Freight and Logistics Terminology

What begins well, ends well.

Understanding Freight and Logistics Terminology

We have pulled from the US Department of Transportation a list of the most commonly used freight shipping and logistic terminology. The DOT terminology list should be your go-to resources for better understanding the industry's language. 

A

 

Agent - A person who transacts business on behalf of another person or company with full or limited decision-making authority. In shipping, an agent may supervise customs procedures, documentation, or insurance. This person may also receive a portion of any monetary gain from a transaction as payment.

 

Arrival Notice - An advice that the carrier or forwarder sends to the consignee advising of goods coming forward for delivery. Pertinent information such as bill of lading number, container number and total charges due from consignee etc, are included and sent to consignee prior to vessel arrival. This is done gratuitously by the carrier or forwarder to ensure smooth delivery but there is no obligation by the carrier or the forwarder to do so. The responsibility to monitor the transit and present himself to take timely delivery still rests with the consignee.

Axle Load - The axle load refers to the weight each axle puts on the nation's highways.

 

 

B

 

Backhaul - The process of a transportation vehicle (typically a truck) returning from the original destination point to the point of origin. A backhaul can be with a full or partially loaded trailer.

 

Bill of Lading - A transportation document that is the contract of the carriage containing the terms and condition between shipper and carrier.

 

Bottleneck - A section of a highway or rail network that experiences operational problems such as congestion. Bottlenecks may result from factors such as reduced roadway width or steep freeway grades that can slow trucks.

 

Average Annual Daily Truck Traffic (AADTT) - The total volume of truck traffic on a highway segment for one year, divided by the number of days in the year.
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Backhaul - The process of a transportation vehicle (typically a truck) returning from the original destination point to the point of origin. A backhaul can be with a full or partially loaded trailer.


Bill of Lading - A transportation document that is the contract of the carriage containing the terms and condition between shipper and carrier.


Bottleneck - A section of a highway or rail network that experiences operational problems such as congestion. Bottlenecks may result from factors such as reduced roadway width or steep freeway grades that can slow trucks.


Breakbulk Cargo - Cargo of non-uniform sizes, often transported on pallets, sacks, drums, or bags. These cargoes require labor-intensive loading and unloading processes. Examples of breakbulk cargo include coffee beans, logs, or pulp.


Broker - A person whose business it is to prepare shipping and customs documents for international shipments. Brokers often have offices at major freight gateways, including border crossings, seaports, and airports.


Bulk Cargo - Cargo that is unbound as loaded; it is without count in a loose unpackaged form. Examples of bulk cargo include coal, grain, and petroleum products.
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C


Capacity - The physical facilities, personnel, and process available to meet the product of service needs of the customers. Capacity generally refers to the maximum output or producing ability of a machine, a person, a process, a factory, a product, or a service.


Carrier - A firm which transports goods or people via land, sea or air.


Centralized Dispatching - The organization of the dispatching function into one central location. This structure often involves the use of data collection devices for communication between the centralized dispatching function, which usually reports to the production control department and the shop manufacturing departments.


Claim - Charges made against a carrier for loss, damage, delay, or overcharge.


Commodity - An Item that is traded in commerce. The term usually implies an undifferentiated product competing primarily on price and availability.


Common Carrier - Any carrier engaged in the interstate transportation of persons/property on a regular schedule at published rates, whose services are for hire to the general public.


Consignee - The receiver of a freight shipment, usually the buyer.


Consignor - The sender of a freight shipment, usually the seller.

 


Deadhead - The return of an empty transportation container back to a transportation facility. Commonly-used description of an empty backhaul.


Detention Fee - The carrier charges and fees applied when rail freight cars, ship, and carriers are retained beyond a specified loading or unloading time.


Direct to store - Process of shipping direct from a manufacturer’s plant or distribution center to the customer’s retail store, thus bypassing the customer’s distribution center.


Dispatcher - An individual tasked to assign available transportation loads to available carriers.


Distribution Center (DC) - The warehouse facility which holds inventory from manufacturing pending distribution to the appropriate stores.


Dock - A space used or receiving merchandise at a freight terminal.


Drop - A situation in which an equipment operator deposits a trailer or boxcar at a facility at which it is to be loaded or unloaded.


Durable Goods - Generally, any goods whose continuous serviceability is likely to exceed three years.

 

E

Exempt Carrier - A for-hire carrier that is free from economic regulation. Trucks hauling certain commodities are exempt from Interstate Commerce Commission economic regulation. By far the largest portion of exempt carrier transports agricultural commodities or seafood.

 

F


Flatbed - A trailer without sides used for hauling machinery or other bulky items.


For-hire Carrier - Carrier that provides transportation service to the public on a fee basis.


Freight All Kinds (FAK) - Goods classified FAK are usually charged higher rates than those marked with a specific classification and are frequently in a container that includes various classes of cargo.


Freight Forwarder - A person whose business is to act as an agent on behalf of a shipper. A freight forwarder frequently consolidates shipments from several shippers and coordinates booking reservations.

 

G


Gross Vehicle Weight (GVW) - The combined total weight of a vehicle and its freight.
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H


Hazardous Material - A substance or material which the Department of Transportation has determined to be capable of posing a risk to health, safety, and property when stored or transported in commerce.


Hours of Service - Ruling that stipulates the amount of time a driver is allotted to work.


Hub - A common connection point for devices in a network. Referenced for a transportation network as in "hub and spoke" which is common in the airline and trucking industry.

 



In-bond Shipment - A shipment status in which goods are permitted to enter a country and temporarily stored for transport to a final destination where the duty will be paid.
Inbound Logistics - The movement of materials from shippers and vendors into production processes or storage facilities.


Interline Freight - Freight moving from point of origin to destination over the lines of two or more transportation lines.


Intermodal terminal - A location where links between different transportation modes and networks connect. Using more than one mode of transportation in moving persons and goods. For example, a shipment moved over 1000 miles could travel by truck for one portion of the trip, and then transfer to rail at a designated terminal.


Inventory - The number of units and/or value of the stock of good a company holds.
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J


Just-in-Time (JIT) - Cargo or components that must be at a destination at the exact time needed. The container or vehicle is the movable warehouse.

 

L


Lead-time - The total time that elapses between an order's placement and it receipt. It includes the time required for order transmittal, order processing, order preparation, and transit.


Less-Than-Truckload (LCL/LTL) - A container or trailer loaded with cargo from more than one shipper; loads that do not by themselves meet the container load or truckload requirements.


Level of Service (LOS) - A qualitative assessment of a road's operating conditions.For local government, comprehensive planning purposes, level of service means an indicator of the extent or degree of service provided by or proposed to be provided by, a facility based on and related to the operational characteristics of the facility. Level of service indicates the capacity per unit of demand for each public facility.


Line Haul - The movement of freight over the road/rail from origin terminal to the destination terminal, usually over long distances.


Liquid Bulk Cargo - A type of bulk cargo that consists of liquid items, such as petroleum, water, or liquid natural gas.


Live Load -A situation in which the equipment operation stays with the trailer or boxcar while being loaded or unloaded.


Lock - A channel where the water rises and falls to allow boats to travel a dammed river.


Logbook - A daily record of the hours an interstate driver spends driving, off duty,

sleeping in the berth, or on duty not driving.


Logistics - All activities involved in the management of product movement; delivering the right product from the right origin to the right destination, with the right quality and quantity, at the right schedule and price.


Lumpers - Individuals that assist a motor carrier owner-operator in the unloading of property; quite commonly used in the food industry.

 

N

Neo-bulk Cargo - Shipments consisting entirely of units of a single commodity, such as cars, lumber, or scrap metal.


Node - A fixed point in a firm's logistics system where goods come to rest; includes plants, warehouses, supply sources, and markets.

 

O

OS&D - Over, short and damaged 
Report is issued at a warehouse when goods are damaged; the claim is usually filed with the carrier.


Outbound Logistics - The process related to the movement and storage of products from the end of the production line to the end user.


Owner-operator - Trucking operation in which the owner of the truck is also the driver.
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P


Placard - A label that identifies a hazardous material shipment and the hazards present.


Pool/Drop Trailers - Trailers that are staged at a facility for preloading purposes.


Point of Sale (POS) - The time and place at which a sale occurs, such as a cash register in a retail operation, or the order confirmation screen in an on-line session. Supply chain partners are interested in capturing data at the POS because it is a true record of the sale rather than being derived from other information such as inventory movement.


Private Carrier - A carrier that provides transportation service to the firm that owns or leases the vehicles and does not charge a fee.


Private Warehouse - A company owned warehouse.


Prepaid - A freight term, which indicates that charges are to be paid by the shipper. Prepaid shipping charges may be added to the customer invoice, or the cost may be bundled into the pricing of the product.


Proof of Delivery - Information supplied by the carrier containing the name of the person who signed for the shipment, the time and date of delivery, and other shipment delivery related information.


Purchase Order (PO) - The purchaser's authorization used to formalize a purchase transaction with a supplier. The physical form or electronic transaction a buyer uses when placing an order for merchandise.

 

R


Reefer Trailer - A refrigerated trailer that is commonly used for perishable goods.


Receiving - The function encompassing the physical receipt of material, the inspection of the shipment for conformance with the purchase order (quantity and damage), the identification and delivery to destination, and the preparation of receiving reports.


Return to Vendor (RTV) - Material that has been rejected by the customer or buyer's inspection department and is awaiting shipment back to the supplier for repair or replacement.

 

S


Seasonality - Repetitive pattern of demand from year to year (or other repeating time interval) with some periods considerably higher than others. Seasonality explains the fluctuation in demand for various recreational products, which are used during different seasons.


Shipper - Party that tenders goods for transportation.


Shipping Manifest - A document that lists the pieces in a shipment.


Supply Chain - Starting with unprocessed raw materials and ending with final customer using the finished goods.
 

T


Third-party Logistics (3PL) Provider - A specialist in logistics who may provide a variety of transportation, warehousing, and logistics-related services to buyers or sellers. These tasks were previously performed in-house by the customer.

 

Transit time - The total time that elapses between a shipment's delivery and pickup.
 

Truckload (TL) - Quantity of freight required to fill a truck, or at a minimum, the amount required to qualify for a truckload rate.
 

W

 

Warehouse - Storage place for products. Principal warehouse activities include receipt of product, storage, shipment and order picking.