Glossary of Logistics Terms
Absolute Minimum Charge (AMC) : The minimum price a carrier will charge for any given shipment. The minimum charge after all pricing terms have been applied to a shipping order. This fee can include tax, assembly, equipment, and administration. This fee is calculated by the carrier and is the lowest they will charge for a specific shipment.
Accessibility : The ability of a carrier to provide service for a freight order.
Access Space : A passage used to access rack compartments and stacks. It is used for the purpose of counting materials.
Accessorial Charges : Fees added to a freight bill for additional services that the carrier might provide. These are a la carte, or per service, and outside of standard shipping and receiving. Fees levied by freight transportation carriers for services that go beyond standard pick-up and delivery. Accessorial charges or accessorial fees are usually applied when there is a need for additional labor, equipment, time, or fuel.
Active Block : Stacking the loads, which are worked on, and on/from which articles put/removed as required.
Activity-Based Costing : A method of expense management that identifies business activities performed, accumulates costs associated with these activities, and uses various cost drivers to trace costs of activities to the products.
Account-Specific Pricing : Customer-specific pricing, or account-specific pricing, refers to an agreement between a vendor moving product and a carrier or 3PL that establishes custom prices. Shippers who move volume above a certain threshold are eligible for a discounted rate because they give the carrier guaranteed business.
Ad Hoc Reporting : Custom-designed data queries that may be used to extract and manipulate customer's data; often a one-time inquiry.
ADR: ADR stands for "Accord Dangereux Routier," which translates to "European Agreement concerning the International Carriage of Dangerous Goods by Road. A standard that governs road transportation of combustible, inflammable and explosive materials, and that the vehicles and drivers are required to hold in order to carry these materials.
Classifications are as follows:
Class 1: Explosive substances
Class 2: Gases
Class 3: Flammable liquids
Class 4.1: Flammable solids
Class 4.2: Substances liable to spontaneous combustion
Class 4.3: Substances which, in contact with water, emit flammable gases
Class 5.1: Oxidizing substances
Class 5.2: Organic peroxides
Class 6.1: Toxic substances
Class 6.2: Infectious substances
Class 7: Radioactive substances
Class 8: Corrosive (acidic) substances
Class 9: Miscellaneous dangerous substances
Advanced Planning and Scheduling (APS) : Techniques that deal with analysis and planning of logistics and manufacturing over the short, intermediate, and long-term time periods. Typically, it accounts for the planning of demand, production, distribution, and transportation.
Advanced Shipment Notice (ASN) : A document sent from the shipper to the recipient before the departure of a shipment. An Advanced Shipment Notice (ASN) is a crucial document in supply chain management. It contains detailed information about a shipment, which includes product descriptions, lot numbers, packaging information, and expected delivery times. The document is often sent out via Electronic Data Interchange (EDI) - a standardized means of sharing information digitally. Typically, an ASN is sent as soon as the order is ready to be shipped out to notify the recipient of an upcoming delivery. Upon shipment arrival, the recipient can cross-check it with the ASN to check for any discrepancies.
Agency Tariff : A document published by a rate bureau that contains the rates charged for transportation services by its members. The tariff lists the origin and destination pairs for which each carrier will provide service, as well as the applicable rates.
Agile : The concept of having a flexible supply chain that allows for quick order fulfillment with short lead times and varying volume. Agile logistics strategies or Agile supply chains are designed to ensure responsiveness, competency, flexibility, and quickness to manage the constant dynamics in the market. The fundamental drivers of an agile supply chain are speed, cost, and efficiency.
Air Cargo or Air Freight : Transportation of goods and cargo via an air carrier. Goods are packed and then flown all around the world on commercial or charter flights.
Air Waybill (AWB) : A bill of lading for air transport that serves as a receipt for the shipper, indicates that the carrier has accepted the goods listed, obligates the carrier to carry the consignment to the airport of destination according to specified conditions. The cargo equivalent of a passenger ticket which means the document made out by or on behalf of the shipper. It evidences the contract between the shipper and the carrier(s) for carriage of goods over routes of the carrier.
Arrival Notice : A document that is issued out by a carrier that lets all relevant parties know when a shipment will arrive at a specified destination. Relevant parties include the shipper and the receiver of goods as well as truckers, customs brokers, and everyone else involved in the shipment of the item.
ATA : Actual Time of Arrival is the time that a vessel or any other mode of transportation is determined to arrive at its destination.
ATD : Actual Time of Departure is the exact time a vessel or any other form of transportation is dispatched from the point of origin.
Audit : In logistics, an audit refers to the process of examining, adjusting, and verifying freight bills for accuracy.
Backhaul : Refers to a truck’s return trip to its point of origin with either a partial or full load. They are also sometimes referred to as “deadheads” in the trucking industry. The transportation of goods or cargo on the return leg of a journey, typically after delivering a previous load.
Benchmark : In logistics, benchmarks refer to KPI thresholds set by an organization to measure supply chain performance.
Billing : A process typically performed by the carrier that determines the total charges for a completed order. The process of generating and sending invoices or bills to customers for products sold or services rendered.
Bill of Landing (BOL) : A legal document, issued by a carrier and passed to the shipping company, that details the type, quantity, and destination of the goods being carried. It accompanies the goods and needs to be signed by an authorised representative of the logistics company, shipper, and owner of the goods in transit.
Blank sailing : A scheduled sailing that has been cancelled by a carrier or shipping line so a vessel skips certain ports or even the entire route.
Blind Shipment : A shipping arrangement in which the identity of the sender is concealed from the recipient.
BOL Number : The number established by the carrier that refers to a specific BOL.
Bonded Goods : Goods on which the customs duty has not yet been paid, and which therefore, are under the control of customs; usually in a Bonded warehouse.
Bonded warehouse : A secure facility where goods are stored until customs duties are paid.
Book and claim : A process where airlines and logistics providers claim the environmental benefits associated with sustainable aviation fuel (SAF) even if they do not use SAF.
Breakbulk cargo : Oversized goods that do not fit into standard containers and must be loaded individually.
Bulk Cargo : Bulk cargo is a shipping term for items that are shipped loosely and unpackaged as opposed to being shipped in packages or containers. An item may be classified as bulk cargo if it is not containerized and easily secured on a vessel. Items such as oil, grain, or coal are all examples of bulk cargo.
Bunker Adjustment Factor : An additional charge levied on shippers to reflect the fluctuations in the cost of fuel.
Cab Extender : A piece of equipment used to seal the gap between cab and trailer. They are often used in cold weather climates.
Cabotage : The right to operate sea, air, or other transport services within a particular territory.
Capacity : In trucking, the term refers to available trucks in any given market. The amount of physical space, assets or personnel available to carry, store or deliver goods Conceptually speaking, tight capacity translates into a more difficult market that is more challenging to find a carrier willing to complete an order. Conversely, loose capacity translates into an easier environment that is easier to find a carrier.
Cargo : Cargo is another word for goods that are shipped or transported all around the world.
Cargo Load Factor (CLF) : The percentage of the vehicle’s cargo utilized.
Carmack Amendment : The piece of legislation that establishes carrier liability and BOL provisions.
Carriage : The transportation of goods or cargo from one location to another. It is however not as simple as it sounds as it includes other components such as loading, stowage, transportation, unloading and delivery.
Cartage : The process of transporting goods across short distances, usually via small vans or trucks.
Chargeable Weight : Chargeable weight, also referred to as volumetric or dimensional weight (DIM), is a billing practice that considers both the size and weight of a shipment to determine the freight cost. “Whichever is greater” (or “carrier’s choice”) is a phrase to remember when calculating the cost of moving goods by air, ocean, road or rail. That’s because the carrier will always look at two different measurements – the actual weight and the volumetric weight of your shipment – and then base their chargeable weight calculation on the larger figure.
Claim : Freight claim can be defined as a legal demand by the consignee or a shipper to a carrier for financial reimbursements. This happens if the shipment has been lost or damaged. Freight claim is also knowns as cargo claims, transportation claims or shipping claims.
Class (Freight Class) : Freight class or National Motor Freight Classification (NMFC), is a standardized way of classifying less-than-container load (LCL) freight shipments based on certain characteristics. For ocean shipping, cargo freight class is determined based on a variety of factors, including value, weight, length, density and more.
Class Rates : Class rates are a way to group items together for shipping purposes. The freight rates that apply to all the items in the group are called “class rates.” This makes billing simpler and can be helpful when shipping a lot of items at once.
Co-Packer : A contracted partner that packages and labels products on behalf of its client.
Co-Manufacturer (Co-Man) : A third-party partner that produces goods from raw materials or semi-finished materials on behalf of its client.
Collect Shipping : A type of billing that charges the consignee with freight costs rather than the consignor.
Commercial Invoice : A commercial invoice is a document that contains the date and invoice number, the shipper’s and buyer’s details, name and description of the goods, quantity, price, delivery method and banking details.
Commodity : A commodity refers to a basic good used in commerce that is interchangeable with other goods of the same type. These goods are usually produced in large quantities by various producers and can include products like grains, metals, and oil.
Common Carrier (Carrier) : A private or public entity that transports goods or people from one place to another for a fee.
Compliance : In retail logistics, the term that refers to the regulations set by retailers for delivery of goods into their supply chain.
Consignee : The consignee is the final recipient of the shipment, usually a customer or client of the consignor. They could be a product assembler, a retailer, or the end user. The consignee is considered the importer of record in international shipping.
Consignment : It is essentially a shipment of goods that a consignor (the sender) sends to a consignee (the receiver).
Consignor : The consignor is the person, business, or organization that originally ships the product. The consignor originates the shipment and, when shipping internationally, serves as the exporter of record. Often, a consignor is a manufacturer, a distributor, or a drop ship warehouse hub.
Consolidation : The combination of multiple shipments on a single order or shipment. This process is most commonly used to lower transportation costs or improve supply chain performance.
Container : A large box used to transport freight via maritime shipping methods. A container is the name given to the metal box or object that is used for transporting some goods. Goods are physically contained within the box, hence the name!
Container Freight Station : A facility where goods can be consolidated before being shipped.
Container ID : The identification system provides uniform international identification of containers, in documentation and in communication associated with the movement of containers from door to door.
Container Yard (CY) : A Container Yard (CY) is a designated area within a port or terminal where containers are stored before they are loaded onto a ship or released after being unloaded. These yards serve as crucial nodes in the transportation network, facilitating the efficient handling, storage, and transfer of cargo containers. Carriers pick-up cargo from these designated spaces.
Contract Carrier : Carriers hired by shippers on a contract basis. A transportation carrier that serves specific customers under contract with one or a limited number of customers as opposed to a common carrier, which transports freight for the public.
Contract Rates : A contract rate is the rate a motor carrier, freight broker or logistics service provider (LSP) agrees to use when moving a shipper's freight for a set lane and its freight characteristics over a set period of time. In most cases, contract rates are set for a one year period. These are rarely upheld as rates fluctuate with market demand and capacity.
Courier : A courier typically transports small commercial goods and packages on behalf of a customer.
Cross-Docking : The practice of unloading goods from inbound delivery vehicles and loading them directly onto outbound vehicles
Cumulative Lead Time : The total time needed to source material, produce goods, and ship a product to its destination.
Customer Pick-Up (CPU) : Collect – Commonly referred to as customer pick-up (CPU) or FOB, the retailer assumes responsibility for moving goods from the supplier to their distribution centers. The supplier quoted price does not include transportation costs and typically starts with factory pricing plus a margin.
Customs : Customs is a government department that regulates the imports and exports for that specific country. The customs department also collects duties levied on imported goods.
Customs Broker : A customs broker, sometimes referred to as a customs agent or a customs services provider, is a company contracted to make sure the customs declaration is correct, duties and taxes are provided accurately, and payment is received so that goods can transit across borders smoothly and without disruption.
Customs Brokerage : The service provided by licensed professionals with the necessary knowledge of rules and regulations to manage customs clearance.
Customs Clearance : Customs Clearance is the process of taking goods through a country’s customs authority, either to import or export the goods in a legal manner.
Daigou : A person who facilitates the buying and selling of international products on behalf of a customer in mainland China
Dashboard : A logistics dashboard is a simple interface that displays real-time metrics about key information relating to things like our inventory levels, supply chain, fleets, shipping, fulfillment, vendors, or other logistics management issues. The key word here is real-time.
Data center logistics : Specialized processes in which equipment, components, and resources involved in a data center environment are moved, stored, and deployed.
De minimis : A value below which goods can be shipped into a country before duties & taxes are assessed.
De Minimis Threshold (DMT) : Most countries set a threshold under which it does not claim duties. In the US, for instance, the DMT is US$800 (€702.70). This means that goods valued at US$800 or less can enter the US without incurring taxes.
Deadhead : Refers to the empty miles traveled without a load in a trailer. A truck traveling with a trailer attached but no cargo.
Dead on Arrival : In logistics, the term used to describe product that is damaged upon delivery to its destination.
Declared Value for Carriage : refers to the monetary value assigned to goods by the shipper during transportation. This value is crucial in determining the carrier's liability in case of loss or damage to the goods in transit. This amount is declared on a BOL.
Deconsolidation : A component of the distribution process whereby cargo shipments are broken down into smaller units and processed for delivery.
Delivery Appointment : is a scheduled agreement between a logistics provider and a customer that specifies the exact date and time for the delivery of goods. This practice helps ensure that deliveries occur when customers can receive them, thus enhancing operational efficiency and customer satisfaction.
Demurrage : Additional charges incurred when freight is unloading past its specified time. Used in rail and maritime transport. A charge imposed by shipping lines on merchants who do not pick up the containers on time.
Density : Density is often expressed as pounds per cubic foot (lb/cu ft). To calculate the density rate, simply multiply the total weight of the shipment by the density. The metric is used to establish pricing for a transported order.
Detention : The time the containers spend outside the terminal. Measured between picking them up at the port when they’re full and returning them to the port or a depot when they’re empty. For an importer, this is usually the time to unpack. Container Detention refers to the time a container spends outside of the port. If the consignee holds on to the carrier's container beyond the allowed free time, detention fees will be imposed. In other words, a detention charge is applied when the container has not returned to the carrier on time.
Dispatch : Dispatch logistics is a stage in the logistics supply chain where the shipment is prepared with steps such as packing, labelling, and tracking its movement till the end destination. Dispatch logistics jobs often involve roles like a logistics dispatcher or logistic coordinator, who oversee these tasks to maximize efficiency and customer satisfaction.
Distributor : A third-party that purchases products to resell to a retailer.
Distribution Center : A distribution centre is any logistics building, space or construction designed to receive and ship different types of goods. A specialized warehouse that serves as a hub to store finished goods. Those goods will then be redistributed to retailers, wholesalers, or directly to consumers.
Drayage : Drayage is a type of freight transportation that moves goods over short distances, usually by truck. This usually occurs within the same geographical area, typically from a port to a nearby storage or distribution centre. Drayage moves shipping containers or cargo over a short distance, helping goods transition smoothly between transportation modes, such as from a ship to a train or truck.
Drop Shipping : A retail fulfillment method in which an online store does not keep goods in stock, but sells a product by shipping it directly from a third-party supplier to customer.
Drop Trailer : A “drop trailer” is a trailer truck that's left, or “dropped”, at the shipper's facility. It can then be unloaded or loaded by the receiver as needed.
Dunnage : Packing material used to protect & secure goods from damage during transport.
Elastic Logistics : The flexibility to expand or reduce capabilities to accommodate changing demands within the supply chain.
Electronic Data Interchange (EDI) : An exchange of information or documents electronically between companies.
Exception Rate : A situation in which a rate does not follow the set class rate. It refers to deviations or changes made to the classification of goods for shipping purposes. These exceptions are necessary to ensure accurate pricing, proper handling, and compliance with regulations.
Expedited Shipment : The rapid delivery of a product from its origin to its destination. It is defined as the moving of shipments at an accelerated rate or priority. Expedited shipping often refers to overnight or two- to three-day delivery and is more costly than standard shipping.
Exports : Exports are defined as the sending of goods or services to a country not of their origin.
FIATA : FIATA stands for the International Federation of Freight Forwarders Associations, and it is a membership-based organisation that represents freight forwarders in over 150 countries.
First Mile Delivery : Movement of products from a production facility to a warehouse or courier managing delivery to the end user.
First-In, First-Out (FIFO) : An inventory management strategy that requires product to be used in chronological order from its arrival to a facility.
Flatbed : A type of trailer that has no enclosed area. A flatbed, also known as a stake body or flatbed body, is a swap body for trucks - an exchangeable load carrier that can be attached to a truck. Flatbeds are used primarily in intermodal road and rail freight transport because they can be transferred from road to rail particularly safely, quickly and efficiently.
Flexitank : A bladder pouch or bag that can be filled with bulk liquids and fitted into a standard-sized shipping container.
Flexibility : The ability of a supply chain to react quickly and efficiently to changing customer demands.
Free on Board (FOB) : Used to decide who is liable for goods that are damaged during shipment. A term specifying the point at which the buyer or the seller is responsible for the good being transported.
For-Hire Carrier : For-hire carriers provide transportation services for a fee. In trucking and logistics, a for-hire carrier is a company paid to transport goods from one location to another. The carrier operates under a contract or agreement with a shipper or consignee.
Freight : Like cargo, freight is defined as goods that are shipped or transported all around the world.
Freight-All-Kinds (FAK) : Pricing strategy that bundles multiple freight classes into a single class. A pricing system that combines different classes of shipments into a given classification to be transported as a single shipment at a fixed rate.
Freight Bill : A freight bill is an invoice from a transportation provider to a shipper for the cost of transportation services for a freight shipment.
Freight Collect : Freight collect is a popular payment term, used most often by large volume carriers or those sending shipments to many different locations (particularly different states and countries), as it helps to improve cash flow and allow greater control over shipping schedules. In a ‘freight collect’ payment, freight charges are billed to the party receiving a shipment, often called the consignee, rather than the party sending it over. Basically, the person that ‘collects’ the shipment at the end has to pay for the cost of its transit. The party that ships the goods will negotiate the terms of this payment before the shipment is sent out, which should be recorded in the purchase order, contract, online invoices, or shipping documents that accompany the freight. The specific shipping terms are noted on the freight bill, which documents the freight collect arrangement.
Freight Forwarding : Freight forwarding is a service moving goods around the world on behalf of importers and exporters. Specialising in moving goods, freight forwarders also arrange customs clearance of goods, maintain all documentation, and oversee cargo packing.
Freight Prepaid : A freight billing method in which the shipper pays transportation costs. Prepaid freight refers to a shipping arrangement where the shipper pays shipping charges in advance and includes them in the overall cost of the goods.
Fuel Surcharge (FSC) : Additional fee for fuel that is sometimes added as a line item on invoices when a carrier lines this charge out separately from their base rate. An extra fee charged by the transport company to cover the fluctuating cost of fuel.
Full Container Load (FCL) : FCL, or full container load, is where an entire container is taken up by a single consignment.
Full Truck Load (FTL) : FTL, or full truck load, is where an entire truck is taken up by a single consignment.
General Agreement on Tariffs and Trade (GATT) : A multilateral agreement that aims to minimize barriers to international trade.
General Average : A legal principle of maritime law where vessels and cargo owners share the incurred losses proportionately following a maritime accident.
Goods : Goods is another word for cargo that is shipped or transported all around the world.
Green Logistics : Business practices aimed at minimizing the environmental impacts of the logistics industry.
Gross Weight : Gross weight represents the combined shipment weight and all its packaging materials, including the container's weight. Laden weight, also known as gross weight, refers to the total weight of the cargo when all components are combined. In other words, it is the total weight of a product and its packaging. Gross weight simply means the total weight of a load. In shipping, gross weight include the weight of the actual product being transported and the package used in wrapping it. Gross weight calculation depends on the type of transport system. The difference in the meaning of gross weight, based on the type of transport system is:
- For air transport, gross weight is the summation of the aircraft, fuel, crew, passengers and cargo weights.
- For rail & road transport, it is the summation weights of the actual goods and the wagon or vehicle.
- For waterway transport, it is either the weight of the product and package or the container weight.
Groupage : Groupage is a method whereby ‘bundles’ of goods are shipped and delivered together, prior to being broken back down for onward travel or storage.
Handling Costs : It refer to the types of costs associated with preparing and transporting inventory. Mostly, the cost cover expenses related to order fulfilment such as shipment and packaging cost.
Haulage : Haulage primarily refers to the transportation of goods or cargo from one place to another. This is usually done by railway or by road, on a large vehicle like a truck or a lorry.
HMRC : HMRC is the UK’s tax, payments and customs authority, responsible for collecting the money that pays for the UK’s public services, such as the NHS.
HS Code (Harmonized System) : A standardized system for classifying goods that are shipped around the world. Commonly used throughout the import and export process for the classification of goods.
Humanitarian logistics : The branch of logistics that specializes in organizing and delivering humanitarian aid to people affected by emergencies or natural disasters
IATA : IATA stands for the International Air Transport Association, and it is a trade association that represents 300 airlines. Member shipments equate to over 80% of total air traffic.
Imports : Imports are defined as the bringing of goods or services into a country not of their origin.
Inbound Logistics : Refers to the transportation and storage of incoming goods into your supply chain. The process through which goods and materials are transported from a manufacturer to a business.
Incoterms : ‘Incoterms’ is the short and snappy way of saying International Commercial Terms. First published way back in 1936, they’re a set of 11 rules defining who’s responsible for what during international transactions. A requirement on every single commercial invoice, they greatly reduce the risk of potentially costly misunderstandings.
Insetting : Directly reducing or removing carbon emissions from a company’s supply chain or operations.
Insurance : Insurance is an arrangement between 2 (or more) parties. It guarantees that compensation is paid upon the loss or damage of specifically insured goods.
Intermodal Transportation : The transportation of freight by two or more modes i.e., using rail shipping and over-the-road shipping for a singular shipment.
Joint Rate : A rate of a route that requires two or more different carriers to transport shipment. It is a pricing mechanism where two or more carriers agree on a single rate for transporting goods over a specified route. This collaborative approach allows for seamless transportation of shipments without the need for multiple rate negotiations or separate billing.
Just in Time (JIT) : A logistics strategy aimed at minimizing storage costs and improving efficiency. For the model to work, goods are delivered exactly when they are needed
Key Performance Indicator (KPI) : In logistics, KPIs are critical metrics that highlight the performance of your supply chain.
Landed Costs : The cost of product combined with additional logistics costs. It can be defined as the total cost of getting a product from the factory to a customer's door. It includes shipping fees, insurance, and any customs and duties due if the goods cross borders.
Lead Logistics Partner (LLP) : A fourth-party logistics provider who manages and directs all aspects of a supply chain on behalf of a client. The lead logistics provider oversees all supply chain processes — including transportation management, supervision of warehouse operations, freight billing audit, and customs services— allowing companies to focus on their core business operations.
Lead Time : It is the planned time from pick-up to delivery.
Less than Container Load (LCL) : LCL loads are where a container contains multiple shipments. The shipments are separated upon arrived at their destination.
Less than Truck Load (LTL) : A shipment mode that consolidations several smaller shipments on a single truck. LTL, is where a truck contains multiple shipments. The shipments are separated upon arrival at one, or multiple destinations.
Liftgate : Rear-end attached equipment that allows freight to be lifted from the ground to the truck.
Line-Haul : In logistics, linehaul or line haul shipping simply refers to the transportation of freight/goods from one point to another by land, air, or waterways. It could also occur between two cities and even two countries. The weight and volume of the freight could vary from small packets of documents to heavily loaded pallets. Line haul refers to the transport of goods by any means of transport by land, air or water between two specified stations.
Load Tender : Load tenders allow a shipper or broker to offer cargo to multiple carriers in order to secure the best rates available. Load tendering in logistics happens when shippers submit a request for carriers to transport their goods. The load tender document includes information such as the type of goods, quantity, pickup location, delivery destination, and timeline.
Logistics : Logistics is the planning and controlling of the flow of goods and cargo moving from the point of origin to its final destination. Logistics encompasses various elements including inventory management, warehousing, order processing, packaging, transportation planning and distribution.
Lumper Fee : Lumper fees are the charges assessed for unloading the cargo from a truck. And since lumpers are often third-party entities, it isn't the warehouse or distribution company's responsibility to ensure that a warehouse lumper is paid. When a carrier or broker hires a lumper service, the driver pays the lumper fee to get the truck unloaded. The lumper fee is reimbursable to the driver by the carrier or broker.
Manifest : A manifest is a document that contains the contents of a container for the purpose of shipping goods by land, road, sea or rail.
Marine insurance : Marine insurance specifically covers the loss of damage of goods and cargo being shipped by sea or ocean freight.
Market Demand : In trucking, this refers to the need for freight services.
Material Safety Data Sheet : A supporting document detailing the safety and health information of all materials and substances in your shipment.
Micro-fulfillment : The concept of placing small-scale warehouse facilities in accessible urban locations that are close to the end-consumer
Mileage Rate : A rate that is determined by the number of miles an order is shipped. It is calculated by multiplying the total distance (in miles) by the applicable rate per mile.
Multimodal logistics : The movement of freight using multiple modes of transportation, but through just one contract and operator
Must-Arrive By Date (MABD) : The date set by retailers that specifies when a vendor must have a product delivered to their receiving facilities. It represents the specific date a shipment must reach a retailer, and it's a pivotal performance metric in the world of big-box retail.
National Motor Freight Classification (NMFC) : It is a standard that provides a comparison of commodities moving in interstate, intrastate and foreign commerce. A tariff that puts all products that can be hauled as freight into 18 different classes, numbered 50 to 500. Every commodity has both a freight class and a NMFC code.
Network Analysis : The careful analysis of a logistics network. They are designed to analyze warehousing, transportation, and other means of distribution.
NVOCC (Non-Vessel Operating Common Carrier) : A company that transports goods under its own House Bill of Lading, or equivalent documentation, without operating ocean transportation vessels.
Ocean Freight : Ocean Freight is a method of transporting goods and cargo via cargo ships. Goods are packed into containers and then shipped all around the world.
On-Time In-Full (OTIF) : A standard by which retailers’ grade a supplier’s ability to have product delivered to their distribution centers within prescribed delivery windows and at full quantities ordered.
Order : A shipment of goods.
Out Of Gauge (OOG) : It refers to goods that are larger than a typical shipping container. These type of shipments are often described as an abnormal loads.
Outbound Logistics : Outbound logistics a supply chain process of storing, transporting, and delivering your goods to the end customers.
Outsource : The process of using a third-party to complete functions that were previously performed in-house.
Over-the-Road (OTR) : Over-the-road trucking is also referred to as long-haul trucking. This term refers to the mode of transportation that requires drivers to run from one coast to the next over interstate borders. Some over-the-road truckers even cross international borders to pick up and deliver loads.
Owner-Operator : A truck driver who has (at least some level) of ownership over their business while simultaneously operating a truck. They sell their services directly to shippers and/or lease their equipment and services to a motor carrier company.
Packing List : A packing list is a document used in international trade which describes how the goods are packaged. It itemizes the contents of each package (box, pallets, etc). It includes weights, measurements and detailed lists of the goods in each package.
Pallet : The platform that product is stacked and wrapped on for transportation. Typically a wooden base for packing goods on, ready for shipping. Pallets come in a variety of sizes, and can be made of plastic, or even cardboard.
Parcel Shipping : Parcel shipping refers to shipping lighter, smaller boxed items. Typically, parcel means packages that weigh 70kg per piece or less and can be moved without assistance. If you need to ship a few small packages at a time, parcel shipping is an economical way to ship your products.
Per Diem : Per diem charges, also known as 'detention', is a fee that an ocean carrier or shipping line charges for each day exceeding the number of free days a container spends away from the port. This acts as a penalty for holding onto a container for too long.
Phytosanitary Products : Phytosanitary products include milk, flowers, seeds and any product with an animal origin, including vehicles and machinery that has been used for agricultural or forestry purposes.
Pick and Pack : Refers to the process of picking product and then immediately packing it into shipping containers. It is a fulfillment process where items are selected (picked) from inventory and then placed in a box (packed) for shipping.
Pool Distribution : A shipping strategy that stocks multiple vendors’ orders in an optimally located warehouse before sending out shipments via shortened LTL delivery methods.
Port : A port is the location where ships load and unload goods that have been transported by sea freight. Ports are typically located in towns and cities, with good road or rail networks, ready for the onward transport of the goods.
Port of Discharge : The port where an order is unloaded.
Port of Entry : A maritime entry for goods into a country. When shipping goods to a foreign country, the port of entry is where you are required to provide customs clearance to ascertain legal entry
Port of Loading : The port where cargo is loaded onto a vessel. The location where cargo and containers are loaded onto a shipping vessel, marking the beginning of its maritime journey.
Postcode : A Postcode is a mix of letters and number used in the delivery process to establish a delivery area.
Proof of Delivery (POD) : Documented information supplied by the carrier that specifies who signed for the shipment, when it arrived, and any other information. It acknowledges a delivery has been completed. This document is typically signed, either physically or digitally, and is kept by the retailer or manufacturer to prove the delivery was made.
Purchase Order (PO) : A document that specifies the details of a transaction between buyer and supplier.
Rail Freight : Rail Freight is the process of transporting goods and cargo by train.
Real-Time : In logistics, this term refers to a shipper’s ability to track an order as it progresses from origin to destination.
Receiving : The physical receipt of a transported order. Receiving is the function encompassing the physical receipt of material, the inspection of the shipment for conformance with the purchase order, etc.
Receiving Dock : At a receiver’s facility, the dock is the place where goods are unloaded.
Reefer : A Reefer container is one of sixteen types of shipping containers used in freight forwarding. A reefer shipping container is an abbreviated term for a refrigerated container and they are equipped with refrigeration units that are connected to the power supply on board the ship being used to transport them.
Refrigerated Transport : Refrigerated Transport is a mode of transporting goods that need to remain chilled, frozen or remain at a controlled temperature during transit.
Request for Proposal (RFP) : Refers to the process of bidding your freight lanes out to transportation providers for an upcoming period of time.
Request for Quote (RFQ) : Another term for a transportation RFP.
Retail Buyer : A person who purchases products from vendors on behalf of a retail outlet. A professional who plans, manages, and selects goods to be sold in retail stores to ensure their own company's competitiveness with other retailers.
Retailer : A business that buys products from suppliers to sell to end-users.
RHA (Road Haulage Association) : RHA is a member-led association that supports businesses and people working in road transport.
Road Freight : Road Freight is the process of transporting goods and cargo by road using vehicles. This could be by transporting cargo in a Heavy Goods Vehicle (HGV), like a lorry, all the way down to a small van.
RoRo (Roll-on/Roll-off) : involves rolling cargo onto specialized vessels. Vehicles such as cars, trucks, and heavy machinery can be driven onto the ship's deck using ramps. The cargo is securely stowed and fastened to prevent movement during transit. RoRo ships are designed with large open decks to accommodate a variety of vehicles. This shipping method is commonly used for automobiles, construction equipment, and oversized cargo.
Routing Guide : The process in which a shipper determines which carrier will move a product based on completed RFPs. In logistics, routing guides are used to determine the most efficient way to ship goods from one location to another.
Scalability : How quickly a supplier can increase productivity to meet rising demand.
Scorecard : A tool used by retailers to grade their suppliers’ ability to deliver product on-time and in-full.
Sea Freight : Another name for Ocean Freight, a method of transporting goods and cargo via cargo ships. Goods are packed into containers and then shipped all around the world.
Shipment : A shipment is defined as the moving of goods from one location to another. The term applies to all modes of transport.
Shipper : The originator of a shipment. A shipper (also known as a consignor) is a person or a company responsible for organising and transporting goods from one point to another.
Shipping Lanes : A shipping lane is a route the is regularly used by commercial ships in the transport of goods from one country to another.
Short Shipment : An order which is incomplete or missing agreed-upon parts. A short shipment describes the absence, non-delivery, or incomplete fulfillment of cargo on a shipping list.
Spot Market : The trucking market that exists for shipments with little lead time or notice. In logistics, "spot market” refers to the market for transportation services arranged on short notice, or in other words, “on-the-spot".
Supplier : A seller of goods. In a channel of distribution, the supplier manufactures goods and transfers them to the distributors.
Supply Chain : The supply chain is the actual network of suppliers that deliver products from raw materials to end customers.
Supply Chain Visibility : Refers to the ability to identify and isolate key metrics within the supply chain.
Tariff : Taxes assessed by a government on goods leaving or entering a country.
Tender : A tender is a formal proposal or request issued by a company, and sometimes government, to suppliers. A logistics tender is when shippers request carriers to quote for their business (shipping their goods) using an 'invitation to tender'. The shipment and transport data is prepared before the invitation to tender so carriers can see how much and what type of cargo the shipper wants to transport and on which lanes.
Tender Rejection : A situation that occurs when a carrier rejects a shipper’s tender forcing them to find an alternative carrier. A tender rejection occurs when a carrier refuses a load offer from a shipper. In general, as capacity tightens and tender rejections increase, spot rates tend to move up, and vice versa.
Third-Party Logistics Provider : A third-party firm that provides logistics services for customers. A company that moves, stores and manages the flow and distribution of products, materials and goods.
Traceability : In shipping, this term refers to real-time or close to real-time location tracking. It consists of tracking an item's journey, from manufacturing to customer delivery. The objective is to ensure quality, safety and compliance with regulations. In industries such as food, pharmaceuticals and chemicals, traceability is essential for maintaining product integrity and safety.
Trailer : A trailer is another term for a vehicle that is used to transport goods and cargo.
Trailer Drop : Trailer drops or drop trailer, is a trailer that is left at a specific location for a period of time. The trailer is dropped at a particular facility which is to be picked up by another truck at a later time.
Transportation Management System (TMS) : TMS is a logistics platform that uses technology to help businesses plan, execute, and optimize the physical movement of goods, both incoming and outgoing, and making sure the shipment is compliant, proper documentation is available. This kind of system is often part of a larger supply chain management (SCM) system. TMS provides visibility into day-to-day transportation operations, trade compliance information and documentation, and ensuring the timely delivery of freight and goods. Transportation management systems also streamline the shipping process and make it easier for businesses to manage and optimize their transportation operations, whether they are by land, air, or sea.
Transportation Mode : The method by which goods are transported. In logistics, there are four main modes of transportation: ocean, road, rail, and air.
Velocity : Supply chain velocity is the speed at which a supply chain moves from start to finish, from placing an order through production, distribution and consumption of goods. Supply chain velocity directly impacts a supply chain's efficiency.
Vendor : A vendor is a company or an individual that supplies goods or services. This term is also referred to as the supplier.
Vessel : A vessel is another word for a ship or a boat used for transporting goods and cargo.
Visibility : Visibility is the ability to monitor the status of products and related parts as they move along the supply chain.
Wagon : A wagon is another term for a vehicle that is used to transport goods and cargo. Usually a vehicle used for transporting goods by rail.
Warehouse : A warehouse is a building where materials are stored. This could be raw materials or goods that have been manufactured ready for sale.