Glossary of Common Terms

The way we work

The shipping industry facilitates world trade – connecting domestic and global manufacturing centres with markets world-wide through transportation of commodities and finish products. This is a non-exhaustive summary of common terms used in the maritime energy transportation and shipping industry. For more information, please contact

ABACAnti-Bribery and Anti-Corruption
AERAnnual Efficiency Ratio uses an approximation of cargo carried by utilizing the vessel’s designed deadweight capacity in place of actual cargo carried and assumes the vessel is continuously carrying cargo
AER of the fleet is calculated as the total CO2 emitted for all vessels / total Deadweight Tonnage X Distance Travelled for all vessels
Ballast WaterFresh or saltwater held in the ballast tanks and cargo holds of ships
Ballast Water Management ConventionThe International Convention for the Control and Management of Ships’ Ballast Water and
Sediments (BWM Convention) requires vessels to comply with standards and procedures for the
management and control of ships’ ballast water and sediments
Baltic LPG IndexBaltic Exchange Liquid Petroleum Gas Index - An assessment of the daily spot charter rates of a vessel
moving LPG between the Middle East and Japan
Bermuda Companies ActThe Companies Act 1981 (as amended) of Bermuda
BIMCOBaltic and International Maritime Council - The largest international association representing shipowners
Bunker FuelAny fuel used to power a ship’s engines
CBMCubic meter - A unit of volume of a gas vessel’s capacity for carrying gas cargoes
CharterHiring of a vessel, or use of its carrying capacity for either (i) a specified period of time (time-charter) or
(ii) a specific voyage or set of voyages (voyage charter)
CIF Cost, Insurance, Freight - Rules covering the carriage of international goods by sea
COAContract of Affreightment - Under a CoA, the shipowner provides capacity to transport a certain
amount of cargo within a specified period from one place to a destination designated by the customer.
All of the ship’s operating, voyage and capital costs are borne by the shipowner. The freight rate is
normally agreed on a per cargo tonne basis. The freight rate can be fixed or floating, or a combination
of both
Commercial managementMarketing of vessels for business, negotiating and firming carriage of cargo contracts with
customers and operating of vessels in accordance with the terms of the charter parties
Dry DockingPlacing a vessel out of water alongside a dock for major repairs and surveys usually coinciding with
periodical regulatory survey requirements of the vessel
Dual-fuel engineAn engine that is able to run on both gas oil and LNG or LPG
EBITDAEarnings Before Interest, Taxes, Depreciation and Amortisation
ECAEmission Control Area - Sea areas in which stricter controls were established to minimise airborne
emissions from ships. Until 31 December 2019, the limit for sulphur content of ships’ fuel oil was 3.5% for
vessels trading outside ECAs. Today, a global cap of 0.5% applies.
EEDIEnergy Efficiency Design Index - An IMO measure designed to ensure the use of more energy efficient
equipment and engines
EEOIEnergy Efficiency Operaitonal Index monitors the energy efficiency of the vessel
EEOI of the fleet is calculated as the total CO2 emitted for all vessels / total Amount of Cargo Carried X Cargo Distance Travelled for all vessels
ESGEnvironmental, social and governance
Flag StateAdministration offering vessel registration services and responsible for ensuring implementation of
international conventions
G&AGeneral and administrative expenses
GHGGreenhouse gases
GHG Scope 1 EmissionsDirect greenhouse gas emissions from owned or controlled sources
GHG Scope 2 EmissionsIndirect greenhouse gas emissions from the generation of purchased energy
GRIGlobal Reporting Initiative- An international standard for sustainability reporting
HFOHeavy Fuel Oil
HSSEQ Health, Safety, Security, Environment and Quality
HSFOHeavy Sulphur Fuel Oil
ISOInternational Organisation for Standardisation
IFRSInternational Financial Reporting Standards - An international standard for accounting and financial
ITInformation Technology
IMOInternational Maritime Organisation - A United Nations global standard-setting authority for the safety,
security and environmental performance of international shipping
IMO 2020A global regulation effective from 1 January 2020 requiring all ships to burn fuels with less than 0.5%
sulphur or use emission abatement technologies
ISMInternational Safety Management Code - An international standard for the safe management and
operation of ships and for pollution prevention
LGCLarge Gas Carrier - Gas carrier of 50,000 - 70,000 CBM
LNGLiquified Natural Gas
LPGLiquefied Petroleum Gas
LSMGOLow Sulphur Mairne Gas Oil
LTIFLost Time Injury Frequency Rate - A ratio of the number of lost time injuries occurring in a workplace per 1 million hours worked. An LTIFR of 7, for example, shows that 7 lost time injuries occur on a jobsite every 1 million hours worked. The formula gives a picture of how safe a workplace is for its workers
LTIFLong-term Incentive Program
MACNMaritime Anti-Corruption Network - A global business network working towards the vision of a maritime
industry free of corruption
MARPOLInternational Convention for the Prevention of Pollution from Ships designed to prevent pollution from
MGOMarine gas oil
New Building/ New Build (NB)A new vessel under construction
NmNautical mile
NOxNitrogen Oxide
Operating Expense (OPEX)Vessel operating expenses, such as manning, insurance, maintenance and repairs
P&I ClubProtection & Indemnity Club - A mutual insurance association providing risk pooling, information and
representation for its shipowner members
PMParticulate matter
PoolArrangement under which vessels owned by different owners are contributed into a pool. The manager
of the pool markets the vessels as a single, cohesive fleet, operating them under spot contracts, CoAs
and time-charters. The income from the vessels included in the pool is distributed to individual owners
according to an agreed upon pool point system whereby each vessel receives its share of the pool’s
earnings according to the vessel’s earning potential
Port State ControlInspection of ships to ensure that the ship and its equipment complies with international conventions
Poseidon PrinciplesFramework developed by leading ship financiers for integrating climate considerations into lending decisions to promote international shipping’s decarbonisation
QIQualified Individual - Under the US Oil Pollution Act, all vessels calling in US waters must ensure that a
Qualified Individual is available to implement a response plan
SASBSustainability Accounting Standards Board
ScrubberEmission abatement technology installed on a ship allowing it to burn high sulphur fuels
SIREShip Inspection Report Programme - A programme for evaluating and rating tanker vessels’ technical
and safety standards, for use as a reference by oil and gas companies when utilising vessels
SOxSulphur dioxide
TCE IncomeTime-Charter Income - Gross freight less voyage related costs
TCFDThe Task Force on Climate-related Financial Disclosures
Technical ManagementDaily operation of a vessel, including maintenance, supplies and manning
Time CharterUnder time-charters, vessels are chartered to customers for fixed periods of time at rates that are
generally fixed. The charterer pays all voyage costs. The owner of the vessel receives monthly charter
payments on a per day basis and is responsible for the payment of all vessel operating expenses
(including manning, maintenance, repair and docking) and capital costs of the vessel
Tonne-mileUnit cargo x distance; i.e. 10 metric tonnes carried 25 miles = 250 tonne miles
TRCFTotal Recordable Case Frequency - The sum of all work-related fatalities and injuries per one million hours
worked over the quantity of hours worked
UNSDGUnited Nations’ Sustainable Development Goals
Vessel RecyclingThe sale of a vessel for dismantling and reprocessing the building materials
VLGCVery Large Gas Carrier - A gas carrier above 70,000 CBM
VLSFOVery Low Sulphur Fuel Oil
Voyage CharterTypically a single round trip that is priced on a current or spot market value. The owner of the vessel
receives payment derived by multiplying the metric tonnes of cargo loaded on board by the agreed
upon freight rate expressed on a per cargo metric tonne basis. The owner is responsible for the payment
of all expenses including voyage expenses (including bunker fuel, agency and port costs), operating
expenses and capital costs of the vessel
WLPGAWorld LPG Association - An international association representing over 250 companies involved in the
LPG value chain
Year on Year - YoYYear on Year