A

Abaft

“Aft of.” See “Aft.”

Abandon / Abandonment

To relinquish or tender all rights of ownership of hull or cargo to insurers as the preliminary step to recovering an insurance claim for an actual or constructive total loss.

Aboard or Onboard

Persons or cargo on a vessel or other conveyance.

ABS - See “American Bureau of Shipping.”

Accident

An unforeseen occurrence or happening; a fortuitous event.

Act of God

A natural event such as flood, storm, lightning, or earthquake not caused by nor preventable by any human agency, and for which no transporter can be held accountable.

Actual Cash Value

Fair market value of property; as opposed to replacement cost or replacement cost less depreciation. See also “Agreed Valuation.”

Actual Total Loss – See “Total Loss.”

Admiralty Court

A court having legal jurisdiction over maritime matters; in the United States, the Federal District Courts and the U.S. Supreme Court, not the State Courts.

Admiralty Law

The branch of law dealing with maritime matters.

ADR – See “Alternative Dispute Resolution.”

Ad Valorem

“According to value” or “agreed value“; e.g. an ad valorem freight rate is based on the cargo’s value, not its weight or volume.

Adventure

The commercial enterprise involving uncertainties, risks, and hazards, in which a vessel and cargo are subjected to the peril of a loss, delay or damage at sea. Merchandise is shipped by the seller on speculation to arrive safely at a foreign port to be sold for a profit. The vessel carries the merchandise in order to earn freight. The vessel and cargo together make up the “common venture.” In clipper ship days, the captain participated in the profits of the venture to give him the incentive to make profitable voyages for the owners. Fishing vessel owners still give their crew “shares” of the venture’s profits.

Advice of Shipment

A notice sent to a buyer advising that the shipment has gone forward, the name of vessel, routing, and anticipated arrival date, etc.

Affreightment – See “Contract of Affreightment.”

Aft / After

Towards or near the stern of a vessel.

Agent

A person authorized to transact business for or on behalf of another person or company; e.g. a “ship’s agent” would book cargo for the pending voyages of a shipping line and make other arrangements for the vessel and/or its owners such as supplies and repairs.

Agreed Valuation

The value of cargo or a vessel agreed between the owner and the insurance company at time of inception of an insurance policy .

A.I.D. (Agency for International Development)

A U.S. government agency.

Air Waybill

The contract of carriage between a shipper and an air carrier; serves a similar purpose as the Bill of Lading on a vessel, but it is not a negotiable document like an ocean Bill of Lading.

ALAE – See “Allocated Loss Adjusting Expense.”

ALE (Allocated Loss Expense) – See “Allocated Loss Adjusting Expense.”

Allision

The striking of a moving vessel with a stationary vessel or other stationary object. See also “Collision.”

Allocated Loss Adjusting Expense (ALAE)

Costs paid by an insurance company to adjust a particular claim; e.g. a survey fee on a cargo water damage claim.

All Risks

The broadest form of insurance coverage available, providing protection against all perils of physical loss or damage from an external cause. Loss must be fortuitous, i.e. accidental, to be covered. All risks does not cover inevitable loss, wear and tear, delay, inherent vice, pre-shipment condition, inadequate packaging, or loss of market.

Alongside

An area next to the side of a vessel. Cargo delivered “alongside” is placed on the dock or barge within reach of the transport ship’s tackle so it can be loaded.

Alternative Dispute Resolution (ADR)

Optional ways of settling disputes between parties other than by a formal trial. The most common forms of ADR are:

• Negotiation
  

  The process in which disputing parties and their attorneys discuss and compromise their differences.

• Settlement Conference
  

  Any meeting of disputing parties and their attorneys in which they discuss possible settlement of the issues. It may be Voluntary if agreed by the parties (see “Mediation” below), or Mandatory if ordered by the court. Many courts mandate a pre-trial settlement conference in which a judge presides but does not make a final decision on the issues.

• Mediation
  

  An informal process in which the disputing parties choose one neutral mediator to conduct a meeting and help them resolve their disputes by discussing, negotiating, and reaching a settlement acceptable to all of them. Mediation can be either Voluntary if agreed by the parties, or Mandatory if ordered by the court. The mediator does not make a final decision on the issues.

• Arbitration
  

  A formal procedure in which the disputing parties choose one or three neutral arbitrators to conduct a hearing, listen to the positions of the parties, evaluate evidence and testimony, and then make a decision on the issues. Arbitration can be either Binding or Non-Binding on the parties, as they agree beforehand.

• Early Neutral Evaluation
  

  An informal procedure that compels the disputing parties to evaluate the strengths and weaknesses of their positions early in a dispute. The early neutral evaluator is an attorney with expertise in the issues involved, who critiques and responds candidly to the merits of the positions of the parties, and makes specific recommendations about the terms of the settlement agreement, thereby providing a “reality check” for all parties. The neutral evaluator does not make a final decision on the issues.

• Mini-Trial
  

  A flexible procedure in which the disputing parties agree to the format of an abbreviated trial. The rules of evidence are relaxed and witnesses are not usually called. A neutral advisor monitors the proceedings in which the parties present their cases to a judge, magistrate, or jury who then give an advisory opinion on the probable outcome of the case. Mini-trials provide a realistic preview of how the parties might fair at trial. The judge, magistrate, or jury does not make a final decision on the issues.

Ambit

The geographic scope of a voyage, including time extensions, covered by cargo insurance; e.g. Warehouse to Warehouse Clause, South American Clause, and the Marine Extension Clauses.

American Bureau of Shipping (ABS)

Inspection service in the United States that inspects and surveys vessels and grants their “class” if the vessel meets the standards of construction, material, workmanship, and maintenance; and certifies the vessel as “seaworthy.” ABS publishes the RECORD, which is an alphabetical register of vessels describing the date built, dimensions, engines, type of construction, and other pertinent data.

Amidships

In the vicinity of the middle portion of a vessel; between bow and stern.

Apparent Good Order

Cargo that is received and appears to be free of damage so far as can be determined without opening the package or container.

Approved Merchandise

Under an Open Cargo Policy, goods that are approved by the insurance company for coverage under the specified insuring conditions and rates of the policy. Other goods can be “held covered,” but subject to terms and conditions to be determined.

Approved Packing

Packaging that meets the packaging industry standards of sufficient design and construction to protect the cargo from the normal hazards expected to be encountered during the intended voyage, including normal domestic handling and storage from point of origin to final destination.

Approved Vessel

In the American market, a cargo-carrying vessel over 1,000 net registered tons and under 20 years of age that insurance companies accept to carry the insured cargo without additional premium. Shipments aboard other vessels are accepted and may be subject to additional premiums, called “penalties,” which results in these vessels being called “penalty vessels.” The London market uses a different standard.

Arbitration -See “Alternative Dispute Resolution.”

Arranged Total Loss - See “Total Loss.”

Arrest

A legal action in Admiralty to seize a vessel, cargo, container or other maritime property as security for a claim or to enforce a maritime lien. The claim may be brought “in rem” against the arrested property itself and not necessarily against the property’s owner (which may be unknown). See “Attachment” and “In Rem.”

Arrival Notice

A notification of the vessel’s arrival by the transporter to the consignee, or the “Notify Party,” or the “Also Notify Party” as listed on the Bill of Lading.

As Is Where Is

Description of the terms under which property is sold, meaning that it is to be sold at its present location and in its present condition without warranty as to quality or quantity. See “Salvage Value.”

Assailing Thieves

Persons committing robbery by force; e.g. at gunpoint. The term does not include theft by any of the vessel’s crew or passengers, clandestine theft, or pilferage by stealth; one of the perils enumerated in the “Perils” clause of a Marine Insurance Policy. See also “Barratry.”

Assignment

The transfer of rights, title, and interest from one party to another by contract or by endorsing a check, bill of lading, or policy of insurance over to another party. An Assignee acquires no greater rights than were held by the Assignor.

Astern

• At or towards the rear of the vessel.
• Behind a vessel.
• To move in a reverse direction.

Athwart / Athwartships – See “Transverse.”

Attachment

A seizure of property to secure an eventual judgment against the owner. Unlike arrest, the property is not the named party in the case and the defendant must own the property for it to be subject to attachment. See “Arrest” and “In Rem.”

Average

Any loss or damage to a vessel or cargo that is due to an insured peril and is less than a total loss. See “Particular Average,” “General Average,” and “Average Clauses.”

Average Adjuster

A marine claims specialist who prepares statements of Particular or General Average, etc. concerning claims for losses, expenses and contributions. The person is usually appointed by the vessel owner and is usually a member of the Association of Average Adjusters.

Average Agreement – See “General Average Agreement.”

Average Bond – See “General Average Agreement.”

Average Clauses (Particular Average Clauses)

The perils listed in the insurance policy establish the basic perils that are covered by a named peril policy, and a total loss of an entire vessel or an entire cargo shipment due to any one of these perils is covered in full. The various Average Clauses determine when PARTIAL LOSSES due to a named peril in the policy are covered.

The Average Clauses fall into two categories: FPA (Free of Particular Average) and W A (With Average):

• FPA – AC (Free of Particular Average – American Conditions) – Limits recovery of partial losses to those directly CAUSED BY the vessel stranding, sinking, burning, or being in collision with another vessel.
• FPA – EC (Free of Particular Average – English Conditions) – Limits recovery of partial losses due to a named peril in the policy occurring on a voyage in which the vessel is stranded, sunk, burnt, or in collision with another vessel. Under F P A – E C, it is NOT NECESSARY that the actual damage be caused by the vessel stranding, sinking, burning, or being in collision, but only that one of these HAS OCCURRED sometime during the voyage to open up the F PA Warranty. Today these conditions are usually worded so that damages caused by collision are covered, but so that a collision does not open the FPA warranty.
• WA if amounting to 3% (With Average with a Franchise equal to 3% of the insured value ) – Limits recovery of partial losses due to a named peril in the policy to those reaching a Franchise (3% is usual for many commodities, but the Franchise can be any percentage of the insured value, or any amount agreed upon by the insurance company and the Assured). See “Franchise.” The Clause can be written in a variety of ways, including:

• With Average, if amounting to 3%.
• With Particular Average, if amounting to 3%.
• Particular Average Payable, if amounting to 3%.
• Average Payable, if amounting to 3%.
• To pay Particular Average, if amounting to 3%.
• Subject to Particular Average, if amounting to 3%.

• WA Irrespective of Percentage
  (With Average, No Franchise) – Allows full recovery of all partial losses due to a named peril in the policy. This clause can also be written in a variety of ways, as above, with the words “if amounting to 3%” replaced by “irrespective of percentage,” or deleted entirely.

I

ibnr- see "Incurred But Not Reported."

ICC

1.      See "Interstate Commerce Commission."

2.      International Chamber of Commerce.

IMCO

International Maritime Consultative Organization.  A forum in which most major  maritime nations participate and through which recommendations for the carriage of dangerous goods, bulk commodities and maritime regulations become internationally acceptable.

IME  (Independent Medical Examination)

Implied Warranty  -  See "Warranty."

Import

To receive goods from a foreign country.

Import License

A document required and issued by some national governments authorizing the importation of goods.

Inboard

Within the perimeter of the vessel's hull.   See also "Outboard."

Inboard - Outboard / Outdrive

A permanently mounted inboard engine connected through the transom of a vessel to an outboard propeller drive assembly that both propels the vessel and is turned from side to side to steer the vessel.  This form of engine eliminates the need for a rudder, rudder post, shaft log, stuffing box, stern bearing, coupling, and conventional propeller shaft.  Inboard-Outboard is also known as "stern drive."                           

In Bond

Cargo moving under Customs control where duty has not yet been paid.

Inchmaree Clause  (Additional Perils Clause)

First added to hull policies following an English case involving the vessel "Inchmaree." It expands coverage to include consequential damage directly caused by explosion, breakdown of electrical machinery, bursting of boilers, breakage of shafts, latent defect in machinery or hull, accidents in handling cargo, repairer's negligence, crew negligence, et al; as long as the damage does not result from want of due diligence by the vessel owner. The clause was later added to cargo policies.

INCOTerms

The "International Chamber Of Commerce Terms of Sale."  These terms were last amended in the year 2000.   See "Cargo Terms of Sale"  Appendix G.

Increased Value Insurance

Insurance that covers an excess amount over the insured value of the property; hull or cargo. Such insurance is for a separate agreed amount in excess of the agreed value of the property and is written on a separate policy form which is essentially Total Loss Only insurance. Hull policies limit the amount of I.V. insurance that an owner may place in excess of the hull agreed value.

Incurred But Not Reported  (IBNR)

An insurance company term for losses that have occurred but have not yet been reported to the company. It is a factor in insurance company accounting that permits the company to take such losses into account for actuarial purposes.

Indemnify

To reimburse a party for loss, damage or expense.

Indemnity

Payment or reimbursement for loss, damage or expense.

Inflammable   - See "Flammable."

Inherent Vice

A loss caused by the nature of the thing insured and not the result of a fortuitous external cause; e.g. spontaneous combustion of bulk grain.

In Personam

Suit against a named individual, corporation or other business entity; i.e. "the person."  See "In Rem."

In Rem   (against the thing)

A maritime lien against a vessel or containers.  This unique feature of Admiralty Law allows a claimant to have a vessel or container arrested or seized to enforce a legal action, rather than arresting its owner (whose identity may not be known). The seized property is held as security until the claim is decided or until acceptable security is substituted. See "Arrest" and "Attachment."            

Inspection Certificate

A certificate issued by an independent agent or firm attesting to the quality and/or quantity of the merchandise being shipped. Such a certificate is usually required in a letter of credit for commodity shipments.

Institute Clauses

Clauses agreed in the London insurance market and offered by the Institute of London Underwriters.  (Clauses offered by the American market are titled "American Institute of Marine Underwriters Clauses.")                                  

Insurable Interest

A real stake in a specific property to the extent that loss of or damage to the property could cause a financial loss.                           

Insurance Certificate- See "Certificate of Insurance."

Intermodal - See "Multimodal." 

International Safety Management (ISM)Code

The International Management Code for the Safe Operation of Ships and for Pollution Prevention requiring every company and bareboat charterer operating a vessel to design and implement a Safety Management System; effective 7/1/98 on some vessels and 7/1/02 on other types of vessels.

Interstate Commerce Commission  (ICC)

The U.S. federal agency charged with enforcing laws applicable to common carriers transporting cargo between states.  It was abolished  January 1, 1996 and replaced by the Surface Transportation Board.

Invoice

The Seller's bill of sale for the goods sold, specifying the type of goods, quantity, price, and terms of sale.  See "Commercial Set."

I Q F    (Individually Quick Frozen)

Small pieces of food that are frozen individually before being packed and shipped.

Irrespective of Percentage

Loss or damage due to a peril insured against collectible in full, without a franchise having to be reached, or a deductible applied. See "Average Clauses."

Irretrievable Deprivement - See "Total Loss."

Irrevocable Letter of Credit

Letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee and which cannot be revoked without joint agreement of both the buyer and the seller.

ISM Code - See "International Safety Management  (ISM) Code."                                                 

Z

No terms beginning with z.

X

No Terms beginning with x.

V

Valuation Clause

The clause in the Marine Policy that contains a consistent basis of valuation agreed upon by the Assured and the insurance company and which establishes the insured value of the cargo or vessel when the insurance attaches.  See "Dual Valuation Clause."

Valued Policy

A policy in which the insured value of the property insured has been agreed between Assured and insurance company when the policy attaches rather than after a loss has occurred; as opposed to an Actual Cash Value policy. 

Vanning

The loading of cargo into a container or van.

Ventilated Container

A container designed with openings in the side and/or end walls to permit the exchange of inside and outside air when the container doors are closed.  

Venture  - See "Adventure."

Vessel

Watercraft of every description used as a means of transporting people or cargo from place to place on navigable waters.   See "Vessel Types"  Appendix F.                        

Vessel Movement (caused by the action of the waves as the vessel moves through the water)

A vessel at sea may move in six different directions at the same time:

Heave - Rise or fall of the entire vessel. 
Surge - Forward or aft movement of the entire vessel. 
Sway - Sideways movement of the entire vessel. 
Pitch - Rise and fall motion (bow and stern) on the width center axis. 
Roll - Side to side (port and starboard) rocking motion on the length center axis. 
Yaw - Port and starboard twisting motion on the vertical center axis.

Vessel Stability

The tendency of a floating vessel to return to its original upright position of equilibrium after being tipped by the forces of wind and sea.  In order to maintain its stable upright position a vessel s Center of Gravity must lie vertically below its Metacenter on the Center of Buoyancy line. 

• Center of Gravity - The central point around which the total mass or weight of a vessel and its cargo is evenly distributed and balanced. The point at which all of the downward forces of a vessel s weight can be considered to act.  If the Center of Gravity is low the vessel is "stiff."  If the Center of Gravity is high the vessel is "tender"  and tends to roll more in the waves.  If the Center of Gravity is too high the vessel s stability decreases and it could capsize.  The Center of Gravity is "C" on the diagram below. 

• Center of Buoyancy Line - The vertical line at which all of the upward forces of the water s support (buoyancy) can be considered to act. The center plane of a vessel; "A" on the diagram below when it is floating upright, and "B"  when slightly tipped. 

• Metacenter  - The highest point to which the Center of Gravity may rise and still permit a vessel to have positive stability; "M" on the diagram below.  The Metacenter must be above the Center of Gravity, or the vessel would be top-heavy and capsize.

C - Center of Gravity (point) 

A - Center of Buoyancy Line of a floating vessel 

B - Center of Buoyancy Line when a vessel is tipped 

M - Metacenter (point) at the intersection of verticals MA and MB

Voluntary Settlement Conference (VSC) -See "Alternative Dispute Resolution."

Voyage

1.  A vessel's journey by sea from one port to another.  A "round voyage" would be a vessel's journey from its Home Port through all of its Ports-of-Call and return to its Home Port.       

2.   The journey of cargo from its point of origin to its final destination.            

Voyage Charter  - See "Charter Party."

VSC (Voluntary Settlement Conference) - See "Alternative Dispute Resolution."

Y

Yard

A place of construction, repair, and/or storage of vessels;  e.g. a dockyard, boatyard, shipyard, or repairyard.

Yaw - See "Vessel Movement."

York-Antwerp Rules

An international code for adjusting General Average claims on a uniform basis.

W

WA    (With Average) - See "Average Clauses." 

Warehouse

A place for the shipment, delivery, consolidation, distribution, or storage of cargo.  See "Terminal" and "Go Down."

Warehouse Endorsement

An endorsement that may be added to the Marine Cargo Policy to provide coverage on cargo while being stored.

Warehouse To Warehouse Clause

A clause in a cargo policy defining when coverage attaches and terminates.

Coverage attaches when the cargo leaves the warehouse at the place named in the policy, and continues during the ordinary course of transit after discharge at the final port.

Coverage ends when one of the following first occurs:

• When the cargo is delivered at the final warehouse at the destination named in the policy , or

• 15 days after discharge if the final destination is within the port, or

• 30 days after discharge if the final destination is outside the port. 

Warranty

An undertaking in which the Assured promises to comply with certain conditions.   Non-compliance constitutes a breach of warranty and the insurance company is discharged from liability from the date of the breach.    

• Expressed Warranty - An agreement written in the policy that the Assured must strictly and  literally comply with. A violation thereof voids the insurance; e.g. trading warranties.

• Implied Warranty - Fundamental conditions implied in a contract of marine insurance:  

1.) Seaworthiness of the vessel;  

2.) Legality of the adventure.        

War Risks

Those risks related to two (or more) belligerents engaging in hostilities, whether or not there has been a formal declaration of war. Such risks are excluded by the F.C. & S. (Free of Capture and Seizure) Warranty, but may be covered by a separate War Risk Policy, at an additional premium.

Watercraft  - See "Vessel" and "Vessel Types"   Appendix  F. 

Waybill

A document prepared by a transportation company (usually a trucker or airline) as a receipt for the cargo at the point of shipment; showing point of origin, destination, route, consignor, consignee, description of shipment, and amount charged for the transportation service. It is forwarded with the shipment or sent by mail to the agent at the transfer point or waybill destination. Unlike an ocean bill of lading, a waybill is NOT a document of title and is NOT a negotiable document.

Ways

The framework on which a vessel is built and from which it slides into the water upon launching.

Ways Table - See "Marine Railway."

Wear & Tear

The ordinary wearing away of the various parts of a vessel, machinery, and equipment through use. Such damage is not accidental in nature, but is inevitable.

Weights and Measures  - See Appendix E.

Wharf

A fixed platform (usually on pilings) built parallel to the shore to which vessels tie up to load or unload cargo or passengers. (A pier is a similar structure but is built perpendicular to the shoreline.)    See "Pier" and "Dock."                      

Wharfage

Fees charged to cargo and vessels for using a wharf or pier.

Wharfinger

The owner or operator of a wharf.

Wheel

1.         A vessel's propeller.  See "Propeller."

2.         The steering wheel of the vessel used to move the rudder.

Wheelhouse - See "Pilothouse."

Winch

A rotating cylinder used for pulling rope or line. See "Capstan."

Without Benefit Of Salvage

A clause in an insurance policy in which the insurance company agrees that, in the event of loss or damage, salvage which may be realized from the property involved shall not be deducted from the claim. 

Without Prejudice

1.      A notation in a report to indicate that the opinion is objective and unbiased to any interested party involved.

2. A claim paid "without prejudice" to the policy terms and conditions. Payment is made without admission of liability, where doubt exists that the claim is recoverable, and  payment  does not set a precedent for recovering future claims.                                                            

WPA    (With Particular Average)  - See "Average Clauses."

Wreck

A vessel so battered, broken or destroyed by a storm, fire, grounding or other disaster that it is without further use as a vessel; a shipwreck.  See "Total Loss."

U

Uberrimae Fidei   ( pronounced  Oo ber ee may  fee day) – See "Utmost Good Faith.”

ULCC   (Ultra Large Crude Carrier) – See “Vessel Types”  Appendix F.

Ullage

The unfilled portion of a drum or tank.

Ultimate Net  Loss

The total paid on a claim including expenses.

Unclaimed Freight

Cargo that has not been picked up by the consignee, and may be subject to demurrage or late charges.

Under Deck

The spaces below the main deck of a vessel.

Under insurance

Insurance effected for less than the value of the property at risk.

Underlying  Insurance

All insurance policies below a particular layer of excess insurance. See “Primary Insurance” and “Excess Insurance.”

Undiscovered Loss Clause

A cargo insurance clause providing coverage for losses that are not discovered until boxes are opened after the termination of the risk.  See “Concealed Damage.”

Unearned Wages  – See “Seaman’s Rights and Remedies.”

Unitization / Unit Load

The consolidation of a quantity of individual items into one large shipping unit (usually on a pallet) for easier handling.  See “Cargo Packing” Appendix A.

Universal Time  (UTC)   (Universal Time Coordinated)

Divides the world into 24 time zones, the same as Greenwich time, but the hours are expressed using the 24-hour clock, i.e. military time (1400 = 2 p.m.).   See “Time Zone Map”  Appendix C.

Unseaworthy  – See “Seaworthy.”

UTC - See “Universal Time.”

Utmost Good Faith   (Uberrimae Fidei)

A basic principle of insurance is that the Assured and his or her broker must disclose and truly represent every material circumstance to the insurance company before a risk is accepted for coverage. Marine insurance contracts demand the utmost good faith in disclosing all information that may possibly influence the judgment of the insurance company because the vessel or cargo may be in some far off place in the world, not subject to inspection or verification. It goes beyond the ordinary requirement that there be no actual fraud, which is implied in all contracts. A breach of good faith entitles the insurance company to void the contract.  See "Lost or Not Lost."

T

Tackle

A system of ropes and lines (tackle) and pulleys (block) used to gain mechanical advantage to move heavy objects or rigging; collectively called “running rigging.” Sometimes it is pronounced “taykle.”

Tail Shaft – See “Shaft.”

Tandem Tow

One tug pulling two or more barges at the same time. See “Deck Barge” in Appendix F.

Tare Weight

The weight of packing material, container, vehicle, etc., i.e. everything except the cargo. The tare weight is deducted from the total weight to calculate the weight of the cargo load being transported.

Tariff

A publication setting forth the conditions, charges, rates, and rules of transportation companies for carrying cargo.

Temperature Recording Devices

• Built-in Temperature Recorder (Partlow) – The temperature recording device that is part of a reefer container’s cooling equipment. During transit, the temperature of the air coming out of the cooling equipment, before it enters the cargo container, is continuously recorded on a round chart, i.e. the Partlow chart. As the equipment cycles on and off (just like a home refrigerator) “peaks” and “valleys” are produced on the chart as the output is recorded. The chart is in the possession of the carrier before, during, and after the voyage.
• Portable Temperature Recorder (RYAN, COX and other brands) – A battery powered self-contained temperature recording device that is independent of a reefer container’s cooling equipment. One or more units are placed in a container (usually by the supplier) when the cargo is loaded. During transit, the temperature of the air inside the cargo container is continuously recorded on a roll of paper, e.g. the Ryan tape. When the cargo is unloaded at its final destination, the unit is removed by the consignee, who usually opens the unit and removes the tape. The unit can be sent to the manufacturer for testing and authentication of its accuracy.

Tender

1. See “Vessel Types” Appendix F.

2. To offer for acceptance; e.g. as tender of abandonment of property or the tender of defense of a lawsuit.

3. To offer goods for transportation or to make railcars, trucks or containers available for loading or unloading of cargo.

Terminal

A large open storage area adjoining a wharf, pier, or runway for loading or unloading dry, bulk, or container cargo from vessels or aircraft to trucks or railcars.

Terms of Sale – See Appendix G.

TEU (Twenty-foot Equivalent Unit)

A standard size designation of an ocean cargo container, since the early containers were 20 feet in length. Later containers were 40 feet in length and were sized by their cargo carrying capacity in terms of 20 foot units; i.e. a 40 foot container is the equivalent of two 20 foot containers; 1 FEU = 2 TEU’s. Vessels are sized by the number of containers of a certain size they can carry; i.e. the number of TEU’s or FEU’s.

Thieves

Persons stealing property. See “Assailing Thieves.”

Third Party

A person or company outside the two parties to a contract; e.g. someone other than the Assured or the insurance company.

Thwartship – See “Transverse.”

Tides

The alternating rise and fall of the oceans of the world (usually twice a day) as they react to the gravitational attraction between the earth and the sun and the moon. Tides are made up of two components: the height of the water and the flow of the current as the height changes. No two tides are the same height.

Some of the more common terms to describe various stages of tide are:

• Rising Tide – The vertical movement of water as the current flows in towards land.
• Falling Tide – The vertical movement of water as the current flows out from land.
• Current – The horizontal movement of water which leads to the rise and fall in the level of water.
• Flood Tide – The horizontal flow of water (current) towards the land. (This is the opposite of wind direction which is expressed in the direction the wind is blowing from).
• Ebb Tide – The horizontal flow of water (current) out to sea.
• Slack Water – The brief time when the current is not in motion as it reverses between flood and ebb and vice versa.
• High Tide or High Water - When the water reaches its greatest height in the tidal cycle.
• Low Tide or Low Water – When the water reaches its lowest height in the tidal cycle.
• Spring Tides – Tides which have the greatest range between low water and high water. This usually occurs once a month when the earth, sun, and moon are aligned and results in the greatest amount of current.
• Neap Tides – Tides which have the least range between low and high water. This usually occurs once a month when the earth, sun, and moon are out of alignment and results in the least amount of current.

Time Charter – See “Charter Party.”

Time Policy

A policy covering the subject matter for a specified period of time.

Time Zones - See Appendix C.

TLO - See “Total Loss Only.”

Tonnage (Vessel)

• Deadweight Tonnage – Actual weight in tons (2240 lbs.) of cargo, stores, fuel, passengers and crew that can be carried by a vessel when fully loaded to summer load line mark. See “Load Line.”

• Displacement Tonnage – Weight of water in tons (2240 lbs.) that a vessel displaces either empty or loaded.

• Gross Tonnage – The total capacity in cubic feet of all the spaces within the hull and the enclosed spaces above the deck available for cargo, stores, fuel, passengers and crew. One gross ton equals 100 cubic feet of capacity.

• Net Tonnage – Cargo carrying capacity of a vessel; i.e. gross tonnage of a vessel less spaces used for stores, fuel, passengers, crew, navigation and propulsion machinery. One net ton equals 100 cubic feet of cargo capacity.

Topsides

The upper part of a vessel’s sides, from the waterline to the rail.

Total Loss (TL)

1. Actual Total Loss – Total loss of an entire vessel or an entire cargo shipment when the property is completely lost or destroyed due to one of the following:

• Physical Destruction – e.g. plywood being totally consumed by fire.

• Irretrievable Deprivement – the owner of the property is deprived of the use of the property even though it is still intact and undamaged; e.g. a shipment of silver ingots is lost overboard; even though they still exist and are undamaged at the bottom of the ocean, they are irretrievably lost.

• Loss of Specie – changes in the character of the property so that it ceases to be the thing shipped; e.g. bags of cement wetted by sea water and hardened into concrete.

• Vessel Lost – a vessel (and its cargo) is posted “missing” at Lloyd’s and is considered an actual total loss, even though there is no evidence of it sinking.

2. Constructive Total Loss (CTL) – A vessel or cargo is so damaged that an actual total loss is inevitable, or the part or remnant remaining can only be recovered and repaired at a cost exceeding the insured value of the property.

3. Compromised (or Arranged) Total Loss – A negotiated total loss settlement between the property owner and the insurance company under unusual circumstances, e.g. a vessel owner accepts a settlement of less than the face value of the hull policy and retains title to the vessel.

Total Loss Only (TLO)

An insurance policy covering ONLY the total loss of an entire vessel, an entire cargo shipment, or other property from an insured peril. A partial loss, even from an insured peril, is NOT covered by the Total Loss Only policy.

Touch & Go – See “Stranding.”

TOVALOP – See “Pollution Liability.”

Tower’s Liability

A tugboat owner’s legal liability arising out of the operation of tugboats towing or pushing barges or other vessels. (Pronounced toe ers, not as in radio tower.)

TPND (Theft, Pilferage, and Non-Delivery)

Theft, pilferage and non‑delivery of cargo.

Tractor

A self-propelled vehicle used for pulling one or more detachable trailers on a highway; as in “tractor-trailer” combinations. Sometimes it is called a truck tractor or highway tractor to differentiate it from a farm tractor. See “Tractor Tug” in “Vessels Types” Appendix F.

Trade Loss

Commodities shipped in bulk are subject to natural shrinkage and evaporation. A trade loss is the percentage of that particular commodity normally lost during the voyage, and is therefore not a fortuitous loss. When insuring such commodities, insurance companies usually apply a deductible equal to the normal percentage (commonly ½ %) lost, in order to avoid paying inevitable losses.

Trading Warranties

The geographical scope of a vessel’s operation stated in an insurance policy; navigating limits.

Trailer

The detachable part of a truck that is pulled by the tractor, usually consisting of a wheeled chassis and a cargo container; e.g. tractor-trailer combination.

Tramp Steamer

A vessel maintaining no regular schedule, calling at any port where it may be able to pick up available cargo. See “Liner.”

Transom

The vertical portion of a vessel’s stern, connecting its sides, bottom, and decks.

Transshipment (Transhipment)

The transfer of cargo from one vessel or conveyance to another for further transit to complete the voyage and carry the cargo to its ultimate destination; e.g. a connecting carrier.

Transtainer

A large wheeled vehicle used to lift and move containers around a container yard. See “Straddle Carrier.”

Transverse

Across the width of a vessel; athwartship.

Treaty – See “Reinsurance.”

Trim

To adjust sails, rigging, or cargo to balance a ship to achieve optimum performance.

Trimaran – See “Vessel Types” Appendix F.

Tsunami

A tidal wave caused by an earthquake under the sea. See “Storm.”

Tug – See “Vessel Types” Appendix F.

Tumblehome

An inward curve of the sides of a vessel.

Turnaround

In water transportation, the time needed for a vessel to dock, discharge cargo, refuel, service machinery, make incidental repairs, load new cargo, and depart. See “Demurrage.”

Twist Lock

A metal locking device with a rectangular cone-shaped top and bottom that is inserted into each of the four corner posts of a container and is turned or twisted to lock the container to the spreader for lifting to or from the vessel deck or to or from another container. See “ Corner Post” and “Spreader.”

D. Noland

Typhoon

A tropical cyclone with winds of 74 mph or greater in the China Seas and the Northwest Pacific Ocean. See “Storm.”

S

Sacrifice

The deliberate destruction or jettisoning of property to prevent greater loss.  See "General Average."

Said To Contain  (STC)

A disclaimer on ocean bills of lading indicating that the ocean carrier did not verify the type, quantity, or condition of the cargo when the ocean carrier received the loaded and sealed container to transport.

 Salvage

1.      A contractual or voluntary service rendered by a third party for assistance at sea in saving vessel or cargo from peril.

2.      The monetary award for rendering such service.  See "Salvage Award."

3.      Vessel or cargo which is saved from loss at sea.

Salvage Award

The sum awarded to salvors for saving property damaged or endangered in a maritime adventure.

 Salvage Charge

The cost incurred by a third party in saving, preserving, and reclaiming cargo or vessel from a loss at sea.

Salvage Loss Adjustment

Insurance company's adjustment of a constructive total loss cargo claim by paying the difference between the insured value and the salvage proceeds realized by selling the damaged cargo.  See "Particular Average Adjustment / PA Adjustment."

 Salvage Value

The estimated amount of money that could be realized by selling damaged property, cargo or the vessel.

Salvor

1.  A third party who saves or assists in the saving or a vessel or cargo from loss at sea.

2.  A person or firm who arranges for the sale of distressed or damaged property.

Screw  - See "Propeller."

 Scuttling

The deliberate sinking of a vessel by opening the sea valves, cutting holes through the hull, or otherwise admitting water into the vessel.

SDR  - See "Special Drawing Rights."

Sea-Bee Vessels  - See "Vessel Types"  Appendix F.

Seal - See "Container Seal."

Seaman

A person employed on board a vessel whose labor contributes to the main objective of the vessel; a sailor or mariner, commonly excluding the officers of a ship.

Seaman's Rights and Remedies

1.      Traditional Entitlements (based in general maritime law and the employment relationship)

General maritime law provides four remedies which are owed by the employer (not necessarily the vessel owner) to a seaman who shows that an illness or injury first manifested itself while working in the service of the vessel or subject to the call of the vessel. These "Entitlement" remedies are owed immediately without consideration of the fault or negligence of the employer / vessel owner or the unseaworthiness of the vessel:

1.1   Maintenance - A daily living allowance for room and board (food and shelter) while the seaman is recovering ashore; the intent is to provide reasonable subsistence. A seaman is not entitled to receive maintenance while being provided with equivalent room and board, e. g. hospital inpatient, jail inmate, etc. Daily rates may vary from port to port, and rates in union contracts are enforceable. A typical maintenance rate is  $20. - $40. per day.

 1.2   Cure - Best available medical care for treating a sick or injured seaman in or out of a hospital, including the reasonable and necessary cost of doctors, nurses, hospital, medicine, rehabilitation, transportation for medical treatment, and repatriation (see below).

NOTE: Maintenance and Cure are owed until the seaman recovers and is fit for duty, or until maximum cure is reached, whichever occurs first. MAXIMUM CURE is reached when a seaman receives the maximum benefit of medical treatment, no further improvement of the seaman's condition is achieved, the condition appears incurable, or any further treatment will merely relieve pain and suffering, but will not improve the medical condition. When maximum cure is reached, the seaman's medical condition is declared to be permanent and stationary, and the employer's / vessel owner's obligation to pay Maintenance and Cure ends; if a relapse occurs the obligation may resume.

1.3   Unearned Wages - Wages that would have been earned after the illness or injury until the end of the voyage. This amount could include "tips" or a share of the "catch." The end of the voyage depends on the particular case, and may be the end of the season for which the seaman was hired, or until the next regular pay period if the seaman was salaried.

1.4   Repatriation - Transporting a seaman from a foreign port back to the port where he or she signed on as part of the vessel's crew.

 2.  Additional Remedies (based in general maritime law and statutes)

A seaman also has remedies available to him or her for recovering damages (money) in addition to the "Entitlements" above. The seaman must prove Jones Act  statutory negligence of the employer / vessel owner or unseaworthiness of the vessel to receive additional damages under these remedies. Pursuing the additional remedies usually involves attorneys, lawsuits, and even trials if negotiations between the seaman and the employer / vessel owner fail to produce an agreed settlement. The two additional remedies are:

2.1   Jones Act Statutory Negligence of the Employer (not necessarily the vessel owner). A seaman must prove Jones Act statutory negligence of the employer / vessel owner, its agents, servants, or employees caused a seaman's illness or injury in order to receive damages. Any causal connection, no matter how slight allows the seaman to recover.

2.2   Unseaworthiness of the Vessel. Under general maritime law, a vessel owner owes an absolute duty to a seaman to provide a seaworthy vessel reasonably fit for its intended use, and that duty cannot be delegated to anyone else. A seaman must prove his or her illness or injury was caused by the unseaworthiness (defective condition) of the vessel, its equipment, or its crew in order to receive damages; this requirement is not dependent on the vessel owner's negligence.

Comparative negligence of the seaman does not bar recovery under either "Additional" remedy; it merely reduces the amount of damages recoverable. Under either additional remedy, a seaman can recover for pain and suffering, lost income, future loss of earning capacity, medical expenses, and any other reasonable damage or loss resulting from the Jones Act statutory negligence of the employer / vessel owner or the unseaworthiness of the vessel. The seaman can, and usually does, claim for both of these additional remedies. There is no limit to the amount of damages the seaman can recover from the employer / vessel owner for these additional remedies, but there is a limit to the amount of coverage that is available to the vessel owner under its P&I insurance policy for these claims.

Seaworthy

The sound condition of a vessel's hull and equipment, machinery, crew, and stowage of cargo, so it is reasonably fit to successfully meet all the varying conditions of sea, wind, and weather normally to be expected on the intended voyage.

SED  (Shipper's Export Declaration)

Settlement Conference- See "Alternative Dispute Resolution."

Settling Agent

An insurance company's representative in a foreign country who is authorized to settle claims and make payment on behalf of the insurance company.

Sewerage

1.      A system of sewer pipes and drains for the removal of water and waste material.

2.      Sewage; waste material.

Shaft

The tailshaft (or drive shaft) that transmits power from the engine to the vessel's propeller.

Ship

A general term for a large seagoing vessel of considerable size.  It is not the type, construction, rig, machinery, equipment, or means of propulsion that makes a ship, but rather the purpose of marine transportation (either military or commercial).  Pleasure vessels are called  "yachts."  A ship becomes a subject of admiralty jurisdiction from the moment its keel first touches the water.   See "Vessel Types" Appendix F.                    

Ship Chandler

An individual or company selling equipment and supplies for vessels.         

Shipper

The consignor (usually the seller) who tenders the goods to a carrier to transport to the consignee. 

Shipper's Instructions

The consignor's instructions to its agent and/or transporters of cargo.  The instructions may be varied; e.g., specific details/clauses to be printed on the B/L, directions for cargo pickup and delivery.

Shipper's Load and Count  (SL&C)

Notation on a bill of lading indicating that the contents of a container were loaded and counted by the shipper;  i.e. not checked or verified by the transporter.

Ship's Bells

1. The ringing of a bell makes an audible signal to mark time of the watch on board ship.  One bell sounds for each half hour starting at the commencement of the watch.  One bell means 12:30, two bells mean 1:00, three bells mean 1:30, and so on until 4:00 (eight bells). At 4:30 the cycle begins again with one bell.  

2. Each vessel must carry a bell to sound when the vessel is anchored in fog.  

Ship Types   - See "Vessel Types"  Appendix F.  

 Any place in a sea, river, etc. where the water is shallow and difficult to navigate.          

Shrink Wrap

Polyethylene or similar substance heat‑treated and shrunk around several units, thereby securing them as a single unit on a pallet.   

Sight Draft  - See "Draft."

Sighting The Bottom

Examining the underside of a vessel.

Silver Nitrate

A chemical used by cargo surveyors to test for the presence of salt (sea) water.

Sinking

A vessel which loses buoyancy and descends until it rests on the bottom or submerges as far as it can under the surface of the water. It is not necessary that it disappears entirely beneath the surface, since a vessel may sink in shallow waters and still have its superstructure exposed.

Sister

1.      To double a structural component of a vessel to increase its strength;  e.g.  the doubling of the ribs in the structure of a ship when one is broken or cracked.   

2.      Resembling another object in form, size, or design;  e.g. sister ships.              

Sistership Clause

In the event of a collision between two vessels owned by the same Assured, this clause in the hull policy confers on the Assured the same rights as if the two vessels were separately owned and separately insured.

Skeg

1. The aft section of the keel to which the rudder can be attached.
2. Modern sailboats, surfboards and runabouts have a small appendage at the aft end of the vessel that is detached from the keel, it provides directional stability to the vessel.  See also "Keel."

Skids  

A pair or series of parallel runners, fitted beneath boxes or packages to raise them clear of the floor to permit easy access of forklift blades or other handling equipment.  See "Pallet."

Skiff  -  See "Vessel Types"  Appendix F.

Slack Water  - See "Tides."

SL&C  -  See "Shipper's Load & Count."

Sloop -  See "Vessel Types"  Appendix F.

Slops

Material collected after such operations as stripping, tank washing, or dirty ballast water separation. It may include oil, free water, suspended sediment and suspended water and is usually contained in a tank or tanks permanently assigned to hold such material.  Also known as "Bilge Water."

Small Craft Warnings 

A system of flags displayed during the day and lights  shown at night at prominent locations in a harbor to warn mariners of anticipated weather conditions and wind strength.     See "Weather Warnings"   Appendix  D.

Sound

1.  Undamaged condition of cargo or a vessel, i.e. sound condition.

2.  To measure the depth of water in which the vessel is sailing or the amount of liquid in a tank.

3.  A long narrow body of water connecting two larger bodies of water, e.g. Puget Sound.

South American Clause

A clause in a cargo policy defining when coverage terminates on shipments to South America.  On such shipments, this clause overrides both the Warehouse to Warehouse Clause and the Marine Extension Clauses (MEC) and extends coverage after discharge from the overseas vessel.

Coverage ends when one of the following first occurs:

•  When the cargo is delivered at the final warehouse at the destination named in the policy, or

• 60 days after discharge from the overseas vessel , or

• 90 days after discharge from the overseas vessel on shipments via the Magdalena River.

 See "Warehouse to Warehouse Clause."

Spars

A general term for pieces of rounded wood or metal used on vessels to support its rigging, principally as masts and booms. 

Special Cargo Policy

A stand-alone cargo policy covering a specific shipment for one voyage or trip. It is the complete policy and not subject to the terms and conditions of an open cargo policy, even if issued in conjunction with an open cargo policy. It is used when evidence of insurance is required, especially by a bank issuing a letter of credit.   See "Certificate of Insurance."       

Special Drawing Rights  (SDR)

An international monetary unit used to measure and compare the changing market values of currencies of member countries of the International Monetary Fund. It is equal to the market value of currencies of the 5 member countries: United States, France, Germany, Japan and England

Spinnaker

A large colorful triangular sail on a sailboat which is used when running before the wind, usually when racing.

Spoils

Material dredged from the bottom of a river or harbor; dredge spoils.

 Spontaneous Combustion

Self -ignition of combustible material by the internal development of heat, without the action of an external cause.  See also "Fire."

 Spotting

Locating a container or railcar in a designated place to be loaded or unloaded.

Spreader 

1. A horizontal steel beam which is attached to a crane wire and is used to spread lifting wires apart so they are vertically aligned to lift cargo safely and efficiently without bending or flexing.

2. Spreaders used for lifting containers have 4 remotely operated twist locks to attach to the corners of the container.

3.  A bar on the mast of a sailboat used to keep lines apart and taut.

Spring Line

A docking line led forward or aft at an angle to the vessel to prevent forward or aft movement of the vessel.

SR&CC  Warranty    (Strikes, Riots & Civil Commotions)

A clause in marine insurance policies that excludes liability for losses caused by the acts of strikers, locked‑out workers, or persons taking part in labor disturbances or riots or civil commotions or for losses which are directly caused by persons acting maliciously. This coverage may be restored to the policy by means of the SR&CC Endorsement, for an additional premium.

Stability - See "Vessel Stability."

Stacktrain

A rail service in which intermodal containers are loaded two‑high on railcars. Truck trailer chassis' are  NOT transported with the containers.   See "Piggyback" and "Container." 

Stand-On Vessel

When meeting another vessel, the vessel with the right of way under the navigational rules; formerly called "privileged vessel."   See "ColRegs"  and "Give-way Vessel."

Starboard

The right side of a vessel or airplane when onboard facing the bow.  The word is derived from "steer board"  referring to a steering board or oar located on the right side amidships (rather than at the stern) of early sailing ships, which  was used as a rudder.  See "Port."                            

Statute Of Limitation

A law limiting the time in which claims or lawsuits may be filed.

STC  - See "Said To Contain."  

Stem

The vertical part of a vessel's bow between the waterline and the main deck  where the sides of the vessel come together.  Most stems are angled forward to increase buoyancy as the vessel dips through the waves, but some older vessels (e.g. "TITANIC") were designed with a plumb (i.e. straight up and down) bow.        

 Stern

The rear or aft  part of a vessel, opposite the bow. 

Stern Drive - See "Inboard - Outboard."

Stevedore

1.   A company that employs longshore workers to load or unload vessels.

2.   Can also refer to a person who loads or unloads a vessel; a longshore worker.

Stevedoring

The act of loading or unloading cargo from vessels.

Stores

Consumable supplies carried aboard a vessel for use during the voyage; e.g. provisions for the crew and fuel for the engine.                                  

Storm

A general term for strong winds accompanied by rain, snow or other violent weather conditions. Storms originating at sea are known by different names in different areas of the world: see "Hurricane," "Typhoon," and "Cyclone."   Other local names for storms having their origin over land: "Tornado"; "Williwaw"; and some local ones: "Willy-Willy" in Australia, Baguio and the Philippines; "Cordonazo" in Mexico and the west coast of Central America;  "Mistral" in the Mediterranean;  "Monsoon" and "Dafeng" in China.   See "Weather Warnings" and "Beaufort Wind Scale"  Appendix D.

Stowage

The placement of cargo aboard the vessel.

Straddle Carrier

A mobile 4-wheeled vehicle which straddles a container and lifts and transports it to and from the vessel within the container yard.

Straight Bill of Lading  - See "Bill of Lading."

Stranding

The grounding of the vessel, causing it to remain fast for an appreciable length of time. Mere contact of the vessel with the bottom without losing momentum and proceeding on course is commonly termed as "touch‑and‑go" and is not considered a stranding.                       

Strikes Cover - See "SR & CC Warranty."

Stripping

To unload cargo from a container; devanning.

Stuffing

To load cargo into a container.

Subrogation

The transfer of the Assured's right of recovery to the insurance company after payment of a claim. The insurance company steps into the shoes of their Assured (usually the cargo owner) and pursues recovery from any third parties responsible for the loss.   

Subrogation Receipt

A document signed by the cargo owner acknowledging receipt of payment of a claim, and assigning its rights of recovery (against any third party) to the insurance company.

Subscription Policy  

A policy issued on behalf of two or more insurance companies who "subscribe" to a stated percentage of the coverage. In the event of default of any of them, each company is only liable for its stated portion of the risk and not that of any other insurer.  Also known as a "Joint Policy."  This is not reinsurance.  see "Coinsurers."       

Substituted Expenses

Expenses incurred to prevent or reduce a loss for which the insurance company would have been liable.

Sue and Labor

Action of the Assured or its representative to prevent or minimize loss or damage to insured property for which an insurance company would be liable. The Assured is required by the insurance policy to take this action so as not to jeopardize the insurance claim.  See "Sue and Labor Clause." 

Sue and Labor Clause

The clause in a marine policy requiring the Assured, in the event of a loss, to act as a prudent uninsured to prevent or minimize damage by taking steps to save and preserve the property from further loss or damage. The clause provides that charges or expenses reasonably incurred in preserving the property are recoverable from the insurance company, if the loss itself is recoverable.

Summary Judgement

A ruling by a judge that there is no genuine issue of material fact and that the party bringing the motion is entitled to prevail as a matter of law.

SuperCargo

The cargo owner's agent or representative who travels on the ship with the cargo to supervise the loading, stowing, and discharging of the cargo and to handle any purchases or sale of cargo.  Before the advent of rapid communications, supercargos were seagoing merchants engaged in trade as the vessel made its voyage. Today, they can still be found on chartered vessels.

Superstructure

The structure above the main deck of a vessel.

Surge - See "Vessel Movement."

Survey

An inspection report issued by a marine surveyor to show the condition of cargo, vessel, or other maritime property, either before or after a loss. 

Surveyor

  A marine specialist who inspects cargo, vessels, and other maritime property to determine:

1.      The condition and/or value of property.  Condition can include adequacy of packing, stowage aboard the vessel, and/or towage arrangements. The surveyor is not an insurance company loss adjuster, but an independent expert who acts without prejudice to the parties involved.

2.      The cause, nature, and extent of damage and recommended methods of repair and/or replacement. The surveyor is not an adjuster, and all actions are without prejudice to the insurance policy terms and conditions.

Sway - See "Vessel Movement."

Sweat Damage

Cargo damage caused by water condensing from humid air inside a container or hold of a vessel due to a drop in the outside temperature.

R

RDC (Running Down Clause) - See "Collision Clause."

Re-Cooper / Re-Cooperage

To repair or replace damaged packaging and consolidate sound cargo during transit in order for the cargo to complete the voyage. It is so named after the cooper, whose work was making and repairing barrels and casks, which were used as shipping packages on early cargo vessels.

Record - See "American Bureau of Shipping."

Recovery

Amount received from a third party responsible for a loss on which a claim has been paid. See "Subrogation."

Red Label

A label on shipments of dangerous material requiring on-deck stowage.

Red letter clause

A clause printed in red on a contract to alert the parties to certain limitations and exclusions in the contract. The clause originated with ship repair contracts.

Reef

A ridge of rock or coral lying at or very close to the surface of the sea forming a barrier and hazard to navigation.

Reefer

Refrigerated container or cargo hold of a vessel.

reinsurance

An arrangement between insurance companies, where one company (the ceding company) cedes a portion of a risk (policy, premium, and losses) to the other insurance company (the assuming company or reinsurer). Thus the risk of loss is spread and a disproportionately large loss under a single policy does not fall on one company. Reinsurers can be other insurance companies or companies specializing in reinsurance only.

There are two types of reinsurance:

1. Facultative - reinsurance of one particular risk (policy) where the reinsurer retains the right (faculty) to accept or reject each risk offered by the ceding company.
2. Treaty - reinsurance (usually written on an annual basis) of an entire class of business consisting of many policies, where the ceding company agrees to cede and the reinsurer agrees to assume all of the risks (policies) of a particular class of business.

When a ceding company places either facultative or treaty reinsurance, the reinsurance is usually placed on one of the following bases:

1. Pro Rata or Quota Share - reinsurance in which the reinsurer shares a pro rata portion of the premium and losses of the ceding company on a fixed percentage basis; e.g. 25%, 30%, or some other percentage.
2. Excess of Loss - Reinsurance In Which The Reinsurer (Subject To A Specified Limit) Pays 100% Of The Losses Of The Ceding Company In Excess Of A Certain Agreed Limit (E.G. $1,000,000. Retention) Either On A Per Risk Basis Or In Excess Of A Certain Aggregate Of All Losses Of A Particular Type (E.G. $10,000,000 For Windstorm Losses). It Includes Various Kinds Of Reinsurance: Catastrophe, Per Risk, Per Occurrence, And Aggregate Excess Of Loss.

Release

A document signed by a third party claimant acknowledging receipt of a claim payment and agreeing to make no further claim.

Repatriation

Transporting a seaman from a foreign port back to the port where he or she signed on as part of the vessel’s crew. See "Seaman’s Rights and Remedies."

Respondentia

An ancient form of loan by the ship’s master secured by the cargo. If the cargo arrived at destination, the loan was to be repaid; but if the cargo did not arrive, the borrower did not have to repay the loan. See "Bottomry Bond."

Rigging

Collective term for all the ropes, lines, wires, chains, and rods used to support the masts, and move the spars and sails of a vessel.

Risk

A fortuitous peril or hazard; i.e. something that may happen, not something that is inevitable.

R.O.D. (Rust, Oxidation, and Discoloration)

An exclusion often used when insuring shipments of steel.

Roll - See "Vessel Movement."

RO-RO - See "Vessel Types" Appendix F.

Rub Rails

Superimposed heavy strips of wood or other material running the length of the vessel on the outside of the hull to protect the hull against impact and scraping damage.

Rudder

A movable fin extending into the water (usually at the aft end of the vessel) used to steer the vessel.

Running Down Clause - See "Collision Clause."

Running Lights

Various colored lights required by law on vessels underway between sunset and sunrise to distinguish its height, starboard from port, and stern from bow. Vessels at anchor use different lights.

Ryan / Cox Tape - See "Temperature Recording Devices."

Q

Quarantine A restraint placed on a vessel and all on board upon entering a port pending determination of the health conditions on board to protect the public from contagious diseases. During the quarantine period, the yellow "Q" flag is hoisted. See "Pratique."

Quay (Pronounced "key")

A wharf or reinforced bank where vessels are loaded or unloaded.

P

PA (Particular Average) - See "Average Clauses." Packing List

An itemized list of commodities shipped showing marks and numbers but no values.

Pallet

A low platform, usually wooden, on which several packages or pieces of cargo are stacked for efficient movement by a forklift or for storage; a skid. See "Cargo Packing" Appendix A.

PandI - See "Protection and Indemnity."

Partial Loss

Any loss to cargo or a vessel that is less than a total loss. If the partial loss is directly caused by a peril insured against, it is a particular average loss. See "Particular Average."

Particular Average (PA)

A partial loss of the property insured (vessel or cargo, including total loss of part of a cargo shipment) caused by a peril insured against, and which is not a General Average loss. See "Average Clauses" and "General Average."

Particular Average Adjustment / PA Adjustment

Cargo is insured at an agreed valuation; therefore, the surveyor establishes the percentage of damage to the goods which is then applied to the agreed value to determine the amount of claim. Where a percentage of damage cannot be agreed, it is common for the damaged goods to be sold. The amount of claim is then computed by determining the sound market value of the goods on the date of sale (as if undamaged), comparing it to the amount for which they were sold, thereby obtaining a percentage of depreciation which can be applied to the agreed value. See "Salvage Loss Adjustment."

Particular Average Clauses - see "Average Clauses."

Partlow Chart - See "Temperature Recording Devices."

Peak Value

The market price of certain traded commodities is established on a daily basis in Commodity Markets. If a consignment of such a commodity is shipped, Peak Value represents the highest market value reached during the voyage. A Peak Value Endorsement establishes the highest value as the insured value of the commodity for that voyage.

Pennsylvania Rule

A legal case against the vessel "PENNSYLVANIA" that has become a general point of law. The case held that where a vessel violates any statutory duty or navigational rule of the road, it must prove not only that the violation did not cause a subsequent collision, incident, or tort but could not have contributed to it in any way.

Perils Clause

One of the clauses in a Marine Policy that specifies the risks or hazards insured against.

Perils Of the Sea

Fortuitous accidents or casualties, peculiar to transportation on navigable water, such as stranding, sinking, collision of the vessel, striking a submerged object, or encountering heavy weather or other unusual forces of nature.

Perils On the Sea

Perils which are named and covered by the policy which are other than "Perils of the Seas"; e.g. fire, which is not a peril unique to the sea.

Phytosanitary Certificate

A certificate issued by the U.S. Department of Agriculture to satisfy import regulations of foreign countries; indicates that a U.S. shipment has been inspected and found free from harmful pests and plant diseases.

P&I - See "Protection & Indemnity."

Pier

A fixed platform (usually on pilings) extending perpendicular to the shore over the water to provide access to vessels or boats. See "Wharf" and "Dock."

Piggyback

A rail service in which intermodal containers are carried on rail cars with their truck trailer chassis’ attached. See "Stacktrain" and "Container."

Pilferage

The theft of part or all of the contents from a shipping package where the package itself is delivered at destination.

Pilot

A navigator who is expert at navigating the waters of a particular port. Many ports require that vessels over a specified tonnage have a licensed Pilot take the vessel into and out of port.

Pilothouse

The deckhouse which encloses the steering wheel, compass, and navigational equipment; and from which the helmsman steers the vessel. Also known as wheelhouse.

Pitch

1. The angle of a propeller blade to its axis.
2. Caulking material used as a sealant between planks of a wooden vessel.
3. See "Vessel Movement."

Plimsoll Mark - See "Load Line."

Point of Origin

Location (City and Country) where a cargo shipment begins transit.

Pollution Liability

Contamination of the water, land or air from oil, oil products, hazardous chemicals or effluent. In additional to legislation in individual states, private and Federal Government responses to pollution concerns include the following:

TOVALOP - 1968 (Tanker Owners' Voluntary Agreement Concerning Liability for Oil Pollution). An agreement subscribed by most of the world's tanker operators whereby they agree to reimburse governments for pollution clean‑up costs in the event of an oil spill. Each member insures its potential liability under the agreement.

CRISTAL - (The Contract Regarding an Interim Supplement to the Tanker Liability for Oil Pollution 1971). A voluntary fund contributed by oil cargo owners to satisfy damages suffered by governments and individuals from an oil spill. The fund will pay a maximum of $135 million. Participation in TOVALOP is a prerequisite for coverage under Cristal.

FWPCA - (Federal Water Pollution Prevention and Control Act). The original federal law enacted in 1948 to address marine pollution, was extensively revised in 1972 and 1977 and became commonly known as the "Clean Water Act."

CERCLA ^{- (}Comprehensive Environmental Response, Compensation and Liability Act of 1980). Applies to the discharge of hazardous substances such as chemical waste, solid waste, garbage, biological materials, heat, discarded equipment and industrial waste, in addition to petroleum.

OPA 90 - (Oil Pollution Act of 1990). A federal law supplementing the Federal Water Pollution Prevention and Control Act (FWPCA) in the wake of the Exxon Valdez disaster setting stringent liabilities and criminal and civil penalties for pollution in U.S. waters.

OPRC - (The Oil Pollution Preparedness Response and Cooperation Convention) was adopted by IMO (International Maritime Organization of the United Nations) in 1990 as a cooperative agreement between signatory nations to establish pre-positioned pollution response equipment and cooperate with equipment and manpower in the event of an oil spill.

Pomerene Act - See "Carrier's Liability Acts (Ocean)."

Port

1. The left side of the vessel or airplane when onboard facing the bow. It is so named because the rudder (steering oar) of early sailing vessels was located on the right side, making it impossible to dock the vessel with the right side facing the pier, so the left side had to face the pier and the port. Port was originally referred to as the "larboard" side, but that was confused with "starboard," so it was officially changed by order of the British Navy in 1844. See "Starboard."
2. A harbor with piers or docks where vessels load and unload cargo or passengers.
3. A large opening in a vessel's side for handling cargo and passengers. Automobiles are often loaded this way.

Portainer

A container crane.

Port of Call

Port where a vessel loads or discharges cargo.

Port of Entry

Port where cargo is unloaded in an importing country.

Port Of Refuge

Nearest port available to a vessel in a storm or other emergency.

Port Risk

Insurance on a vessel which is laid‑up and out of commission, not navigating, and confined to the port area.

Power takeoff (PTO)

A device attached to an engine that supplies power to a stationary pump or other auxiliary equipment.

P P I (Policy Proof of Interest)

A notation on an insurance policy used to indicate that the policy itself is proof of an Assured’s insurable interest in the property; no further proof of such interest need be submitted by the Assured to collect a covered loss. PPI policies are not written for parties who have no insurable interest in the property and who are gambling that there may be a loss, since gambling policies are illegal in all maritime countries. See ''FIA ."

Pratique

Clearance granted by a Health Officer certifying the vessel and crew to be clear of contagious diseases and releasing the vessel from quarantine. A foreign vessel must fly a yellow "Q" flag upon entering port and anchor in a designated anchorage until a local health officer grants clearance.

Preference Cargo

Government owned (e.g. defense) or subsidy cargo (such as A.I.D. shipments of grain) is required to be carried by U.S. flag carriers to help support the U.S. merchant marine and personnel. Refer to Cargo Preference Act of 1904 and 1954 ( Public Law 83-664).

Prima Facie

A fact presumed to be true so far as can be judged from the first disclosure, until disproved by some evidence to the contrary. A "clean" Bill of Lading is prima facie evidence of the apparent good order of cargo, i.e. cargo is presumed to be in good order when received by the carrier, and the burden is on the carrier to prove otherwise.

Primary Insurance

The first layer of insurance on a risk. Excess policies can provide higher limits of coverage when stacked above the primary layer. See "Excess Insurance."

Privileged Vessel - See "Stand-On Vessel."

Privity

Knowledge of a condition.

Processing Cover

Endorsement that extends coverage of the Warehouse-to-Warehouse Clause to continue while the merchandise is being assembled or worked on.

Pro Forma Invoice

An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value and specifications (weight, size, etc.).

Prompt Notice

Notification by an Assured to the insurance company or the company's representative within a reasonable period of time after the occurrence of a loss.

Propeller

The metal "wheel" or "screw" with two or more blades mounted at an angle to the hub. It is attached to the end of the propeller shaft and turns in the water providing a vessel with propulsion by pushing against the water. See "Shaft."

Proportionate Fault

A method of apportioning liability for damages when two vessels collide, where each vessel’s liability for the total damages (percentage) is based on that vessel’s degree of fault or negligence for the collision. It replaced the doctrine of Divided Damages in the United States in 1975 (U.S. v. Reliable Transfer Co.) to agree with the custom and practice of the other maritime nations of the world. See "Divided Damages."

Protection & Indemnity (P&I)

Insurance against the shipowner's third party legal liability for damage to property (such as cargo, harbors, docks, buoys, etc.), collision liability (insofar as such liability is not already covered under the Collision Clause in the hull policy), personal injury, and loss of life. Also known as "PandI."

Protest - See "Master’s Protest."

Proximate Cause

Doctrine of "causa proxima non remota spectator," or that it is to be the direct, primary, and immediate cause of loss that is to be considered, and not the remote or incidental cause.

Pulp Temperature

The temperature of the internal flesh of refrigerated commodities.

Punitive Damages

Damages in excess of the amount of the actual loss, that are awarded by the court as punishment of a defendant or to set an example for others. Also known as "exemplary damages" or "extra contractual damages."

O

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

Ocean Shipping Reform Act (1999) (OSRA )

This legislation further deregulates ocean shipping by permitting the parties to make service contracts confidential from disclosure to other shippers or carriers. A service contract essentially guarantees a minimum volume commitment from shippers in exchange for lower freight rates or better contract terms from carriers. The service contract may alter terms and conditions on nonnegotiable bills of lading.

Oil Pollution - See "Pollution Liability."

Omnibus Clause

1. Phrase in the perils clause of cargo and hull policies that covers "All other perils, losses, and misfortunes" meaning perils of the same nature as those specifically described in the perils clause; known as doctrine of "ejusdem generis."
2. Clause in a yacht policy that affords other people the same protection as the Assured when they are operating the Assured's yacht with the Assured's prior permission.

On Board - See "Aboard."

On Deck Cargo

Cargo carried on the main deck of the vessel, or other spaces above the main deck; cargo carried on deck is subject to damage by wind, sea water, and being washed overboard. See "Deck Load Conditions."

OPA 90 (Oil Pollution Act of 1990) - See "Pollution Liability."

Open Account

A trade arrangement in which goods are shipped to a foreign buyer without guarantee of payment.

Open Policy

A cargo policy with no expiration date that provides automatic coverage of cargo shipments to or from an Assured in a specified trade at agreed rates, terms, and conditions. The marine and war policies are usually two separate open policies.

OPRC - See "Pollution Liability."

Origin - See "Point Of Origin."

OS&DReport

A report documenting the condition of a cargo shipment as "Over, Short or Damaged" at unloading.

OSRA - See "Ocean Shipping Reform Act."

Outboard

Outside the perimeter of the vessel’s hull. See "Inboard."

Outdrive – See "Inboard – Outboard."

Out Of Commission

A vessel without certain items of equipment or gear necessary for operation, such as batteries, fuel, water, navigational aids, etc. See "Port Risk" and "Laid-Up."

Owner Ad Pro Hoc (for this particular occasion)

Charterers of vessels who, for all intents and purposes, are the temporary owners of the vessel during the charter period. It is found in the LSHW (Longshoremen’s and Harbor Workers’ Act).

N

Named Perils Policy Any marine policy limiting coverage to perils specifically listed in the policy; as opposed to an All Risks policy. See "All Risks."

Navigational Limits - See "Trading Warranties."

Negligence

Doing something that a reasonable and prudent person would not do, or not doing something that a reasonable and prudent person would do in a particular situation. The failure to exercise normal care or act reasonably under the circumstances.

Negligence Clause

A clause in a property insurance policy extending the policy to cover the peril of negligence; e.g. Inchmaree Clause.

Negligence General Average Clause - See "Jason Clause."

Negotiable Instrument

A document (such as a bank draft, promissory note, check, or bill of lading) transferable from one party to another in good faith, for a consideration.

Net Tonnage - See "Tonnage."

New For Old

Insurance coverage for repairs to a vessel to be accomplished employing new parts to replace old damaged parts without deduction for depreciation.

New Jason Clause - See "Jason Clause."

NFFD (Not Fit For Duty) - See "Seaman’s Rights and Remedies."

No-Cure, No-Pay

A form of salvage contract in which the salvor receives no payment if he or she fails to save any property, and is paid only if successful.

Non-Delivery

A loss in which an entire shipping package and its contents are missing at destination. Non-delivery does not include pilferage of cargo from a package where the package itself is delivered.

Non-Separation Of Interest Agreement

Additional form required as General Average Security in the event cargo must be separated from the vessel and forwarded to destination by another vessel. Cargo owner's signature on this document preserves the vessel owner's maritime lien on cargo. See "General Average Security."

Non-Vessel Operating Common Carrier (NVOCC)

A cargo consolidator who buys a block of space from a carrier, divides it, and re‑sells it to smaller shippers. The NVOCC issues Bills of Lading, publishes tariffs, and otherwise conducts itself as an ocean common carrier, except that it does not provide the actual ocean or intermodal transportation of cargo.

Not Fit For Duty (NFFD) - See "Seaman’s Rights and Remedies."

Notice of Abandonment - See "Abandon / Abandonment."

NVOCC - See "Non-Vessel Operating Common Carrier."

M

Maintenance

Necessary measures to keep the vessel in operating condition. See "Seaman’s Rights and Remedies."

Mandatory Settlement Conference - See "Alternative Dispute Resolution."

Manifest

An itemized list by Bill of Lading number of the kind and quantity of all cargoes loaded aboard a vessel or other conveyance prepared by the transporter.

Marina

A docking facility for private pleasure boats. There may be several hundred berths at one location. The facility often contains a fuel dock, other marine supplies, a parking lot, a ramp or haul out facility for trailered boats, and other commercial facilities.

Marine Extension Clauses (M E C)

A clause in the Cargo Policy extending the Warehouse to Warehouse Clause to provide continuous coverage on the cargo during any deviation, delay, forced discharge, reshipment, transshipment or other interruption in the due course of transit that is beyond the control of the Assured.

Note: this clause

• only extends the policy during delays;
• does not add "delay" as an insured peril.

See "Ambit," " Delay Clause" and "Warehouse to Warehouse Clause."

Marine Insurance Act

1906 English law which codified marine insurance case law into a comprehensive code for consistent application. U.S. lacks a counterpart code and depends on case law precedent for its legal decisions.

Marine League - See "Weights and Measures" Appendix E.

Marine Railway

A set of tracks extending from on shore into the water on an incline, used to haul vessel in and out of the water to allow access to their underbodies. A vessel is floated onto a submerged cradle or ways table (similar to a railroad flat-car) which are winched up the tracks into the shipyard. See also "Ways."

Maritime

Matters pertaining to commerce or navigation upon the sea or in seaports. See "Admiralty Court."

Maritime Lien - See "General Average Security" and "Lien."

Marks

1. Indications on a lead line showing the depth of the water.
2. Buoys or other navigation aids marking a channel or obstruction.
3. Letters, numbers or symbols placed on packages for identification.

Marline Spike

A pointed metal spike used by deck crew to separate strands of rope for splicing or untying knots. Something done in a skillful manner is called "marline spike seamanship."

Mast

A vertical spar on a vessel used to carry sails, navigational lights or signals, and rigging for loading and unloading cargo or equipment.

Master

Person who has command of a vessel; the captain.

Master's Protest

1. Sworn statement of the captain describing any unusual happening during the voyage, and disclaiming vessel responsibility therefor.
2. Accident report submitted by the captain on a hull claim.

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

MEC-See "Marine Extension Clauses."

Mediation - See"Alternative Dispute Resolution."

Metacenter - See "Vessel Stability."

Mini-Trial - See "Alternative Dispute Resolution."

Mooring / Moorage

Where a vessel is secured and held in place by chains, ropes, lines, or two anchors; e.g. to a mooring buoy, wharf or pier. A buoy securely anchored to the bottom by a heavy weight is used for tying up vessels.

Multimodal

The transportation of cargo using two or more modes of transportation. Same as Intermodal. See page 104 for illustration.

L

Laches A doctrine in Admiralty Law in which a party’s failure to do the required thing in a timely manner causes the party to lose that right of action; e.g. unreasonable delay in asserting a claim

Laden 

Loaded aboard a vessel.

Lading -See "Bill of Lading."

LAE (Loss Adjusting Expenses)  - see "Allocated Loss Adjusting Expense."

Lagan   (Ligan)

A heavy article thrown overboard with a buoy to mark where it is located for recovery at a later time; e.g. crab pots.

Laid-Up

A vessel removed from active operation or navigation.

 Landbridge

Movement of cargo by water from one country through the port of another country, then by rail or truck to an inland point in that country or to a third country;   e.g. a through-movement of Asian cargo to Europe across North America.

Landed Cost

The total cost of goods to a buyer, including transportation, duty, and other costs.

Landed Value

Market valueof cargo at destination on the final day of discharge from the ocean vessel.

L.A.S.H.    (Lighter Aboard Ship) - See "Vessel Types"  Appendix  F.

 Lashing

Wire, rope, turnbuckles, chains, etc. used to secure cargo in a container or truck trailer, or to secure cargo or containers on a vessel to prevent shifting during transit.

Latent Defect

Any defect which has not resulted from wear and tear and which cannot be discovered by a diligent Assured through the use of any known or customary test.  In particular, latent defects are not limited to defects in metal.

Latitude / Longitude

A grid system of reference in which every point on the surface of the earth can be located using its unique coordinates:

• Latitude lines (called Parallels) circle the earth and are parallel to the Equator.  Latitude locates a point’s distance North or South of the Equator, and is measured in degrees, minutes, and seconds, from 0º at the Equator to 90º at the North Pole or South Pole.
• Longitude lines (called Meridians) radiate from the North Pole to the South Pole and are not parallel. Longitude locates a point’s distance East or West of the Prime Meridian (Greenwich, England), and is measured in degrees, minutes, and seconds from 0º at the Prime Meridian to 180º at the International Date Line.

For example, San Francisco has coordinates 37º 48' N and 122º 24' W and is located on:

• A Latitude line 37º 48' North of the Equator, and
• A Longitude line 122º 24' West of the Prime Meridian.

Latitude Lines   +   longitude lines   =  grid system

Lay Days

1. The number of days a vessel is out of the water for maintenance work, repair work, or storage.  See "Haul Out" and "Haul Days."
2. The number of days a ship may use a dock for loading or unloading cargo before demurrage is charged.
3. The number of days between yacht races to allow repair of vessels and crew rest.

 Laytime

The amount of time a vessel is allowed to remain in port before incurring delay penalties.  See "Demurrage."

Lay-Up  - See "Laid-Up."

Lay-Up Returns

A return premium given to the Assured by the insurance company for periods the vessel was not operated during the policy term.

L/C     (Letter of Credit)

LCL   (Less than full Container Load)

Shipments oftwo or more shippers consolidated into one container to make a full container load.

Lead Underwriter

The insurance company which sets the terms and usually accepts the largest participation in a joint or subscription policy and the other subscribing companies usually agree to follow.

League - See "Weights and Measures"  Appendix E.

Legal Liability

Responsibility imposed by law.

Letter Of Credit  ( LC)  (LOC )

A document issued by a bank and used to pay for cargo. The buyer arranges a letter of credit from its local bank, creating a fund in a foreign bank near the seller in a specified amount in the seller’s favor. The buyer authorizes the seller to draw drafts against the fund for goods purchased by the buyer.  A sum of money is paid to the seller under specific terms and conditions, including the receipt by the bank of certain documents within a given time.   See "Cargo Terms of Sale"  Appendix G.

Letter of Indemnity

A letter agreeing to reimburse a party or hold it harmless for loss or damage.  It is sometimes used as a fraudulent practice in which a cargo owner gives a vessel owner a guarantee of "no claim"  if the vessel owner issues a clean bill of lading to the cargo owner to satisfy a letter of credit requirement, when the cargo laden aboard is actually damaged.

Letter of Undertaking

A letter issued by a Protection and Indemnity Club or other financial organization guaranteeing reimbursement to a party for loss or damage (usually to cargo).  It is a more informal form of security and less expensive than posting a bond to guarantee performance. However, it is only as good as the good faith of the entity issuing the letter as there is no third party (such as a bank or insurance company) to guarantee performance.

LHWCA – See "Longshoremen's and Harbor Workers'  Compensation Act."

Liability Insurance

Insurance to cover the legal responsibility of an Assured.

Lien

A property right in which a party has a legal claim upon cargo or vessel for the satisfaction of some debt or duty.

Ligan - See "Lagan."

Lighter  - See "Barge" under "Vessel Types"  Appendix F.

Lighterage

Transportation of cargo between an ocean-going vessel and the pier by a smaller vessel called a lighter or barge.  A lighter is used when the water is not deep enough for the ocean-going vessel to lie alongside the pier or wharf, or when the discharge facilities of the port are so congested that lighterage is more efficient.

Limitation Of Liability Act  - See "Carrier’s Liability Acts (Ocean)."

Line of Demarcation

The line between two points where the navigational rules of international waters and inland waters meet.  see "Colregs."

Liner

A vessel sailing between specified ports on a regular schedule (as opposed to a "Tramp Steamer" which has no regular schedule).

Liner Negligence Clause

Replaces Inchmaree Clause in the Hull policy and provides virtually All Risks coverage on a vessel, as long as the damage does not result from want of due diligence by the vessel owner.

List

The amount of vessel tilt or heel (measured in degrees) from the vertical upright position. A list can be caused by improper stowage or shifting of cargo or fuel to one side of the vessel, or a flooded tank or hold.  It is different than the normal rolling that a vessel experiences as it rides over the waves in the ocean.  See "Vessel Stability."

Lloyd’s Agent

A representative of Lloyd’s of London located in ports throughout the world. They serve three primary functions:

1. Reporting the arrival and departure of vessels.
2. Inspecting vessels and issuing certificates to show they maintain their "Class."
3. Surveying cargo losses for Lloyd’s members.

Lloyd’s Agents are also nominated by various marine insurance companies to act as cargo survey or settling agents.

Lloyd’s Confidential Index

A listing of vessels with descriptions, data, major claims, prior vessel names and owners on each vessel registered at Lloyd’s.  The index also shows all vessels in a fleet under common ownership or management.

Lloyd’s Register

An alphabetical listing of vessels including their specifications and other information valuable to shipping and marine insurance industries.

Lloyd’s Register of Shipping

An organization maintained for the surveying and classing of vessels so that insurance companies and others may know the quality and condition of the vessels offered for insurance or employment.

LNG   (Liquefied Natural Gas carrier) - See "Vessel Types"   Appendix F.

Load Line

A mark on a vessel’s side indicating the maximum depth to which it may be safely immersed when loaded with cargo. This depth is variable and depends on the waters of operation, time of year, and type of cargo;  e.g. winter, North Atlantic, timber will have a special depth.  Laws regulate the amount of cargo a vessel can carry and still maintain enough reserve buoyancy and a low enough center of gravity to ensure its safety in adverse weather and dangerous seas.  The white areas in the pictures below are empty spaces for paying cargo, and the remaining space houses a vessel’s main and auxiliary machinery, living quarters and supply lockers.

While there are other load lines, the most common is the Plimsoll Mark, which was established by the British Parliament in 1876 to prevent overloading of vessels. It was named after Samuel Plimsoll, a member of British Parliament, who was interested in maritime safety.

Deck Line ____________________ The Plimsoll Mark

The letters signify: TF    Tropical Fresh Water Load Line F     Fresh Water Load Line T     Tropical Load Line S     Summer Load Line W     Winter Load Line WNA  Winter, North Atlantic Load Line

Loan Receipt

Document signed by the Assured acknowledging receipt of money advanced by the insurance company as an interest‑free loan (instead of payment of a loss) repayable to the insurance company only if the loss is recovered from a third party and then only to the extent of the recovery.

LOC - See "Letter of Credit."

Lock

An enclosed area of water with a gate at each end. Water can be let in or out to raise or lower vessels from one level to the next through a canal or around a dam.

Longitude - See "Latitude / Longitude."

Longshoreman / Longshore Worker

An individual employed locally in a port to load and unload vessels. See "Stevedore."

Longshoremen's and Harbor Workers' Compensation Act

A federal worker's compensation statute (1927) which requires an employer to pay an employee (other than a crew member of a vessel) benefits for injury, disability or death resulting from injury arising out of maritime employment on navigable waters of the U.S., or adjoining areas customarily used by such employer in loading, unloading, repairing, or building a vessel.  The 1972 Amendments preserved the rights of Longshoremen and Harbor Workers to sue the vessel owner for his or her negligence, but they can no longer claim for unseaworthiness of the vessel.   The Defense Base Act and Outer Continental Shelf Act provide similar benefits to workers at these offshore locations.

Loss Adjusting Expense - See "Allocated Loss Adjusting Expense."

Loss Of Market  

A reduction in the value of merchandise for reasons other than physical damage - either late arrival or obsolescence;  e.g. Christmas trees arriving undamaged in January.  This is a "business loss" and is not recoverable under a Marine Cargo Policy.

Loss of Specie

A change in the nature or character of cargo or a vessel so that it is no longer the thing insured.See "Total Loss."

Lost Or Not Lost  

An agreement by the insurance company that, even though a voyage of a vessel or cargo may have already commenced, coverage will attach from the beginning of the voyage provided the Assured has no knowledge as to the status of the vessel. A notation is usually made on the insurance policy that the coverage has been bound "Lost Or Not Lost" and is accompanied by a statement signed by the Assured "warranted no known or reported losses" as of that date.

LSWCA – See "Longshoremen's and Harbor Workers' Compensation Act."

LTL (Less than a full Truck Load)

K

Keel

1. Centerline strength member running fore and aft along the entire bottom of a vessel; the vessel's backbone to which the ship's ribs or shell plating are attached.
2. In modern sailboats, the keel is a weighted appendage to counterbalance the tendency of the vessel to heel from the wind pressing against the sails. It is usually made of lead and can have wings or a bulb attached to the bottom of it. This type of keel is tall and slender, only attaches at the midpoint of the vessel, and does not run the entire length of a vessel. A separate skeg is usually located at the aft end of the vessel in front of the rudder to give the directional stability that a full length keel would give. See also "Skeg."

King Pin

A coupling pin centered on the front underside of a truck chassis; couples to the tractor.

Knocked Down (K D)

Articles which are disassembled either to reduce the cubic footage displaced or to make a better shipping unit, to be re‑assembled at destination; e.g. knocked down furniture.

Knot

Unit of speed equal to one nautical mile (6,080.20 ft.) per hour. One statute mile equals .868 nautical mile, or one nautical mile equals 1.15 statute miles. In the days of sail, speed was measured by tossing a log overboard which was secured by a line to the vessel. Knots were tied into the line at approximately six feet intervals (the breadth of a man’s arm span). As the vessel sailed on, the number of knots passing over the side in a measured period of time was counted and thus became the measure of ship’s speed.

Known Loss

A loss that has already occurred and is known to exist by one or both parties prior to the placement of insurance coverage. As a condition of the placement of the insurance, a warranty "no known or reported losses" is frequently used by the insurance company to exclude such losses.

J

Jacob's Ladder A rope ladder suspended from the side of a vessel used for boarding or leaving the vessel; e.g. as used by a pilot.

Jason Clause (Negligence General Average Clause)

A clause in ocean bills of lading providing that any general average will be borne proportionately by vessel, cargo, and freight even if the general average arises out of the vessel owner’s negligence, errors of the master or crew, or unseaworthiness of the vessel. Without this clause, cargo has no obligation to contribute to any general average arising from these causes.

Jetsam

Anything which is voluntarily cast overboard from a vessel in time of distress. See "Jettison" and "Flotsam."

Jettison

The deliberate throwing overboard of cargo, or of part of the vessel's superstructure, equipment or stores, in the event of an emergency. Cargo or equipment might be jettisoned to lighten a vessel to relieve it from a strand, to stabilize it during a storm, or to get rid of flammables or explosives during a fire. (Washing overboard is the accidental loss of equipment or cargo overboard due to the action of the elements.)

Jetty

A pier, mole, wharf, or other structure projecting into a body of water to influence the current or tide or to protect a harbor or shoreline.

Joint Policy - See "Subscription Policy."

Jones Act

A 1920 U.S. Statute which provides that a seaman injured by the negligence of the vessel owner, master, or fellow crew member can recover damages for his or her injuries from the vessel owner. See "Seaman’s Rights and Remedies."

Jury Rig

A temporary or makeshift arrangement of equipment set up to take the place of rigging or equipment which was lost or carried away; i.e. to make temporary repairs. Originally, in the days of sail, it referred to the ship’s masts and rigging. It now refers to any temporary repairs made to continue the operation of the equipment or vessel before a proper or complete repair can be made.

JWO (jettison and washing overboard) - See "Jettison" and "Deck Load Conditions."

I

ICC

1.      See "Interstate Commerce Commission."

2.      International Chamber of Commerce.

IMCO

International Maritime Consultative Organization.  A forum in which most major  maritime nations participate and through which recommendations for the carriage of dangerous goods, bulk commodities and maritime regulations become internationally acceptable.

IME  (Independent Medical Examination)

Implied Warranty  -  See "Warranty."

Import

To receive goods from a foreign country.

Import License

A document required and issued by some national governments authorizing the importation of goods.

Inboard

Within the perimeter of the vessel�s hull.   See also "Outboard."

Inboard - Outboard / Outdrive

A permanently mounted inboard engine connected through the transom of a vessel to an outboard propeller drive assembly that both propels the vessel and is turned from side to side to steer the vessel.  This form of engine eliminates the need for a rudder, rudder post, shaft log, stuffing box, stern bearing, coupling, and conventional propeller shaft.  Inboard-Outboard is also known as "stern drive."                           

In Bond

Cargo moving under Customs control where duty has not yet been paid.

Inchmaree Clause  (Additional Perils Clause)

First added to hull policies following an English case involving the vessel "Inchmaree." It expands coverage to include consequential damage directly caused by explosion, breakdown of electrical machinery, bursting of boilers, breakage of shafts, latent defect in machinery or hull, accidents in handling cargo, repairer's negligence, crew negligence, et al; as long as the damage does not result from want of due diligence by the vessel owner. The clause was later added to cargo policies.

INCOTerms

The "International Chamber Of Commerce Terms of Sale."  These terms were last amended in the year 2000.   See "Cargo Terms of Sale"  Appendix G.

Increased Value Insurance

Insurance that covers an excess amount over the insured value of the property; hull or cargo. Such insurance is for a separate agreed amount in excess of the agreed value of the property and is written on a separate policy form which is essentially Total Loss Only insurance. Hull policies limit the amount of I.V. insurance that an owner may place in excess of the hull agreed value.

Incurred But Not Reported  (IBNR)

An insurance company term for losses that have occurred but have not yet been reported to the company. It is a factor in insurance company accounting that permits the company to take such losses into account for actuarial purposes.

Indemnify

To reimburse a party for loss, damage or expense.

Indemnity

Payment or reimbursement for loss, damage or expense.

Inflammable   - See "Flammable."

Inherent Vice

A loss caused by the nature of the thing insured and not the result of a fortuitous external cause; e.g. spontaneous combustion of bulk grain.

In Personam

Suit against a named individual, corporation or other business entity; i.e. "the person."  See "In Rem."

In Rem   (against the thing)

A maritime lien against a vessel or containers.  This unique feature of Admiralty Law allows a claimant to have a vessel or container arrested or seized to enforce a legal action, rather than arresting its owner (whose identity may not be known). The seized property is held as security until the claim is decided or until acceptable security is substituted. See "Arrest" and "Attachment."            

Inspection Certificate

A certificate issued by an independent agent or firm attesting to the quality and/or quantity of the merchandise being shipped. Such a certificate is usually required in a letter of credit for commodity shipments.

Institute Clauses

Clauses agreed in the London insurance market and offered by the Institute of London Underwriters.  (Clauses offered by the American market are titled "American Institute of Marine Underwriters Clauses.")                                  

Insurable Interest

A real stake in a specific property to the extent that loss of or damage to the property could cause a financial loss.                           

Insurance Certificate- See "Certificate of Insurance."

Intermodal - See "Multimodal." 

International Safety Management (ISM)Code

The International Management Code for the Safe Operation of Ships and for Pollution Prevention requiring every company and bareboat charterer operating a vessel to design and implement a Safety Management System; effective 7/1/98 on some vessels and 7/1/02 on other types of vessels.

Interstate Commerce Commission  (ICC)

The U.S. federal agency charged with enforcing laws applicable to common carriers transporting cargo between states.  It was abolished  January 1, 1996 and replaced by the Surface Transportation Board.

Invoice

The Seller�s bill of sale for the goods sold, specifying the type of goods, quantity, price, and terms of sale.  See "Commercial Set."

I Q F    (Individually Quick Frozen)

Small pieces of food that are frozen individually before being packed and shipped.

Irrespective of Percentage

Loss or damage due to a peril insured against collectible in full, without a franchise having to be reached, or a deductible applied. See "Average Clauses."

Irretrievable Deprivement - See "Total Loss."

Irrevocable Letter of Credit

Letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee and which cannot be revoked without joint agreement of both the buyer and the seller.

ISM Code - See "International Safety Management  (ISM) Code."