Logistics Terminology
Logistics Terminology: A Comprehensive Guide
Logistics can feel overwhelming with its unique jargon and industry-specific terms. Whether you’re new to the field or an experienced professional, understanding logistics terminology is essential for effective communication and decision-making. Below is a curated glossary of essential logistics terms to simplify the complex world of supply chain and transportation.
Freight Transportation Terminology
General Terms
3PL (Third-Party Logistics): A company that provides logistics services to another business.
4PL (Fourth-Party Logistics): A company that manages and integrates logistics services.
Bill of Lading (BOL): A document that serves as a contract between the shipper and carrier.
Carrier: A company that transports goods.
Consignee: The person or company receiving the shipment.
Consignor: The person or company shipping the goods.
Freight: Goods being transported.
Shipment: A quantity of goods being transported.
Shipper: The person or company sending the goods.
Transportation: The movement of goods from one place to another.
Shipping Terms
FOB (Free on Board): A shipping term indicating the point of transfer of ownership.
FAS (Free Alongside Ship): A shipping term indicating the seller’s responsibility.
CIF (Cost, Insurance, and Freight): A shipping term including costs.
DDP (Delivered Duty Paid): A shipping term indicating the seller’s responsibility.
DDU (Delivered Duty Unpaid): A shipping term indicating the buyer’s responsibility.
Trucking Terms
FTL (Full Truckload): A shipment that fills an entire truck.
LTL (Less Than Truckload): A shipment that doesn’t fill an entire truck.
TL (Truckload): A shipment that fills an entire truck.
Intermodal: Transportation using multiple modes (e.g., truck, rail, sea).
Deadhead: A truck driving without cargo.
Logistics Terms
TMS (Transportation Management System): Software for managing logistics.
WMS (Warehouse Management System): Software for managing warehouse operations.
Inventory Management: Managing stock levels and storage.
Supply Chain: The network of organizations involved in producing and delivering products.
Freight Forwarder: A company that arranges transportation.
Documentation Terms
Manifest: A document listing cargo and shipping details.
Commercial Invoice: A document detailing the transaction.
Packing List: A document detailing the shipment contents.
Certificate of Origin: A document certifying the shipment’s origin.
Other Terms
Demurrage: Fees charged for delaying carrier equipment.
Detention: Fees charged for delaying carrier equipment beyond allowed time.
Tracking: Monitoring shipment location and status.
POD (Proof of Delivery): A document confirming delivery.
Rate: The cost of shipping.
Last-Mile Delivery
The final stage of the supply chain where goods are delivered to the end customer. Last-mile logistics focus on speed and customer satisfaction, often involving smaller vehicles and local routes.
Just-in-Time (JIT)
An inventory management strategy where materials are delivered only when needed, minimizing storage costs and enhancing production efficiency.
Intermodal Transportation
The movement of goods using multiple modes of transportation (e.g., rail, truck, and sea) under a single contract. It optimizes efficiency and reduces costs, particularly for long-distance freight.
Reverse Logistics
The process of managing returns, repairs, recycling, or disposal of products. Reverse logistics ensures environmental sustainability and customer satisfaction.
Cross-Docking
A supply chain practice where goods are unloaded from inbound vehicles and directly loaded onto outbound vehicles with minimal or no storage. This method speeds up delivery times.
Cold Chain
A temperature-controlled supply chain used for transporting perishable goods such as food, pharmaceuticals, and chemicals, ensuring product integrity.
Freight Class
A standardized classification system used to categorize freight based on factors such as weight, size, and value to calculate shipping costs.
Hazardous Material (Hazmat)
Goods that pose a risk to health, safety, or the environment during transportation. Hazmat shipping requires compliance with strict regulations and proper documentation.
Incoterms (International Commercial Terms)
A set of standardized trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities of buyers and sellers in international trade.