A booking confirmation from a forwarder usually arrives as one page of abbreviations. Buyers read it, recognise about half of it, and sign. Then a document is missing at destination, or an invoice carries a line nobody can explain. This is a short glossary of the letters that cause the most questions — not every term in the trade, only the ones that decide money and release.
Three documents that all look like a bill of lading
This is the single most common confusion. The three are not versions of each other; they do different jobs, and each one has its own release mechanism.
| Document | Who issues it | Negotiable? | How cargo is released |
|---|---|---|---|
| MBL — master bill of lading | the carrier or its agent, to the forwarder | yes, if issued to order | against the original MBL, or a telex release |
| HBL — house bill of lading | the forwarder, to the shipper | yes | against the original HBL; the forwarder controls the MBL underneath |
| SWB — sea waybill | carrier or forwarder | no — it is not a document of title | to the named consignee on identity, no original to surrender |
Practical consequence: if payment depends on the buyer receiving a document, you want a bill of lading, not a waybill. An SWB releases the cargo to whoever is named, which is fast and cheap and completely unsuitable for a shipment you are still waiting to be paid for. If you have been told “the original is on its way” and the goods are already collected, the file was an SWB — or a telex release was given without your instruction. Both are worth checking before, not after.
VGM: the number that decides whether it sails
VGM stands for verified gross mass — the weight of the packed container, cargo, pallets, dunnage and all, verified under the SOLAS rule. It is not the cargo weight on the packing list, and it is not the figure the factory quoted. Someone has to weigh the packed box, by a calibrated weighbridge (Method 1) or by adding verified cargo and packing weights to the tare (Method 2), and the figure has to reach the carrier before the loading cut-off.
If it does not arrive, or arrives after the cut-off, the container is not loaded — it is that mechanical. If it is wrong, the risk moves: misdeclared weight is a safety issue for the terminal and the vessel, and the party who signed the VGM carries it. The practical rule is to build the weighing into the loading plan rather than treat it as paperwork to be filled in later.
CBM, and why the same carton costs more than it weighs
CBM is cubic metre, the volume of the shipment. Sea LCL is normally charged on W/M — whichever is greater, one cubic metre or one tonne — so a light, bulky carton pays on volume while a dense one pays on weight. Air freight uses a volumetric divisor: length × width × height in centimetres divided by 6,000 gives the volumetric kilos, and the chargeable weight is the higher of that and the actual kilos.
One worked example: a carton of 60 × 50 × 40 cm is 0.12 CBM. By sea in LCL that is 0.12 of a revenue tonne; by air it is 120,000 ÷ 6,000 = 20 volumetric kilos, so a 9 kg carton is billed as 20. That single line explains most of the gap between a quote a buyer expects and the invoice they receive — and it is why packing density, not packing beauty, is what a forwarder measures.
The surcharge alphabet
Freight is the smallest part of most quotes, and the codes below are where the rest lives. They are not invented per invoice; each has a trigger you can predict.
| Code | Stands for | Charged when |
|---|---|---|
| THC | terminal handling charge | per container, at origin or destination, for moving the box through the terminal |
| DDC | destination delivery charge | destination side of a sea move, separate from THC |
| BAF / EBS | bunker adjustment / emergency bunker | fuel cost moves; reviewed monthly or quarterly |
| CAF | currency adjustment factor | the tariff currency moves against the carrier’s |
| PSS / GRI | peak season / general rate increase | announced by the carrier ahead of a season or a quarter |
| ISPS | port security charge | per container, at ports covered by the security code |
| CIC | container imbalance charge | when boxes are piling up on one side of a trade lane |
| Demurrage / detention | storage inside the terminal / equipment held outside it | the clock runs from different events — free days do not stack |
Two of these deserve a sentence each. Demurrage is the container sitting in the terminal after the free days; detention is the container sitting at your yard or warehouse after pickup. Buyers routinely assume they are one charge with one clock, then pay both. And PSS is not a price rise you can argue with after booking: it applies from the date the carrier announces, so a quote that predates the announcement is not the number you will be invoiced.
DDP and DDU, in one line each
Since these two carry most of the confusion: under DDP the seller’s side clears the goods at destination and pays duty and import tax; under DDU — written DAP since 2020 — the goods arrive cleared for export, and the buyer clears and pays at destination. Every other difference, including who can claim the tax back and who is exposed if the entry is wrong, follows from that single line.
Reading a quote in five minutes
- Which term, and with a named place — “DAP Rotterdam”, not “DAP Europe”.
- Which surcharges are included, and which will be added at destination.
- Whether the rate is all-in or subject to PSS and BAF from a stated date.
- Whether the document will be a bill of lading or a waybill, and who holds the original.
- How chargeable weight is calculated, and whether the volume was measured or estimated.
Ask before the container moves
None of this is secret knowledge; it is simply spread across carrier tariffs, customs notices and habit, and most buyers meet it for the first time when something has already gone wrong. If a line on a booking or an invoice is unclear, send it over — we would rather explain a THC than explain a demurrage bill three weeks later. Our desk in Shenzhen handles both directions, China out and cargo coming back in, with FBA first-leg bookings and Thailand DDP where the importer question is the first thing to settle. Message the operations desk on WhatsApp for a live shipment: +86 135 0963 1114.