Easy way to understand the differences between port-to-port, port-to-door, door-to-port and door-to-door shipments

Today, I would like to explain some of the basic shipping terms, that define the starting and ending points of the transportation, known as port-to-port, port-to-door, door-to-port and door-to-door shipments, which you may encounter on your daily work routine very frequently as a shipper or consignee.

Let me start my explanations with port to port shipments.

Port to Port Shipment

“Port to Port Shipment” defines a type of shipment, which commences at the Port of Loading and ends at the Port of Discharge.

Port to Port shipment or Port to Port delivery is the basic form of sea freight transportation, which is used by carriers for hundreds of years.

Bill of lading is the generic name of the transport document, commonly used in Port to Port shipments. It is also known as port to port bill of lading, marine bill of lading or ocean bill of lading.

Port to Port Shipment Graphic

Thanks to the technological improvements in logistics sector and standardization achieved by containerization, now carriers, actual or contractual, can offer more flexible transport options to their clients.

Negotiable Bill of Lading Example 1: "To Order" and Blank Endorsed

According to Incoterms 2010 FOB, CFR, CIF trade terms rules, the seller is required either to deliver the goods on board the vessel or to procure goods already so delivered for shipment.

The reference to “procure” here caters for multiple sales down a chain (‘string sales’), particularly common in the commodity trades.

Above definition explains seller's delivery obligation under FOB, CFR and CIF trade terms according to Incoterms 2010 rules. As mentioned on the 1st paragraph, incoterms rules allow multiple sales or string sales.
But what sort of bill of lading the seller (exporter) should supply to his buyer, which becomes the new seller and trades the same goods to another potential buyer with the same bill of lading?

How to complete consignee and notify fields of a bill of lading?

Today on this post, I will be explaining with examples one of the key elements of a bill of lading in international trade.

Bill of lading is a negotiable transport document, only when it is issued in a negotiable form.

Negotiable bill of lading plays a key role in international export-import transactions, where the exporter or exporter's bank does not want to release the goods to the importer without surrendering at least one original bill of lading to the carrier's agent at the port of discharge.
Today on this article I will try to answer below questions:
  • What is a negotiable transport document? 
  • What are the differences between negotiable bill of lading and non-negotiable bill of lading? 
  • How does a bill of lading could be issued in a negotiable form? 
  • What is a consignee field on the bill of lading? 
  • What is a notify field on the bill of lading? 
  • How to complete consignee and notify fields of a bill of lading? (explanations with examples)

What does cy/cy mean on a bill of lading?

Bill of lading, which is a transport document evidences receipt of cargo, contract of carriage and represents title of goods, is mostly used in international port-to-port sea shipments.

A bill of lading should normally state the port of loading and port of discharge.

Port of loading is the place where the goods are shipped on board a vessel. Port of discharge is the place where the vessel is off-loaded and the goods are distributed to their respective consignees.

Some bills of lading contain "cy/cy" term in addition to port of loading and port of discharge.

Today I would like to explain the meaning of "cy/cy" term as seen on the bills of lading.

Top 3 Online Free Volumetric Weight Calculators

Transportation companies prepare their freight quotations based on the chargeable weight of the cargo.

In order to reach the chargeable weight, first of all you have to calculate the volumetric weight of the cargo.

Recently I have written couple of articles in regards to chargeable weight and volumetric weight. 

On one of my articles, I have explained how to calculate chargeable weight in air, sea and road shipments

In another article I have answered the question whether chargeable weight and volumetric weight are the same concepts or not.
Today I would like to suggest you 3 different online volumetric weight calculators all of them are totally free of charge.

Are chargeable weight and volumetric weight the same?

On my previous article I have explained how to calculate chargeable weight not only in air shipments but also sea and road shipments as well.

When I was writing my article I have read couple of websites, who mentioned that chargeable weight and volumetric weight as if they are the same concepts.

Unfortunately it is not true. Chargeable weight and volumetric weight (also known as dimensional weight) are not the same concepts.

Do you want to learn why? Please keep reading...

How to calculate chargeable weight in air, sea and road shipments?

As an exporter or an importer you have to know the gross weight and total volume of the cargo in order to calculate the transportation cost.

Each means of conveyance, such as container vessel, truck or aircraft, has a limited space.(volume constraint) Additionally there are weight limitations for all types of modes of transport. (weight constraint)

In order to sell their free spaces more efficiently, international logistics sector developed a concept, which is known as chargeable weight. 

According to this concept, first of all transport companies are calculating an hypothetical volumetric weight of the cargo to compare it with the actual gross weight of the goods.

Then, they choose the bigger amount, either actual gross weight or hypothetical volumetric weight. Result is known as the chargeable weight.

Only chargeable weight is used by international logistics companies, when calculating their freight offers.

Is it possible to use FOB incoterms with land and or air shipments?

The aim of the international commercial terms, known as incoterms, is to create a set of international standard rules for the application of the most commonly used trade terms in foreign trade.

Incoterms can only achieve its goal if it could reduce or eliminate the uncertainties of different interpretations of such terms in different countries.

ICC, International Chamber of Commerce, published latest version of international trade terms rules, which is known as Incoterms 2010. 

Incoterms 2010 rules define 11 different trade terms.

FOB, Free on Board, trade term is one of the most frequently used incoterms along with CIF and Ex Works. 

As a result every exporter or importer must understand these trade terms very well.

Is it possible to use CIF incoterms with air shipments?

Incoterms 2010 is the newest set of rules, which regulates international trade terms. 

There are 11 different trade terms defined in Incoterms 2010 rules. 

Each trade term defined in incoterms 2010 rule have a unique characteristics. 

As a result an exporter or importer must understand the differences between trade terms in detail.

What does CIF trade terms mean according to Incoterms 2010 rules and what are the key characteristics of CIF incoterms?

CIF means "Cost, Insurance and Freight" according to Incoterms 2010 rules. “Cost, Insurance and Freight” means that the exporter delivers the goods on board the vessel at the port of loading as determined by the sales contract.

Alternatively exporter can procures the goods already shipped on board a vessel as per CIF trade terms. 

This is a common practice in crude oil market.