HS Code
A 6 to 10 digit numerical code that customs uses to classify your product when it crosses a border.
The first 6 digits are the international Harmonized System code, recognised by every member of the World Customs Organization. Countries add 2 to 4 more digits for their national tariff. The HS code determines the duty rate, the certification requirements, and the import controls applied to your shipment. Most F&B exporters use HS chapters 02 (meat), 04 (dairy), 07 (vegetables), 08 (fruit), 09 (coffee, tea), 15 (oils), 17 (sugar), 18 (chocolate), 19 (cereal preparations), 20 (vegetable preparations), 21 (food preparations), 22 (beverages).
Landed cost
The full cost of getting your product into your buyer's warehouse, not just the factory price.
Landed cost includes the product cost (FOB or EXW), international freight, insurance, import duty, destination VAT or GST, customs clearance fees, port charges, inland trucking, and any inspection or certification fees. Most exporters underestimate landed cost by 14 to 20 percentage points because they only add freight to the FOB number.
True margin (true export margin)
Your real profit after every cost between your factory and the distributor's warehouse.
True margin is gross margin minus freight, duty, VAT, certification fees, samples, trade promotion spend, payment term cost of capital, and any other operational cost. For most F&B exporters the true margin is 14 to 20 percentage points lower than the gross margin they quote with. The gap shows up in five places: freight surprises, FX losses, sample and trade support spend, payment term costs, and quote drift.
Margin floor
The minimum acceptable true margin percentage you set for a market or product category.
A margin floor is the threshold below which a quote should not go out. Setting a floor per market and category and enforcing it at quote time stops your team from accidentally agreeing to unprofitable deals. The floor is usually 2 to 5 percentage points below your target margin to allow for negotiation room.
MFN rate (Most Favoured Nation)
The standard import duty a country applies to imports from countries it has no trade agreement with.
MFN is the default duty rate set by each country under WTO rules. It applies unless a preferential rate from a Free Trade Agreement is claimed. MFN rates for F&B products range from 0% (some raw ingredients into developed markets) to 40%+ (some agricultural products into protected markets).
FTA (Free Trade Agreement)
A treaty between two or more countries that reduces or removes import duty on goods that meet specific rules of origin.
Major F&B-relevant FTAs include RCEP (15 Asia-Pacific countries), CPTPP (11 Pacific Rim countries), ASEAN AFTA (10 Southeast Asian countries), MAFTA (Malaysia-Australia), AANZFTA (ASEAN-Australia-NZ), and many EU bilaterals. To claim a preferential rate, your shipment usually needs a Certificate of Origin documenting that your product satisfies the agreement's Rules of Origin.
Certificate of Origin (CoO)
A document that certifies where your product was made, required to claim FTA preferential rates.
A Certificate of Origin documents the country of origin of your goods and confirms they meet the Rules of Origin under the relevant FTA. CoOs are usually issued by a chamber of commerce or the national customs authority. Without a valid CoO, your shipment defaults to the MFN rate even if an FTA preference would otherwise apply.
Incoterms
Standard three-letter trade terms that define where seller responsibility ends and buyer responsibility begins.
Common Incoterms for F&B export: EXW (buyer picks up at your factory), FOB (you deliver to the ship, buyer takes over from there), CIF (you pay freight and insurance to destination port, buyer takes over from there), DAP (you deliver to the buyer's named destination, buyer handles customs), DDP (you deliver duty-paid to the buyer's warehouse, you handle everything). Most F&B exports use FOB or CIF.
FOB (Free On Board)
An Incoterm where the seller delivers the goods loaded onto the buyer's nominated vessel, and risk transfers to the buyer at that point.
FOB is the most common Incoterm for F&B sea export. The seller arranges export clearance, transports the goods to the port of origin, and loads them onto the vessel. From the moment the goods cross the ship's rail, the buyer assumes responsibility for freight, insurance, and destination clearance.
CIF (Cost, Insurance, Freight)
An Incoterm where the seller pays cost, insurance, and freight to the destination port, but risk still transfers at the origin port.
Under CIF, the seller pays for freight to the destination port and arranges marine insurance. However the risk of loss transfers to the buyer when the goods are loaded at the origin port, not when they arrive at destination. Many F&B buyers prefer CIF because they know the landed cost up front.
MOQ (Minimum Order Quantity)
The smallest order size you will accept from a distributor.
MOQ protects you from unprofitable small orders. Each shipment has fixed costs (documents, certificates, freight booking, customs clearance) that do not scale down with order size. Below a certain MOQ, the per-unit fixed cost destroys margin. F&B exporters typically set MOQ at 1 to 5 pallets for new distributors, 1 to 3 FCL (full container load) for established distributors.
Halal certification
A certificate confirming your product complies with Islamic dietary law and was produced under audited halal-compliant conditions.
Major halal authorities include JAKIM (Malaysia), MUI (Indonesia), ESMA (UAE), SFDA (Saudi Arabia), CICOT (Thailand), MUIS (Singapore). Each authority has its own audit process, certificate validity period (1 to 3 years), and renewal requirements. Some authorities recognise each other's certificates, some require their own audit. Renewal usually starts 60 to 90 days before expiry.
Pre-shipment inspection
An inspection of your goods before they leave your factory, usually arranged by the buyer or a customs authority.
Pre-shipment inspection (PSI) verifies that the goods match the purchase order in quantity, quality, and packaging. Some destinations require PSI by law (varies by country and product category). PSI reports are usually issued by accredited third-party inspectors (SGS, Bureau Veritas, Intertek).
Reorder cycle
The typical interval between repeat orders from the same distributor.
Snack and confectionery products typically reorder every 4 to 8 weeks. Ambient ingredients reorder every 8 to 12 weeks. Frozen and cold-chain products vary more widely depending on shelf life. Tracking your reorder cycles per distributor reveals which relationships are healthy (orders within expected cycle) and which are fading (delayed reorders).
Trade promotion fund
A contribution you make to your distributor's local marketing budget, expressed as a percentage of invoice value.
Trade promotion funds (also called co-op marketing, A&P, marketing development fund) typically run 2 to 8% of invoice value for new F&B brand launches, 1 to 4% for established brands. The fund pays for in-store activation, sampling programmes, listing fees, and digital marketing in the destination market. Without tracking per distributor, this spend disappears into overheads and quietly eats true margin.
Container Optimisation
Planning how cartons fit inside a 20ft or 40ft container to maximise space and minimise damage in transit.
A 20ft container holds roughly 28 cubic metres of usable space. A 40ft holds 58. Container optimisation matches your carton dimensions against the container, calculates the right loading orientation, and recommends dunnage (bracing material) to prevent cargo shifting in transit. Done well, you fit more cartons and reduce relabelling claims from damage.
Bill of Lading (B/L)
The shipping document issued by the freight carrier that serves as receipt of goods, contract of carriage, and title document.
The B/L is the most important shipping document. It proves the goods were loaded, defines who owns them in transit, and is required for the buyer to collect the container at destination. Original B/Ls are usually couriered. Electronic B/Ls (Telex Release or seaway bill) are increasingly common for trusted buyer relationships.
Packing List
A document detailing every carton in your shipment, including dimensions, weight, and product contents.
The packing list is used by customs at origin and destination to verify the shipment matches the commercial invoice. It also helps the buyer plan warehouse receipt and inspection. Mismatches between packing list and actual cargo cause customs holds and inspection delays.
Commercial Invoice
The invoice you send the buyer that customs uses to assess duty.
The commercial invoice declares the value of the goods, the Incoterm, the HS codes, and the country of origin. Customs at the destination uses this value to calculate import duty and VAT. Under-invoicing is illegal and triggers customs investigations and penalties.
Importer Portal
A shared workspace where you and your importer can see the same shipment status, documents, and certificates.
An importer portal replaces email back-and-forth with a single source of truth. Importer sees current shipment status, can download required documents, sees the certificate calendar, and tracks payment status. Reduces the operational load of managing multiple distributors across multiple markets.