The terms of international trade and logistics, explained in plain language and applied to real import operations. Each definition tells you what the term means, when it affects you importing from Asia into Mexico and Latin America, and the mistake that costs importers the most.
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Air freightThe air cargo transport document: receipt and evidence of the contract of carriage. Unlike the ocean B/L, it is not negotiable and does not represent ownership of the goods.
Air freightSubstances or articles that can endanger a flight, grouped in 9 classes. Air carriage follows IATA's DGR, and lithium batteries are Class 9.
Air freightThe two air waybills in a consolidated shipment: the MAWB between consolidator and airline, and the HAWB the forwarder issues to each shipper.
Air freightThe air containers and pallets that group cargo on the aircraft. Each has an IATA code, contour and maximum weight that limit what fits.
Air freightThe theoretical weight calculated from the cargo's volume. Air freight charges the greater of actual and volumetric weight: that is why big, light shipments pay like heavy ones.
Customs & regulationThe authorized installation inside or next to Mexican customs where foreign trade cargo is stored and handled under customs control while it clears.
Customs & regulationThe document proving where goods were produced, and the key to preferential duties under trade agreements. Without it, your product pays the general tariff rate.
Customs & regulationThe professional licensed to clear goods through Mexican customs on behalf of importers: classifies the merchandise, files the pedimento and answers to the authority for the operation.
Customs & regulationDeposit with an authorized institution that secures taxes, mainly when goods are imported below Mexico's estimated price.
Customs & regulationThe base on which your import taxes are calculated: the price actually paid plus the additions the law requires when they were not already included in that price.
Customs & regulationMexico's federal fee on every customs operation filed with a pedimento, even when goods are duty free. For definitive imports, the general rate is 8 per thousand.
Customs & regulationMexico's import duty: the rate of the tariff classification applied to the customs value. Day to day, simply called the tariff.
Customs & regulationThe Mexican program that lets manufacturers temporarily import inputs without paying import taxes upfront, provided they are transformed and the finished product is exported.
Customs & regulationThe Mexican tax authority's register every regular importer must be enrolled in; without an active registration, no customs broker can clear goods in your name.
Customs & regulationMexico's mandatory technical regulations: certain tariff codes require proof of compliance, through labeling or product certificates, before the goods can enter the country.
Customs & regulationThe pedimento is Mexico's official customs entry: the declaration stating what you import, its value, its tariff code and the taxes paid. Your cargo's fiscal birth certificate in Mexico.
Customs & regulationMinistry of Economy program that lets manufacturers import inputs, machinery and equipment at a preferential duty rate to produce the goods of their sector.
Customs & regulationMinistry of Economy prior permit to import inputs and machinery under heading 98.02 at a preferential rate, to manufacture under PROSEC.
Customs & regulationThe code customs assigns to every product crossing the border. It sets the duty you pay, the regulations that apply and the preferential treatment under trade agreements.
Customs & regulationThe importer's sworn statement of the elements of customs value in Mexico, filed electronically as form E2 through the Digital Single Window.
Ground transportSecurity measures for cargo in road transit: tracking, planned routes, monitoring and escorts. The reference standard is TAPA TSR.
Ground transportThe tax complement required to move goods across Mexican territory: what is moving, who moves it, from where and to where, with the route and the carrier's details.
Ground transportThe two ways to contract trucking: FTL books the whole truck for your cargo; LTL shares the unit with other shippers and you pay for the space you use.
Ground transportThe final leg of the chain, from the last distribution center to the recipient's door. The shortest in distance and almost always the most expensive per unit.
Ground transportThe freight truck combinations allowed by Mexico's NOM-012, such as C3, T3-S2 or the "full" T3-S2-R4, with limits by road type.
IncotermsSea freight incoterm where the seller pays freight to the destination port, but risk passes to the buyer once the goods are on board at origin.
IncotermsMaritime incoterm where the seller pays freight and insurance to the destination port, but risk transfers to the buyer at shipment, and the mandatory insurance is minimum cover.
IncotermsLike CPT plus seller-paid insurance with broad cover (Clauses A), unlike the minimum cover required under CIF.
IncotermsAny-mode incoterm where the seller pays carriage to the destination, but risk passes to the buyer on delivery to the first carrier.
IncotermsIncoterm where the seller delivers at the named destination, ready for unloading; unloading, import clearance and duties are the buyer's.
IncotermsThe seller's maximum-obligation incoterm: delivered at destination with transport, clearance and import taxes paid. The closest thing to buying at your warehouse, with fine print worth reading.
IncotermsThe only incoterm where the seller must unload the goods at destination; import clearance and duties remain the buyer's.
IncotermsThe seller's minimum-obligation incoterm: goods made available at their factory. Everything else, from the truck at the gate to your warehouse, is the buyer's cost and risk.
IncotermsSea freight incoterm where the seller delivers alongside the vessel at the port of shipment; meant for bulk and project cargo, not containers.
IncotermsAny-mode incoterm where the seller clears export and hands the goods to the carrier nominated by the buyer; the recommended choice for containers.
IncotermsMaritime incoterm where the seller delivers by placing the goods on board at the origin port, export cleared; from that point, cost and risk of the voyage belong to the buyer.
Risk & insuranceWritten notice to the carrier recording damage, shortage or delay. Deadlines are short, and missing them can forfeit the right to claim.
Risk & insuranceThe policy covering your goods in international transport. Not the same as carrier liability, which is capped by convention at amounts per kilo far below real value.
Risk & insuranceAn extraordinary sacrifice or expense to save ship and cargo from a common danger, shared among all interests in the voyage, even if your cargo was not damaged.
Risk & insuranceThe standard cargo insurance terms: (A) covers all risks except exclusions, (B) and (C) only named perils. CIF requires (C) and CIP requires (A).
Sea freightThe central document of ocean shipping: receipt for the cargo, evidence of the contract of carriage and title representing the goods. Whoever controls the B/L controls the container.
Sea freightThe standardized variants of the box that moves world trade: 20 and 40 foot standard, high cube, reefer, open top and flat rack, each one for a kind of cargo.
Sea freightThe carrier's charges when its container exceeds the free days: demurrage inside the terminal and detention for returning the empty box late. Two clocks on the same cargo.
Sea freightThe estimated departure and arrival dates of your shipment. The word that matters is estimated: the best available projection, not a contractual commitment from the carrier.
Sea freightThe two ways to contract ocean container freight: FCL books a whole container for your cargo; LCL shares the box with other importers and you pay for the space yours occupies.
Sea freightWhen the carrier leaves your container off the booked vessel and loads it on the next one. Your cargo is not lost: it is a week or more late, with your planning inside it.
Sea freightThe THC is the fee for moving your container through the port terminal, the best known of the carrier surcharges that stack on top of the base freight.
Sourcing & purchasingThe total time from placing an order to having goods ready to sell: production, inspection, clearances, transit and last mile, with all their variability.
Sourcing & purchasingThe smallest quantity a manufacturer will produce per order. It reflects the factory's fixed costs and is more negotiable than it looks, especially with staggered volumes.
Sourcing & purchasingThe two models for manufacturing under your brand: OEM builds to your design and specs; ODM lets you brand and adapt a product the factory already developed.
Sourcing & purchasingThe document detailing how your shipment is physically assembled: how many packages, what each contains, with what dimensions and weights. The map of the cargo.
Sourcing & purchasingThe verification of your goods at origin, before shipment and before paying the balance: quantities, quality, function and packaging against your specs, with a photographic report.
Sourcing & purchasingThe supplier's formal offer before the sale: goods, price, quantity, incoterm, payment terms and lead times. Not valid for clearance, but where the deal is actually closed.
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