Logistics Companies Industry Terminology

ABC Analysis

Inventory categorization method that segments SKUs into A (high value/low count), B (moderate), and C (low value/high count) to focus effort where it matters most.

- We performed ABC analysis and moved A items to forward pick locations - The client wants cycle counts weekly for A items and quarterly for C items - ABC results drove our safety stock targets

Accessorial Charges

Fees billed in addition to base freight for extra services (e.g., liftgate, inside delivery, residential, limited access, detention).

- The LTL invoice included accessorials for liftgate and appointment delivery - We negotiated a lower detention accessorial in our carrier contract - Misclassifying a shipment triggered a reweigh and an accessorial charge

Advanced Shipping Notice (ASN)

Pre-shipment electronic notice (often via EDI 856) that details what’s shipping and when, enabling receiving, cross-dock, and appointment planning.

- The retailer requires an ASN before scheduling a delivery - ASN mismatches caused receiving delays and chargebacks - We automated ASN generation from the WMS at pack-out

Air Waybill (AWB)

Non-negotiable transport document and contract of carriage for air freight, issued by the airline or forwarder; includes shipper, consignee, routing, and charges.

- The export team attached the MAWB and HAWB to the customs entry - Wrong AWB routing led to a missed connection - The shipper reference is printed on the AWB for traceability

Backhaul

The return leg of a transport movement where capacity can be sold at a discount to improve asset utilization.

- We filled the backhaul with paper rolls to lower empty miles - The carrier offered backhaul rates from Dallas to Atlanta - Backhaul opportunities helped us cut cost per mile by 12%

Bill of Lading (BOL)

Legal document serving as receipt of goods, evidence of contract of carriage, and document of title (negotiable for ocean); required for pickup and delivery.

- The consignee refused delivery due to discrepancies on the BOL - The driver needed three signed copies of the BOL - A clean B/L was presented to the bank to release payment

Breakbulk

Cargo handled as individual pieces or bundles rather than in containers; also the operation of deconsolidating a container into smaller shipments.

- The project used breakbulk for oversized turbines - We’ll breakbulk the inbound container and ship parcel to stores - Breakbulk handling requires extra stevedoring and gear

Carrier

Company that transports goods (truckload, LTL, parcel, ocean, air, rail) under a contract of carriage.

- We onboarded two additional LTL carriers to improve service - The ocean carrier announced a schedule blanking - Carrier selection is automated by our TMS rating engine

Cold Chain

End-to-end temperature-controlled logistics for perishables or pharmaceuticals, including packaging, transport, storage, and monitoring.

- Data loggers confirmed the cold chain stayed between 2–8°C - We used reefers and thermal blankets for the lane - A lane risk assessment flagged two cold-chain breakpoints

Consignee

The party to whom goods are delivered; named on the BOL/AWB and responsible for receiving and, in imports, often for customs clearance.

- The consignee arranged final-mile delivery - The carrier requires consignee contact for appointment - The consignee of record paid the import duties

Consolidation

Combining multiple shipments into a larger load (LTL-to-TL, small parcel to pallet, LCL in ocean) to reduce cost and improve utilization.

- We consolidated three POs into one FTL - The forwarder offered weekly LCL consolidation to Hamburg - Parcel consolidation cut our per-package cost by 25%

Cross-Docking

Transferring products directly from inbound to outbound vehicles with minimal or no storage, reducing dwell time and handling.

- The DC runs a nightly cross-dock for store replenishment - Late ASNs disrupt cross-docking plans - Cross-docking helped us hit early morning delivery windows

Customs Broker

Licensed intermediary who files entries, classifies goods, pays duties/taxes, and manages compliance to clear imports/exports.

- Our broker corrected the HS code to avoid penalties - The broker’s ACE filing released the freight - We issued a POA to the customs broker for entries

Demurrage

Charge for keeping containers or cargo inside the terminal past the free-time period; assessed by the ocean carrier/terminal.

- Port congestion led to heavy demurrage bills - We extended free time to avoid demurrage on reefers - Visibility to earliest return date helped cut demurrage

Detention

Fee for holding a carrier’s container or trailer outside the terminal past free time, or keeping a driver waiting at pickup/delivery (driver detention).

- Two-hour loading delay incurred driver detention - We returned the empty late and paid container detention - New SOPs reduced detention by speeding gate-in/gate-out

Dimensional Weight (DIM)

Pricing method that charges by the greater of actual weight or volume-based weight (length × width × height divided by a DIM factor).

- The parcel was billed at DIM, not actual weight - We redesigned packaging to reduce DIM charges - TMS auto-calculates DIM for LTL quotes

Distribution Center (DC)

Warehouse focused on receiving, storage, order fulfillment, and value-added services for downstream distribution.

- The retailer’s DC requires delivery appointments - We shifted volume from the Midwest DC to the East Coast DC - The DC added kitting as a value-added service

Drayage

Short-haul trucking of containers between port/rail ramps and nearby warehouses or yards.

- Port strikes spiked drayage rates - We secured a bobtail for same-day drayage - Chassis shortages constrained drayage capacity

Electronic Data Interchange (EDI)

Standards-based system-to-system document exchange (e.g., X12 204, 214, 856; EDIFACT) replacing manual communication.

- EDI 214 status updates feed customer portals - ASN EDI errors caused chargebacks - We complemented EDI with APIs for real-time visibility

Estimated Time of Arrival/Departure (ETA/ETD)

Predicted arrival and departure timestamps used for planning, appointment setting, and performance tracking.

- The carrier revised ETA to 14:00 - ETD slipped due to documentation issues - We measure forecast accuracy of ETAs by lane

Fill Rate

Percentage of demand or order lines fulfilled from available inventory on the first shipment.

- Fill rate dropped after the promo - We target 98% line-fill for A SKUs - Backorders hurt our customer fill rate KPI

Freight Forwarder

Intermediary that arranges transportation, consolidates cargo, prepares documentation, and manages door-to-door logistics; may act as NVOCC in ocean.

- Our forwarder booked space during peak season - The forwarder handled export clearance and AES - We use one forwarder globally to standardize SOPs

Free Trade Zone (FTZ)

Designated area where goods can be stored/processed with deferred, reduced, or eliminated duties until they enter the domestic market.

- Kitting in the FTZ avoided inverted tariffs - We deferred duty by holding imports in the FTZ - Customs audits our FTZ inventory annually

General Rate Increase (GRI)

Across-the-board base rate hike announced by ocean carriers, often monthly or quarterly, impacting contract and spot rates.

- A transpac GRI of $600/FEU hits next week - We advanced sailings to avoid the GRI - The GRI was mitigated by our rate caps

Harmonized System (HS) Code

Standardized tariff classification used worldwide to determine duties, controls, and statistics.

- Misclassification of the HS code triggered penalties - The broker requested the 10-digit HTSUS code - Engineering provided specs to support HS classification

Incoterms

International commercial terms (e.g., EXW, FOB, CIF, DDP) defining seller/buyer responsibilities for delivery, risk, and costs.

- We sell DDP to simplify the buyer’s experience - Under FOB, the buyer arranges main carriage - The quote compares CIF and FCA terms

Intermodal

Freight moved via multiple modes using the same load unit (e.g., container) without handling the contents; often rail plus truck.

- We converted truck to rail intermodal to cut emissions - Drayage connects the intermodal ramp to our DC - Intermodal transit is longer but cost per mile is lower

Just-in-Time (JIT)

Lean strategy that minimizes inventory by synchronizing deliveries with consumption or production.

- JIT parts arrive hourly to the assembly line - Disruptions forced us to buffer JIT with safety stock - Carriers must meet tight JIT delivery windows

Key Performance Indicator (KPI)

Quantifiable metric used to measure performance against targets (e.g., OTIF, cost per shipment, dwell time, damage rate).

- Our OTIF KPI improved to 96% - We dashboard tender acceptance as a carrier KPI - Quarterly business reviews analyze KPI trends

Last Mile

Final leg from a local hub to the customer; complex and costly due to density, time windows, and service expectations.

- We switched to gig-economy couriers for last mile - Saturday delivery improved last-mile NPS - Route density is key to last-mile profitability

Less-than-Truckload (LTL)

Network-based service for shipments that don’t fill a trailer; priced by class, weight, distance, and accessorials.

- We reclassed the freight to lower LTL costs - The carrier uses hub-and-spoke LTL terminals - LTL transit is 2–5 days depending on lanes

Letter of Credit (LC)

Bank instrument guaranteeing payment to the seller upon presentation of compliant documents (e.g., B/L, invoice, packing list).

- The LC requires a clean on-board bill of lading - Discrepancies in the LC documents delayed payment - The forwarder helped structure the LC terms

Manifest

Official list of cargo, containers, or parcels loaded on a vehicle or vessel; used for planning, billing, and customs reporting.

- The carrier transmitted the manifest to customs - A manifest hold stopped the container at the terminal - We reconciled WMS shipments with the outbound manifest

Non-Vessel-Operating Common Carrier (NVOCC)

Ocean transport intermediary that issues its own house bill of lading and purchases capacity from vessel-operating carriers.

- The NVOCC filed the tariff and issued the HBL - Our NVOCC consolidated LCL freight weekly - Using an NVOCC gave us flexible space during peak

On-Time In-Full (OTIF)

KPI measuring whether deliveries arrive by the committed time and with complete quantities; widely used by retailers.

- OTIF penalties applied for two late POs - We segment OTIF by lane and customer - Inventory accuracy is key to improving OTIF

Order Management System (OMS)

Platform that captures orders, allocates inventory, orchestrates fulfillment, and provides status across channels.

- OMS routed the order to the closest DC - We enabled ship-from-store via the OMS - The OMS integrates with TMS and WMS for execution

Proof of Delivery (POD)

Evidence that goods were delivered, often a signed delivery receipt, photo, GPS timestamp, or electronic confirmation.

- The driver uploaded ePOD within minutes - Missing PODs delayed invoicing - The SLA requires photo POD for unattended deliveries

Radio-Frequency Identification (RFID)

Auto-ID technology using tags and readers to identify and track items, cases, or pallets without line-of-sight.

- RFID improved cycle count accuracy to 99% - We tagged returnable totes with RFID - Retail mandates RFID on apparel SKUs

Reverse Logistics

Processes for moving goods from customers back to the seller or manufacturer for returns, repair, refurbishment, or recycling.

- We set up a reverse logistics hub for e-commerce returns - Grading and disposition rules cut reverse costs - Carrier pickups are scheduled via the returns portal

Safety Stock

Buffer inventory held to absorb demand and supply variability, set using service targets, variability, and lead times.

- Safety stock increased ahead of peak season - We use service-level optimization to set buffers - Supply volatility forced a temporary safety stock uplift

Service Level Agreement (SLA)

Contracted performance commitments (e.g., pickup reliability, transit time, ePOD timeliness) often with credits or penalties.

- The 3PL missed its SLA on dock-to-stock - We added an uptime SLA for the TMS - SLA scorecards drive quarterly reviews

Supply Chain Visibility (SCV)

Near-real-time insight into orders, inventory, and shipments across partners and modes through EDI, APIs, and telematics.

- SCV flagged a customs hold before ETA - We use geofencing for predictive ETAs - The control tower provides end-to-end visibility

Twenty-Foot Equivalent Unit (TEU)

Standard unit for containerized capacity and throughput, based on a 20-foot container; 1 FEU equals about 2 TEU.

- The terminal handled 1.2M TEU last year - Our allocation is 300 TEU per month - Rates rose $500/TEU on the transpacific

Transportation Management System (TMS)

Software that plans, optimizes, executes, and settles freight across modes; includes rating, tendering, tracking, and analytics.

- The TMS auto-tenders loads based on carrier score - Route optimization in the TMS cut miles by 8% - We reconciled freight audit and pay through the TMS

Transloading

Moving goods from one conveyance or container type to another (e.g., ocean container to domestic trailer) often changing load configuration.

- We transload at LA and ship inland via rail - Bulk grain was transloaded to hopper cars - Transloading reduced inland dray and chassis fees

Truckload (TL)

Full trailer capacity shipments priced mainly by market per-mile or per-load rates with point-to-point service.

- We converted LTL to TL once volume hit the threshold - TL rates spiked due to tight capacity - The load required a team-driver TL for speed

Unit Load Device (ULD)

Standardized air cargo containers and pallets that allow efficient loading and securing of freight on aircraft.

- We booked PMC ULDs for the pharma move - ULD availability constrained uplift - The airline billed us for a damaged ULD

Value-Added Services (VAS)

Additional services provided by 3PLs/DCs beyond storage and shipping (e.g., kitting, labeling, light assembly, returns processing).

- VAS rework fixed mislabeled cartons - Seasonal VAS included gift-wrapping - We priced VAS separately in the RFP

Warehouse Management System (WMS)

Software that manages warehouse workflows such as receiving, putaway, slotting, picking, packing, and cycle counting.

- The WMS wave plan improved picker productivity - We integrated scanners with the WMS for accuracy - WMS-directed putaway shortened travel time

Yard Management System (YMS)

System for managing trailers, containers, yard inventory, and dock scheduling to reduce dwell and improve gate throughput.

- The YMS assigned dock doors dynamically - Yard checks moved from manual to RFID via the YMS - Appointment scheduling in the YMS cut congestion