Glossary of Logistics Terms
A third-party, or contract, logistics company. A firm to which logistics services are outsourced. Typically handles many of the following tasks: purchasing; inventory management/warehousing; transportation management; order management.
Group of airlines or ocean carriers who coordinate and cross list schedules, and sell capacity on each other’s flights/voyages.
Backload or backhaul
A freight movement in a direction (or lane) of secondary importance or light demand. Backloads are preferred to deadheads by transportation companies since revenue is generated. Carriers may offer lower rates in order to entice shippers to move goods in backload markets.
Bill-of-Lading (Bill, B/L or BoL)
A document providing a binding contract between a shipper and a carrier for the transportation of freight, specifying the obligations of both parties. Serves as a receipt of freight by the carrier for the shipper.
A firm that provides transportation services, typically owning and operating transportation equipment. Examples include: trucking company; railroad; airline; shipping line; parcel or courier company.
An individual or firm to whom freight is shipped. A freight receiver.
Consignor / Shipper
An individual or firm that sends freight. A freight originator.
Bringing together many small shipments, often from different shippers, into large shipment quantities, in order to take advantage of economies of scale in transportation costs. In-vehicle consolidation is when a vehicle makes pickups from many customers and consolidates freight inside the vehicle. Out-of-vehicle consolidation occurs at a terminal facility; shipments to a single customer/region are consolidated before shipment.
Container (see also TEU and FEU)
A single, rigid, sealed, reusable metal box in which merchandise is shipped by vessel, truck, or rail. Container types include standard, high cube, hardtop, open top, flat, platform, ventilated, insulated, refrigerated, or bulk. Usually 8 ft x 8 ft in width and height, 20 to 45 ft long. Specialised containers also exist for air transportation modes, but are much smaller and cannot be directly transferred to truck or rail.
Transportation terminal in which received items transferred directly from inbound to the outbound shipping dock, with storage only occurring temporarily during unloading and loading. No long-term storage is provided. Usually used only for vehicle transfers. Often owned and operated by large shippers.
A portion of a transportation trip in which no freight is conveyed; an empty move. Transportation equipment is often dead-headed because of imbalances in supply and demand. For example, many more containers are shipped from Asia to Europe than in reverse; empty containers are therefore dead-headed back to Asia.
Penalty charges assessed by a carrier to a shipper or consignee for holding transportation equipment. Detention usually refers to the charge for keeping equipment whilst demurrage is charged for the space taken by the equipment eg if a loaded container was kept in the docks you would pay for the container and the docks space.
Wood and packaging materials used to keep cargo in place inside a container or transportation vehicle.
FCL (Full Container-Load)
An ocean-shipping and intermodal industry term; a full container-load shipment is when a shipper contracts for the transportation of an entire container. The vast majority of intermodal and ocean freight is contracted in this manner.
Forty-foot equivalent unit. Method of measuring vessel load or capacity, in units of forty-foot long containers.
An agency that receives freight from a shipper and then arranges for transportation with one or more carriers for transport to the consignee. Often used for international shipping. Will usually consolidate freight from many shippers to obtain low, large volume transportation rates from carriers (through a contract). Often owns some pickup and delivery equipment; uses to transport freight to/from consolidation facilities. Also provide other shipping services: packaging, temporary freight storage, customs clearing.
A transportation system design in which large hub terminals are used for freight consolidation. Medium-volume services serve the spoke-to-hub collection and hub-to-spoke distribution tasks. Large-volume services are operated in the hub-to-hub markets. In most systems, all outbound/inbound freight for a spoke uses the same hub, thus larger shipment sizes are realised.
International COmmercial TERMS are internationally agreed rules for determining where the risk and responsibility transfer from seller to buyer during transportation and define who arranges for transport and carrier, who pays for transport; where and when does title (ownership) of goods transfer from seller to buyer.
Companies that provide door-to-door domestic and international air freight service. Own and operate aircraft, as well as ground delivery fleets of trucks; eg UPS, FedEx and DHL.
Loss or Damage
Loss or damage of freight shipments while in transit or in a carrier-operated warehouse. Terms for the handling of claims are usually stipulated in the freight bill. Shippers/consignees usually take out insurance against L&D with premiums a function of the value of goods shipped, and the likelihood of L&D.
Transportation that uses a specialised container that can be transferred from the vehicle of one mode to the vehicle of another; a single freight bill is used for the shipment.
An ocean-shipping and intermodal industry term; LTL equivalent in container shipping. Container freight stations at ports serve as consolidation and deconsolidation terminals.
“Lift-on, lift-off” Conventional container or cargo ships, in which quay cranes are used to load and unload containers or generalised cargo.
LSP / LLSP
Logistics service provider or lead logistics service provider; a general term for any provider or, in the case of LLSP, a term for one provider who manages all your other providers for you.
A trucking industry term; a less-than-truckload (LTL) shipment is when a shipper contracts for the transportation of freight that will not require an entire truck. LTL shipments are priced according to the weight or volume of the freight whichever is greater when calculated using standard industry methods.
Non Vessel-Operating Common Carrier. Owns no vessels (ships), but provides ocean shipping freight-forwarding services. Provides consolidated, negotiated-rate services for ocean and inland water carriers. Freight forwarders are often also NVOCC.
Pallet / Europallet
A small platform, 120x80cms on which goods are placed for handling within a warehouse or a transportation vehicle such as a container. Good for grouping break-bulk cargo for handling. Normally made of wood and should be certified as heat treated or they will not be acceptable in many locations. USA uses different sized pallets.
Proof of delivery; a signed document showing what was delivered and by whom it was received. Usually used for noting any damages or shortages.
A refrigerated container. For long storage in transit (or in ports) must be plugged into a ship’s power system (or port’s). Temporary power units can be attached that last for 18-36 hours.
RFI / RFP / RFQ
Request for information, proposal or quotation; terms for documents you would send out when putting your business to the market place.
Radio frequency identification; devices placed within shipments allowing automated tracking of items and removing or reducing the need for manual tracking.
“Roll On/Roll Off” A method of ocean cargo service using a vessel with ramps which allows wheeled vehicles to be loaded and discharged without cranes.
A place for a container on board a container ship; typically, one TEU fits in a slot.
Stock-keeping unit. A line-item of inventory, that is a different type or size of good.
Twenty-foot equivalent unit. Method of measuring vessel load or capacity, in units of containers that are twenty feet long. A 40’ long container measures 2 TEUs.