International Shipping Terms, Defined

A list of international acronyms, terms, and basic shipping knowledge.

ATA Carnet - Allows a merchant to skip paying duties and taxes on goods if the goods are in the country for less than a year. For example, if you need to present your products at a trade show, but they will be shipped back to the country of origin before a year’s time.

Commercial Invoice – CI’s are used as a customs document and are one of the most common and important documents used in cross-border trade and shipping. A CI is required for any international shipment containing goods, and it is the primary document used for importation control, valuation, and duty determination. 

Cargo insurance - insurance that covers damage due to loading/unloading, weather conditions, piracies and other potential risks during international shipping. Cargo insurance can be specified for marine or air freight.

Certificate of insurance - documentation of cargo insurance that covers the importer/exporter for any possible damage to the goods while in transit. Reach out to a broker or freight forwarder to arrange the insurance.

EEI (Electronic Export Information - EEI is the data that must be filed through the Automated Export System (AES) for goods shipped from the U.S. to a foreign country. The filing includes information about the sender and receiver of the goods, and about the goods being exported. The Census Bureau uses these filings to calculate U.S. trade statistics, and Customs and Border Protection (CBP) and the Bureau of Industry and Security (BIS) use the data to help ensure compliance with U.S. export regulations.

Freight Forwarder - a person or company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer or final point of distribution. DCL customers have the ability to seamlessly integrate with Flexport for their freight forwarding services and platform.

De Minimus Value – De minimis is a threshold that exempts imports from duty and or tax/VAT and differs by country. De minimis value provides faster clearance and opportunity to sell into markets competitively.

HTS Code - The HTS is an internationally standardized system of names and numbers for classifying traded products. It is important to properly classify your products and materials. The HTS is organized into 21 sections and 96 chapters comprising 200,000 entries, under which all goods are assigned to categories according to numerical codes. All products can be classified in the existing HTS utilizing the General Rules of Interpretation.

Import Duty A tax collected by a country’s customs authorities on goods that arrive from other countries (i.e. imports). The duty amount is calculated based on the value of the goods and will vary depending on the country’s regulations and duty de minimis values.

Import Tax - A tax collected by the country, state, or province in relation to the goods getting imported. The tax rates will vary depending on the country’s regulations and tax de minimis values.

Importer of Record/IOR –owner or purchaser of products being imported to a country. The IOR is responsible for ensuring the imported goods comply with local laws and regulations, filing a completed duty entry and associated documents required by the CBP (Customs Border Protection), and paying the import duties and taxes. The IOR is typically the person or entity who has ownership of the imported goods at the time of import.

Incoterm - trade terms for the delivery of goods, which provides certainty and clarity to businesses and traders in the industry. Incoterms and rules are standardized and published by the International Chamber of Commerce (ICC).

Non-Resident Importer (NRI) - a business located outside of Canada that ships goods to customers in Canada and assumes responsibility for customs clearance and other import-related requirements

Power of Attorney (POA) - also known as a “Letter of Empowerment,” is a legal document used in the shipping industry to grant the customs broker you have appointed the legal authority to process customs clearance on your behalf. The importer of record needs to fill out the POA and sign, usually done by the DCL Customer.

Total Landed Cost – A total landed cost includes the calculation of duties, taxes, and other export or import fees. Taxes and duties alone typically do not constitute the total for a landed cost calculation. Other fees could be applied to the import cost from shipping carriers, brokers, customs, or other government agencies.

USMCA - If the product originates in the United States or Mexico, it may have a preferential tariff treatment under the United States-Mexico-Canada Agreement (USMCA)