Glossary of terms
International Trading terms are highlighted in RED
Soap Noodle related terms are highlighted in BLUE
Any Safe World Port
This is not an official incoterm, but is often used in sellers' quotes as "CIF ASWP", and is widely accepted. This implies that shipment based on a quote worded in this way would incur the same CIF price for delivery to any safe port in the world, whatever the distance from source.
Bank Comfort Letter
Also known as a Bank Capability Letter, or Bank Confirmation Letter, this is a letter from the customer's bank confirming his ability to meet a certain level payment requirements. It should however be understood that this does not imply any guarantee of payment.
This is sometimes a component of soap, and prevents rancidity in the oils.
BOL or B/L
Bill of Lading
This is the receipt given by the shipping company when goods are loaded on board the vessel. This is an important document and gives title to the goods. It is needed by the buyer to obtain the goods from the port. Sometimes written simply as BL.
Bank Payment Undertaking
Cash Against Documents
This is basically the same as D/P. CAD should NOT be used to mean Cash Against Delivery (this should be COD).
A CAS number is a unique registration numerical identifier for one chemical (substance). It has no chemical significance, but allows the linking of a wealth of information about the substance. The CAS number for Sodium Palmitate (Palm oil soap) is 408-35-5.
Also referred to as Cocamide DEA, this is a coconut-derived chemical used in cleaning products. Similarly PKDE is the equivalent from Palm Kernel origin.
Cost and Freight
The price includes the cost of the goods, loading, and freight to the named Destination Port. This does not include unloading charges.
Same as CFR.
Cost, Insurance and Freight
This is the same as CNF, but also includes insurance to the named Destination Port.
Carriage and Insurance Paid (to)
The seller has the same obligations as under CPT but has the responsibility of obtaining insurance against the buyer's risk of loss or damage of goods during the carriage. The seller is required to clear the goods for export. However he is only required to obtain insurance on minimum coverage. This term requires the seller to clear the goods for export and can be used across all modes of transport.
Certificate Of Analysis
This is an authenticated document, issued by an accredited firm or individual, that certifies the quality and purity of the products being exported.
Cash On Delivery
COO, CO or C/O
Certificate of Origin
A documentary statement signed by the exporter and attested to by a local Chamber of Commerce/Consulate, attesting the country of origin (normally the exporter's) of the goods being shipped. Some countries have different types of CO (e.g. Singapore has 'Ordinary' and 'Preferential')
Crude Palm Oil
Oil derived from the fruit (excluding kernel) of the Oil Palm.
Carriage Paid (to)
The seller pays the freight for the carriage of goods to the named destination. The risk of loss or damage to the goods occurring after the delivery has been made to the carrier is transferred from the seller to the buyer. This term requires the seller to clear the goods for export and can be used across all modes of transport.
DA or D/A
Documents against Acceptance
This relates to the Documentary Collection process (see D/C). The importer is required to pay on a specified date.
The documents are sent to the buyers bank who releases only the draft to be accepted by the buyer. Once the draft has been accepted with a stated maturity date, and returned to the buyer's bank, the bank will release the title documents to the buyer. The buyer has the obligation to make payment at maturity, but if the buyer does not pay, the bank will not make payment to the seller. This is therefore not as secure as DP (or of course a L/C).
Delivered At Place
Seller delivers the goods when they are placed at the disposal of the buyer on the arriving means of transport ready for unloading at the named place of destination. Parties are advised to specify as clearly as possible the point within the agreed place of destination, because risks transfer at this point from seller to buyer. If the seller is responsible for clearing the goods, paying duties etc., consideration should be given to using the DDP term.
Delivered At Terminal
The seller delivers when the goods, once unloaded from the arriving means of transport, are placed at the disposal of the buyer at a named terminal at the named port or place of destination. "Terminal" includes quay, warehouse, container yard or road, rail or air terminal. Both parties should agree the terminal and if possible a point within the terminal at which point the risks will transfer from the seller to the buyer of the goods. If it is intended that the seller is to bear all the costs and responsibilities from the terminal to another point, DAP or DDP may apply.
Delivered Duty Paid
The seller is responsible for delivering the goods to the named place in the country of importation, including all costs and risks in bringing the goods to import destination. This includes duties, taxes and customs formalities. This term may be used irrespective of the mode of transport.
This is the delaying of a vessel, railway wagon, etc., caused by the charterer's failure to load, unload, clear, etc., before an agreed time - e.g. the time of scheduled departure of the vessel. The compensation levied for such delay is also called "demurrage", e.g. leaving a container at a port for longer than agreed.
DP or D/P
Documents against Payment
This relates to the Documentary Collection process (see D/C). The documents are sent to the buyer's bank who holds the documents until payment is received from the buyer. Once payment has been received, the bank releases the documents to the buyer, and remits funds to the seller.
A documentary collection is a transaction whereby the exporter entrusts the collection of a payment to his bank, which sends documents to a collecting bank (i.e. the buyer/importer's bank), together with instructions for payment. Funds are received from the importer and remitted to the exporter through the banks in exchange for the documents. D/Cs involve using a draft that requires the importer to pay - either at sight (DP) or on a specified date (DA).
The draft gives instructions that specify the documents required for the transfer of title to the goods.
Although banks do act as facilitators for their clients under Documentary Collections, D/Cs offer no verification process and limited recourse in the event of non-payment. Drafts are usually simpler and less expensive than letters of credit (L/Cs).
The process is fully defined in the ICC Uniform Rules for Collections (URC522 ).
Documentary Letter of Credit (see L/C)
Distillate Palm Fatty Acid
Used in the manufacture of some soaps.
Errors and Omissions Excepted
This is often found on invoices and quotations, and denotes that the author does not take responsibility if there are errors or missing text. Documents should therefore be thoroughly checked.
This is a colourless, water-soluble solid best known for its properties as a chelating agent. In soap EDTA acts as a preservative and anti-oxidation/anti-discolouring agent and water softener.
The buyer pays all costs of transport from pickup at the suppliers premises.
Fats Analysis Committee (of the American Oil Chemists' Society)
The FAC reference is used to analyse the colour of a fat, such as the fatty acids used in soap manufacture. The FAC method is used when fats are too dark or green to be read by the Lovibond method.
FAC numbers are all odd, in the range 1-45. FAC 1-9 = light colored fats; FAC 11,11A-11C are very yellow fats; FAC 13-19 are dark, reddish fats; FAC 21-29 are greenish fats; FAC 31-45 are very dark fats. Each different series is independent so there is not necessarily an increase in the color from the lowest to the highest numbers, i.e., a fat graded 21 may actually be lighter than one graded 13.
Free Alongside Ship
The supplier pays costs only to the port of loading. Loading and shipment are then the responsibility of the buyer.
The supplier must deliver the goods, cleared for export, to the carrier nominated by the buyer at the named place.
Full Container Load
Often suppliers will not supply less then one full container (soap noodles approx 20Mt per 20' container). LCL would denote less than one container load.
Full Corporate Offer
A FCO usually starts with a clause similar to the following : We, (named seller), with full legal and corporate responsibility, and under penalty of perjury, with full knowledge of the act of fraud; and as the Seller, are ready, willing and able to deliver the herein offered goods under the following terms and conditions:
Forwarder's Certificate of Receipt
With the FCR, the forwarding agent certifies that he has received the shipment for irrevocable transport to the designated recipient. The shipment can be revoked only if the original document is returned.
Free Fatty Acid
The amount of a fatty acid of a specified average molecular weight, which is present in the soap noodles in unconjugated form (expressed as a percentage). FFA can produce enhanced user properties like lathering and texture. If the FFA level is too high, the bar may be too soft. Fillers can modify the physical effects of FFA.
Free on Board
This means that the supplier pays only to the point where the goods are loaded on board the carrying vessel.
Glycerin is a component of soap noodles. A high glycerin content will make the soap translucent. Often glycerin is removed during the saponification process and used in the production of other cosmetics. Low glycerin soaps are harder, but if too low can leave the skin dry and lacking in moisture. In its pure form it is referred to as Glycerol. It is generally accepted that glycerin in soap helps soften/moisturise the skin.
1-hydroxy ethylidene-1,1-diphosphonic acid
HEDP is normally a crystalline powder, and acts as a chelating agent. It is commonly found in soap products, and is deemed to be non-toxic.
HS / HTS / HTC Code
Harmonized System Code
The Harmonized System Code is a system of specific identifiers for commodities, including subcategories. HS Code is becoming a universally-recognized classification standard worldwide for export, import and customs tariffs. The HS code for soap noodles is normally 3401.20.0000. In the USA this is referred to as HTC (Harmonized Tariff Code) from the HTS (Harmonized Tariff Schedule - HTSUS). The full codes are 10-digit of the form 0000.00.0000. If 6-digit codes are requested, this relates to the first 6 digits.
"International Commercial Terms"
A set of import/export related shipping terms devised and published by the International Chamber of Commerce (ICC). These terms ('Incoterms 2000', 'Incoterms 2010') are internationally accepted and should always be used in order to avoid misunderstandings between trading partners. Many of the trading terms in this glossary are Incoterms. The version (year) applicable should also be stated when referring to Incoterms.
The Iodine Value measures the amount of unsaturation of the fatty acid. It is represented by the number of grams of iodine that are absorbed by 100g of the sample material. As IV increases, the soap becomes softer and stickier, and more prone to rancidity.
Letter of Credit
A Letter of Credit is a document issued by a bank which guarantees the payment of a buyer's drafts for a specified period of time and up to a specified amount, under specified conditions.
Effectively it is a method of payment where the buyer's bank guarantees payment to the supplier. L/C are almost always irrevocable, can (if required) be transferable, and subject to terms (e.g. on SIGHT, 30 days, 60 days, etc.). For regular shipments a Revolving L/C is often utilised. The various types can be defined as follows :
CL/C (Confirmed Letter of Credit) A letter of credit, issued by a foreign bank, with validity confirmed by a First Class (usually US or European) bank. A seller with CL/C terms is assured of payment even if the foreign buyer or the foreign bank defaults.
DL/C or DLC (Documentary Letter of Credit) A document issued by a bank which guarantees the payment of a buyer's drafts for a specified period and up to a specified amount. The Documentary Letter of Credit provides a more secure means of carrying out transactions in import-export trade than by documentary bills collection (see Bill of Exchange). A letter of credit when transmitted through a bank, usually in the seller's country, becomes the means by which the seller obtains payment. The necessary documents, correctly completed, are presented to a bank by an agreed date. If the terms of the credit are met, a seller can receive payment from a bank immediately.
IL/C (Irrevocable Letter of Credit) An Irrevocable Letter of Credit cannot be amended or cancelled without the consent of the issuing bank, the confirming bank (if confirmed), and the beneficiary. The payment is guaranteed by the bank if the credit terms and conditions are fully met by the beneficiary. The words Irrevocable Documentary Credit or Irrevocable Credit may be indicated in the L/C. It means that once the buyer's conditions in the letter have been agreed to by the seller, they constitute a definite undertaking by the buyer's bank and cannot be revoked without the seller's agreement.
Revocable Letters of Credit are rarely used as the terms of the credit can be cancelled or amended by an overseas buyer at any time without notice to the seller.
RL/C (Revolving Letter of Credit) When a letter of credit (L/C) is specifically designated a Revolving Letter of Credit, the amount involved when utilized is automatically reinstated, that is, the amount becomes available again without issuing another L/C and usually under the same terms and conditions within a period of time (usually several months to one year). This saves administration when multiple shipments are involved.
SL/C or SBLC (Stand-by Letter of Credit) is a financial guarantee or performance bond issued by a bank on behalf of a buyer. i.e. a written obligation of the issuing bank to pay a sum to a beneficiary on behalf of their customer in the event that the customer himself does not pay the beneficiary. The SL/C is regulated by the ICC-500 rules.
RDLC Revolving Documentary Letter of Credit
Less than a Container Load
LCL denotes less than one container load. The goods do not fill the complete space of a container. Often containers are consolidated, i.e. they are filled with goods from different suppliers for different buyers in order to make efficient use of space.
Letter Of Intent
A document by which the buyer states that he intends to enter into a transaction.
A method of assessing colour using the Lovibond® Tintometer. Commonly used for Soap Noodle specifications.
Expressed as a percentage of total weight. With soap noodles, usually the higher the TFM% the lower the moisture content.
Medium Chain Triglyceride
Component of some oils, such as Coconut oil (66% MCT), Palm Kernel Oil. Important for soap making. A triglyceride consists of three molecules of fatty acids bound with one molecule of glycerol
Moisture, Impurities and Unsaponifiables
Used mainly in the specifications of tallows and fatty acids - the full meaning is Moisture, Insoluble Impurities and Unsaponifiables
Minimum Order Quantity
The minimum quantity a supplier will transact.
Materials Safety Data Sheet
An MSDS is a data sheet, designed for workers and emergency personnel, relating to a particular product or chemical. The MSDS specifies safety handling methods, health hazards, ingredients, fire safety data, contamination, spillage, storage, treatment, physical properties, etc.
SDS similarly, is Safety Data Sheet
TDS similarly, is Technical Data Sheet
Metric tonne (or just tonne) = 1000kg. The old spelling of 'ton' was the old British ton (2240 lbs, = approx 1016kg).
Palm Acid Oil
Palm Fatty Acid Distillate. A light-brown solid, this by-product of Crude Palm Oil refining is used in some soap manufacturing processes.
Palm Kernel Fatty Acid Distillate. A light-brown oil, derived from the reining process of Palm Kernel Oil.
Palm Kernel Oil
Palm Oil (confusing : the abbreviation is sometimes used to refer to Palm Olein [POo])
Oil from the fruit of the oil palm (Elaeis guineensis).
Proof of Funds
A note from a buyer's bank to the seller/seller's bank that money is available to complete the proposed transaction.
Proof of Product
A Proof of Product ('POP') is often requested by customers or agents who believe it will give them some guarantee of the existence of the product and ability of the supplier to deliver. In practice many POPs are produced which are false. In practice it offers no proof at all, because once a POP has been drafted it is automatically out of date - the product could have been sold to another buyer and therefore no longer exists. Nevertheless, a POP is still occasionally requested as apparent proof that a seller/broker has the product, which is possibly not the case.
A POP for large quantities is often not genuine as it is unlikely that a manufacturer has stockpiled possibly millions of tonnes of a product. Large quantities of a products are made to order to match the terms of a specific contract, in this case a proof of allocation would be more relevant. A POP without a contract reference is also worthless, a POP with a contract reference can and will only be issued once a financial instrument has been put in place, so is therefore superfluous.
A POP is realistically provided only when the buyer's bank issue a Bank Confirmation Letter (BCL) to the seller's bank via SWIFT. Then the seller's bank can check the availability of funds in the buyer's bank and issue a POP to the buyer's bank within an agreed time period (e.g. 5 days). In reality, the best and only real proof of product is when the seller can demonstrate the products in his possession at the dock side.
Palm Oil fractionates mainly into Palm Stearin (the harder fraction) and Palm Olein (the softer fraction). Palm Stearin can be used in soap manufacture, particuarly where a harder, long lasting soap is required. These fractions are also sometimes referred to as 'POs' and 'POo'.
Refined, Bleached and Deodorised
Refers to pre-processing of oil utilised in the manufacture of soap noodles (cooking oils are also usually RBD).
Revolving Documentary Letter of Credit (see L/C)
Registration Evaluation and Authorisation of CHemicals
REACH is a relatively new European Community regulation relating to chemicals and their safe use. Introduced in June 2007. The aim of REACH is to improve the protection of human health and the environment through the better and earlier identification of the intrinsic properties of chemical substances. At the same time, innovative capability and competitiveness of the EU chemicals industry should be enhanced. REACH is managed by the European Chemicals Agency (ECHA). Exports to the EU in excess of 1 tonne require to be REACH registered.
Request for Information
Request for Proposal
Request for Quotation
Request for Tender
Residue of Fatty Substance
A banking term meaning Readiness, Willingness and Availability of funds for a particular transaction.
SAP or SV
This is the amount of KOH (Potassium hydroxide), in mg, required to saponify 1g of oil/fat. This value is part of the specification for oils used in the manufacture of soap.
Palm Kernel Oil (PKO) has a SAP value of around 220; Palm Oil 190-205; Coconut Oil 250-265; Olive Oil 184-196.
Safety Data Sheet (See MSDS)
This is an international company (SGS Group) who are the definitive quality/specification testing agency for many commodities. Their certificates are internationally accepted. Other organisations also exist that offer similar services such as Bureau Veritas, Cotecna, CIQ (China), etc.
In other languages :
Сапун, Gallúnach, Jabon, صابون, Milo, Muilas, Мыла, Мыло, Мило, Mydła, Mydlo, Mýdlo, ןוֹבּסַ, Sabão, Sabonete, Sabuni, Sæbe, Saibe, Saippua, Sápa, Såpe, せっけん, Sapone, Saponetta, Sabó, Sabun, Saippuan, Sapoúni, Sapun, Savon, สบู่, Sebon, Seep, Seife, صابون, Soap, 비누, Szappanok, Tvål, Xabón, Xà phòng, Zeep, Zeyf, זייף, Ziepes, Σαπούνι, סַבּוֹן, साबुन, 肥皂
Sale and Purchase Agreement
Sodium Silicate is a soap additive sometimes used in laundry noodles. Silicates soften water by the formation of precipitates that can be easily rinsed away, and do not deposit on the fibres of the material being washed. Silicates also have good suspension and anti-re-deposition qualities, providing wetting and emulsifying properties. Sodium silicate also has excellent buffering action against acidity, which is useful as most laundry soiling is acidic in nature.
Stearic acid is usually prepared by treating animal fat with water at a high pressure and temperature. It can also be obtained by the hydrogenation of some unsaturated vegetable oils. Stearic acid is commonly made up of a mixture of stearic acid and palmitic acid. In the soap industry it is often used to harden soaps.
Saponification Value (see SAP)
Tallow is the name given to fats derived from animals such as mutton, pigs or beef (most common). Often used as a component of soap noodles, but many soap manufacturers (particularly toilet soaps) prefer noodles derived solely from vegetable oils such as palm, coconut, olive, etc. Use of tallows in soap can also be precluded due to religious or cultural conventions.
Technical Data Sheet (See MSDS)
Twenty foot Equivalent Unit
A unit of capacity measurement, where one TEU is the equivalent capacity of one standard 20 foot container (approx. 20ft x 8ft x 8ft). A standard 40ft container is therefore 2 TEU.
Total Fatty Acids
In relation to Soap Noodles, this represents the total fatty acid content of the noodles.
Total Fatty Matter
The total fat content expressed as a percentage. In general the higher TFM provides a higher grade of soap.
Simply, this is the temperature (usually expressed in degrees centigrade) at which the fatty acids solidify.
In more detail; the titre is the solidifying point of the mixed fatty acids obtained by saponification
and subsequent acidification of fats and oils; the basis of the actual determination of the titre lies in the fact that
liquids during solidifying evolve heat (the latent heat of fusion) and a rise in temperature occurs. This rise can be
quite distinct with fatty acids, and the temperature taken is the top point of the rise.
The titre of soap noodles can affect the hardness and feel of the soap.
Unsaponified and Unsaponifiable Matter
Neutral unreacted fat which has not been saponified. If the U&U is high the soap may be sticky and discoloured. Unsaponifiables contribute to the skin feel texture of soap, acting as superfatting agents and contributing to the TFM value.
Zeolite is a natural mineral that emits negatively charged ions, and is rich in silicon, calcium, potassium and iron. This ability of ionic attraction helps neutralize toxic materials and the coagulation of collidal dirt, also preventing re-deposition - increasing the washing effects. It also helps with grease removal. It is an excellent 'builder' for soap manufacture and is environmentally friendly. Zeolite can improve the characteristics of toilet soap as well as laundry soap and has been reported to be beneficial for skin detoxification.
Refers to the composition of the oils from which the soap is derived. 80:20 is usually 80% Palm Oil and 20% Palm Kernel Oil (PO/PKO). Similarly 90:10, 70:30, 80:10:10 etc.