Complete Glossary of
Marine Terms & Abbreviations
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Abaft
a position behind [the vessel]
Abandonment
Giving up the proprietary rights in insured property to the underwriter in exchange for payment of a constructive total loss.
Abeam
on a line at right angles to a ship's or aircraft's length
ACOG
Aircraft on ground
Act of God
"An event that is the result of natural forces, arising without human intervention, which no human foresight could have provided against and of which no human prudence was not bound to recognise the possibility".
Witherby's Dictionary of Insurance, 2nd Edition.
Actual Total Loss
This occurs when:
1. The insured property is completely destroyed; or
2. The insured is irretrievably deprived of the insured property; or
3. Cargo changes in character so that it is no longer the thing that was insured (e.g., cement becomes concrete); or
4. A ship is posted "missing" at Lloyd's, in which case both the ship and its cargo are deemed to be an actual total loss.
Ad Valorem Bill of Lading
Same as Valued Bill of Lading.
Advance
An agreed percentage increase applied to the total of invoice plus freight, for unknown expenses at the time of shipment, and also for a portion of the insured's profit.
Advance Freight
Same as Prepared Freight.
Adventure
The exposure of property to risk at sea.
Affidavit
A written declaration on oath.
Affreightment
A contract which sets forth the obligations of both shipper and carrier con¬cerning transportation of the merchandise. The most common forms of affreightment are Bills of Lading and Waybills.
Aft
towards the stern or rear of the vessel
AIR CARGO TERMINOLOGY
Advance Arrangements
Certain classes of commodities in air freight such as gold, precious gems, fur, live animals, human remains and oversized shipments, require arrangements in advance with carriers. An official Air Cargo Guide or any airline will have detailed information.Air Transportation Waybill (Air Waybill)
The airfreight equivalent to a bill of lading is merely a receipt for the goods and is not a document of title.The airline would normally advise the customer (consignee) of the arrival of the goods and providing the customer holds the necessary invoices, etc would release the goods to them. To ensure payment is protected it is possible to make arrangements through your bank or finance house to present the necessary invoices to your customer only against payment or on signing a draft. Alternatively in some cases the airline will undertake to collect payment.
Assembly Service
A service under which an airline assembles shipments and transports them as one shipment to one receiverBonded Terminal
An airline terminal approved by the Customs Department for the storage of goods until duties are paid or the goods are otherwise released.Check Digit Number
A single digit of the airbill number which ensures the airbill number is correctly entered into a computer system.Demurrrage
The detention of containers by shippers or receivers of freight beyond a specified free time. The airlines tender carrier-owned containers to the customer for loading and unloading of the unit. In the event the container is not returned to the carrier within a specific time (usually 36 to 48 hours) a charge will be assessed by the carrier for each 24 hours or fraction thereof beyond the allowed time.Dimensional Weight
Dimensional Weight refers to density, ie weight per cubic foot. The Dimensional Weight Rule was developed as a practice application to low density shipments under which the transportation charges are based on a cubic dimensional weight rather than upon actual weight.Exception Ratings
Rates set at a certain percentage above the general commodity rates because they apply to commodities that require special handling.Freight All Kinds (FAX)
A tariff term used for airfreight, allowing for any type of commodity to be consolidated. A forwarder with a bulky light product can pack it with a smaller denser product, allowing them to maximise the space and weight availability.General Commodity Rate
An air freight rate applicable on all commodities except those for which specific rates have been filed. Such rates are based on weight and distance.Gross Weight
Entire weight of a shipment, including containers and packaging material.In Bond
As applied to air freight coming into a country the term 'in bond' designates' a procedure under which customs clearance of cargo is postponed until the cargo reaches an inland customs point rather than subjecting the cargo to clearance procedures at congested gateway cities.Intermodal Compatibility
The capability which enables a shipment to be transferred from one form of transport to another.International Air Transport Association (IATA)
The trade and service organisation for airlines of more than 100 countries serving international routes.International Civil Aviation Organisation (ICAO)
ICAO is an agency of the United Nations, organised to ensure orderly worldwide technical development of civil aviation.Memorandum Tariff
Non-official publications which contain rule and rate information extracted from official tariffs.Minimum Charge
The lowest rate applicable on each type of air cargo service, no matter how small the shipment.NES (Not Elsewhere Specified)
The abbreviation often appears in air freight tariffs. For example: "advertising matter, NES". This means that the rate stated in d-ie tariff applies to all commodities within the commodity group except those appearing under their own rate. Other abbreviations include: NOIBN (not otherwise indexed by number), NOS (not otherwise specified) and ORM (other regulated material).Palletisation
The use of a platform upon which the containerised or otherwise utilised shipment rests. Palletisation means more efficient use of space aboard freighter aircraft or ships and better cargo handling, particularly when used as part of mechanised systems employing such other advances as Pallet Loaders and Pallet Transporters.The Pallet Loader is a device employing one or more vertical lift platforms for the mechanical loading or unloading of palletised freight at planeside. The Pallet Transporter is a vehicle for the movement of loaded pallets between the aircraft and the freight terminal or truck dock. Sometimes the functions of both the Pallet Loader and Pallet Transporter are combined into a single vehicle.
Restricted Articles (Air Transport)
Explosives
Flammable and non-flammable compressed gas
Flammable liquids
Flammable solids
Oxidising materials
Poisons and irritating materials
Radio-active materials
Corrosive liquids and solids
Magnetised materials
Etiological agents
Polymeiizable materials.Shipper's Letter of Instruction
A form used by a shipper to authorise an airline to issue an air waybill on the shipper's behalf. All details of shipment are contained in the form which anthorises the airline to sign the air waybill in the name of the shipper.Signature Service
A service designed to provide responsibility for the custody of shipments in transit. A signature is required from each person handling the shipment at each stage of its transit.Tare Weight
The actual weight of the container (ULD) when empty.Total Cost of Distribution
The sum total of all the costs incurred in the distribution of goods. This includes:
Transportation charges
Cost of capital tied up in inventory
Warehousing expenses
Packaging
Insurance
Product obsolescence
Pilferage
Inventory taxes.As a percentage of income from sales, total cost of distribution ranges from a low of 4.4% in the pharmaceutical industry to a high of 26.6% in consumer and industrial merchandising.
ULD (Unit Load Device)
Term commonly used to refer to airfreighted containers.
AIRMIC
Association of Risk Managers in Industry and Commerce
Air Waybill
A bill of lading issued by an airline acknowledging receipt of merchandise and indicating conditions for carriage.
All E.R.
All-England Law Reports
All Risks
All fortuitous causes of loss. it does not embrace inevitable loss such as wear and tear.
All Other Perils & Misfortunes
Phrase in a Cargo policy meaning perils of the same nature as those described specifically in the Perils clause.
Annual Policy
Designed for clients with a small turnover of Goods in Transit. A deposit premium is paid and this is adjusted at the end of the year based on declara¬tions made.
Anti-dumping duties
These are duties which may be applied by importing countries against goods for which there is evidence that dumping is taking place. The aim of these duties is to raise the base level price (before transport and other duties) of the imported goods to a level at least equivalent to those being sought within the country of origin.
Appd
Approved
Application
A written form submitted to underwriter to obtain quotation for a risk, and contains particulars of the risk.
Approved or H/C
An "approved" vessel is one which the underwriters deem adequate to carry the insured cargo, at the agreed rate of premium. Where the vessel is not approved, the risk is still covered but subject to a reasonable additional pre¬mium.
ARRIVED SOUND VALUE I ARRIVED DAMAGED VALUE
Is a basis of settlement when adjusting claims for damaged cargo. A comparison of the estimated arrived sound value and the actual arrived damaged value shows the difference as a percentage of the arrived sound value for the purpose of arriving at the percentage of depreciation. The percentage is applied to the insured value to arrive at the claim settlement.
Example:
Ten cases of fruit arrive damaged. Insured for $10000 arrived sound value is established at $2000. The fruit is auctioned and sold for $500 (arrived damaged value). Adjustment would be as follows:
$2,000 - $500 x 100 = 75% (partial loss) x $1,000 = $750 (claim settlement)
$2,000 1
Any auction or costs associated with directly mitigating the loss must be added to the claim settlement.
Arr. T.L.
Arranged total loss
Assignment
The passing of beneficial rights from one party to another.
Assailing Thieves
Forcible taking of property but not sneak thievery.
Athwart
Across
Average
Any partial loss or damage, due to insured perils.
Average Adjuster
Appointed by shipowner to prepare General Average Statement.
Average Agreement
A document signed by cargo owners by which they agree to pay any General Average contribution rightfully due so that cargo may be released after a GA loss has occurred.
AVERAGE BOND
An agreement signed by all interested parties acknowledging their liability to pay a share of the loss under general average. A "general average guarantee" is sometimes referred to (particularly in the USA) as an "average bond".
Average Clause
The clause in marine policy which sets out the coverage provided in the event of partial loss.
AVERAGE DISBURSEMENTS
Expenditure incurred by the shipowner in connection with a general average act or an act of salvage. Such expenditure, when properly incurred, is recoverable from the GA or salvage fund created by the adjuster. Hull underwriters are not liable directly for GA expenditure. The insured must recover his expenditure from the GA fund. Underwriters’ liability for GA contribution, if any, will incorporate their proportion of the GA expenditure that is included in the contribution paid by the insured.
Average Irrespective of Percentage
Indicates that partial losses will be paid regardless of any franchise or per¬centage.
Avoidance
The right of an underwriter, in the event of a breach of good faith or delay in commencement of an insured voyage to step aside from the insurance con¬tract and to treat it as though they had never accepted the risk.
Av.
Average
Award
A decision given by a court of law or by an arbitrator to conclude a dispute. The term can he used also to define the amount of damages allowed, if any, in the award. A judge in court will often state the reasoning fur the decision, whereas this is rarely the case with an arbitrator’s award.
a.a.
After arrival. Always afloat
A.A.I.
Alliance of American Insurers
A.B. or A.B.S.
American Bureau of Shipping
A.B.I.
Association of British Insurers
A.B.I.S.
Association of Burglary Insurance Surveyors
A.I.I.C.
Association of the Insurance Institute of Canada
A.C.I.L.A.
Association of the Charted Institute of Loss Adjusters
A.C.V.
Air cushion vehicle (hovercraft)
A.D.
Accidental damage
A.F.I.A.
American Foreign Insurance Association
A.H.F.
American Hull Form
A.H.I.S.
American Hull Insurance Syndicate
A.I.D.A.
Association Internationale du Droit de l'Assurance (International Association of Insurance Law)
A.I.M.U.
American Institute of Marine Underwriters
A.I.O.A.
Aviation Insurance Offices Association
A.L.M.
Association of Lloyd's Members
A.M.L.
Absolute maximum loss
A.N.L.
Above-normal loss
a.o.a.
any one accident
A.O.A.
Accident Officer's Association
a.o.b.
any one bottom
A.O.C.
All other contents
a.o.e.
Any one event
a.o.l.
any one loss
a.o.o.
any one occurrence
a.o.voy.
any one voyage
a.o.v.
Any one vessel
AP
Additional premium. Annual premium. Agricultural produce
a.p.l.
As per list
A.P.P.
Adjustable premium policy
A.R.P.
Accrued rights premium
A.T.L.
Actual Total Loss (sometimes wrongly used for Arranged total loss.)