Glossary


Shipping systems come with a whole set of
nomenclature here are a few common terms to help.


Accessorial Charges

A carrier’s charge for accessorial services such as liftgate, two-person crew, and inside delivery.

Advanced Shipping Notice (ASN)

Detailed shipment information transmitted to a customer or consignee in advance of delivery, designating the contents (individual products and quantities of each) and nature of the shipment. In EDI data standards this is referred to as an 856 transaction. May also include carrier and shipment specifics including time of shipment and expected time of arrival.

Air Waybill (AWB)

A bill of lading for air transport, which serves as a receipt for the shipper, indicates that the carrier has accepted the goods listed, and obligates the carrier to carry the consignment to the destination, according to specified conditions.

Barcode

A symbol consisting of a series of printed bars representing values. A system of optical character reading, scanning, and tracking of units by reading a series of printed bars for translation into a numeric or alphanumeric identification code. A popular example is the UPC code used on retail packaging.

Batch Processing

A computer term, which refers to the processing of computer information after it has been accumulated in one group, or batch. This is the opposite of “real-time” processing, where transactions are processed in their entirety, as they occur.

Bill of Lading (BOL)

A transportation document, which is the contract of carriage. It contains the terms and conditions between the shipper and carrier.

Blanket Rate

A rate that does not increase according to the distance the commodity is shipped.

Carrier

A firm that transports goods or people via land, sea or air.

Certificate of Origin

An international business document that certifies the country of origin of the items in the shipment.

Cloud Computing

An emerging computing paradigm where data and services reside in massively scalable data centers, and can be ubiquitously accessed from any connected devices over the internet.

Collect Freight

Freight payable to the carrier at the port of discharge or ultimate destination. The consignee does not pay the freight charge if the cargo does not arrive at the destination.

Commercial Invoice

A document created by the seller. It is an official document that is used to indicate, among other things, the name and address of the buyer and seller, the product(s) being shipped, and their value for customs, insurance, or other purposes.

Commodity Code

A code describing a commodity or a group of commodities pertaining to a goods classification. This code can be carrier tariff or regulating in nature.

Consignee

The party to whom goods are shipped and delivered; the receiver of a freight shipment.

Consignor

The party who originates a shipment of goods (shipper); the sender of a freight shipment, who is usually the seller.

Consolidation

Combining two or more shipments in order to realize lower transportation rates. Inbound consolidation from vendors is called make-bulk consolidation; outbound consolidation to customers is called break-bulk consolidation.

Country of Origin

The country of manufacture, production or growth from where a product comes.

Cube

The volume of the shipment or package. Calculation: length x width x height

Dangerous Goods

Articles or substances classified as posing significant health, safety, or environmental risk, which ordinarily require special attention, including packaging and labeling when stored or transported.

Dashboard

A performance measurement tool used to capture a summary of the Key Performance Indicators (KPIs)/metrics of a company.

Declaration of Dangerous Goods

A special notice to inland and ocean transport companies when goods are hazardous, required by U.S. law.

Declared Value

The value of the goods, declared by the shipper on a bill of lading, for the purpose of determining a freight rate or the limit of the carrier’s liability. Also used by customs as the basis for calculation of duties, etc.

Deficit Rating

An LTL pricing decision whereby a shipper chooses to pay for an artificially-inflated weight due to the decreased per-pound rate at the next higher weight-break, rather than the rate for the actual shipment’s actual weight.

Dimensional Weight

The calculation of a packages weight, based on the dimensions of the package, as opposed to its physical weight. Calculated by multiplying length x height x width (in inches), and then dividing by a dimensional factor, often depending on the packages destination (i.e. domestic vs. international). This is as of January 1, 2017, UPS dimensional factors of 166 and 139 depending on the package size and FedEx uses a dimensional factor of 139; however based on typical box sizes and products being shipped, companies may negotiate a more favorable dimensional factor with the carriers.

Drop Ship

A customer fulfillment strategy where products are shipped directly from the manufacturer or distributor to a customer, bypassing the retail or secondary distribution location. Intended to expedite delivery and reduce handling costs. Billing transactions occur in the normal manner, only altering the material flow.

Dunnage

The materials used in packaging, holds and containers to protect goods from damage.

Electronic Banding

The grouping (via computer sorting and consolidation) of individual packages and shipments going to a single location, into a single aggregate shipment, to obtain the lowest consolidated shipping cost. An example would be shipping via UPS Ground service to a client throughout the day, and at carrier closeout, consolidating any packages/shipments that qualify into UPS Hundredweight. This eliminates the need to stage or manually consolidate carrier shipments to qualify for lower “Shipment-Based Pricing”, and the consolidation is processed as an accounting change within the shipping software.

Electronic Data Interchange (EDI)

Inter-company, computer-to-computer transmission of business information in a standard format. An EDI transmission consists only of business data, not any accompanying verbiage or free-form messages.

Enterprise Resource Planning (ERP) System

A class of software for planning and managing “enterprise-wide” the resources needed to take customer orders, ship them, account for them and replenish all needed goods according to customer orders and forecasts. Often includes electronic commerce with suppliers. Examples of ERP systems are the application suites from SAP, Oracle, Dynamics AX and others.

Expediting

1) Moving shipments through regular channels at an accelerated rate.

2) To take extraordinary action because of an increase in relative priority, perhaps due to a sudden increase in demand.

Export Declaration

A document required by the Department of Commerce that provides information as to the nature, value, etc., of export activity.

Extensible Markup Language (XML)

A computer term for a language that facilitates direct communication among computers on the Internet. Unlike the older hypertext markup language (HTML), which provides data tags giving instructions to a web browser about how to display information, XML tags give instructions to a browser or to application software, which help to define the specifics about the category of information.

Flat File

A computer term that refers to any file having fixed-record length, or in EDI, the file produced by EDI translation software to serve as input to the interface. Usually includes the same fields as the original file, but each field is expanded to its maximum length. Does not have delimiters.

Freight

Goods being transported by truck, train, ship or aircraft.

Freight Bill

The carrier’s invoice for transportation charges applicable to a freight shipment.

Freight Carriers

Companies that directly handle your shipments. If you are shipping Less Than Truckload (LTL) or international freight, several carriers may handle and transfer your shipment.

Freight Charge

The rate established for transporting freight.

Freight Collect

The freight and charges to be paid by the consignee.

Freight Consolidation

The act of combining individual shipments into a single lot, in order to reduce costs or improve transport equipment utilization. Consolidation can take a variety forms by customer, geography, shipping land or schedule. Consolidation may occur at the shipping facility or may be a service of a third party.

Freight Forwarder

An organization that provides logistics services as an intermediary between the shipper and the carrier, typically on international shipments. Freight forwarders provide the ability to respond quickly and efficiently to changing customer and consumer demands and international shipping (import/export) requirements.

Goods

A term associated with more than one definition: 1) Common term indicating movable property, merchandise, or wares. 2) All materials which are used to satisfy demands. 3) Whole or part of the cargo received from the shipper, including any equipment supplied by the shipper.

Gross Weight

The total weight of the vehicle and the payload of freight or passengers.

Harmonized Code

An international classification system that assigns identification numbers to specific products, which all parties in international trade use, as a consistent classification for documentation, statistical control, and duty assessment.

Hazardous Materials

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

Hundredweight (cwt)

A pricing unit used in transportation (equal to 100 pounds).

Import/Export License

Official authorization issued by a government agency, which allows for the transport of goods across their national boundaries. Licenses may be required for all, or only specific, classes of commodities.

Inbound Logistics

The movement of materials from suppliers and vendors into production processes or storage facilities.

INCOTERMS

International terms of sale developed by the International Chamber of Commerce, to define sellers’ and buyers’ responsibilities.

Information Systems (IS)

Managing the flow of data in an organization in a systematic, structured way to assist in planning, implementing, and controlling.

Interline Shipping

The utilization of multiple freight carriers for a single shipment, which may require intermediaries to coordinate various aspects of the process.

Just-in-Time (JIT)

An inventory control system which controls material flow into assembly and manufacturing plants by coordinating demand and supply to the point where desired materials arrive just in time for use. An inventory reduction strategy that feeds production lines with products delivered “just in time”. Developed by the auto industry, it refers to shipping goods in smaller, more frequent lots.

Less-Than-Truckload (LTL) Carriers

Trucking companies that consolidate and transport smaller (less than truckload) shipments of freight by utilizing a network of terminals and relay points.

License Plate

Refers to a uniquely numbered barcode sticker placed on a box or pallet of product. Typically contains information about product in the box or on the pallet.

Link

The transportation method used to connect the nodes (plants, warehouses) in a logistics system.

Logistics

The process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods, including services, and related information, from the point of origin to the point of consumption, for the purpose of conforming to customer requirements. This includes inbound, outbound, internal, and external movements.

Manifest

A document that describes individual orders contained within a shipment.

Mapping

A computer term referring to diagramming data that is to be exchanged electronically, including how it is to be used and what business management systems need it. It is a preliminary step for developing an applications link, which is performed by the functional manager responsible for a business management system.

Minimum Weight

The shipment weight specified by the carrier’s tariff as the minimum weight required to use the TL or CL rate; the rate discount volume.

Node

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

Non-Resident Importer

A U.S.-based company, often without a physical location in Canada, who is the exporter and importer on record, and handles the duties and taxes incurred in bringing products across the border.

North American Free Trade Agreement (NAFTA)

A free trade agreement, implemented January 1, 1994, between Canada, the United States and Mexico. It includes measures for the elimination of tariffs and non-tariff barriers to trade, as well as many more specific provisions concerning the conduct of trade and investment that reduce the scope for government intervention in managing trade.

Omni-Channel

A multi-channel integration of in-store (brick and mortar) shopping with information offered by back-end, web-enabled systems. The configuration allows for consumers to shop in-store or to view items via the retailer’s website(s). When shopping online, consumers can select products from individual store and distribution centers’ inventories, giving the online consumer the options of having their orders shipped from a distribution center or a store, as well as allowing pre-purchase of items for in-store pickups. Customer information may also be retrieved by staff members at various locations, to enhance the overall client-experience.

Outbound Consolidation

Consolidation of a number of small shipments for various customers into a larger load. The large load is then shipped to a location near the customers, where it is broken down, and the small shipments are distributed to the customers. This can reduce overall shipping charges where many small packet or parcel shipments are handled each day.

Outbound Logistics

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

Parcel Shipment

Parcels include small packages like those typically handled by providers such as UPS and FedEx.

Pick List

A list of items to be picked from stock in order to fill an order; the pick list generation and the picking method can be quite sophisticated.

Pick-to-Carton

Pick-to-carton logic uses item dimensions/weights to select the shipping carton prior to the order picking process. Items are then picked directly into the shipping carton.

Pick-to-Light

Pick-to light systems consist of lights and LED displays for each pick location. The system uses software to light the next pick and display the quantity to pick.

Pro Number

Any progressive or serialized number applied for identification of freight bills, bills of lading, etc.

Proof of Delivery (POD)

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. POD is also sometimes used to refer to the process of printing materials just prior to shipment (Print on Demand).

Quality Control

The management function that attempts to ensure that the services manufactured or purchased meet the product or service specifications.

Radio Frequency Identification (RFID)

The use of radio frequency technology including RFID tags and tag readers to identify objects. Objects may include virtually anything physical, such as equipment, pallets of stock, or even individual units of product. RFID tags can be active or passive. Active tags contain a power source and emit a signal constantly. Passive tags receive power from the radio waves sent by the scanner / reader. The inherent advantages of RFID over bar code technology are: 1) the ability to be read over longer distances, 2) the elimination of requirement for “line of sight” readability, 3) added capacity to contain information, and 4) RFID tag data can be updated / changed.

Rated Weight

For a small package, the weight (higher of actual vs. dimensional), typically rounding up fractional pounds to the next higher pound, that a package’s shipping charge is based upon. In an LTL shipment, it is either the minimum fee that a shipper incurs if they do not meet the necessary weight threshold, or the per-pound charge of the shipment.

Return Service

The inclusion or transmitting of a shipping label that allows a consumer to return a purchased item to the sender/manufacturer.

Reverse Logistics

A specialized segment of logistics focusing on the movement and management of products and resources after the sale and after delivery to the customer. Includes product returns for repair and/or credit.

Routing / Routing Guide

1) The process of determining how a shipment will move between origin and destination. Routing information includes designation of carrier(s) involved, actual route of carrier(s), and estimated time enroute. 2) Right of shipper to determine carriers, routes and points for transfer shipments.

Schedule B Code

A 10-digit number, determined by the U.S. Commerce Department, which is used to classify a physical good when it is exported to a country. The number is required to be reported in the Automated Export System (AES) in situations where the total value of a Schedule B code in the shipment is valued over $2,500, or if the product requires a license.

Shipping Manifest

A document that is typically presented to the carrier outlining the individual shipping orders included in a shipment. The manifest will show the reference number of each shipping order in the load, the weight and count of boxes or containers, and the destination.

Staging

The practice of picking material for a production or sales order and moving them to a separate area for purposes of consolidation or identifying shortages.

Surcharge

An add-on charge to the applicable charges; motor carriers have a fuel surcharge, and railroads can apply a surcharge to any joint rate that does not yield 110% of variable cost.

Tariff

The term is also used in transportation in reference to the fees and rules applied by a carrier for its services.

Third-Party Logistics (3PL) Provider

A firm that provides multiple logistics services for use by customers. Preferably, these services are integrated, or “bundled” together by the provider. These firms facilitate the movement of parts and materials from suppliers to manufacturers, and finished products from manufacturers to distributors and retailers. Among the services that they provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding.

Tracking & Tracing

Monitoring and recording shipment movements from origin to destination.

Traffic

A department responsible for the process of determining timely and economic delivery methods, arranging internal or external transportation, and tracking shipment status and logistics network issues.

Transit Time

The total time that elapses between a shipment’s pickup and delivery.

Transportation Management System (TMS)

A computer system designed to provide optimized transportation management in various modes along with associated activities, including managing shipping units, labor planning and building, shipment scheduling through inbound, outbound, intra-company shipments, documentation management (especially when international shipping is involved), and third party logistics management.

Truck Load (TL)

A term which defines a shipment that occupies at least one complete truck trailer, or allows for no other shippers goods to be carried at the same time.

Uniform Product Code (UPC)

A standard product numbering and bar coding system used by the retail industry. UPC codes are administered by the Uniform Code Council; they identify the manufacturer as well as the item, and are included on virtually all retail packaging.

Unitize

To consolidate a number of packages into one unit; the several packages are strapped, banded, or otherwise attached together.

Upcharges

Charges added to a bill, particularly a freight bill, to cover additional costs that were not envisioned when a contract was written. These might include costs related to rapidly increasing fuel charges or costs related to government mandates.

Value-Added Service (VAS)

Delivery option add-ons offered by a carrier for an additional fee (i.e. Residential Delivery, Dangerous Goods, Proof of Delivery, etc.).

VICS Bill of Lading

A Bill of Lading format developed by the Voluntary Interindustry Commerce Standards, which includes a unique 17-digit number Bill of Lading Number assigned by the shipper.

Warehouse Management System (WMS)

The systems used in effectively managing warehouse business processes and direct warehouse activities, including receiving, putaway, picking, shipping, and inventory cycle counts. Also includes support of radio-frequency communications, allowing real-time data transfer between the system and warehouse personnel. They also maximize space and minimize material handling by automating putaway processes.

Waybill

Document containing a description of goods that are part of common carrier freight shipment. Shows origin, destination, consignee/consignor, and amount charged. Copies travel with goods and are retained by originating/delivering agents. Used by carrier for internal record and control, especially during transit. Not a transportation contract.

Weight Break

The weight at which a shipment will be rated at a lower per pound rate associated to a heavier shipment.
The constant price of a product at all geographic locations within the zone.

Zone Skipping

The practice of delivering a large quantity of packages via Truckload (TL) or Less-Than-Truckload (LTL) services to a parcel carrier hub, local to the package’s final destination. Doing so allows for the shipper to decrease costs by skipping carrier zones. This practice should be considered only if the total cost of the TL or LTL carrier plus the costs associated with the local delivery of the packages is less than the cost of all packages shipping out of the origin point via a small package carrier.