Glossary of Marine Insurance and Shipping Terms

1. Coastal trade and navigation between ports within the same country.
2. Air transportation within the same country.

A large float (often a small barge or cluster of logs) placed between a large ship and a pier or between two ships to prevent rubbing or chafing. See "Fender."

A rotating cylinder used for hauling in rope or line or for lifting heavy loads.  See "Winch."

Captain's Protest - See "Master’s Protest."

Cargo Manifest - See "Manifest."

An international customs document, acting as a passport for merchandise that allows goods to temporarily enter certain foreign countries and return to the United States without paying duty or posting customs bonds in either country; e.g. goods for trade shows, display, or demonstration.

1. A transporter of cargo or passengers; a steamship company, trucker, airline or railroad. Carriers may be either a "common carrier" (operating under a public tariff for established routes, stops, and terms of carriage for various commodities) or a "contract carrier" for individually negotiated contracts.
2. An insurance company is sometimes referred to as a "carrier."

Fire Statute -1851

U.S. statute that provides no vessel owner or bareboat charterer can be held liable for any loss or damage to cargo on board the vessel by reason of fire on board, unless the fire has been caused by the design or neglect of the shipowner or bareboat charterer.

Limitation Of Liability -1851

The U.S. Limitation Act, a companion to the Fire Statute, allows a shipowner or bareboat charterer of a vessel to limit its liability for any loss, damage or personal injury caused by the vessel to the value of the vessel as long as the loss or damage occurred without the privity or knowledge of the owner or bareboat charterer. Liability can be limited to the value of the vessel at the end of the voyage and the pending freight. In the case of loss of life or personal injury caused by a seagoing vessel, the minimum limitation value of the vessel is $60 per gross ton.

HARTER ACT - 1893

U.S. statute that voids clauses in ocean bills of lading which attempt to relieve the vessel owner of liability for loss or damage to cargo arising from negligence in loading, stowage, care and proper delivery or clauses that attempt to avoid or lessen the vessel owner’s obligations to exercise due diligence to provide a seaworthy vessel and crew for the carriage and delivery of cargo. It relieves a vessel owner of liability for errors in navigation or management of the vessel if the owner exercises due diligence to make the vessel in all respects seaworthy. The Harter Act still applies to carriage of goods not subject to COGSA, including the period before loading and after discharge. It applies to carriage between U.S. ports (e.g. U.S. mainland to / from Hawaii and/or Alaska) unless the bill of lading expressly makes COGSA applicable to such shipments.

Pomerene Act -1916

Also known as the U.S. Federal Bill of Lading Act of 1916, it establishes the requirements for the issuance of ocean bills of lading in the U.S.

Hague Rules - 1922

International rules based essentially on the U.S. Harter Act for the regulation of bills of lading in the carriage of goods by sea. The rules were recommended to the governments of all the maritime nations for adoption as the basis for their various carriage of goods by sea acts. The U.S. adopted the Hague Rules with some minor changes in 1936 as the "U.S. Carriage of Goods by Sea Act" (COGSA).

Carriage of Goods by Sea Act - 1936 (COGSA)

U.S. statute adopting the Hague Rules. It applies to bills of lading covering ocean carriage of goods between U.S. ports and foreign ports and sets forth the responsibilities, defenses, and immunities of carriers and vessel owners for loss of or damage to cargo. It provides for a minimum carrier / ship liability of $500 per package (or customary freight unit if applicable) and for a one year time limit from the date of delivery for filing suit against the carrier and ship.

Hague - Visby Rules - 1968

Amendment to the 1922 Hague Rules brought about by a development in transportation that could not have been foreseen in 1922 - containerization. The Visby amendment provides that when a container, pallet or similar article of transport is used to consolidate cargo, the number of packages or units enumerated in the Bill of Lading shall be deemed to be the number of packages or units shipped. It also increased the carrier’s package liability limit from 100 pounds sterling to 10,000 French Francs (or equivalent).

Hamburg Rules - 1978

Proposal by the United Nations conference on Trade and Development (in Hamburg) to amend the Hague Rules in their entirety. The proposal would make the carrier liable for all damage resulting to cargo regardless of cause and without limitation while the goods were in the care & custody of the carrier. The Hamburg Rules would come into effect among signatory countries when approved by 20 of those countries. Traditional shipowning countries such as England and the U.S. are opposed to the Rules.

Material used to plug seams between planks of a wooden vessel to prevent water from entering.

Causa Proxima - See "Proximate Cause."

1. In meteorology, the height at which the cloud base covers all or part of the sky.
2. The inside lining or planking of a ship’s hull extending up the side of the ship to the first deck. This ceiling is therefore on the sides of the ship and what would normally be called a "ceiling" in a house is termed the "overhead" on a ship.

Cells (Container Ships)

Center of Gravity - See "Vessel Stability."

Certificate Of Insurance

A certified document used in international commerce to show the country of origin of the goods.

C&F (Cost and Freight) - See "Cargo Terms of Sale" Appendix G.

CFS (Container Freight Station) - See "Container Handling Facilities."

A notation on bills of lading indicating that cargo was consolidated at one container freight station, transported to another container freight station, and then deconsolidated at that CFS.

A person or company that rents, hires, or leases a vessel from its owner.

Responsibility of the charterer to the vessel owner, and sometimes to the cargo owner or a third party for damages to vessel, cargo, or other persons or property.

Charter Party

A written contract between the owner of a vessel and the party desiring to employ the vessel (charterer); sets forth the terms of the arrangement such as duration of agreement, freight rate, and ports involved in the trip.

Major Types of Charter Parties:

Time Charter - A contract to rent a fully-equipped vessel including crew for a certain period of time.

Voyage Charter - A contract to rent a fully-equipped vessel including crew for a specific voyage between 2 or more designated ports.

Space Charter - A contract for only a portion of the vessel, e.g. one hold, or space on deck. Space charters are used to have a vessel call at an out of the way or an un-scheduled port.

Bareboat Charter - A contract to rent a vessel without equipment, crew, fuel, or stores.

Chassis

A trailer frame with wheels for carrying a cargo container on the highway. 

Chock

1. A block or wedge placed around wheels or barrels to prevent them from rolling or moving.
2. A fitting on the deck of a vessel through which dock or anchor lines are led and held in place.

CIF (Cost, Insurance and Freight) - See "Cargo Terms of Sale" Appendix G.

Classification Societies

Organizations which survey and classify ships according to their condition for insurance and other purposes; e.g. Lloyd’s Register of Shipping (England), American Bureau of Shipping (ABS - United States), Bureau Veritas (Norway).

Clean Bill Of Lading - See "Bill of Lading."

Clearance Limits

The height beyond which vehicles and cargo cannot clear bridges, tunnels, etc.

Cleat

A fitting on a vessel’s deck or a pier for securing lines. Also, the act of securing a line to a cleat.

Clip-On

Detachable refrigeration equipment used with an insulated container that does not have its own built-in refrigeration unit.

Coastwise

Vessels operating along the coast; also known as "Brown Water." See "Cabotage."

COFR (Certificate Of Financial Responsibility)

COGSA (Carriage Of Goods by Sea Act) - See "Carrier’s Liability Acts (Ocean)."

CoInsurers

Two or more insurance companies sharing a single risk under a subscription policy. The total participation of all coinsurers adds up to 100% of the risk, and each coinsurer has a separate contract with the Assured. Each company is a direct insurer and not a "reinsurer." See "Subscription Policy" and "Reinsurance."

Collision

In Marine Insurance, a vessel striking another vessel or floating, not stationary, object.

Collision Clause

A clause in a hull insurance policy insuring the shipowner’s legal liability for collision damage to another vessel, its freight, or cargo; a.k.a. the "Running Down Clause." See "Both to Blame Collision Clause."

ColRegs (Collision Regulations)

International Regulations for Preventing Collision at Sea, 1972 (also known as the "International Rules of the Road" and "navigation rules") is a treaty between participating maritime nations that governs the conduct of ships approaching other vessels so as to avoid the risk of collision. It applies in all international waters and to local waters of countries that do not have their own local rules. The United States has local rules for Inland Waters, and for the Great Lakes and the Western Rivers, and all other waters within the coastal headlands -- such as San Francisco Bay and Puget Sound.

Commercial Invoice - See "Invoice" and "Commercial Set."

Commercial Set (of Documents) - See individual words:

Set of four "negotiable" documents that represents and takes the place of the goods themselves in the financing of the cargo sales transaction, comprised of:

1. Commercial Sales Invoice.
2. Bill of Lading.
3. Certificate of Insurance.
4. Bank Draft.

Commodity

Any physical thing having utility and trade value.

Common Carrier

A company (vessel owner, railroad, airline or trucker) providing transportation services to the general public for the carriage of goods over a fixed route on a regular schedule with prices and terms of carriage published in a tariff. See "Contract Carrier."

Common Charges

When adjusting hull claims, an expense that would have to be incurred twice if vessel were hauled separately for regular vessel maintenance and for damage repair, but is incurred only once if maintenance and repairs are done at the same time; e.g. the haul out charge and drawing the vessel's tailshaft. These common charges are shared equally by vessel owner and the insurance company in adjusting the hull claim.

Comparative Fault / Negligence

A legal principle where damages are measured and apportioned in terms of percentage of fault to the responsible parties. The principle is most often seen in collision cases. See "Proportionate Fault."

Compromised Total Loss - See "Total Loss."

Concealed Damage

Damage to the contents of a package which is externally in apparent good condition.

Condemnation

In a War Risk insurance policy, property which has been captured by the enemy is not considered an absolute total loss until it has been condemned by a competent court of the enemy or one of its allies. Prior to condemnation there is always the remote chance that the property will be released. Prior to condemnation such seized property is a Constructive Total Loss; after condemnation, the property is an Absolute Total Loss.

Conference

An association of vessel owners operating in the same trade route who operate under collective conditions and agree on tariff rates and terms.

Connecting Carrier

A transportation company that carries cargo or passengers to a destination to which the first carrier does not go. The liability for delivery still rests with the first carrier who issues a "through Bill of Lading" and the connecting carrier operates as a sub-contractor to the primary carrier.

Connecting Conveyance

The inland or ocean transport vehicle that carries cargo before and/or after the main ocean or air transit.

Consignee

The party (usually the buyer) named in a bill of lading or air waybill who is entitled to receive cargo that is shipped by the consignor and delivered by the transporter.

Consignment

1. A shipment of goods from a shipper to a consignee.
2. Goods of others held for sale without taking title.

Consignor

The party who ships goods, the shipper; usually the seller.

Consolidation

Combining shipments of two or more shippers or suppliers for one or more consignees into one container.

Consolidation clause / Endorsement

A clause or endorsement in an open cargo policy providing coverage at an agreed premium on goods while in transit to, and while at, a common consolidation point for the purpose of preparing or consolidating the goods for export.

Constructive Total Loss - See "Total Loss."

Consular Documents

A formal statement certified by a consular official describing goods, and the value, quantity, nature, and origin of the cargo shipped.

Consumption Entry

The process of declaring the importation of foreign-made goods into the United States for use in the United States.

Container

A rectangular metal box used to transport cargo between two or more modes of transit; i.e. truck, train, vessel or airplane. The same loaded container is transferred, eliminating the intermittent handling of cargo; also called "Multimodal." Intermodal containers may be 20 feet, 40 feet, 45 feet, 48 feet, or 53 feet in length; 8’0" or 8’6" in width, and 8'6" or 9'6" in height. They may be ventilated, insulated, refrigerated, flat rack, vehicle rack, open top, bulk liquid or other configurations. Specialized containers for air shipments are called "Igloos" due to their shape. See "TEU" and "FEU." See "Cargo Packing" Appendix A.

Container Crane

A special purpose shoreside crane positioned alongside the vessel with enough reach to load / unload containers to/from the container cells on the ship.

Container Handling Facilities:

Container Depot

A designated area where empty or off-lease containers are stored or repaired.

Container Freight Station (CFS)

A shipping dock where container cargo is consolidated by destination. Incoming containers with multiple cargo destinations are unloaded (stripped). Cargo is sorted by destination and cargo with the same destination is either reloaded (stuffed) into one container for continued transit or sent directly to the destination without being containerized. Generally a CFS handles less than full container load (LCL) shipments.

Container Terminal

A materials handling and storage facility for the transfer of containers between trucks, rail cars, and vessels.

Container Yard (CY)

An open area (usually fenced with controlled access) at the carrier’s terminal where fully loaded containers are received and held awaiting further transit.

Containerization

Shipping system based on large cargo-carrying containers that can be easily interchanged between trucks, trains, and vessels without re-handling the contents. See "Container."

Container Load

A load sufficient in size to fill an entire container either by cubic measurement or by weight. Also known as "Full Container Load" (FCL).

Container Manifest

Document showing contents of a container.

Container Seal

A device installed through the door locking handles of a loaded container that prevents the door from being opened without breaking the seal.

	Indicator Seal – a flimsy plastic or metal strip with preprinted numbers that are recorded on the shipping documents and compared with the seal numbers on the doors when the doors are opened at destination. Missing seals or non-matching numbers provide evidence of possible tampering during the transit.
	Barrier Seal – a heavy bolt or lock that can only be removed with a special bolt or cable cutter. They will not keep out a determined thief, but they do make it more difficult to break into a container.
	Electronic Seal– Since the 9-11-01 terrorist attacks, more shippers and carriers are ordering the high-tech "electronic seals" that can store information and pinpoint exactly when the seal is broken.

Container Terminal - See "Container Handling Facilities."

Container Yard (CY) - See "Container Handling Facilities."

Contingency Insurance

Backup insurance that protects a party’s interest if certain events occur, e.g. if the Assured buys or sells cargo on terms under which the insurance is arranged by the other party, and that insurance fails to respond to a covered loss, the Contingency Insurance protects the Assured’s interest in the shipment.

Contraband

During time of war, materials carried aboard a vessel that could aid a belligerent in the process of the war, such as arms, weapons, or munitions.

Contract

A legally binding agreement (oral or written) between two or more persons or organizations creating an obligation to do or not to do a particular thing. The essentials are competent parties, legal subject matter, consideration (value), mutual understanding, and mutual obligations, e.g. an insurance policy, bill of lading, and charter party. See "Third Party."

Contract Carrier

A company (steamship, airline, railroad, or trucker) providing transportation services under individual contracts or agreements with specific parties (not the general public) to transport passengers or property to specified locations at an agreed time and charge. Not a "common carrier" (although some companies may serve in the capacity as both a common and a contract carrier). See "Common Carrier."

Contract Of Affreightment

The document evidencing the terms of carriage between a shipper and a carrier. It is usually expressed in the Bill of Lading and is subject to the Carriage of Goods by Sea Act (COGSA) if a U.S. port and a foreign port are involved, or the Harter Act if two U.S. ports are involved. See "Bill of Lading."

Contribution

The amounts to be paid by cargo owners and vessel owner for their share of a General Average loss or Salvage Award .

Contributory Negligence

A legal principle where the claimant is found partially at fault for causing its own damages or injury. The principle has been replaced by the doctrine of comparative negligence in many jurisdictions.

Contributory Values

The actual value of each cargo shipment and of the vessel at the time of arrival at the destination or termination of the voyage (even in a damaged condition) that is used to calculate each cargo owner’s and the vessel owner’s share of the General Average loss or Salvage Award. See "General Average."

Controlled Atmosphere

A system that controls the mixture of gases within a container to retard decay of perishables during a voyage. 

Corner Post

Structural frame member at each corner of a container supporting the top, sides, and floor. It is the strength member by which the container is lifted by the container crane for loading / unloading aboard the vessel. 

Countervailing Duty

An additional duty imposed to offset export grants, bounties or subsidies paid to foreign suppliers in certain countries by the government of that country for the purpose of promoting export.

Country Damage

Damage to baled or bagged goods (e.g. cotton, coffee and similar commodities) caused by excessive moisture from damp ground or exposure to weather, or by grit, dust, or sand forced into the cargo by windstorm or inclement weather, prior to commencement of transit.

Coxswain (pronounced "kok' sen")

A crew member who is in charge of a small boat and acts as helmsman.

Cradle

A wooden or metal framework to support a vessel upright while out of the water being built, repaired, lifted, or transported. It may have wheels for moving the vessel.

Crew

Seamen on board who operate and navigate a vessel; may include or exclude the master and officers. See "Seaman."

Cristal - See "Pollution Liability."

CRO (Cancelling Returns Only)

A phrase used in hull policies to indicate that the rate does not allow lay-up returns.

Cross Liabilities

1. In the event of a collision where both vessels are at fault, liability is apportioned between the two parties according to their degree of fault. See "Collision Clause."

2. A clause often used in contracts and in the Additional Assured Endorsement to an insurance policy stating that, even though both parties are named as an Assured for joint coverage under a policy of insurance, each will retain the rights against the other as though separate policies had been issued to each Assured. Also called a "Severability of Interest" clause, it is usually required to be shown on the Certificate of Insurance and/or Additional Assured Endorsement when the other party is to be named in the policy.

Crow's Nest

The place or position on a mast where a crew member can stand and watch for fish or other vessels.

CTL (Constructive Total Loss) - See "Total Loss."

Cure - See "Seaman’s Rights and Remedies."

Current

A flow of water or air in a definite direction. See "Tides."

Customs Bonded Warehouse - See "Bonded Warehouse."

Customs Broker (Customshouse Broker)

A person or firm licensed by the U.S. Treasury Department, who is hired by the cargo importer to expedite clearance of their cargo through U.S. Customs.

Cyclone

A tropical storm with winds of 74 mph or greater in the South Western Pacific Ocean (Philippines), South China Sea, and the Indian Ocean. See "Storm" and "Weather Warnings" Appendix D.

CY - CY

A shipment from one Container Yard to another Container Yard.