Draft:Glossary of logistics terms

This glossary of logistics terms explains commonly used terms in logistics, in alphabetical order. Some of these terms have their own pages, like Vendor or Commodities.

A

Acquisition Cost

In cost accounting, the cost required to obtain one or more units of an item. It is order quantity times unit cost.

Agent

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

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, and obligates the carrier to carry the consignment to the airport of destination according to specified conditions.

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).

ATA (Actual Time of Arrival)

The actual time at which a shipment or cargo arrives at the designated destination. It is also sometimes referred to as the American Trucking Associations' time standard for tracking shipments.

ATD (Actual Time of Departure)

The actual time at which a shipment or cargo departs from the origin or transit point.

Attributes

Characteristics or qualities of an item or entity that help define its nature, usage, or performance. These could be physical, functional, or technical characteristics that are used for classification, comparison, or specification purposes.

B

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 Number

The number assigned by the carrier to identify the bill of lading.

Bill of Material (BOM)

A structured list of all the materials or parts and quantities needed to produce a particular finished product, assembly, subassembly, or manufactured part, whether purchased or not.

Booking

The act of requesting space and equipment aboard a vessel for cargo which is to be transported.

Booking Number

The number assigned to a certain space reservation by the carrier or the carrier’s agent.

Break-Bulk

The separation of a consolidated bulk load into smaller individual shipments for delivery to the ultimate consignee. The freight may be moved intact inside the trailer, or it may be interchanged and rehandled to connecting carriers.

C

Cargo

Merchandise carried by a means of transportation.

Carrier

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

Commodities

Any article exchanged in trade, most commonly used to refer to raw materials and agricultural products.

Commodities Clause

A clause that prohibits railroads from hauling commodities that they produced, mined, owned, or had an interest in.

Commodity Code

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

Contract

An agreement between two or more competent persons or companies to perform or not to perform specific acts or services or to deliver merchandise. A contract may be oral or written. A purchase order, when accepted by a supplier, becomes a contract. Acceptance may be in writing or by performance, unless the purchase order requires acceptance in writing.

Cost and Freight

A shipping arrangement in which the seller is responsible for the costs and risks involved in transporting goods to the destination port. The buyer is responsible for the cost of insurance and unloading once the goods arrive.

D

Dangerous Goods

Articles or substances capable of posing a significant risk to health, safety, or property, and that ordinarily require special attention when transported. See also Hazardous Goods.

Direct Cost

A cost that can be directly traced to a cost object since a direct or repeatable cause-and-effect relationship exists. A direct cost uses a direct assignment or cost causal relationship to transfer costs. Also see: Indirect Cost.

Discharge Port

The name of the port where the cargo is unloaded from the export vessel.

Door to Door

The through-transport of goods from consignor to consignee.

Door to Port

The through transport service from consignor to port of importation.

Drop Ship

To take the title of the products but not actually handle, stock, or deliver it, e.g., to have one supplier ship directly to another or to have a supplier ship directly to the customer.

E

Electronic Commerce (EC)

Also written as e-commerce. Conducting business electronically via traditional EDI technologies, or online via the Internet.

Electronic Data Interchange (EDI)

The automated exchange of business documents (like orders or invoices) between organizations in a standardized digital format, eliminating the need for paper and manual data entry. It improves efficiency, reduces errors, and enables faster, secure communication.

Enterprise Resource Planning (ERP) System

The integrated software used by organizations to manage and automate core business processes, such as finance, inventory, human resources, and supply chain. It centralizes data, improves efficiency, and provides real-time insights across departments.

ETA (Estimated Time of Arrival)

The expected time at which a shipment, vehicle, or individual is scheduled to arrive at its destination.

ETD (Estimated Time of Departure)

The expected time at which a shipment, vehicle, or individual is scheduled to depart from its origin.

F

Final Destination

The last stopping point for a shipment.

First In First Out (FIFO)

In inventory control and financial accounting, this refers to the practice of using stock from inventory on the basis of what was received first and is consumed first. Antonym: Last In First Out.

FOB

A term of sale defining who is to incur transportation charges for the shipment, who is to control the shipment movement, or where title to the goods passes to the buyer; originally meant “free on board ship.”

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.

Freight

Goods being transported from one place to another.

Freight Forwarder

An organization which provides logistics services as an intermediary between the shipper and the carrier, managing the transportation of goods on behalf of the shipper.

G

Goods

A term associated with more than one definition:

Common term indicating movable property, merchandise, or wares. All materials which are used to satisfy demands. 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.

I

INCOTERMS

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

Item

Any unique manufactured or purchased part, material, intermediate, sub-assembly, or product.

K

Key Performance Indicator (KPI)

A measure which is of strategic importance to a company or department. For example, a supply chain flexibility metric is Supplier On-Time Delivery Performance, which indicates the percentage of orders that fulfilled on or before the original requested date.

L

Lading

The cargo carried in a transportation vehicle.

Last In First Out (LIFO)

In inventory control and financial accounting, this refers to the practice of using stock from inventory on the basis of what was received last is consumed first. This has limited use in stock keeping and is primarily a cost-accounting method.

Lead Time

The total time that elapses between an order’s placement and its receipt. It includes the time required for order transmittal, order processing, order preparation, and transit.

Less-Than-Containerload (LCL)

A term used when goods do not completely occupy an entire container. When many shipper’s goods occupy a single container, each shipper’s shipment is considered to be LCL.

Lift on, Lift off (LO/LO, LOLO)

A method by which cargo is loaded onto and unloaded from an ocean vessel, typically by cranes.

N

Net Weight

The weight of the merchandise, unpacked, exclusive of any containers.

O

Origin

The place where a shipment begins its movement.

P

Packing List

A document containing information about the location of each Product ID in each package. It allows the recipient to quickly find the item he or she is looking for without a broad search of all packages. It also confirms the actual shipment of goods on a line item basis.

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.

Payroll

Total of all fully-burdened labor costs, including wages, fringe benefits, overtime, bonus, and profit sharing.

Picking

The operations involved in pulling products from storage areas to complete a customer order.

Port of Discharge

Port where vessel is offloaded.

Port of Loading

Port where cargo is loaded aboard the vessel.

Portal

A web site that serves as a starting point to other destinations or activities on the Internet.

S

Self Billing

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

Shipper

The party that tenders goods for transportation.

Stakeholders

People with a vested interest in a company, including managers, employees, stockholders, customers, suppliers, and others.

Stock-Keeping Unit (SKU)

The unique identifier used to track and manage individual products or items in inventory. It typically includes information about the product’s characteristics, such as size, color, or style, and helps businesses organize stock, monitor sales, and streamline ordering.

Supplier

A provider of goods or services. Also see: Vendor. A seller with whom the buyer does business, as opposed to vendor, which is a generic term referring to all sellers in the marketplace.

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.

T

Transit Time

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

Transportation Mode

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

U

Unit Cost

The cost associated with a single unit of product. The total cost of producing a product or service divided by the total number of units. The cost associated with a single unit of measure underlying a resource, activity, product, or service. It’s calculated by dividing the total cost by the measured volume. Unit cost measurement must be used with caution as it may not always be practical or relevant in all aspects of cost management.

Unit of Measure (UOM)

The unit in which the quantity of an item is managed, e.g., pounds, each, box of 12, package of 20, or case of 144. Various UOMs may exist for a single item. For example, a product may be purchased in cases, stocked in boxes, and issued in single units.

V

Vendor

The manufacturer or distributor of an item or product line. Also see: Supplier.

Vessel

A floating structure designed for transport.

W

Warehouse

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

Waybill

Document containing 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.

References

CSMP – Council of Supply Chain Management Professionals and its member companies WERC – Warehouse Education and Research Council and its member companies Transportation and Logistics Basics-A Handbook, by R. Neil Southern, PhD, Continental Traffic Publishing, copyright 1997 U.S. Department of Transportation – Maritime Administration 1-800-99-MARAD Tradeport-California’s Gateway to International Trade-tradeport.org