Freight Agents and Brokers Industry Terminology

3PL (Third-Party Logistics)

A company that manages transportation and related logistics services for shippers, often including brokerage, LTL consolidation, and warehousing.

-Our 3PL manages all outbound TL and LTL and provides a single invoice. -The shipper routed the load through its 3PL’s TMS. -We onboarded a new 3PL to improve OTIF performance.

4PL (Fourth-Party Logistics)

A strategic integrator that designs and orchestrates the entire supply chain, managing multiple 3PLs and carriers, often asset-light and vendor-neutral.

-The retailer hired a 4PL to run its control tower and manage all providers. -Our 4PL aggregates rates and capacity across several 3PLs. -The 4PL owns no trucks but manages the network end to end.

Accessorial Charges

Fees for services beyond basic linehaul, such as detention, layover, liftgate, driver assist, redelivery, lumper, TONU, and appointment fees.

-The carrier billed detention and a lumper accessorial. -Make sure accessorials are preapproved on the rate con. -Accessorial disputes delay carrier settlement.

API (Application Programming Interface)

A software interface that connects systems (e.g., TMS, carriers, load boards) to automate tenders, tracking, rates, and documents in real time.

-We use APIs for instant carrier tracking and POD retrieval. -The shipper’s portal pushes tenders via API to our TMS. -Spot pricing is returned through a rating API.

Backhaul

The return leg to a carrier’s home market; often priced lower than headhaul due to imbalanced freight flows.

-That Dallas to Atlanta lane is a backhaul for Southeast carriers. -We found backhaul capacity to reduce the rate. -Offer this as a backhaul to the Chicago carrier base.

Bill of Lading (BOL)

The contract of carriage and receipt for goods; lists shipper, consignee, terms, description, and is required for pickup and delivery.

-Ensure the driver leaves with the correct BOL. -The BOL did not list the NMFC, causing an LTL reclass. -Use a blind BOL to hide the shipper from the consignee.

Blind Shipment

A shipment where one or more parties’ identities or locations are concealed via a blind BOL, often to protect pricing or sources.

-Issue a blind BOL so the receiver doesn’t see the origin. -The customer requested a double-blind shipment. -Carrier must present the blind paperwork at delivery.

BMC-84 / BMC-85 Surety Bond

FMCSA financial responsibility filings for brokers. BMC-84 is a $75,000 surety bond; BMC-85 is a $75,000 trust fund. Required to operate as a broker.

-Verify the broker’s BMC-84 is active before tendering. -Our BMC-85 trust is on file with FMCSA. -The bond protects shippers and carriers from nonpayment.

Cabotage

Transport of domestic freight by a foreign carrier within a country; restricted by law (e.g., within the U.S.).

-Canadian carriers cannot perform U.S. cabotage without compliance. -That move would be cabotage; use a U.S.-authorized carrier. -Cabotage rules affect cross-border routing options.

Capacity

The supply of available trucks, drivers, containers, and equipment. Tight capacity raises rates; loose capacity lowers them.

-Capacity is tight ahead of the holiday; expect spot premiums. -We need to grow our carrier base to increase capacity. -The lane is capacity-constrained due to weather.

Cargo Claim

A demand for compensation for loss, damage, or delay to cargo. Domestic motor claims generally fall under the Carmack Amendment.

-File a cargo claim within the carrier’s deadline. -Photos and notations on the BOL support the claim. -The insurer denied the claim due to improper packaging.

Carrier

An authorized motor carrier that transports freight (asset-based or owner-operator). Brokers contract with carriers to move loads.

-We tendered the load to a vetted carrier. -The carrier’s safety rating is satisfactory. -Build relationships with core carriers by lane.

Carrier Packet

Onboarding documents required to set up a carrier: W-9, MC authority, insurance certificates, SCAC (if applicable), and broker-carrier agreement.

-Accounting can’t pay without a completed carrier packet. -Make sure the insurance COI in the packet shows cargo limits. -The packet includes our quick-pay terms.

Chassis

A wheeled frame used to haul intermodal containers to and from ports and rail ramps.

-The dray provider requested a 40-foot chassis. -Chassis shortages at the port caused delays. -The rate includes chassis and flip fees.

Chassis Split

Picking up a container and chassis at different locations, often incurring a split fee.

-Add a chassis split accessorial to the dray rate. -The chassis pool is off-terminal, so expect a split. -Congestion forced a chassis split to meet the cutoff.

Consignee

The party receiving the goods at delivery.

-Confirm consignee hours and appointment requirements. -The consignee refused due to packaging damage. -Update the consignee with the revised ETA.

Consignor (Shipper)

The party tendering the goods for transport; the origin.

-The consignor requires a 24-hour pickup notice. -Load count and seal were verified by the shipper. -The shipper requested driver assist loading.

Cross-Docking

Moving product from inbound to outbound trucks with little or no storage to reduce dwell and speed transit.

-We cross-docked imports to avoid warehouse backlog. -The 3PL’s cross-dock combined LTL shipments into a multi-stop TL. -Cross-docking cut lead time by two days.

CSA (Compliance, Safety, Accountability)

FMCSA program that scores carriers on safety metrics (BASICs). Shippers and brokers use CSA data when vetting carriers.

-Review CSA scores during carrier onboarding. -Elevated CSA in Hours-of-Service triggered a safety plan. -The shipper’s routing guide excludes carriers with poor CSA.

Customs Broker

A licensed professional or firm that clears imports and exports through customs, handling filings, duties, and compliance.

-The customs broker filed the ISF before vessel departure. -Duties were advanced by the broker to avoid holds. -Coordinate drayage after the customs broker releases the freight.

Deadhead

Miles driven empty between loads. Excess deadhead reduces carrier profitability and affects pricing.

-Minimize deadhead by matching backhauls. -There’s 80 miles of deadhead from the driver’s last stop. -Higher rate requested due to heavy deadhead.

Detention

A time-based fee when loading or unloading exceeds contracted free time (often 2 hours for TL).

-Carrier billed two hours of detention at delivery. -Make sure the BOL shows in and out times for detention. -Detention must be preapproved per the rate con.

Dimensional Weight (DIM)

A pricing method that uses cubic size to calculate a billed weight (LxWxH/Dim factor), common in parcel and LTL.

-The LTL invoice shows a higher DIM weight than actual. -Repack to reduce DIM and avoid reclass. -The carrier uses a 139 DIM divisor for parcel.

Drayage

Short-haul movement of containers between ports/ramps and nearby warehouses, often involving chassis, fees, and appointments.

-Book drayage to pull the box before last free day. -Port congestion extended dray turn times. -Include chassis and pier pass in the dray rate.

Drop and Hook

A trailer operation where a driver drops an empty or loaded trailer and hooks to another, reducing dwell versus live loading.

-The DC prefers drop and hook to speed turns. -We staged drop trailers for weekend pickups. -Drop and hook requires sufficient yard space and trailers.

EDI (Electronic Data Interchange)

Standardized, structured data exchange between systems. Common transactions: 204 (tender), 214 (status), 210 (invoice), 997/999 (acknowledgment).

-The shipper sends 204 tenders via EDI. -We transmit 214 tracking updates every two hours. -The 210 EDI invoice failed due to a mapping error.

ELD (Electronic Logging Device)

A device that records drivers’ Hours of Service electronically; required for most U.S. interstate carriers.

-ELD limits prevent adding a second pickup today. -Request an ELD screenshot to confirm drive time. -The carrier is ELD exempt under the short-haul rule.

Expedite (Hot Shot)

Time-critical shipping using dedicated vehicles (sprinter vans, straight trucks, teams) with minimal dwell and fastest transit.

-Book an expedite to meet the MABD. -The plant line-down requires hot shot service. -We quoted a team expedite for overnight delivery.

Factoring

Financing where a carrier sells its receivables to a factor for early payment, minus a fee; brokers may receive NOA (notice of assignment).

-Send the payment to the factor per the NOA. -The carrier uses non-recourse factoring. -Factoring helps small carriers manage cash flow.

FAK (Freight All Kinds)

An LTL pricing arrangement that groups different commodities into a single freight class for rating simplicity.

-The contract includes an FAK from classes 55 to 125. -FAK reduces reclass risk across mixed SKUs. -The carrier denied FAK for hazmat items.

FMCSA (Federal Motor Carrier Safety Administration)

U.S. agency regulating interstate trucking and brokerage, including operating authority, safety rules, and broker bonds.

-Check FMCSA SAFER for the carrier’s MC status. -Our broker authority is active with FMCSA. -FMCSA audits focus on HOS and drug/alcohol compliance.

Fuel Surcharge (FSC)

A variable fee added to linehaul to offset diesel price fluctuations, usually indexed to DOE weekly averages.

-The contract rate is $2.10 plus FSC. -FSC rose 3 cents this week per the DOE index. -Some spot quotes are all-in without a separate FSC.

Hazmat

Hazardous materials requiring special handling, packaging, placards, and driver endorsements; regulated by DOT/PHMSA.

-Verify hazmat endorsement and placards before pickup. -Hazmat loads often require team or route restrictions. -The SDS must travel with the shipment.

HOS (Hours of Service)

Regulations that limit driving and on-duty time (e.g., 11-hour drive, 14-hour on-duty, 30-minute break, 60/70-hour weekly limits).

-HOS won’t allow a same-day round trip. -Plan for a rest break to stay HOS compliant. -ELD data shows HOS remaining for the driver.

Incoterms

International commercial terms defining responsibilities, risk transfer, and cost allocation between buyer and seller (e.g., EXW, FOB, CIF, DDP).

-Under FOB Origin, the buyer arranges inland transport. -DDP requires the seller to handle duties and delivery. -Clarify Incoterms before quoting dray and inland rates.

Intermodal

Moving freight using multiple modes under one bill of lading (commonly rail plus truck), leveraging containers and standardized equipment.

-We converted long-haul TL to rail intermodal. -Intermodal adds a day of transit but reduces cost. -Ensure dray capacity at both ramps for intermodal.

Lane

A defined origin-to-destination pair used for pricing, routing, and carrier procurement.

-What’s your contract rate on the ATL to ORD lane? -Build a core carrier base by lane. -Lane volatility is high in produce season.

Last Mile

The final delivery segment to the end customer or retail location, often requiring appointments, liftgates, or inside delivery.

-Last-mile white glove service includes room-of-choice. -Our last-mile partner handles residential delivery windows. -Expect accessorials for last-mile retail deliveries.

LCL (Less than Container Load)

Ocean freight consolidation where multiple shippers share a container; rated by w/m (weight or measure).

-We booked LCL for a small export to Rotterdam. -LCL transit is longer due to consolidation. -Destination charges for LCL are billed separately.

Load Board

An online marketplace where brokers post loads and carriers post capacity; includes spot pricing, credit, and compliance tools.

-Post the hot load on the load board with live tracking. -Check the broker’s credit score on the board. -The load-to-truck ratio is spiking on this board.

Load Tender

A formal offer of a shipment to a provider (shipper-to-broker or broker-to-carrier), via EDI, API, email, or portal.

-The 204 EDI tender hit our TMS at 09:00. -We declined the tender due to equipment mismatch. -Auto-tender to primaries, then waterfall to backups.

Lumper

Third-party unloading labor at warehouses or grocery DCs; carriers often pay and seek reimbursement with a receipt.

-The driver paid a $250 lumper fee at delivery. -Include the lumper receipt with the invoice. -Preauthorize lumper charges on this account.

LTL (Less Than Truckload)

A network model consolidating multiple shipments on a single truck, priced by class, weight, distance, and density.

-Choose LTL for pallets under 10,000 lbs. -The LTL carrier reclassed the freight for density. -Use a pallet count and NMFC on the LTL BOL.

MC Number

FMCSA-assigned operating authority identifier for carriers and brokers in interstate commerce.

-Verify the carrier’s MC number and insurance. -Our broker MC number appears on the rate con. -The MC is inactive; do not tender.

NMFC (National Motor Freight Classification)

A standard that assigns LTL freight classes based on density, handling, stowability, and liability.

-Include the correct NMFC item and class on the BOL. -Misstated NMFC led to a reclass charge. -FAK agreements can override specific NMFC classes.

OS&D (Over, Short, and Damage)

Exceptions where freight is over-delivered, short, or damaged; must be notated at delivery to support claims.

-Note OS&D on the POD with photos. -The consignee reported OS&D due to crushed cartons. -OS&D trends indicate packaging issues.

POD (Proof of Delivery)

Signed delivery document (paper or electronic) confirming receipt; required for invoicing and claims.

-Upload the POD to close out the load. -The ePOD includes timestamp and GPS. -No payment without a clear POD image.

Rate Confirmation (Rate Con)

The broker-to-carrier load contract that states the rate, accessorials, commodity, stops, and terms.

-Send the rate con before dispatching the driver. -The rate con shows detention at $50 per hour. -Any changes must be reflected on the revised rate con.

RFP (Request for Proposal)

A formal bid event where shippers solicit carrier or broker rates and capacity commitments for specified lanes and service levels.

-The annual RFP covers all North American lanes. -We submitted multi-stop TL rates in the RFP. -Post-RFP, tenders follow the routing guide waterfall.

TMS (Transportation Management System)

Software that plans, tenders, tracks, settles, and analyzes freight across modes; core platform for brokers and shippers.

-The TMS automates API tracking and EDI billing. -Build routing guides and waterfall logic in the TMS. -Analytics in the TMS show tender acceptance and cost per mile.