Entering the world of international trade can feel overwhelming at first. Whether you’re looking to export textiles or import wellness products, knowing the key terminology is essential to communicate confidently and make smart business decisions.

This beginner-friendly guide walks you through the most common trade and logistics terms, so you can navigate the import/export process like a pro.

Common International Trade Terms You Should Know

➜ FOB (Free on Board)
FOB means the seller is responsible for getting the goods to the port of shipment. Once on board the ship, the responsibility shifts to the buyer.
Example: If you’re buying t-shirts from India FOB Mumbai, you handle everything after the goods are loaded.

➜ CIF (Cost, Insurance, Freight)
Here, the seller covers the cost of goods, insurance, and freight to the destination port. The buyer takes over after arrival.
Example: Buying school supplies CIF Hamburg means the seller pays up to that port.

➜ Bill of Lading (B/L)
A vital legal document issued by the carrier to acknowledge receipt of cargo. It also acts as a shipment contract and document of title.
Used by both shipper and receiver for tracking and claiming goods.

➜ HS Code
Harmonized System Code is a standardized code used globally for identifying products in customs and tariffs.
Example: Cotton t-shirts might have HS Code 610910.

➜ Customs Clearance
The process of getting official permission to move goods across borders. It includes checking documents, paying duties, and following regulations.

➜ Freight Forwarder
A logistics expert or company that coordinates shipping on behalf of exporters/importers. They manage carriers, documents, insurance, and more.
AAA Impex functions as your freight forwarder, ensuring smooth delivery.

➜ Incoterms
Short for International Commercial Terms, these define the roles of buyers and sellers in shipping responsibilities, costs, and risks.
Examples: FOB, CIF, EXW, DDP.

➜ Importer of Record (IOR)
The legal entity responsible for ensuring goods are imported in compliance with local laws. They pay duties, file documents, and clear goods.

➜ Lead Time
The total duration from placing an order to receiving the goods. Includes production, shipping, and customs delays.

10. Letter of Credit (LC)
A secure bank-issued document that guarantees payment to the seller, provided all terms are met. Often used in international trade to reduce risk.

➜ Packing List
A detailed document that lists each item in the shipment, with quantities, weights, and dimensions. Crucial for customs and inventory checks.

➜ Proforma Invoice
A preliminary bill sent before the shipment or production begins. It outlines the expected cost and is often used to secure payment or approvals.

➜ Certificate of Origin
This document verifies the manufacturing country of the exported goods. It’s often needed for customs clearance and trade agreements.

➜ Demurrage
Charges applied when cargo stays too long in a port or container terminal beyond the free time allowed.

➜ Export License
Some goods require special permission from government authorities to be shipped internationally. This document grants that approval.

Why Learning These Terms Matters

Understanding these basic terms helps:

➜ Speed up communication with suppliers and clients

➜ Avoid costly mistakes or delays

➜ Build trust with global partners

➜ Stay compliant with international trade laws

Whether you’re exporting textiles or importing natural goods, AAA Impex is your trusted partner to make the process seamless.

Ready to take your business global? Contact AAA Impex today and let us handle your international logistics with care and expertise.