Even if you aren't an expert in cargo transportation, it's a good idea to know standard shipping abbreviations to communicate with your shipping provider, carriers, and vendors throughout your supply chain network.
Fortunately, grasping these standard shipping abbreviations is easier than you think.
Let's break down three of the most common shipping abbreviations you should know and go over a few essential shipping terms that may make your business run smoothly.
Why Is It Important To Know Shipping Terms?
Simply put, it will help you understand shipping contracts and terms easily, plus avoid misunderstanding when you are responsible for cargo and risk.
When you know the proper shipping abbreviations, you can read freight contracts accurately and always know when you assume the risk for cargo.
This can help you make the right decisions (i.e., whether to use a flatbed or dry van trailer) and determine the best carriers/rates for your needs.
Furthermore, knowing shipping terms will help you negotiate better contracts and rates for your cargo loads in many cases. Some less-than-stellar carriers may try to hoodwink you or charge you higher-than-average rates if you don't know what they are talking about.
Which Shipping Abbreviations Should You Know?
Now that you know why it's crucial to know key shipping terms, let's break down three of the most common shipping abbreviations you should fully understand before signing a deal with a freight carrier.
FAK
First is "FAK," or "freight of all kinds." In a nutshell, freight of all kinds means you pool different products or cargo types into a single load to simplify the pricing or rating process.
For example, if a small to medium sized business needs a truckload of multiple types of cargo delivered quickly, they may refer to it as "FAK." This is a helpful acronym for cargo loads containing numerous materials or product types.
FOB/FCA
"FOB" stands for "free on board." It's often used in the same context as "FCA," which stands for "free carrier." The FOB designation tells you when the liability or ownership of goods is officially transferred from a seller to a buyer.
If FOB is used with a specific physical place, like a drop-off point, it points out which party (the buyer or seller) has responsibility for paying the freight charges, as well as when exactly the title for the shipment goes from the seller to the buyer.
Meanwhile, if a cargo load is designated FCA, the seller is responsible for delivering goods to the carrier at the appropriate delivery or pick-up location.
Remember these abbreviations when scheduling cargo pick-ups and loads with your transportation company of choice.
DAT/DAP
DAT and DAP are also common and used in similar contexts, though they are slightly different.
"DAT" stands for "delivered at terminal." It is used in freight instances where the seller clears goods for export. It also means that the seller is responsible for the goods until they arrive at their final destination.
Meanwhile, "DAP" stands for "delivered at place." This acronym also states that the seller has responsibility for delivering goods, so they are ready for unloading at the designated place.
In other words, the seller assumes all the risks for the cargo up until the unloading process begins, at which point the buyer assumes the risk and cost of any damaged materials.
The difference between DAT and DAP is that DAP states the seller is responsible for the last leg of any freight journey. The buyer then becomes responsible for the final unloading process.
DAT means the seller retains responsibility for the goods or freight until it's fully unloaded and ready to go.
What Are Some Other Shipping Terms You Should Know?
While the above three acronyms are most important, there are some other standard shipping terms you should probably be familiar with, such as:
- BOL or bill of lading. The BOL is a document necessary to move a shipment. Think of it as the binding contract between the seller and buyer of cargo. It lists all the products and quantities shipped and received from place to place.
- EDI or electronic data exchange. This refers to any communication or document exchanges between businesses using technological means.
- ETD or estimated time of departure. This tells you when an overseas shipment should depart from the port of origin.
- JIT or just-in-time. This is a supply chain strategy where cargo freight arrives or is manufactured right before the next shipment or stage in the shipping process.
- P2P or port-to-port. It refers to shipping cargo from one port to another rather than having any stops. It's usually used for international shipping, but not always.
The Bottom Line
In the end, these shipping abbreviations are good for any business owner, especially if you plan on shipping a lot of freight soon.
Of course, an excellent cargo transportation service like RPM will handle most of the nitty-gritty details of hauling your freight from place to place.
We maintain a diverse and well-respected network of carriers, so there's always someone available to haul your cargo wherever you need it to go. Plus, we offer cargo tracking and other logistics features. Contact us today to learn more about how we can help you.
Sources:
Goods & Equipment in Transit | Risk Management & Audit Services | Harvard.edu
Delivery at Terminal (DAT) Incoterms® Rule 2010 | Trade Finance Global
Bill of Lading: Meaning, Types, Example, and Purpose | Investopedia
