement Concerning Liability for Oil Pollution". An agreement subscribed by most tanker owners worldwide, whereby owners agree to pay for clean-up costs incurred by Governments in respect of oil discharged from tankers belonging to such owners.
A ship being towed.
An account rendered for towage expenses.
Liability incurred by any ship or vessel incurred when she is towing another ship, vessel or other object.
Natural loss to cargo (e.g. evaporation).
The act of transferring goods from one vessel to another or from one conveyance to another, including periods at transhipping ports or places.
A Customs document used when a vessel is coasting, giving full cargo details. It serves as clearance from the port of issue.
A vehicle used tor carrying cargo containers during loading or discharge operations or within port or terminal areas (see Straddle Carrier).
Across a ship at right angles to a line drawn from bow to stern.
Trade-Related Aspects of Intellectual Property Rights.
Any ship having one or more decks below the main deck.
Twenty-foot Equivalent Unit (TEC):
Standard ISO container measuring 20ft by 8ft by 8ft 6in (about 6m by 2.4m by 2.5m).
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Utmost good faith.
See Trade Ullage.
A Bill of Lading that has been claused by the carrier to show that the goods were not in sound condition when received.
Under Deck Tonnage:
The cubic capacity of the vessel below the tonnage deck in measurement tons of 100 cubic feet per ton.
Insuring for less than the full value of the subject matter insured.
One who agrees to compensate another for loss from an insured peril in consideration for payment of a premium.
One who acts for an underwriter either in accepting business on his behalf (e.g. a company underwriting agent) or in taking care of his financial affairs in relation to underwriting (e.g. a Lloyd's underwriting agent).
Premium already paid to an underwriter which is in respect of a period when he was not at risk.
The condition of a vessel where from any cause it is unsafe to send her to sea.
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Value for Duty:
Value at which goods would pay duty if ad valorem. Goods have VFD even when duty is not payable.
The agreed value of subject matter insured is stated on the policy. Hull and Goods policies are invariably of this type.
Value Added Network.
A document showing bonded stores for the vessel's use.
Vienna Sales Convention:
More correctly known as the United Nations Convention for the International Sale of Goods, it is an attempt to establish an internationally accepted standard code relating to international sale of goods. Ratified by Australia on 17.03.1988 and became part of the domestic law of all Australian States and Territories from 01.04.1989 as a result of enabling legislation which had been passed by the States and the Commonwealth. In Western Australia, it is given effect under the "International Sale of Goods (Vienna Convention) Act 1989".
A policy in respect of which the underwriter is entitled to avoid liability (see Avoidance).
A policy which is invalid in a court of law (e.g. a policy in respect of which the assured has no insurable interest, or a P.P.l. policy).
Virtual Private Network.
The shipowner hires his vessel, subject to various conditions, for the carriage of cargo for a single voyage.
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A policy in respect of which the assured has no insurable interest.
Wide Area Network.
Any building or structure used for the storage of goods.
A document required by Customs authorities when goods are placed in a bonded warehouse.
Using ropes or cables to manoeuvre a ship.
An undertaking by one party to a contract agreeing to abide by certain conditions required by the other party in relation to performance of the contract (e.g. warranty of seaworthi ness, whereby the shipowner agrees to provide a seaworthy vessel to carry the goods specified in a contract of affreightment).
An understanding in the marine insurance market whereby underwriters will cover goods against war risks only while they are on board an overseas vessel. Limited cover is allowed while goods are in craft en route between the ship and shore and, also, during transhipment.
Weather Working Day:
A day of 24 hours on which work is not pre- vented by bad weather.
Form made available at a web site setting out fields of information to enable users to send it to the site in a defined form.
The person controlling information placed on a web site.
An organisation's information on the world wide web, identified by its address.
Depot location for Skippers Transport general, mining & regional dispatch operations. Also the site for warehousing services & Kore Transport.
World Customs Organization.
An open space between superstructures or deckhouses on a ship.
The charges made for the use of a wharf, usually levied on the cargo owner.
The person in charge of a wharf.
World Intellectual Property Organization
Used in cargo insurance, this means that the policy covers both particular and general average.
Without Benefit of Salvage:
A term in a marine insurance policy whereby the underwriter forgoes his subrogation rights.
A designated facility in Australia where wool is 'dumped' or compressed from the original wood bale size to high, medium, normal, conventional or jumbo sizes to facilitate packing in containers.
A day in which work is normally done at a particular port, excluding Sundays or official holidays.
Whatever may remain of property which has been severely damaged in a maritime adventure. An underwriter who has paid a total loss on the property is entitled to take over the wreck, dispose of it as he thinks fit and retain the whole of the proceeds, if any, even if these exceed the claim paid.
World wide web - Internet platform capable of supporting multimedia applications, such as voice, graphics, text and video transmission.
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A set of internationally accepted rules for application to general average circumstances. Most contracts of affreightment provide for general average to be adjusted in accordance with these rules. In the absence of such agreement adjustment is made in accordance with the law of the place where the adventure is terminated.