MODELS & ACRONYMS

General Terms:

• ASWP (Any Safe World Port): Not an official incoterm, but used in quotes (e.g., CIF ASWP) to indicate the seller's price includes delivery to any safe port globally.

• ATB (Authority To Board): Used for oil shipments, issued by the seller to allow the buyer to verify cargo details on the vessel.

• ATL (Authority To Load): Permission for the buyer to load their vessel with the goods.

• AWB (Air Way Bill): Similar to a Bill of Lading (BOL) but for air freight.

• BCL (Bank Comfort Letter): Verifies a buyer's ability to meet payment requirements (not a guarantee).

• BG (Bank Guarantee): A bank guarantees payment on behalf of the buyer.

• BL (Bill of Lading): Receipt issued by the shipping company upon loading goods on a vessel, granting ownership rights to the buyer.

• BPU (Bank Payment Undertaking): Bank commits to pay a specific amount under certain conditions.

Incoterms (Delivery Responsibilities):

• CFR (Cost and Freight): Seller pays for goods, loading, and freight to the named destination port (excluding unloading).

• C&F, CNF (Cost and Freight): Obsolete terms, use CFR instead.

• CIF (Cost, Insurance, and Freight): Similar to CFR but includes insurance to the destination port.

• COO, CO, C/O (Certificate of Origin): Document verifying the origin (country) of the exported goods.

• DDP (Delivered Duty Paid): Seller delivers the goods, all duties paid, to the named destination (including buyer's premises).

• E&OE (Errors and Omissions Excepted): Disclaimer on invoices/quotations for potential errors.

• EXW (Ex-Works): Buyer pays all transport costs from the seller's premises.

• FAS (Free Alongside Ship): Seller pays costs to the loading port, buyer handles loading and shipment (seller clears goods for export).

• FOB (Free on Board): Seller pays costs until goods are loaded on the ship (seller clears goods for export). Buyer responsible thereafter.

• FCA (Free Carrier): Seller delivers cleared goods for export to the buyer's nominated carrier at the named place.

Other Common Terms:

• FCL (Full Container Load): Goods fill a container (no shared space with other buyers' goods).

• FCO (Full Corporate Offer): Detailed seller proposal outlining specifications, price, and payment terms.

• ICPO (Irrevocable Corporate Purchase Order): Buyer's firm commitment to purchase (various interpretations exist).

• INCOTERMS (International Commercial Terms): Standardized terms published by the International Chamber of Commerce (ICC) to avoid misunderstandings in international trade.

Letters of Credit (L/C):

• L/C (Letter of Credit): Bank document guaranteeing payment to the seller upon meeting specified conditions.

  • CL/C (Confirmed Letter of Credit): Guaranteed by a first-class bank in addition to the issuing bank.

  • DL/C or DLC (Documentary Letter of Credit): Bank guarantees payment based on specific documents.

  • IL/C (Irrevocable Letter of Credit): Cannot be amended or cancelled without consent from all parties.

  • Revolving L/C: Replenishes funds automatically for multiple shipments under set terms.

  • SL/C or SBLC (Stand-by Letter of Credit): Bank guarantees payment if the buyer defaults.

  • RDLC (Revolving Documentary Letter of Credit): See Revolving L/C.

• LCL (Less than a Container Load): Goods do not fill a full container, often consolidated with other shipments.

• LOI (Letter of Intent): Buyer expresses interest in a transaction but is not a binding agreement.

• PB (Performance Bond): Insurance guaranteeing contract fulfillment.

• POF (Proof of Funds): Buyer's bank confirms sufficient funds are available for the transaction.

• POP (Proof of Product): Often unreliable document claiming product existence (doesn't guarantee availability).

• RDLC (Revolving Documentary Letter of Credit): See Revolving L/C.

• RWA (Readiness, Willingness, and Availability): Indicates funds are available for a transaction.

• SPA (Sales and Purchase Agreement): Legally binding contract outlining terms of the sale.