The time allowed by the ship owner to the charterer or shipper in which to load or discharge the cargo. May be expressed in days or hours, or tonnes per day. Laydays may be set in running days (every calendar day), working days (excludes Sundays and holidays observed by the port), or weather working days (excludes in addition days where operations are prevented by bad weather). It may be contractually provided that if the charterer or shipper loads/unloads more quickly than is necessary, they are eligible for payment of an incentive called dispatch money; if the loading/unloading time is excessive, however, the charterer or shipper may have to pay a penalty known as demurrage.

Letter of Credit

Less than container load. Refers to shipments of goods which must be packed together with other consignments in order to fill up a container.

A way of quoting container freight rates in which the carrier agrees to pack the container at the outset (LCL) but the unpacking at destination must be carried out by the receiver or consignee. A common approach for buyers who wish to consolidate small purchases from multiple suppliers in a foreign market into container shipments.

A way of quoting container freight rates in which the carrier agrees to pack the container on departure as well as unpack the container at destination.

Loading.

A documentary credit is issued by the Importer’s bank stating its commitment to honour the draft (or otherwise pay) on presentation of specific documents by the exporter within a stated period of time. The minimum documents the importer requires in the credit usually include a commercial invoice and clean bill of lading, but may also comprise a certificate of origin, consular invoice, inspection certificate, and other documents. The most widely used type of credit in international trade is the irrevocable credit.
The following are the main types of documentary credit:
• Irrevocable: A credit which cannot be retracted or revoked once the beneficiary has been notified. (There is a presumption under the UCP500 that a credit is irrevocable.
• Advised: A credit opening, of which a local bank informs the beneficiary.
• Confirmed: A credit which has received an additional guarantee of payment by a local or highly reputed bank.
• Sight: The beneficiary is entitled to present a sight draft or sight bill of exchange, which is a call for immediate payment upon acceptance of shipping documents.
• Revolving: A credit which can be drawn against repeatedly by the beneficiary; can take a variety of different forms, depending on whether the credit is limited in terms of time, number of possible drafts, maximum quantity per draft, or maximum total quantity.
• Cumulative revolving L/C: Revolving L/C under which unused amounts can be carried forward and become available under the next draft.
• Red clause: This allows pre-shipment advances to be made to the exporter at the risk and expense of the applicant.
• Deferred: A D/C under which payment by the importer is to take place a specified time after their receipt of the shipping documents.
• Transferable: A D/C which allows the beneficiary to make part or all of their credit payable to another supplier; used in middleman/brokerage contexts; distinguishable from back-to-back D/Cs because the transferable credit requires the knowledge and authorisation of the importer (applicant/principal).
• Back to back: A system utilised by middlemen/intermediaries to finance a single transaction through the use of two D/C’s opened in succession (e.g.‘back to back’) in order to permit the middleman/broker to use the proceeds from the first credit to pay off their supplier under the second credit. The importer may be unaware that there is a middleman in this situation.
• Import: A D/C used to finance importation of goods.
• Standby: The primary function of the standby credit is to serve as a security or a guarantee rather than as a payment mechanism. Under this agreement, the beneficiary claims payment in the event that the contractual partner fails to perform or fulfil certain obligations.

A letter from an importer to the shipping company in which the importer undertakes to indemnify the shipping company against the consequences of delivering goods without production of an original bill of lading. The importer’s letter of undertaking requires the prior endorsement or guarantee by their bankers before it is acceptable to the shipping company.

In banking, a liability is a commitment expressed in monetary terms. It can be direct or contingent.
Direct liability is that which sooner or later must be repaid, e.g. negotiation, trade finance loan, surrendered bill of lading, special documentary credit establishment.
Contingent liability is one which may or may not eventuate, e.g. import documentary credit established which is never drawn under.

A contractual arrangement in which the licenser’s patents, trademarks, service marks, copyrights, or know-how may be sold or otherwise made available to a licensee for compensation negotiated in advance between the parties. Such compensation may consist of a lump sum royalty, a “running’ royalty (based on volume of production), or a combination of both. Licensing enables a firm to enter a foreign market quickly and poses fewer risks than setting up a foreign manufacturing facility. Furthermore, it allows parties to overcome tariff and non-tariff barriers of trade.

In international trade: liner in free out; referring to a freight charge which includes the cost of loading in the port of departure but does not include unloading costs in the port of destination. In accounting practice: last in first out.

Barges used for unloading sea vessels when normal harbour facilities are non-existent or unavailable.

Services provided by a steamship company or shipping line, under which cargo vessels operate according to a fixed schedule and publicly advertised freight rates.

Freight rates which include loading/unloading charges according to the custom of the respective ports - which unfortunately varies widely. “Liner terms” is, thus, not yet a standard designation, and may or may not include cargo handling charges or the costs of moving cargo between the ship’s hold and the quay; traders are therefore well advised to require full details in advance from carriers. The ICC is currently working on establishing a standard liner term.
In New Zealand, a liner (or berth) term shipping rate indicates that the shipping company organises the stevedoring onto and out of the ship. This is the standard type of freight rate for most ships picking up general cargo. It particularly applies to any containerised cargo but not always to bulkbreak (loose) cargo and therefore the customer should check this with the shipping/forwarding agents.

Leakage and Breakage.

The written instructions from a customer which constitutes the bank’s authority to act in respect of collection of proceeds on customer’s behalf. Use WestpacTrust’s Lodgement Instruction form (Stationery Item No. 03551WT).

A letter from an importer to the shipping company in which the importer undertakes to indemnify the shipping company against the consequences of delivering goods without production of an original bill of lading. The importer’s letter of undertaking requires the prior endorsement or guarantee by their bankers before it is acceptable to the shipping company.

Excess of purchases over sales or of foreign currency liabilities over assets.

Less than truck load.