Glossary

The words you will meet in every deal, in plain language.

MT

Metric ton: 1,000 kg. The unit for most bulk cargo.

FOT

Free on truck: the buyer collects the goods on the truck at the seller's site and pays transport from there.

FCA

Free carrier: the seller hands the export-cleared goods to the buyer's carrier at a named place.

FOB

Free on board: the seller loads the goods on the ship at the named port; the buyer pays freight from there.

CFR

Cost and freight: the seller pays freight to the destination port; risk passes once the goods are on the ship.

CIF

Cost, insurance and freight: like CFR, and the seller also buys minimum cargo insurance.

DAP

Delivered at place: the seller delivers to the named place, often the buyer's warehouse, ready to unload.

KYC

Know your customer: the company document pack a serious counterparty asks for (registration, tax clearance, director IDs, permits).

NCNDA

Non-circumvention and non-disclosure agreement: protects an introducer so buyer and seller cannot cut them out.

LOI

Letter of intent: a non-binding statement that a buyer wants to buy on stated terms.

ICPO

Irrevocable corporate purchase order: a buyer's formal purchase intention, often asked for before a seller issues an offer.

POF

Proof of funds: a bank letter or statement showing the buyer can pay.

LC

Letter of credit: a bank promises to pay the seller when the agreed documents are presented. At sight means payment on presentation.

SBLC

Standby letter of credit: a bank guarantee that pays only if the buyer fails to pay.

SCO/SPA

Soft corporate offer, then the sale and purchase agreement: the seller's offer, then the final contract.

Mandate

Written authority to sell, or to find a buyer for, a product on someone's behalf.

Introducer fee

Introducer fee: the commission paid to the person who connects buyer and seller, usually a percentage of the executed contract.

Assay

Laboratory analysis of grade and impurities. Buyers ask for it before trusting a spec.

CCBC/SGS

Inspection companies that sample, weigh and certify cargo at loading.