Helpful Logistics Terms & Shipping Container Specification Charts


Incoterm refers to a group of standardized trade terms 3 letters commonly used in international contracts of sale of goods. They are used to divide the costs of international business transactions, defining responsibilities between buyer and seller, and reflect current practice in the international freight.

The seller makes the goods available at its premises. The buyer is responsible for unloading. This term places the maximum obligation on the buyer and minimum obligations on the seller. The Ex Works term is often used when making an initial quotation for the sale of goods without any costs included. EXW means that a seller has the goods ready for collection at his premises (works, factory, warehouse, plant) on the date agreed upon. The buyer pays all transportation costs and also bears the risks for bringing the goods to their final destination. The seller doesn’t load the goods on collecting vehicles and doesn’t clear them for export. If the seller does load the good, he does so at buyer’s risk and cost. If parties wish seller to be responsible for the loading of the goods on departure and to bear the risk and all costs of such loading, this must be made clear by adding explicit wording to this effect in the contract of sale.
The seller hands over the goods, cleared for export, into the disposal of the first carrier (named by the buyer) at the named place. The buyer pays for carriage to the named point of delivery, and risk passes when the goods are handed over to the first carrier.
The seller pays for carriage. Risk transfers to buyer upon handing goods over to the first carrier at place of Import.
The containerized transport/multimodal equivalent of CIF. Seller pays for carriage and insurance to the named destination point, but risk passes when the goods are handed over to the first carrier.
Seller pays for carriage to the terminal, except for costs related to import clearance, and assumes all risks up to the point that the goods are unloaded at the terminal.
Seller pays for carriage to the named place, except for costs related to import clearance, and assumes all risks prior to the point that the goods are ready for unloading by the buyer.
Seller is responsible for delivering the goods to the named place in the country of the buyer, and pays all costs in bringing the goods to the destination including import duties and taxes. The buyer is responsible for unloading. This term is often used in place of the non-Incoterm “Free In Store (FIS)”. This term places the maximum obligations on the seller and minimum obligations on the buyer.

Sea and inland waterway transport

The four rules defined by Incoterms 2010 for international trade where transportation is entirely conducted by water are:

The seller must place the goods alongside the ship at the named port. The seller must clear the goods for export. Suitable only for maritime transport but not for multimodal sea transport in containers. This term is typically used for heavy-lift or bulk cargo.
The seller must load the goods on board the vessel nominated by the buyer. Cost and risk are divided when the goods are actually on board of the vessel (this rule is new!). The seller must clear the goods for export. The term is applicable for maritime and inland waterway transport only but not for multimodal sea transport in containers. The buyer must instruct the seller the details of the vessel and the port where the goods are to be loaded, and there is no reference to, or provision for, the use of a carrier or forwarder.
Seller must pay the costs and freight to bring the goods to the port of destination. However, risk is transferred to the buyer once the goods are loaded on the vessel. Insurance for the goods is not included. This term is formerly known as CNF (C&F). Maritime transport only.
Exactly the same as CFR except that the seller must in addition procure and pay for the insurance. Maritime transport only.

Common Logistical Service Terms

SUPPLY CHAIN and LOGISTICS TERMS and GLOSSARY (Updated October 2006) Definitions compiled by: Kate Vitasek Supply Chain Visions ( Bellevue, Washington.

Please note: The Council of Supply Chain Management Professionals (CSCMP) does not take responsibility for the content of these definitions, nor does CSCMP endorse these as official definitions except as noted. Additional terms/definitions provided by Cargoways Logistics, LLC.

Abandonment: The decision of a carrier to give up or to discontinue service over a route. Railroads must seek ICC permission to abandon routes.

Accessibility: The ability of a carrier to provide service between an origin and a destination.

Accessorial charges: A charge for services over and above transportation charges such as: inside delivery, heading, sort and segregate, heating, storage, etc.

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. May also include carrier and shipment specifics including time of shipment and expected time of arrival.

Agent: An enterprise authorized to transact business for, or in the name of, another enterprise.

Air Cargo: Freight that is moved by air transportation.

Air Cargo Containers: Containers designed to conform to the inside of an aircraft. There are many shapes and sizes of containers. Air cargo containers fall into three categories: 1) air cargo pallets 2) lower deck containers 3) box type containers.

Air Taxi: An exempt for-hire air carrier that will fly anywhere on demand: air taxis are restricted to a maximum payload and passenger capacity per plane.

Air Waybill (AWB): A bill of lading for air transport that serves as a receipt for the shipper, indicates that the carrier has accepted the goods listed, obligates the carrier to carry the consignment to the airport of destination according to specified conditions.

All-cargo Carrier: An air carrier that transports cargo only.

All-Water Service: Entirely ship transport, no mini land bridge (MLB).

Alternate Routing: A routing, usually less preferred than the primary routing, but resulting in an identical item. Alternate routings may be maintained in the computer or off-line via manual methods, but the computer software must be able to accept alternate routings for specific jobs.

Anti-Dumping Duty: An additional import duty imposed in instances where imported goods are priced at less than the normal price charged in the exporter’s domestic market and cause material injury to domestic industry in the importing country.

Any-Quantity Rate (AQ): The same rate applies to any size shipment tendered to a carrier; no discount rate is available for large shipments.

Arrival Notice: A notice from the delivering carrier to the Notify Party indicating the shipment’s arrival date at a specific location (normally the destination).

Auditing: Determining the correct transportation charges due the carrier: auditing involves checking the accuracy of the freight bill for errors, correct rate, and weight.

Backhaul: The process of a transportation vehicle returning from the original destination point to the point of origin. The 1980 Motor Carrier Act deregulated interstate commercial trucking and thereby allowed carriers to contract for the return trip. The backhaul can be with a full, partial, or empty load. An empty backhaul is called deadheading.

Balance to Ship (BTS): Balance or remaining quantity of a promotion or order that has yet to ship.

Barge: The cargo-carrying vehicle used primarily by inland water carriers. The basic barges have open tops, but there are covered barges for both dry and liquid cargoes.

BAS: Basic Ocean Freight

Bill of Lading (BOL): A transportation document that is the contract of carriage containing the terms and conditions between the shipper and carrier.

Bill of Lading,Through: A bill of lading to cover goods from point of origin to final destination when interchange or transfer from one carrier to another is necessary to complete the journey.

Bonded Warehouse: Warehouse approved by the Treasury Department and under bond/guarantee for observance of revenue laws. Used for storing goods until duty is paid or goods are released in some other proper manner.

Boxcar: An enclosed rail car typically 40 to 50 feet long; used for packaged freight and some bulk commodities.

Bracing: Securing a shipment inside a carrier’s vehicle to prevent damage.

Break-Bulk: Break bulk cargo or general cargo is a term that covers a great variety of goods that must be loaded individually, and not in intermodal containers nor in bulk as with oil or grain. Ships that carry this sort of cargo are often called general cargo ships. The term break bulk derives from the phrase breaking bulk—the extraction of a portion of the cargo of a ship or the beginning of the unloading process from the ship’s holds.

Broker: An intermediary between the shipper and the carrier. The broker arranges transportation for shippers and represents carriers.

Bulk Area: A storage area for large items which at a minimum are most efficiently handled by the pallet load.

Bulk storage: The process of housing or storing materials and packages in larger quantities, generally using the original packaging or shipping containers or boxes.

Bulk packing: The process or act of placing numbers of small cartons or boxes into a larger single box to aid in the movement of product and to prevent damage or pilferage to the smaller cartons or boxes.

Bundle: A group of products that are shipped together as an unassembled unit.

Bundling: An occurrence where two or more products are combined into one transaction for a single price.

Bunker Adjustment Factor: Refers to fuel charges.

Bunker Recovery Charge: Refers to fuel charges.

Cabotage: A federal law that requires coastal and inter-coastal traffic to be carried in U.S.-built and registered ships.

Cantilever rack: Racking system that allows for storage of very long items.

Car Supply Charge: A railroad charge for a shipper’s exclusive use of special equipment.

Cargo: A product shipped in an aircraft, railroad car, ship, barge, or truck.

Carriage Paid To (CPT): The buyer takes the risk at the port of origin.

Carriage, Insurance Paid To (CIP): Same as CPT, but the buyer is responsible for the insurance from the port of origin (required).

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

Certificate of origin: An international business document that certifies the country of origin of the shipment.

Chock: A wedge, usually made of hard rubber or steel, that is firmly placed under the wheel of a trailer, truck, or boxcar to stop it from rolling.

Coastal carriers: Water carriers that provide service along coasts serving ports on the Atlantic or Pacific oceans or on the Gulf of Mexico.

Congestion Surcharge: May be imposed by steamship line based on traffic flow in/out of certain ports.

Consignee: The party to whom goods are shipped and delivered. The receiver of a freight shipment.

Consignment: 1) A shipment that is handled by a common carrier. 2) The process of a supplier placing goods at a customer location without receiving payment until after the goods are used or sold.

Consignor: The party who originates a shipment of goods (shipper). The sender of a freight shipment, 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.

Consumption Entry: An official Customs form used for declaration of reported goods, also showing the total duty due on such transaction.

Container: 1) A “box,” typically 10 to 40 feet long, which is primarily used for ocean freight shipments. For travel to and from ports, containers are loaded onto truck chassis or on railroad flatcars.

Container Security Initiative (CSI): U.S. Customs program to prevent global containerized cargo from being exploited by terrorists. Designed to enhance security of sea cargo container.

Containerization: A shipment method in which commodities are placed in containers, and after initial loading, the commodities per se are not re-handled in shipment until they are unloaded at the destination.

Coordinated Transportation: Two or more carriers of different modes transporting a shipment.

Cost and Freight (CFR): The supplier assumes the risk and cost to get goods to the foreign port, and then the buyer assumes the risk and cost.

Cost, Insurance, Freight (CIF): Same as CFR, but the supplier always takes care of the insurance (required).

Courier Service: A fast, door-to-door service for high-valued goods and documents; firms usually limit service to shipments of 50 pounds or less.

Cross Docking: A distribution system in which merchandise received at the warehouse or distribution center is not put away, but instead is readied for shipment to retail stores.

Cross-Shipment: Material flow activity where materials are shipped to customers from a secondary shipping point rather than from a preferred shipping point.

C-TPAT: See Customs-Trade Partnership against Terrorism

Cube: The volume of the shipment or package (the product of the length x width x depth).

Cubage: Cubic volume of space being used or available for shipping or storage.

Currency Adjustment Factor (CAF): An added charge assessed by water carriers for currency value changes.

Customs House Broker: A business firm that oversees the movement of international shipments through customs and ensures that the documentation accompanying a shipment is complete and accurate.

Customs-Trade Partnership against Terrorism (C-TPAT): A joint government/business initiative to build cooperative relationships that strengthen overall supply chain and border security. The voluntary program is designed to share information that will protect against terrorists’ compromising the supply chain.

Dangerous Goods: Articles or substances capable of posing significant health, safety, or environmental risk, and that ordinarily require special attention including packaging and labeling when stored or transported. Also referred to as Hazardous Goods or Hazardous Materials (HazMat).

Deadhead: The return of an empty transportation container to its point of origin. See: backhauling.

Deadweight: The total lifting capacity of a ship expressed in tons of 2240 lbs. It is the difference between the displacement light (without cargo, passengers, fuel, etc.) and the displacement loaded.

Declaration of Dangerous Goods: To comply with the U.S. regulations, exporters are required to provide special notices to inland and ocean transport companies when goods are hazardous.

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.

Delivered At Place (DAP): The supplier pays to get it to a door at destination. The buyer is still responsible for duties and custom clearance.

Delivered At Terminal (DAT): For containers, the supplier is paying the destination terminal charges. When it goes into the yard at the foreign destination, the buyer takes over the charges.

Delivery-Duty-Paid: Supplier/manufacturer arrangement in which suppliers are responsible for the transport of the goods they have produced, which is being sent to a manufacturer. This responsibility includes tasks such as ensuring products get through Customs.

Delivery Appointment: The time agreed upon between two enterprises for goods or transportation equipment to arrive at a selected location. Typically used to help plan warehouse and receiving / inspection operations and to manage backup of carriers at loading docks.

Demurrage: The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time. Also see: Detention

Destination-Enhanced Consolidation: Ganging of smaller shipments to cut cost, often as directed by a system or via pooling with a third party.

Detention: The carrier charges and fees applied when rail freight cars and ships are retained beyond a specified loading or unloading time. Also see: Demurrage

Differential: A discount offered by a carrier that faces a service time disadvantage over a route.

Dispatching: The carrier activities involved with controlling equipment; involves arranging for fuel, drivers, crews, equipment, and terminal space.

Dock Receipt: A receipt that indicates an export shipment has been delivered to a steamship company by a domestic carrier.

Documentation: The papers attached or pertaining to goods requiring transportation and/or transfer of ownership. These may include the packing list, hazardous materials declarations, export / customs documents, etc.

Domestic Trunk Line Carrier: An air carrier classification for carriers that operate between major population centers. These carriers are now classified as major carriers.

Door: Point of origin or destination, as in “door to door”.

Dormant route: A route over which a carrier failed to provide service 5 days a week for 13 weeks out of a 26-week period.

Double Bottoms: A motor carrier operation involving two trailers being pulled by one tractor.

Double-pallet jack: A mechanized device for transporting two standard pallets simultaneously.

Double Stack: Two containers, one on top of the other, loaded on a railroad flatcar; an intermodal service.

Drayage: Transportation of materials and freight on a local basis, but intermodal freight carriage may also be referred to as drayage.

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.

Dry Van: Non-refrigerated trailer connected to a tractor.

Dual Rate System: An international water carrier pricing system where a shipper signing an exclusive use agreement with the conference pays a lower rate (10% to %15) than non-signing shippers for an identical shipment.

Dunnage: The packing material used to protect a product from damage during transport.

Durable Goods: Generally, any goods whose continuous serviceability is likely to exceed three years (e.g., trucks, furniture).

Duty Free Zone (DFZ): An area where goods or cargo can be stored without paying import customs duties while awaiting manufacturing or future transport.

Embargo: A prohibition upon exports or imports, either with specific products or specific countries.

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 carriers transports agricultural commodities or seafood.

Expediting: Moving shipments through regular channels at an accelerated rate.

Export: In logistics, the movement of products from one country to another. For example, significant volumes of cut flowers are exported from The Netherlands to other countries of the world.

Export Broker: An enterprise that brings together buyer and seller for a fee, then eventually withdraws from the transaction.

Export Chassis Usage: Fee for chassis hooked up to truck on which container is placed.

Export License: A document secured from a government authorizing an exporter to export a specific quantity of a controlled commodity to a certain country. An export license is often required if a government has placed embargoes or other restrictions upon exports.

Exporter Identification Number (EIN): A number required for the exporter on the Shipper’s Export.

Exports: A term used to describe products produced in one country and sold in another.

Express: Carrier payment to its customers when ships, rail cars, or trailers are unloaded or loaded in less than the time allowed by contract and returned to the carrier for use. See: demurrage, detention.

Fast and Secure Trade (FAST): U.S. Customs program that allows importers on the U.S./Canada border to obtain expedited release for qualifying commercial shipments.

FCL: See Full Container Load

FEU: See Forty-foot Equivalent Unit

Flat: A loadable platform having no superstructure whatever but having the same length and width as the base of a container and equipped with top and bottom corner fittings. This is an alternative term used for certain types of specific purpose containers – namely platform containers and platform-based containers with incomplete structures.

Flatbed: A flatbed is a type of truck trailer that consists of a floor and no enclosure. A flatbed may be used with “sideboards” or “tie downs” which keep loose cargo from falling off.

Flatcar: A rail car without sides; used for hauling machinery.

FOB: See Free on Board

FOB Destination: Title passes at destination, and seller has total responsibility until shipment is delivered.

FOB Origin: Title passes at origin, and buyer has total responsibility over the goods while in shipment.

Foreign Trade Zone (FTZ): An area or zone set aside at or near a port or airport, under the control of the U.S. Customs Service, for holding goods duty-free pending customs clearance.

Forklift truck: A machine-powered device that is used to raise and lower freight and to move freight to different warehouse locations.

Fourth-Party Logistics (4PL): Differs from third party logistics in the following ways; 1) 4PL organization is often a separate entity established as a joint venture or long-term contract between a primary client and one or more partners; 2) 4PL organization acts as a single interface between the client and multiple logistics service providers; 3) All aspects (ideally) of the client’s supply chain are managed by the 4PL organization; and, 4) It is possible for a major third-party logistics provider to form a 4PL organization within its existing structure. The term was registered by Accenture as a trademark in 1996 and defined as “A supply chain integrator that assembles and manages the resources, capabilities, and technology of its own organization with those of complementary service providers to deliver a comprehensive supply chain solution.”, but is no longer registered. Also see: Lead Logistics Provider

Forty-foot Equivalent Unit (FEU): A standard size intermodal container.

Free Alongside Ship (FAS): A term of sale indicating the seller is liable for all changes and risks until the goods sold are delivered to the port on a dock that will be used by the vessel. Title passes to the buyer when the seller has secured a clean dock or ship’s receipt of goods. The seller agrees to deliver the goods to the dock alongside the overseas vessel that is to carry the shipment. The seller pays the cost of getting the shipment to the dock; the buyer contracts the carrier, obtains documentation, and assumes all responsibility from that point forward.

Free Days: Days an empty container may be away from port at no charge or a loaded container may sit in port at no charge.

Free on Board (FOB): Contractual terms between a buyer and a seller, that define where title transfer takes place.

Free Out: Destination fee charged before container can leave port.

Free Time: The period of time allowed for the removal or accumulation of cargo before charges become applicable.

Freight: Goods being transported from one place to another.

Freight-all-kinds (FAK): An approach to rate making whereby the ante is based only upon the shipment weight and distance; widely used in TOFC service.

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

Freight Carriers: Companies that haul freight, also called “for-hire” carriers. Methods of transportation include trucking, railroads, airlines, and sea borne shipping.

Freight Charge: The rate established for transporting freight.

Freight Collect: The freight and charges to be paid by the consignee.

Freight Consolidation: The grouping of shipments to obtain reduced costs or improved utilization of the transportation function. Consolidation can occur by market area grouping, grouping according to scheduled deliveries, or using third-party pooling services such as public warehouses and freight forwarders.

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.

Freight Prepaid: The freight and charges to be paid by the consignor.

Fronthaul: The first leg of the truck trip that involves hauling a load or several loads to targeted destinations.

FTL: See Full Truckload

FTZ: See Foreign Trade Zone

Full Container load (FCL): A term used when goods occupy a whole container.

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

General Commodities Carrier: A common motor carrier that has operating authority to transport general commodities, or all commodities not listed as special commodities.

General-Merchandise Warehouse: A warehouse that is used to store goods that are readily handled, are packaged, and do not require a controlled environment.

General Order (GO): A customs term referring to a warehouse where merchandise not entered within five working days after the carrier’s arrival is stored at the risk and expense of the importer.

Gondola: A rail car with a flat platform and sides three to five feet high; used for top loading of items that are long and heavy.

Goods: Whole or part of the cargo received from the shipper, including any equipment supplied by the shipper.

GreenLane: A concept that would give C-TPAT members that demonstrate the highest standard of secure practices additional benefits for exceeding the minimum requirements of the program. GreenLane benefits would include expedited movement of cargo, especially during an incident of national significance.

GRI: General Rate Increase (by carriers)

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

Haulage: The inland transport service, which is offered by the carrier under the terms and conditions of the tariff and of the relative transport document.

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

HazMat: See Hazardous Material

Hi-low: Usually refers to a forklift truck on which the operator must stand rather than sit.

Honeycombing: The practice of removing merchandise in pallet load quantities where the space is not exhausted in an orderly fashion. This results in inefficiencies due to the fact that the received merchandise may not be efficiently stored in the space, which is created by the honeycombing.

Hopper Cars: Rail cars that permit top loading and bottom unloading of bulk commodities; some hopper cars have permanent tops with hatches to provide protection against the elements.

Hostler: An individual employed to move trucks and trailers within a terminal or warehouse yard area.

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

Igloos: Pallets and containers used in air transportation; the igloo shape is designed to fit the internal wall contours of a narrow-body airplane.

Import: Movement of products from one country into another. The import of automobiles from Germany to the U.S. is an example.

Importation Point: The location (port, airport or border crossing) where goods will be cleared for importation into a country.

Import/Export License: Official authorization issued by a government allowing the shipping or delivery of a product across national boundaries.

In Bond: Goods are held or transported In-Bond under customs control either until import duties or other charges are paid, or to avoid paying the duties or charges until a later date.

Inbound Freight and Duties: Freight costs associated with the movement of material from a vendor to the buyer and the associated administrative tasks. Duties are those fees and taxes levied by government for moving purchased material across international borders. Customs broker fees should also be considered in this category.

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

Inland Bill of Lading: The carriage contract used in transport from a shipping point overland to the exporter’s international carrier location.

Inland Carrier: An enterprise that offers overland service to or from a point of import or export.

Inspection Certificate: A document certifying that merchandise (such as perishable goods) was in good condition immediately prior to shipment.

Integrated Carrier: A company that offers a blend of transportation services such as land, sea and air carriage, freight forwarding, and ground handling.

Integrated Logistics: A comprehensive, system-wide view of the entire supply chain as a single process, from raw materials supply through finished goods distribution. All functions that make up the supply chain are managed as a single entity, rather than managing individual functions separately.

Intercoastal Carriers: Water carriers that transport freight between East and West Coast ports, usually by way of the Panama Canal.

Interline: Two or more motor carriers working together to haul the shipment to a destination. Carrier equipment may be interchanged from one carrier to the next, but usually the shipment is re-handled without the equipment.

Intermodal Container Transfer Facility: A facility where cargo is transferred from one mode of transportation to another, usually from ship or truck to rail.

Intermodal Transportation: Transporting freight by using two or more transportation modes such as by truck and rail or truck and oceangoing vessel.

Intermodal transport unit (ITU): Container, swap body or semi-trailer/goods road motor vehicle suitable for intermodal transport.

Internal Water Carriers: Water carriers that operate over internal, navigable rivers such as the Mississippi, Ohio, and Missouri.

In-transit Inventory: Material moving between two or more locations usually separated geographically; for example, finished goods being shipped from a plant to a distribution center.

Invoice: An invoice, forwarded by the seller of goods prior to shipment, that advises the buyer of the particulars and value of the goods. Usually required by the buyer in order to obtain an import permit or letter of credit.

Lading: The cargo carried in a transportation vehicle.

Laid-Down Cost: The sum of the product and transportation costs. The laid-down cost is useful in comparing the total cost of a product shipped from different supply sources to a customer’s point of use.

Land Bridge: The movement of containers by ship-rail-ship.

Landed Cost: Cost of product plus relevant logistics costs such as transportation, warehousing, handling, etc. Also called Total Landed Cost or Net Landed Costs.

Lash Barges: Covered barges that are loaded on board oceangoing ships for movement to foreign destinations.

LCL: See Less-Than-Carload or Less-Than-Container load.

Lead Logistics Partner (LLP): An organization that organizes other 3rd party logistics partners for outsourcing of logistics functions. An LLP serves as the client’s primary supply chain management provider, defining processes and managing the provision and integration of logistics services through its own organization and those of its subcontractors.

Leg: A portion of a complete trip which has an origin, destination, and carrier and is composed of all consecutive segments of a route booked through the same carrier. Also called Bookable Leg.

Less-Than-Carload (LCL): Shipment that is less than a complete rail car load (lot shipment).

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.

Letter of credit (LOC): An international business document that assures the seller that payment will be made by the bank issuing the letter of credit upon fulfillment of the sales agreement.

License Plate: A pallet tag; refers to a uniquely numbered bar code sticker placed on a pallet of product. Typically contains information about product on the pallet.

Lighter: A flat-bottomed boat designed for cross-harbor or inland waterway freight transfer. While the terms barge and lighter are used interchangeably, a barge usually refers to a vessel used for a long haul, while a lighter is used for a short haul.

Lift truck: Vehicles used to lift, move, stack, rack, or otherwise manipulate loads.

Line-Haul Shipment: A shipment that moves between cities and distances over 100 to 150 miles.

Liner Service: International water carriers that ply fixed routes on published schedules.

Live: A situation in which the equipment operator stays with the trailer or boxcar while it is being loaded or unloaded.

Load Tender (Pick-Up Request): An offer of cargo for transport by a shipper. Load tender terminology is primarily used in the motor industry.

Load Tendering: The practice of providing a carrier with detailed information and negotiated pricing (the tender) prior to scheduling pickup. This practice can help assure contract compliance and facilitate automated payments (self billing).

Loading Port: The port where the cargo is loaded onto the exporting vessel. This port must be reported on the Shipper’s Export Declaration, Schedule D and is used by U.S. companies to determine which tariff is used to freight rate the cargo for carriers with more than one tariff.

Location Tag: A bar coded sign that hangs above or on a warehouse location. The location number can be read from the tag or scanned with an RF gun.

Locator System: Locator systems are inventory-tracking systems that allow you to assign specific physical locations to your inventory to facilitate greater tracking and the ability to store product randomly.

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 destination.

Logistics Channel: The network of supply chain participants engaged in storage, handling, transfer, transportation, and communications functions that contribute to the efficient flow of goods.

LOLO: Lift on-lift off (non-container cargo lifted on/off ship).

Long Ton: Equals 2,240 pounds.

LTL: See Less-than-truckload Carriers

Major Carrier: A for-hire certificated air carrier that has annual operating revenues of $1 billion or more: the carrier usually operates between major population centers.

Manifest: A document, which describes individual orders contained within a shipment.

Marine Insurance: Insurance to protect against cargo loss and damage when shipping by water transportation.

Maritime Administration: A federal agency that promotes the merchant marine, determines ocean ship routes and services, and awards maritime subsidies.

Maritime Transportation Security Act (MTSA): Law passed in 2002 to create a comprehensive national system of transportation security enhancements. The MTSA designated the U.S. Coast Guard as the lead federal agency for maritime homeland security and requires federal agencies, ports, and vessel owners to take numerous steps to upgrade security.

Marks and Numbers: Identifying marks and numbers affixed to or placed on goods used to identify a shipment or parts of a shipment.

Marshaller or Marshalling Agent: This is a service unique to international trade and relates to an individual or firm that specializes in one or more of the activities preceding Main Carriage, such as consolidation, packing, marking, sorting of merchandise, inspection, storage, etc. References state that Marshaling Agent, Consolidation Agent and Freight Forwarder all have the same meaning.

Material Safety Data Sheet (MSDS): A document that is part of the materials information system and accompanies the product. Prepared by the manufacturer, the MSDS provides information regarding the safety and chemical properties and (if necessary) the long-term storage, handling, and disposal of the product. Among other factors, the MSDS describes the hazardous components of a product; how to treat leaks, spills, and fires; and how to treat improper human contact with the product. Also see: Hazardous Materials

Measurement Ton: Equals 40 cubic feet; used in water transportation rate making.

Metric Ton: 2,204 lbs

Micro-Land Bridge: An intermodal movement in which the shipment is moved from a foreign country to the U.S. by water and then moved across the U.S. by railroad to an interior, non-port city, or vice versa for exports from a non-port city.


Mileage Allowance: An allowance based upon distance and given by railroads to shippers using private rail cars.

Mini-Land Bridge: An intermodal movement in which the shipment is moved from a foreign country to the U.S. by water and then moved across the U.S. by railroad to a destination that is a port city, or vice versa for exports from a U.S. port city. (Also called Micro-Land Bridge)

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.

Mixed loads: The movement of both regulated and exempt commodities in the same vehicle at the same time.

Motor Carrier: An enterprise that offers service via land motor carriage.

Multiple-Car Rate: A railroad rate that is lower for shipping more than one carload rather than just one carload at a time.

Net Weight: The weight of the merchandise, unpacked, exclusive of any containers.

Non-Durable goods: Goods whose serviceability is generally limited to a period of less than three years (such as perishable goods and semi durable goods).

Non-Intrusive Inspection technology (NII): Originally developed to address the threat of smugglers using increasingly sophisticated techniques to conceal narcotics deep in commercial cargo and conveyances, NII systems, in many cases, give Customs inspectors the capability to perform thorough examinations of cargo without having to resort to the costly, time consuming process of unloading cargo for manual searches, or intrusive examinations of conveyances by methods such as drilling and dismantling.

Non-Vessel-Owning Common Carrier (NVOCC): A firm that offers the same services as an ocean carrier, but which does not own or operate a vessel. NVOCCs usually act as consolidators, accepting small shipments (LCL) and consolidating them into full container loads. They also consolidate and disperse international containers that originate at or are bound for inland ports. They then act as a shipper, tendering the containers to ocean common carriers. They are required to file tariffs with the Federal Maritime Commission and are subject to the same laws and statutes that apply to primary common carriers.

Not Otherwise Specified/Not Elsewhere Specified (NOS/NES): This term often appears in ocean or airfreight tariffs respectively. If no rate for the specific commodity shipped appears in the tariff, then a general class rate (for example: printed matter NES) will apply. Such rates usually are higher than rates for specific commodities.

Ocean Bill of Lading: The bill of lading issued by the ocean carrier to its customer.

On-Carriage: Transporting a container after it has been off-loaded from a vessel (also see pre-carriage).

Origin: The place where a shipment begins its movement.

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

Over-the-Road: A motor carrier operation that reflects long-distance, inter-city moves; the opposite of local operations.

Owner-Operator: A trucking operation in which the owner of the truck is also the driver.

Pack Out: In a fulfillment environment this refers to the operations involved in packaging and palletizing individual units of product for introduction into the warehouse distribution environment. For example, a contract 3PL may received or assemble units of product which need to be placed into retail packaging, then over packed with a carton and then palletized.

Packing and Marking: The activities of packing for safe shipping and unitizing one or more items of an order, placing them into an appropriate container, and marking and labeling the container with customer shipping destination data, as well as other information that may be required.

Pallet: The platform which cartons are stacked on and then used for shipment or movement as a group. Pallets may be made of wood or composite materials.

Pallet Jack: Material handling equipment consisting of two broad parallel pallet forks on small wheels used in the warehouse to move pallets of product, but not having the lifting capability of a forklift. It may be a motorized unit guided by an operator who stands on a platform; or it may be a motorized or manual unit guided by an operator who is walking behind or beside it. Comes as a “single” (one pallet) or “double” (two pallets).

Pick-Up Order: A document indicating the authority to pick up cargo or equipment from a specific location.

Piggyback: Terminology used to describe a truck trailer being transported on a railroad flatcar.

Pin Lock: A hard piece of iron, formed to fit on a trailer’s pin, that locks in place with a key to prevent an unauthorized

Port: A harbor where ships will anchor.

Port Authority: A state or local government that owns, operates, or otherwise provides wharf, dock, and other terminal investments at ports.

Port of Discharge (POD): Port where vessel is off loaded.

Port of Entry: A port at which foreign goods are admitted into the receiving country.

Port of Loading (POL): Port where cargo is loaded aboard the vessel.

Pre-Carriage: Transporting a container before it is loaded onto a vessel. (see On-Carriage)

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 for the product.

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

Public Warehouse: A business that provides short or long-term storage to a variety of businesses usually on a month-to-month basis.

Rack: A storage device for handling material in pallets. A rack usually provides storage for pallets arranged in vertical sections with one or more pallets to a tier. Some racks accommodate more than one-pallet-deep storage.

Racking: A function performed by a rack-jobber, a full-function intermediary who performs all regular warehousing functions and some retail functions, typically stocking a display rack.

Random-Location Storage: A storage technique in which parts are placed in any space that is empty when they arrive at the storeroom. Although this random method requires the use of a locator file to identify part locations, it often requires less storage space than a fixed-location storage method.

Receiving Dock: Distribution center location where the actual physical receipt of the purchased material from the carrier occurs.

Re-consignment: A carrier service that permits changing the destination and/or consignee after the shipment has reached its originally billed destination and paying the through rate from origin to final destination.

Refrigerated Carriers: Truckload carriers designed to keep perishables good refrigerated. The food industry typically uses this type of carrier.

Reefer: A term used for refrigerated vehicles.

Regional Carrier: A for-hire air carrier, usually certificated, that has annual operating revenues of less than $74 million; the carrier usually operates within a particular region of the country.

Regular-Route Carrier: A motor carrier that is authorized to provide service over designated routes.

Relay Terminal: A motor carrier terminal designed to facilitate the substitution of one driver for another who has driven the maximum hours permitted.

Request for Proposal (RFP): A document, which provides information concerning needs and requirements for a manufacturer. This document is created in order to solicit proposals from potential suppliers. For, example, a computer manufacturer may use a RFP to solicit proposals from suppliers of third party logistics services.

Request for Quote (RFQ): A document used to solicit vendor responses when a product has been selected and price quotations are needed from several vendors.

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

Self Billing: A transportation industry strategy which prescribes that a carrier will accept payment based on the tender document provided by the shipper.

Ship Agent: A liner company or tramp ship operator representative who facilitates ship arrival, clearance, loading and unloading, and fee payment while at a specific port.

Ship Broker: A firm that serves as a go-between for the tramp ship owner and the chartering consignor or consignees.

Shipper: The party that tenders goods for transportation.

Shipper-Carriers: Shipper-carriers (also called private carriers) are companies with goods to be shipped that own or manage their own vehicle fleets. Many large retailers, particularly groceries and “big box” stores, are shipper-carriers.

Shipper’s Agent: A firm that acts primarily to match up small shipments, especially single-traffic piggyback loads to permit use of twin-trailer piggyback rates.

Shipping Lane: A predetermined, mapped route on the ocean that commercial vessels tend to follow between ports. This helps ships avoid hazardous areas. In general transportation, the logical route between the point of shipment and the point of delivery used to analyze the volume of shipment between two points.

Shipping Manifest: A document that lists the pieces in a shipment. A manifest usually covers an entire load regardless of whether the load is to be delivered to a single destination or many destinations. Manifests usually list the items, piece count, total weight, and the destination name and address for each destination in the load.

Short-Haul Discrimination: Charging more for a shorter haul than for a longer haul over the same route, in the same direction, and for the same commodity.

Short Shipment: Piece of freight missing from shipment as stipulated by documents on hand.

Sleeper Team: The use or two drivers to operate a truck equipped with a sleeper berth; while one driver sleeps in the berth to accumulate the mandatory off-duty time, the other driver operates the vehicle.

Slip Seat Operation: A term used to describe a motor carrier relay terminal operation where one driver is substituted for another who has accumulated the maximum driving time hours.

Slip Sheet: Similar to a pallet, the slip sheet, which is made of cardboard or plastic, is used to facilitate movement of unitized loads.

Smart and Secure Trade Lanes (SST): Private initiative of the Strategic Council on Security Technology, an assembly of executives from port operators, major logistics technology providers, transportation consultancies, and former generals and public officials. Aims to enhance the safety, security and efficiency of cargo containers and their contents moving through the global supply chain into U.S. ports.

Special-Commodities Carrier: A common carrier trucking company that has authority to haul a special commodity; there are 16 special commodities, such as household goods, petroleum products, and hazardous materials.

Special-Commodity Warehouses: A warehouse that is used to store products that require unique types of facilities, such as grain (elevator), liquid (tank), and tobacco (barn).

Stand Up Fork Lift: A forklift where the operator stands rather than sits. Most commonly used in case picking operations where the operator must get on and off the lift frequently.

Standard Carrier Alpha Code (SCAC/SCAC Code): A unique 2 to 4-letter code assigned to transportation companies for identification purposes. SCAC codes are required for EDI, and are printed on bills of lading and other transportation documents.

Straight Truck: A truck which has the driver’s cab and the trailer combined onto a single frame. Straight trucks do not have a separate tractor and trailer. The driving compartment, engine and trailer are one unit.

Supply Chain: 1) starting with unprocessed raw materials and ending with the final customer using the finished goods, the supply chain links many companies together. 2) The material and informational interchanges in the logistical process stretching from acquisition of raw materials to delivery of finished products to the end user. All vendors, service providers and customers are links in the supply chain.

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.

Sustaining Activity: An activity that benefits an organizational unit as a whole, but not any specific cost object.

Tandem: A truck that has two drive axles or a trailer that has two axles.

Tank Cars: Rail cars that are designed to haul bulk liquids or gas commodities.

Tapering Rate: A rate that increases with distance but not in direct proportion to the distance the commodity is shipped.

Tare Weight: The weight of a substance, obtained by deducting the weight of the empty container from the gross weight of the full container.

Task Interleaving: A method of combining warehouse picking and put away. Warehouse Management Systems (WMS) use logic to direct (typically with an RF terminal) a lift truck operator to put away a pallet en route to the next pick. The idea is to reduce “deadheading” or driving empty material handling equipment around the warehouse.

Terminal Delivery Allowance: A reduced rate offered in return for the shipper of consignee tendering or picking up the freight at the carrier’s terminal.

TEU: See Twenty-foot Equivalent Unit

Third-Party Logistics (3PL): Outsourcing all or much of a company’s logistics operations to a specialized company. The term “3PL” was first used in the early 1970s to identify intermodal marketing companies (IMCs) in transportation contracts. Up to that point, contracts for transportation had featured only two parties, the shipper and the carrier. When IMCs entered the picture—as intermediaries that accepted shipments from the shippers and tendered them to the rail carriers—they became the third party to the contract, the 3PL. But over the years, that definition has broadened to the point where these days, every company that offers some kind of logistics service for hire calls itself a 3PL.

Third Party Logistics Provider: A firm, which 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, which they provide, are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding.

Ton-Mile: A measure of output for freight transportation; it reflects the weight of the shipment and the distance it is hauled; a multiplication of tons hauled and distance traveled.

Tracing: Determining where a shipment is during the course of a move.

Tractor: The tractor is the driver compartment and engine of the truck. It has two or three axles.

Trailer: The part of the truck that carries the goods.

Trailer Drops: When a driver drops off a full truck at a warehouse and picks up an empty one.

Trailer on a Flatcar (TOFC): A specialized form of containerization in which motor and rail transport coordinate. Synonym: Piggyback

Tramp: An international water carrier that has no fixed route or published schedule; a tramp ship is chartered for a particular voyage or a given time period.

Transit Privilege: A carrier service that permits the shipper to stop the shipment in transit to perform a function that changes the commodity’s physical characteristics but to pay the through rate.

Transportation Mode: The method of transportation: land, sea, or air shipment.

Transportation Security Administration (TSA): TSA was created in response to the attacks of September 11th and signed into law in November 2001. TSA was originally in the Department of Transportation but was moved to the Department of Homeland Security in March 2003. TSA’s mission is to protect the nation’s transportation systems by ensuring the freedom of movement for people and commerce.

Truckload Carriers (TL): Trucking companies, which move full truckloads of freight directly from the point of origin to destination.

Truckload Lot: A truck shipment that qualifies for a lower freight rate because it meets a minimum weight and/or volume.

Unit Load Device (ULD): Refers to airfreight containers and pallets.

Vessel: A floating structure designed for transport.

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

Warehousing: The storing (holding) of goods.

Warehouse Management System (WMS): The systems used in effectively managing warehouse business processes and direct warehouse activities, including receiving, put away, picking, shipping, and inventory cycle counts.

Waterway Use Tax: A per-gallon tax assessed barge carriers for use of the waterways.

Waybill: Document containing description of goods that are part of common carrier freight shipment. Show 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 shipment volume at which the LTL charges equal the TL charges at the minimum weight.

Yard Management System (YMS): A system which is designed to facilitate and organize the coming, going and staging of trucks and trucks with trailers in the parking “yard” that serves a warehouse, distribution or manufacturing facility.

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