A Beginner’s Guide To Ocean Freight Container Shipping
Ocean Freight Terms and Abbreviations
Terms, codes, and abbreviations define many industries. Ocean Freight container shipping is no different. One of the most difficult things to navigate in ocean shipping is understanding the basic everyday terms experienced professionals take for granted. For people new to the ocean freight industry this can be as confusing as rocket science. So without further ado, here is a guide for new shippers to ocean freight terms and abbreviations.
CY/CY means Container Yard to Container Yard. This is when the ocean carrier is contracted to ship the container from their designated container yard at origin, to their designated container yard at destination. All costs for transport to and from these container yards are not included in the contracted price.
Similar to CY/CY, the term Port/Port (or sometimes read as “Port to Port”) means that the ocean carrier is contracted to move the container from the port of loading to the port of discharge. All costs for transport to and from these ports, including terminal charges, are not included in the contracted price.
The abbreviation FCL stands for Full Container Load. Shippers who contract under FCL terms will pay term for the entire container movement from point to point. A FCL container will have one shipper per container.
The abbreviation LCL stands for Less than Container Load. Sometimes a shipper will not need a full container. In these cases, the shipper will book a portion of the container or LCL. Under these terms the shipper is charged for only that portion of the container the freight uses. In most cases the cost of shipping LCL is significantly less than a full box. However, there are other shippers in the container, and LCL shipping tends to take more time, as there is coordination with multiple shippers to fill an entire container.
Free In/Free Out
A shipping term most commonly used in the Mediterranean. Shippers who contract under Free In/Free Out terms are responsible for all terminal charges at both ends. The ocean carrier is simply contracted to ship the container from one port to another. Unlike Port/Port terms, Free In/Free Out states clearly that the shipper must pay terminal charges.
Liner Terms are most commonly used when carriers contract space amongst each other, a shipper who has contracted liner terms with the carrier is not responsible for any terminal handling charges. The terms of contract will cover all port charges at origin and destination.
GP, ST, STD
General Purpose and Standard (both abbreviations) refer to the size and type of container. Standard container sizes are 20’ and 40’ with a height of 8’6”. Standard or general purpose containers are able to carry cargo that does not require protection from heat or cold, or needs to be kept cool or frozen. All containers are 8’ in width. Naturally, the 20’ container will cost less than the 40’, however, it is not half the cost. Trades are different in how they price the 20’ box, however, a general rule of thumb is 75% of the cost of the 40’.
Hi Cube Containers are similar to standard container except they are 9’6” in height. As they are larger, they generally cost slightly more to ship than standard containers, but not in all cases. Several trades today price 40’ HC containers the same as the 40’ Standard.
In very specific trades, ocean carriers will offer 45’ containers. These containers are 45’ in length and have a height of 9’6”. The additional cost of shipping a 45’ over a standard or Hi Cube can range from 25-30%.
RE and RF are abbreviations for refrigerated containers. Refrigerated containers are in 20’ and 40’ HC sizes. They are built to keep products frozen, cool or heated for several weeks at a time. Technology in refrigeration has advanced over recent years to the point that variations in container temperature are rare once the unit temperature has been set. Some refrigerated containers can keep products frozen well below -50 Celcius. However, most frozen product is shipped at -18 to -25 Celcius, while cool products move between -1 and +1 Celcius. The cost to ship a refrigerated container is significantly higher than a standard box.
OT is an abbreviation for open top containers. As some product requires loading on from the top of the container, shipping lines have produced specialized containers that have the roof removed. In place of that roof is a tarp, which can be removed to allow for top loading, and then reattached to protect the product. Open top containers are generally in limited supply, so the cost of shipping is higher than a standard container. The cost often depends on availability with the individual carrier, so if a shipper does require an open top container, it may be necessary to contact several shipping lines.
FR or Flatrack containers have the sides and roof removed. This allows for side or top loading. Freight moving on Flatrack containers are generally oversized and may be overwidth. Specific types of project cargo generally moves on flatrack containers.