Ad valorem is a Latin term meaning "according to value." In the context of shipping and logistics, ad valorem refers to a type of additional charge or fee that is calculated as a percentage of the value of the goods being transported. It is commonly applied in international trade to determine customs duties or insurance premiums based on the declared value of the cargo. Ad valorem charges help ensure that the costs associated with shipping reflect the value of the goods, providing a fair and proportional assessment.