Pack and Ship Services Industry Terminology

3PL (Third-Party Logistics)

Outsourced logistics provider offering warehousing, fulfillment, transportation, and returns management.

We moved peak-season fulfillment to a 3PL; The 3PL’s WMS integrates with our Shopify store; Our 3PL hit a 99% on-time ship SLA last quarter.

4PL (Fourth-Party Logistics)

Asset-light orchestrator that designs, manages, and optimizes the entire logistics ecosystem across multiple providers.

The 4PL rate-shops across our 3PL network; We hired a 4PL to design our omnichannel fulfillment; The 4PL manages KPI dashboards for all providers.

Accessorial Charges

Additional service fees applied by carriers for nonstandard services or conditions.

Invoice shows an address correction accessorial; LTL added a limited access delivery fee; DAS added 3.60 per parcel.

Address Validation

Automated verification and standardization of ship-to addresses to reduce failed deliveries and fees.

Address failed validation as missing apartment number; Validation flagged PO Box as ineligible for courier; Residential flag triggered DAS.

Advanced Shipping Notice (ASN)

Pre-shipment electronic notification detailing contents, packing, and arrival timing of a shipment.

Retailer requires ASN before delivery; ASN lists SSCC for each carton; DC rejected load due to missing ASN.

Air Waybill (AWB)

Contract of carriage and tracking document for air freight issued by an airline or forwarder.

Airline demanded corrected AWB weight; HAWB linked to the consolidator’s MAWB; AWB shows shipper’s declared value.

API (Application Programming Interface)

Programmatic interface enabling systems to exchange shipping rates, labels, events, and data.

We used carrier APIs for label generation; OMS calls API to rate-shop; Tracking API feeds our customer portal.

Bill of Lading (BOL)

Legal contract and receipt for freight transport specifying parties, cargo, and conditions.

Carrier refused pickup without signed BOL; BOL lists NMFC code for the product; Claims require the original BOL.

Bonded Warehouse

Secured facility authorized to hold dutiable goods in custody without immediate duty payment.

We staged inventory in a bonded DC; Goods transferred under bond to the FTZ; Duty paid when orders cleared to domestic.

Commercial Invoice

Primary international trade invoice used by customs to assess duties and taxes.

Customs requested a revised commercial invoice; Invoice shows DDP terms; Declared value must match the CI.

Consolidation

Grouping smaller shipments into a larger move to reduce cost and improve efficiency.

We consolidated orders at the cross-dock; Postal injection uses consolidation; Weekly export consolidation to the EU.

Customs Broker

Licensed agent who facilitates customs clearance and compliance for importers and exporters.

Broker filed our Section 321; Broker asked for product composition and HS codes; They cleared the shipment after providing a ruling.

Cutoff Time

Operational deadline to ensure a shipment makes the intended pickup, flight, or linehaul.

Our same-day cutoff is 2 p.m.; Missed the carrier dock cutoff; We moved the cutoff to match linehaul departure.

Dangerous Goods (Hazmat)

Hazardous substances subject to strict handling, packaging, and documentation regulations.

DG team applied Class 3 labels; Carrier rejected undeclared lithium batteries; DG shipper needed updated training.

De Minimis

Customs value limit permitting duty- and tax-free entry of low-value shipments.

Section 321 allows USD 800 de minimis into the U.S.; We split orders to stay under de minimis; Broker confirmed no VAT under local threshold.

Delivery Area Surcharge (DAS)

Extra parcel fee for deliveries to designated remote or extended service areas.

Cart shows DAS for rural destination; DAS applies to certain residential zones; Negotiated a lower DAS with our carrier.

Dimensional Weight (DIM Weight)

Billing method that converts package volume into a chargeable weight using a divisor.

18x14x10 in rated at 12 lb DIM; We moved to right-size packaging to reduce DIM; DIM factor changed to 139 for air.

Drop Shipping

Order fulfillment model where the seller does not stock goods but forwards orders to suppliers to ship.

Vendor drop-ships bulky items; We sync tracking from the drop-shipper; Drop-ship SLAs mirror our DC service.

Dunnage

Protective packaging used to secure and cushion goods in transit.

Swapped foam for paper dunnage; Added corner protectors and airbags; Dunnage reduced damages by 40%.

Electronic Data Interchange (EDI)

Structured, machine-to-machine exchange of business documents in standard formats.

Retailer mandates EDI 856; Our 214 feed updates tracking; EDI errors delayed the PO.

Export Declaration (EEI/AES Filing)

Required export information filed electronically with authorities for certain shipments.

Filed EEI for value over threshold; Forwarder handled AES filing; Shipment on hold pending ITN number.

Freight Class (NMFC)

Standard classification system that determines LTL rates according to commodity characteristics.

Reclassed from 150 to 125 due to density; BOL lists NMFC code 156600; Class impacts our LTL rates.

Fuel Surcharge

Index-based adjustment reflecting fuel price fluctuations applied to freight charges.

Fuel surcharge rose 3% this week; Our contract has a cap on fuel; Parcel fuel applies to ground and air.

Fulfillment Center

Warehouse optimized for order processing and parcel distribution.

New FC went live in Dallas; FC moved to zone 4 to cut transit; FC uses robots for picking.

Harmonized System (HS) Code

International nomenclature for classifying traded products for customs and statistics.

Updated HS code to 4202.92; Misclassification triggered a customs hold; Broker requested 10-digit HTS code.

Incoterms

Standard rules that define buyer and seller obligations in international delivery.

Quote is DDP to Paris; Supplier prefers FOB Shanghai; We shifted to DAP to avoid VAT prepayment.

Kitting

Process of assembling multiple items into a single SKU or package before picking.

Built gift kits ahead of peak; Kitting BOM added tissue and insert; QC rejects incomplete kits.

Landed Cost

All-in cost to bring a product to its final destination.

Landed cost analysis changed our pricing; Quoting DDP requires accurate landed cost; We modeled landed cost by lane.

Last-Mile Delivery

The end segment of delivery to the consignee’s address or pickup point.

Switched to crowdsourced last mile for same-day; Parcel locker reduced last-mile failures; Last-mile capacity was tight in Q4.

Liftgate Service

Equipment-assisted loading or unloading at the curb when no dock or forklift is available.

Added liftgate to residential LTL; Delivery delayed without liftgate; We negotiated a lower liftgate fee.

LTL (Less-Than-Truckload)

Freight mode for shipments too big for parcel but not requiring a full trailer.

Shifted heavy items to LTL from parcel; Our LTL uses pallets and PRO numbers; Transit time is 3 days zone to zone.

Manifesting

Process of finalizing and transmitting shipment data to carriers before pickup.

Missed manifest created invoice mismatches; EOD manifest sent via API; Driver scanned the consolidated manifest.

Multi-Carrier Rate Shopping

Comparing carrier options in real time to choose the optimal rate and service level.

Rate shopping chose regional over national; Dim cutover changed the winning carrier; We exclude services without Saturday delivery.

On-Time In-Full (OTIF)

Performance metric indicating whether deliveries meet schedule and quantity commitments.

Retailer fines for OTIF misses; New cutoffs improved OTIF; We track OTIF by lane and carrier.

Order Management System (OMS)

Software that captures, allocates, and routes orders across channels and locations.

OMS routes orders to the closest FC; Backorders managed in the OMS; OMS feeds WMS with picks.

Packing List

Document detailing what is inside each shipment or carton.

Customs asked for a signed packing list; DC matched cartons to the packing list; ASN aligns with the packing list.

Palletization

Arranging cases on pallets for efficient handling, storage, and transport.

Followed 48x40 GMA standards; Used corner boards and stretch wrap; Created Ti-Hi to optimize loads.

Parcel Audit

Systematic review of parcel bills to find and recover overcharges and service failures.

Audit recovered 2% of spend; Found duplicate residential fees; DIM corrections reduced costs.

Pick and Pack

Core fulfillment process of retrieving ordered items and preparing them for shipment.

Switched to batch picking for smalls; Added scan verification at pack; Auto-bagger sped up packs by 20%.

POD (Proof of Delivery)

Confirmation that a shipment was delivered and received.

Customer requested POD image; LTL claim denied without POD; Driver’s ePOD shows delivery at 10:42.

Rate Card

Contracted schedule of carrier rates, rules, and surcharges.

New rate card adds peak surcharges; Zones shifted in the 2025 card; We modeled savings under the revised card.

Reverse Logistics

Processes that move goods from customers back to the seller or a refurbisher.

Portal generates prepaid return labels; We triage returns for resale; Reverse logistics SLA targets 48-hour refunds.

SKU (Stock Keeping Unit)

Distinct product code used to manage inventory and fulfillment.

Consolidated variants under one SKU; WMS tracks lot and expiry per SKU; We cycle-count by SKU class.

Tracking Number

Carrier-assigned code that enables track and trace of a shipment.

Posted tracking to the order page; 1Z number shows out-for-delivery; LTL PRO used as tracking.

Transit Time

Duration a shipment spends in carrier networks between origin and destination.

We quoted 2-day transit for zones 2–4; Weather extended transit times; New DC reduced average transit by a day.

Transportation Management System (TMS)

Software that manages transportation planning, execution, visibility, and freight audit-pay.

TMS auto-tendered the load; We built a carrier scorecard in the TMS; TMS optimizes multi-stop routing.

Warehouse Management System (WMS)

Software that governs warehouse operations, inventory, and labor workflows.

RF-directed picking in the WMS; WMS triggered replenishment; Slotting optimized by the WMS.

White-Glove Delivery

High-touch delivery option for large or delicate items requiring special handling.

Sofa shipped white-glove with two-man crew; Added debris removal; Service includes room-of-choice delivery.

Zonal Pricing (Zones)

Distance-based pricing model where regions are grouped into zones that determine parcel rates.

Zone 8 is most expensive from our West Coast DC; We opened an East Coast node to lower zones; Label shows zone 4.

Zone Skipping

Strategy of bypassing intermediate sorting by moving consolidated shipments closer to the delivery zone before parcel induction.

We linehauled to a regional hub for injection; Zone skipping cut cost per parcel by 18%; Transit stabilized by avoiding multiple handoffs.