Trade terms explained
The language of trade, in plain English.
21 terms you are likely to come across when buying, selling or shipping goods, grouped by topic and explained simply.
Buying & selling
Words you will see when asking about a product or offering goods.
- Specification
- The details that define exactly what a product is, such as the brand, model, size, material or grade. The clearer the specification, the easier it is to confirm availability and cost.
- Condition (new or used)
- Whether goods are new or have been used before. For used goods, a clear description of their condition helps both sides agree what is being bought or sold.
- Minimum order quantity (MOQ)
- The smallest quantity a supplier will sell in a single order.
- Lead time
- The time between an order being agreed and the goods being ready to send or delivered, depending on how it is quoted.
- Quotation
- A statement of the price and terms for supplying goods or services. Submitting an enquiry on this website does not create a quotation; prices and terms are confirmed with you directly.
Shipping & packing
Terms used when goods are packed and moved by sea, air or road.
- Consignment
- A batch of goods sent together from one sender to one receiver.
- FCL and LCL
- Full container load and less than container load. With FCL the goods fill a shipping container on their own; with LCL they share a container with other consignments.
- Pallet
- A flat platform that goods are stacked and secured on so they can be moved by forklift. Quantities for road and sea freight are often given in pallets.
- Chargeable weight
- The weight a carrier charges for. Particularly for air freight, this is whichever is greater: the actual weight, or a weight calculated from the size of the package.
- Transit time
- The time goods spend travelling between two points. Collection, loading, customs clearance and waiting for space can add to the total time.
Shipping documents
Paperwork that commonly travels with goods crossing a border.
- Commercial invoice
- The seller's invoice for the goods being shipped. It describes the goods, their value and the parties involved, and customs authorities use it to work out any duty and tax due.
- Packing list
- A list of what is in each package, carton or pallet, usually with weights and dimensions. It helps with handling, checks and customs inspections.
- Bill of lading
- The document issued for goods shipped by sea. It acts as a receipt for the goods and evidence of the contract of carriage, and it is often also a document of title to the goods.
- Air waybill
- The transport document for goods sent by air. Unlike a bill of lading, it is not a document of title.
- CMR note
- The standard consignment note for international road transport, recording the goods, the sender, the carrier and the receiver.
- Certificate of origin
- A document confirming the country where goods were made. Some buyers and destination countries ask for one, and origin can affect the duty that applies.
Customs & tax
Terms that come up when goods are imported or exported.
- Customs declaration
- The information given to customs about goods being imported or exported, including what they are, what they are worth and where they come from.
- Commodity code (HS code)
- A number that classifies goods for customs purposes. The first six digits follow the international Harmonized System; the full code decides the rate of duty and any controls that apply.
- Import duty and import VAT
- Taxes that may be payable when goods enter a country. Whether they apply, and how much, depends on the goods, their value, their origin and the countries involved.
- EORI number
- A registration number that identifies a business to customs when it moves goods into or out of a country. Numbers issued in Great Britain start with GB.
- Incoterms®
- International rules published by the International Chamber of Commerce that set out which party, buyer or seller, arranges and pays for each stage of a shipment, and where responsibility for the goods passes between them. Examples include EXW (Ex Works), FOB (Free On Board) and DDP (Delivered Duty Paid).
General explanations only. These are not legal, tax or customs advice. The exact requirements depend on the goods, the route and the countries involved, so raise any questions in your enquiry and we will discuss them with you.
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