I think just about everyone’s had that feeling at some point. But it’s easier to deal with when the conversation turns to a subject you know nothing about – maybe open heart surgery, theoretical astrophysics, or fantasy football stats.

The panic you feel when it’s a conversation in your own field, however, is so much worse. We want to help you get up to speed, and have an easy way to explain these global business acronyms to others.

If there are any acronyms that aren’t covered here, just let us know in the comments below and you may see them featured in a future article.

1. FTZ (Foreign/free trade zones)

FTZs are special areas created by countries, usually encompassing ports, where goods can be shipped, processed and stored duty-free, and then re-exported without additional charges. Duties must only be paid if the goods are moved from the FTZ into the rest of the country.

It is most commonly referred to as a foreign trade zone within the U.S., and a free trade zone in the rest of the world.

2. HS (Harmonized System, or Harmonized Commodity Coding and Description System)

HS is a system used to classify goods to determine what customs tariffs apply to it when exported or imported, as well as to gather statistics on international trade, monitor controlled goods and determine taxes. There are about 5,000 commodity groups, each of which has its own 6-digit code to identify and classify it. This system is used by over 200 countries and is applied to over 98% of merchandise shipped around the world.

3. IMF (International Monetary Fund)

Originally created in 1945, this global organization is headquartered in Washington DC and currently has 189 member countries. Each member contributes funds on an annual basis. Any country experiencing problems with their balance of payment is able to receive a loan from the IMF to resolve their issues, rather than having to reduce imports or drastically cut government spending. The organization also collects detailed statistics on the global economy to evaluate future economic changes.

The main difference between it and the World Bank is that while the IMF gives interest-free loans to many developing countries during crisis, aiding developing countries is not its primary mission. The World Bank, in contrast, is set up to provide loans to developing countries for programs intended to reduce poverty or help the poorest sections of their populations.

4. JIT (Just in time)

JIT is a methodology for inventory and manufacturing where materials or products are ordered as needed based on customer demand, rather than having stores of inventory ready in advance. Many have advocated for it because it reduces waste, and reduces storage and real estate needs for many companies, though it does require greater coordination between suppliers and businesses. While it runs the risk of shortages due to delayed shipments or errors, it is generally applauded for its efficiency.

5. L/C (letter of credit)

A letter of credit is a document that a person or company buying goods or services can ask a bank to create. It promises to whoever is selling the goods or services that a specified amount of money will be paid to them once the bank receives the requested documents – and within a certain time frame. It is also known as a documentary letter of credit or a documentary credit.

The bank has to pay the seller as long as all documents are presented according to specifications, so it’s one of the most common ways to guarantee payment in international trade transactions.

6. MOU (memorandum of understanding)

An MOU is a signed agreement between at least two parties detailing points of agreement which can be used to move forward with future partnerships, contracts or other forms of closer business relationship. MOUs are often not legally binding unless they meet specific criteria, which vary between countries, but can be used as the first step in creating a binding contract or agreement.

7. OECD (Organization for Economic Cooperation and Development)

The OECD is an organization of 35 countries, including many of the world’s most developed and prosperous economies. Its members are supporters of democracy and market economies, and work through the organization to promote economic prosperity and trade growth, among other issues. Along with providing economic data and predictions, the organization has played major roles in anti-bribery and anti-spam efforts, as well as advocating for greater openness in sharing financial data.

8. SWIFT (Society for Worldwide Interbank Financial Transactions)

SWIFT is the network through which banks transmit and receive financial transactions from one another. As a secure method used by over 9,000 different banks worldwide, it is the most common way for transactions to be sent to other banks. It does not, however, serve as a way to transfer money, but acts as a facilitator, communicating between banks.

9. TEUs (Twenty foot equivalent units)

TEUs are the standard unit of measure used to determine the capacity of cargo containers, or the ships and terminals which store or transport them. A standard cargo container is 20 feet long, or 1 TEU, and eight feet wide. Though the height of a container can vary, a 1 TEU container is usually about eight and a half feet tall.

Along with twenty foot containers, the other popular size is forty foot long (2 TEUs) containers. Forty foot containers are often used to ship goods by sea, and are the standard sized container shipped by semi-trailer (transport) trucks.

Forty five foot long containers are also used by some shipping companies, and confusingly are often measured as being 2 TEUs, rather than 2.25 TEUs.

10. USTR (U.S. Trade Representative)

This position within the U.S. government is the highest related to international trade. Along with overseeing around 200 employees in the Trade Representative Office, the USTR develops and recommends trade policies for the President, works to negotiate trade agreements and coordinates trade policies with other government departments.

The post Your guide to 10 global business acronyms you need to know appeared first on Trade Ready.

1. Around 14,000 ships per year pass through the Panama Canal.

The Panama Canal is a critical waterway that passes through a strategic isthmus in Panama. If it weren’t for this canal, large container ships would have to travel thousands of extra miles around the southern tip of South America in order to cross from the Atlantic to Pacific Ocean, or vice versa.

Such delays would dramatically slow down supply chains for many different industries. The fact that 14,000 ships can cut their journeys in half by travelling through the canal each year dramatically improves efficiency for companies shipping their goods through the area.

To speed things up even more, the canal is currently undergoing expansions, and will be able to handle even more traffic and larger ships as early as April 2016.

2. The largest container ships can carry over 19,000 Twenty-foot Equivalent Unit (TEU) Containers.

In recent years, companies have been competing to build a new class of “mega-ships,” in an effort to reduce shipping costs. These ships are so large that they almost look like mini floating sections of cities. The amount of goods they can carry is astronomical. Made with large steel hulls, these ships are extremely strong and seaworthy.

Currently, the world’s four largest container ships are owned by MSC (Mediterranean Shipping Company), each of which can hold up to 19,224 containers. Each twenty foot container can hold roughly 200 mattresses. So, 19,224 containers is the equivalent of one ship carrying 3,844,800 mattresses!

This total eclipses previous record holders like the Maersk Triple-E class, which could hold up to 18,270 containers, and more recently the CSCL Globe, which could hold up to 19,100 containers.

Cranes can load up all the containers in one port and unload them in another port. This prevents companies from having to use multiple ships or make two or more journeys to ship larger loads, making a major impact on supply chain efficiency.

3. Roughly 1.6 billion cups of coffee are consumed every day.

Coffee is a highly desired commodity around the world, currently being produced in over 70 countries. In fact, coffee is the second most consumed beverage in the world after water. There are over 100 million people who drink coffee in the U.S. every day. Many people who drink coffee like to drink it on a regular basis, so the demand remains high and relatively stable.

The top coffee producing countries in the world are Brazil, Vietnam, Colombia, and Indonesia. The top coffee consuming countries in the world are the U.S., Brazil, Germany, and  Japan.

It is the demand for commodities such as coffee that keeps trade bustling around the world. There are also large coffee chains, such as Starbucks, that operate internationally. This can provide brand consistency across many different regions and further strengthen the coffee trade.

4. Over 85 million new automobiles were sold around the world in 2014.

Similar to coffee, there is a lot of global demand for new automobiles. Automobiles tend to break down and become expensive to fix as time goes on, especially when parts for older models can be harder to access. So, many people simply choose to replace their vehicles every few years with newer models.

In 2013, global automobile sales surpassed the 80 million mark for the first time to reach 82.8 million, and further growth brought the 2014 total even higher. In February 2015, IHS Automotive predicted sales could surpass 88 million around the world by the end of the year.

Demand is likely to continue to increase as the middle class expands in China and other countries with growing economies. The Asia/Pacific region was home to 48% of automotive sales in 2014, with China serving as the world’s largest national market. 23 million vehicles were sold there in 2014, compared to 16.5 million in the U.S.

5. Maersk, one of the world’s largest internationally trading companies, conducts business in 130 different countries.

The Maersk Group is an incredibly important company for international trade. As a whole, the company has nearly 89,000 employees across the world. Its shipping division, Maersk Line, is the largest shipping company in the world and possesses some of the largest container ships in existence, such as the Maersk Triple E line.

Approximately 11 million containers move annually from point A to point B aboard a Maersk ship, and in 2012 the company estimated it had shipped $675 billion worth of goods.

The vast distances between many trading countries make shipping by plane, train, or trucks simply not feasible. For example, it would be very difficult to ship tremendous quantities of many products from Canada to Europe without the transportation services of companies like Maersk.

6. 90% of goods travel by sea.

The reason why so many goods travel by sea is because sea travel is typically cheaper and greener than other alternatives such as airplane transport. Also, container ships can hold far more goods on board than a plane can.

The oceans connect every continent in the world and serve as an excellent interconnected transport system. Oceans are not always calm, however, and the weather can sometimes present challenges to shipping by sea. However, modern container ships are built to withstand extremely strong storms.

Also, there is technology available today to help ships anticipate and steer clear of major storms. So the sea transport is still incredibly important for facilitating international trade.

7. The Port of Shanghai processed 35.29 million TEU Containers in 2014.

The port of Shanghai in China is the largest port in the world, and it processes an amazing amount of goods. In comparison, the ports of Los Angeles and Long Beach, the two largest in North America, combined to process nearly 11 million containers that year, less than a third than that of Shanghai. In fact, in 2014, the Port of Shanghai alone processed almost as many containers as every port in North America combined!

China has a very large manufacturing base and the Port of Shanghai helps to serve as a launching point for Chinese goods to be shipped all across the world. It’s not the only major port across the country, however, as seven of the ten busiest ports in the world in 2014 were located in China.

The United States and other prosperous countries are large consumers of Chinese manufactured goods. So Chinese ports, such as the Port of Shanghai, help China organize its exports to be loaded onto ships and then sent off to their destinations.

8. China exported over 2.3 trillion U.S. Dollars worth of goods in 2014.

In 2014, Chinese exports grew more slowly than expected, but still set a new national record. This made it the top exporter in world. China also has the largest population in the world, and that population has been in transition from an agricultural based economy to an industrial based economy for decades.

These large economic changes have helped expand its manufacturing base and its global exports. In fact, many companies around the world hire Chinese companies to produce products for them because of the high quality and efficiency of manufacturing in the country.

9. More than 38 million jobs in the U.S. alone depend on trade.

38 million jobs is quite an extensive amount. To put it into perspective, roughly 1 in 8.5 Americans, or more people than the entire population of Canada work in trade-based jobs. Many people may not realize that international trade jobs account for such a large percentage of the economy. However, when you consider that shipping, warehousing, supply chain management, transportation, law, retail, sales and many other fields are heavily involved with trade, it makes sense.

Import/export professionals may specialize in trade with one country or many different countries simultaneously. And regardless of which nation is in question, there is a good chance that international trade is critical to the healthy function of its economy.

Which of these global trade statistics surprised you most? If you have more, please add them in the comments!

The post 9 more incredible statistics that show the staggering scale of global trade appeared first on Trade Ready.