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Logistics terms and definitions

3PL: 3PL stands for third-party logistics. A 3PL provider is a company that offers logistics services to other businesses. These services can include transportation, warehousing, inventory management, order fulfillment, and other supply chain activities.

logistics terms and definitions-281810692By outsourcing logistics functions to a 3PL provider, businesses can focus on their core competencies and leave the complexities of logistics to an experienced third party. 3PL providers can offer a range of benefits, including improved efficiency, reduced costs, and greater flexibility.

Some of the services that a 3PL provider may offer include:

  • Transportation management: arranging for the movement of goods by land, sea, or air.
  • Warehousing and distribution: storing and handling goods in a warehouse and distributing them to customers.
  • Freight forwarding: coordinating the transportation of goods across international borders.
  • Customs brokerage: helping companies navigate customs regulations and procedures.
  • Supply chain optimization: analyzing supply chain processes and recommending improvements to increase efficiency and reduce costs.

Overall, 3PL providers can help businesses streamline their logistics operations and improve their supply chain performance, leading to increased customer satisfaction and a competitive advantage in the marketplace.

4PL: 4PL stands for fourth-party logistics. A 4PL provider is a company that acts as an integrator or coordinator of supply chain services for its customers. Unlike a 3PL provider, which typically offers specific logistics services, a 4PL provider manages the entire supply chain on behalf of its customers, working with multiple logistics providers to deliver a comprehensive supply chain solution.

A 4PL provider typically has a high level of expertise in supply chain management and uses advanced technology and analytics to optimize its customers' supply chains. The 4PL provider is responsible for managing relationships with other logistics providers, coordinating their activities, and ensuring that the overall supply chain meets the customer's requirements.

Some of the services that a 4PL provider may offer include:

  • Supply chain design and optimization: designing and optimizing the entire supply chain to meet the customer's specific requirements.
  • Carrier selection and management: selecting the best carriers for each shipment and managing their performance.
  • Freight audit and payment: auditing and paying transportation invoices on behalf of the customer.
  • Inventory management: managing the customer's inventory levels and providing real-time visibility into inventory status.
  • Data analytics and reporting: providing insights into supply chain performance through data analytics and reporting.

Accessorial Fee: An accessorial fee is a charge that a carrier may add to a shipment's transportation cost in addition to the base rate. Accessorial fees are typically charged for services that are not included in the standard shipping process. These fees can include charges for additional services such as inside delivery, liftgate service, detention, and residential delivery. Accessorial fees may also be added for special requirements such as hazardous materials, overweight shipments, or specialized equipment needs. Accessorial fees can vary depending on the carrier, shipping location, and the specific service requested. It is important for shippers to be aware of potential accessorial fees that may apply to their shipments to avoid unexpected costs.

Airway Bill: A document used to define the terms and conditions of a shipment between a shipper and a carrier for air freight. The document includes information such as the shipper and consignee names and addresses, the origin and destination of the shipment, the type and quantity of goods being transported, and any special instructions or requirements.

Backhaul: A return trip that a truck driver makes after delivering a load to a destination. The backhaul helps to reduce the cost of transportation by allowing the driver to carry another load or cargo on their return trip.

Base Rate: The basic rate that a carrier charges for shipping goods from one location to another. The base rate does not include any additional fees or charges that may apply.

Bill of Lading (BOL): A legal document that serves as a receipt of goods and a contract between the shipper and carrier. The BOL includes information about the goods being shipped, the names and addresses of the shipper and carrier, and the terms and conditions of the shipment.

Bobtail: A truck that is operating without a trailer attached.

Bobtail Truck: A truck that is operating without a trailer attached. Bobtail trucks are typically used for local deliveries or for transporting smaller loads and are generally smaller vehicles than a tractor. They will also likely come equipped with an enclosed storage box suitable for transporting goods in a safe manner.

Bonded Cargo: In-bond cargo is cargo that is being transported under bond or security from one point to another within a country or across international borders. This means that the cargo is not cleared by customs at the point of entry but is transported under bond to an approved location where it will be cleared by customs.

The purpose of in-bond cargo is to allow for the secure transportation of goods while they are in transit, and to allow for their clearance by customs at a later point in time. This can be useful for companies that need to transport goods from one location to another, but do not yet have all the necessary documentation to clear customs at the point of entry.

In the United States, for example, in bond cargo is regulated by the U.S. Customs and Border Protection (CBP) agency. There are two types of in-bond cargo:

  • Immediate transportation (IT) in bond: This type of in-bond cargo is used for goods that are being transported from one point of the U.S. to another point of the U.S. without entering into the commerce of the U.S.
  • Transportation and exportation (T&E) in bond: This type of in-bond cargo is used for goods that are being transported from a port of entry to another port of exit outside the U.S.

Breakbulk: A method of transporting cargo that involves separating it into smaller units for loading and unloading. Breakbulk cargo is typically shipped in crates, barrels, or other containers that can be easily moved by hand.

Carrier: A company that transports goods. Carriers can include trucking companies, shipping lines, air cargo carriers, and railroads.

CDL (Commercial Driver's License): A license that allows a driver to operate commercial motor vehicles. To obtain a CDL, a driver must pass a series of tests that demonstrate their knowledge of safe driving practices and the operation of commercial vehicles.

Chassis: The frame or structure that supports a container or trailer. Chassis are typically used to transport containers and are designed to be compatible with a specific type of container.

Clean Truck Fee: A fee charged by some ports or shipping terminals to help reduce air pollution and improve air quality. The fee is usually assessed on trucks that do not meet certain emissions standards.

Consignee: The person or company that receives a shipment of goods. The consignee is responsible for inspecting the goods upon delivery and for signing the bill of lading to acknowledge receipt of the shipment.

Consignor: The person or company that sends a shipment of goods. The consignor is responsible for preparing the goods for shipment and for arranging for their transport.

Container Freight Station (CFS): A facility used for the consolidation and deconsolidation of cargo, typically located near a seaport or airport. CFS facilities provide a range of services, including container loading and unloading, cargo inspection, and customs clearance.

Container Per Diem: Container per diem refers to a fee charged by a shipping line or leasing company for the use of a container beyond the agreed-upon free time. The fee is charged on a per-day basis and is intended to compensate the owner of the container for the cost of the container's use and the loss of revenue from the container being unavailable for use by other customers. The per diem fee encourages shippers to return containers promptly and helps ensure that containers are available where and when they are needed.

Container Reduction Station: A facility where shipping containers can be disassembled, sorted, and stacked for transport. The facility is generally used for the reduction of weight from a shipment. In this case the container reduction station is located in a designated overweight zone where overweight shipments can be legally managed.

Container: A large metal (usually steel) or plastic box used to transport goods. Containers are typically designed to be compatible with a specific type of chassis and can be easily loaded and unloaded from ships, trucks, and trains.

Container Grounding: This occurs when a container is placed on the ground as opposed to placing the container on a wheeled chassis. The container is generally stacked with other containers thereby creating an efficient use of space. The strategy can also be implemented when there is a shortage of chassis.

CzarLite Tariff: A rating system used in the freight transportation industry to determine the cost of shipping goods by truck. It was created by the National Motor Freight Traffic Association (NMFTA) as a simplified method for calculating shipping rates. The system is based on a set of pricing formulas that take into account factors such as the weight and classification of the shipment, the distance traveled, and any additional services required. The CzarLite tariff is used by many carriers and shippers in the United States to determine the cost of shipping goods by truck and is widely recognized as an industry standard.

Deadhead: A truck that is traveling without a load. Deadheading is a common practice in the trucking industry when a driver has delivered a load and is returning to their home base or to pick up another load.

Delivery Order: A document that authorizes the delivery of goods to a specific location. The delivery order is typically issued by the consignee or their agent and must be presented to the carrier at the time of delivery.

Demurrage: Charges assessed by a carrier when a shipment is delayed beyond a certain period of time. The charges occur in ocean shipping when containers exceed the negotiated free time allowed.

Dimensional Weight: A pricing method used by carriers to calculate the cost of shipping based on the size and weight of the package. Dimensional weight is calculated by multiplying the length, width, and height of the package and dividing by a predetermined factor.

Dispatch: The process of assigning loads to drivers and giving them instructions. The dispatch process is typically managed by a dispatcher or a dispatch team and involves coordinating with shippers, carriers, and drivers.

Dock: A platform for loading and unloading cargo from trucks. Docks are typically found at warehouses, distribution centers, and other facilities where goods are loaded or unloaded from trucks. They can come in different types, such as a loading dock that is built at the same level as the truck bed or a dock that requires a ramp or lift to raise the cargo to the level of the warehouse.

DOT (Department of Transportation): The federal agency that regulates the transportation industry in the United States. The DOT oversees various modes of transportation, including highways, aviation, railways, and maritime. Its responsibilities include establishing safety regulations, issuing operating licenses, and providing funding for infrastructure projects.

Drayage: The process of transporting goods over a short distance, typically from a port to a nearby warehouse or distribution center. Drayage can also refer to the use of specialized equipment, such as a dray, to move cargo.

Drop and hook: A method of delivery that involves dropping off one trailer and picking up another at the same location. This allows the driver to quickly exchange trailers without having to wait for the cargo to be loaded or unloaded. It is a common practice in the trucking industry and is often used for time-sensitive shipments.

Dry Run: An attempt to pick up or deliver goods to a consignee or designated pick up or return location where the goods cannot be delivered or picked up. This is usually followed by an accessorial fee for the attempt.

Dry Van: A type of trailer that is enclosed and used to transport dry goods. These trailers are typically used for shipping non-perishable items, such as furniture, electronics, and clothing.

Equipment Types: This refers to the various types of vehicles and equipment used in the transportation industry. This can include tractor-trailers, flatbed trailers, refrigerated trucks, and intermodal containers, among others.

ERP: Short for "enterprise resource planning," an ERP system is a software platform that integrates various business functions, such as finance, human resources, and supply chain management, into a single system. An ERP can provide real-time visibility into the state of the business and help to optimize operations across different departments.

FMC: The Federal Maritime Commission (FMC) is an independent agency of the U.S. government responsible for regulating ocean transportation in the foreign commerce of the United States. The FMC's mission is to ensure a competitive and efficient ocean transportation system that supports the U.S. economy and protects the public from unfair and deceptive practices.

The FMC has various responsibilities, including:

  • Regulating ocean common carriers, marine terminal operators, and ocean transportation intermediaries (OTIs), which are companies that arrange for the transportation of cargo between the U.S. and foreign countries.
  • Reviewing and approving agreements among ocean carriers that relate to rates, services, and operations, to ensure they are in the public interest and do not harm competition.
  • Investigating complaints of unfair or deceptive practices by ocean carriers, marine terminal operators, or OTIs.
  • Collecting and publishing data on ocean shipping rates and services.

The FMC has broad authority to regulate the ocean transportation industry and has the power to take action against companies that violate its regulations, including imposing fines and revoking licenses.

FMCSA: Stands for the Federal Motor Carrier Safety Administration. The FMCSA is a United States government agency that is responsible for regulating and overseeing commercial motor vehicles and their operators.

The FMCSA's primary mission is to reduce crashes, injuries, and fatalities involving large trucks and buses. The agency sets safety standards for commercial vehicles, drivers, and motor carriers, and enforces those standards through a range of programs, including inspections, audits, and investigations.

Some of the key responsibilities of the FMCSA include:

  • Developing and enforcing safety regulations for commercial motor vehicles and their operators
  • Conducting safety inspections and audits of commercial motor carriers and drivers
  • Maintaining a database of safety information on motor carriers, drivers, and vehicles
  • Investigating crashes and other safety violations
  • Providing safety education and outreach programs to the motor carrier industry and the public

Four-Axle Tractor: A type of tractor-trailer truck that has four axles, typically used for transporting heavier loads over long distances. Four-axle tractors are often used in the construction and mining industries, as well as for long-haul shipments.

Free Time: The period during which cargo can be stored at a facility without incurring additional charges. This is typically negotiated between the shipper and carrier and varies depending on the type of cargo and the facility. Free time is also used when referring to Demurrage, Per Diem, and the time allotted for loading or unloading shipments.

Freight Broker: An intermediary who connects shippers with carriers to transport goods. Freight brokers help to coordinate the transportation process, negotiate rates, and ensure that the shipment is delivered on time and in good condition.

Freight Classification: A system for categorizing different types of freight based on their size, weight, and other characteristics. Freight classification is used to determine the rates that carriers charge for shipping different types of cargo.

Freight Forwarder: A company that specializes in arranging the transportation of goods on behalf of shippers. Freight forwarders typically manage the coordination of the shipping process, including booking cargo space, coordinating with carriers, and managing customs clearance.

Freight: Goods that are transported by a carrier. Freight can include a wide range of goods, from raw materials and components to finished products.

Fuel Surcharge: An additional fee added to the cost of shipping to cover the cost of fuel. Fuel surcharges are calculated based on the price of fuel at the time of shipment and are subject to change based on market conditions.

Full Container Load (FCL): A shipment that occupies an entire shipping container. FCL shipments are typically used for larger volumes of cargo and are more cost-effective than shipping multiple smaller loads.

Hot Hatch: A term used in the logistics industry to describe a shipment that requires urgent and expedited delivery. Hot hatch shipments are typically time-sensitive and require special handling and transportation.

In ocean shipping, a Hot Hatch container is stowed as close to the first unloading position as possible to expedite the container becoming available for grounding and transport.

Liftgate: A liftgate, also known as a tailgate lift or hydraulic lift, is a device used on trucks and other vehicles to raise and lower heavy or bulky items. A liftgate consists of a platform that is mounted on a hydraulic system, which raises and lowers the platform using a series of hydraulic cylinders.

Liftgates are commonly used in the transportation industry to move heavy or oversized items, such as furniture, appliances, and machinery, into and out of the back of a truck or trailer. They are especially useful for deliveries to locations without loading docks or where manual loading and unloading is not feasible.

Material Handling Equipment: Material Handling Equipment (MHE) refers to a wide range of equipment used in warehouses and distribution centers to move, store, and protect goods. Examples of MHE include forklifts, conveyor systems, pallet jacks, and storage racks. MHE is essential in managing the movement and storage of goods in a safe and efficient manner.

NMFTA: The National Motor Freight Traffic Association (NMFTA) is a nonprofit organization based in the United States that develops and maintains transportation pricing standards and practices for the motor carrier industry. The organization was established in 1956 and is made up of over 800 members, including trucking companies, shippers, and transportation intermediaries.

The NMFTA is responsible for creating and updating the National Motor Freight Classification (NMFC) system, which is a standardized system for classifying freight based on its density, stowability, handling, and liability. The NMFC system is used by carriers and shippers to determine shipping rates and is widely recognized as an industry standard.

In addition to the NMFC, the NMFTA is also responsible for developing and maintaining other pricing and classification systems for the motor carrier industry, including the CzarLite tariff and the Uniform Straight Bill of Lading. The organization also provides education and training programs for industry professionals and advocates on behalf of the trucking industry in matters of policy and regulation.

Non-Vessel Owning Common Carrier (NVOCC): A type of freight forwarder that provides shipping services for goods without owning any vessels. NVOCCs typically consolidate smaller shipments from various shippers into full container loads, then contract with ocean carriers to transport these shipments by sea. NVOCCs assume the responsibility of a carrier for the carriage of goods and issue their own bill of lading.

Ocean Bill of Lading: A legal document issued by an ocean carrier to acknowledge receipt of goods and the contract of carriage of goods by sea. The bill of lading serves as evidence of ownership of the cargo and contains information such as the shipper and consignee's name and address, the description of the goods, the date and place of loading, and the port of discharge.

Carrier Operating Authority: Operating authority is the legal permission or authority granted by a government agency to a motor carrier, allowing them to operate commercial vehicles on public roads. In the United States, the Federal Motor Carrier Safety Administration (FMCSA) is responsible for issuing operating authority to motor carriers.

Motor carriers must apply for operating authority and provide certain information to the FMCSA, including their business name and address, the type of operations they plan to conduct, the types of cargo they will carry, and their insurance information. The FMCSA reviews the application and conducts a safety audit to ensure that the carrier meets certain safety and financial responsibility requirements.

Once the motor carrier is granted operating authority, they are assigned a unique motor carrier number (MC number), which must be displayed on their vehicles. The motor carrier must also comply with various other regulations, including driver qualifications, vehicle maintenance, and hours of service.

Operating authority is required for most for-hire motor carriers, including interstate and intrastate carriers. There are some exceptions, however, such as private carriers (carriers that transport their own goods and do not transport goods for others) and certain agricultural and livestock carriers.

Overweight Corridor: A designated route or highway that allows trucks with overweight loads to travel through. Overweight corridors have different weight limits and may require special permits or fees.

Overweight Trailer or Container: A trailer or container that exceeds the maximum allowable weight limit for a particular road or state. Overweight trailers or containers require special permits and may be subject to additional fees and regulations.

Owner-operator: A truck driver who owns and operates their own truck. Owner-operators may contract with carriers to transport goods, or they may operate as independent contractors.

Pallet: A flat platform used for stacking and transporting goods. Pallets are typically made of wood, plastic, or metal and come in many sizes and configurations. Pallets facilitate loading and unloading of goods, as well as provide protection during transportation.

Partner Carrier: A partner carrier is a transportation provider that works in partnership with a shipper or logistics provider to transport goods. Partner carriers may provide regular, scheduled service on a designated route or may be engaged on an as-needed basis. Partner carriers are typically selected based on their capacity, reliability, and cost-effectiveness.

Pier Pass: A fee charged by the terminal operator for the use of their facilities, such as the loading and unloading of cargo. The fee is typically charged to the shipping line, which then passes it on to the cargo owner or shipper.

Pre-Pull: A process in which cargo is pulled from the terminal or port prior to the vessel's arrival. Pre-pulling helps to reduce congestion and wait times at the terminal or port.

Rate confirmation: A document that confirms the rate and terms of a shipment. The rate confirmation includes information such as the carrier's name, the shipper's name, the origin and destination of the shipment, the freight charges, and any other relevant terms and conditions.

Reefer: Short for "refrigerated." Refers to a trailer or truck used for transporting temperature-sensitive goods. Reefers are equipped with cooling systems that maintain a constant temperature and prevent spoilage of the cargo.

Relay: A method of delivery that involves multiple drivers taking turns to transport a shipment. Relays are commonly used for long-haul trucking and can help reduce delivery times and increase efficiency.

Shipment: A load of goods that is being transported. A shipment may consist of one or more pieces of freight and may be transported by various modes of transportation.

Shipper: The person or company that sends a shipment of goods. The shipper is responsible for preparing the shipment, including packaging, and labeling, and arranging for its transportation.

SKU: Short for "stock keeping unit," an SKU is a unique identifier assigned to each product in inventory. SKUs are used to track inventory levels, manage orders, and provide real-time visibility into stock levels.

Sleeper cab: A tractor-trailer truck that has a built-in sleeping compartment for the driver. Sleeper cabs allow drivers to rest while on the road and are commonly used for long-haul trucking.

Spot market: A market where carriers can bid on loads that need to be transported. Spot markets are typically used for ad-hoc shipments or one-time delivery needs. Carriers can search for available loads on spot market platforms and submit bids to transport them. Spot markets can provide carriers with opportunities for additional business and can also provide shippers with competitive pricing and flexibility.

Stevedore: A stevedore is a person or company responsible for loading and unloading cargo on a ship. They are responsible for the safe and efficient movement of cargo between the ship and the dock, as well as the proper stowage of the cargo on board the vessel. Stevedores use a variety of specialized equipment, such as cranes and forklifts, to move cargo in and out of ships.

Tarping: The process of covering a load with a tarp to protect it from the elements. Tarping is commonly used when transporting open-top loads, such as flatbed trailers or containers. It is done to protect the load from rain, snow, and other weather conditions, as well as from debris on the road. Tarping is often a requirement for transporting certain types of cargo, such as construction materials, machinery, or vehicles.

Terminal: A facility used for loading, unloading, and storing cargo. Terminals are typically located near ports, rail yards, or airports, and they serve as a central hub for the movement of goods. Terminals can include warehouses, distribution centers, and cross-docking facilities. They provide a range of services, including cargo handling, storage, and transportation.

Container Top Handler: A container top handler is a type of machine used in container terminals for loading and unloading shipping containers from the top of a stack. It is also known as a straddle carrier or a gantry carrier.

It is a mobile machine that can straddle a stack of shipping containers and use a crane to lift a container off the top of the stack. The machine is operated by a driver, who sits in a cab at the top of the machine and uses controls to move the machine and lift and place containers.

Container top handlers are commonly used in container terminals because they can handle containers quickly and efficiently, allowing for high volumes of containers to be loaded and unloaded. They are also able to move containers short distances within the terminal, which can be useful for arranging containers for loading onto ships or trucks.

Tractor: A type of truck used for hauling trailers and containers. Tractors, also known as semi-trucks or big rigs and are designed to tow large loads over long distances. They are equipped with a powerful engine, a cab for the driver, and a hitch or fifth wheel for attaching trailers. Tractors come in a variety of sizes and configurations, ranging from small day cabs to large sleeper cabs.

Trailer: A vehicle that is attached to a tractor and used for transporting goods. Trailers come in a variety of types and sizes, including dry vans, reefers, flatbeds, and tankers. They are typically made of steel or aluminum and are designed to carry different types of cargo. Trailers can be loaded and unloaded from the rear or from the sides, depending on their design.

Transportation Management System (TMS): A software system that helps shippers and logistics providers manage and optimize their transportation operations, including carrier selection, routing, scheduling, and tracking of shipments. A TMS can provide visibility into transportation costs and delivery times, as well as help to manage exceptions and resolve issues that may arise during transit.

Tri-axle Chassis: A type of trailer chassis that has three axles, allowing it to carry heavier loads. Tri-axle chassis are commonly used for transporting containers, as they provide more stability and weight capacity than single or tandem axle chassis.

Truck Order Not Used: This occurs when a carrier is booked to pick up a shipment from a shipper where the goods are not ready, and the carrier is turned away. This is usually followed by an accessorial fee compensating the carrier for the lost revenue.

Truck Stop: A facility that provides services such as fuel, food, and rest areas. Truck stops are designed to meet the needs of truck drivers who are on long hauls. They provide a range of amenities, including fuel stations, restaurants, convenience stores, showers, and parking areas. Truck stops are typically located along major highways and interstates.

UCC128 Label: A label that is used to identify and track individual items or pallets in a supply chain. The label contains a barcode or RFID tag that provides a unique identifier for each item, as well as information about its origin, destination, and other characteristics.

UIIA: The Uniform Intermodal Interchange and Facilities Access Agreement (UIIA) is an agreement that governs the interchange of intermodal equipment (such as shipping containers and chassis) between motor carriers and equipment providers in the United States. The UIIA helps to standardize the interchange process and reduce the administrative burden of managing intermodal equipment.

VICS Bill of Lading: Short for "Voluntary Interindustry Commerce Solutions," the VICS bill of lading is a standard document used to define the terms and conditions of a shipment between a shipper and a carrier. The document includes information such as the shipper and consignee names and addresses, the origin and destination of the shipment, the type and quantity of goods being transported, and any special instructions or requirements.

Waiting Time: The time that a driver spends waiting to load or unload a shipment. Waiting time can be a significant issue for carriers, as it can result in lost time and revenue. Carriers typically negotiate waiting time provisions with shippers as part of their transportation contracts.

Warehouse Management System (WMS): A software system that manages and optimizes the day-to-day operations of a warehouse, including inventory management, order fulfillment, and tracking of goods in and out of the facility. A WMS typically uses barcode or RFID technology to monitor the movement of goods and can also integrate with other supply chain systems to provide real-time visibility into inventory levels and delivery times.

Wheeled Container: A container that is placed on a chassis for transport. This is generally done at a marine terminal or storage facility after the container has been previously grounded.

Yard Management System (YMS): A software system that manages the movement and tracking of trailers and other equipment within a yard or distribution center. A YMS can provide real-time visibility into the location of trailers, as well as track the arrival and departure of shipments. It can also help to optimize the use of yard space and reduce waiting times for drivers.

Yard: A location used for storing and managing trailers and other equipment. Yards are typically used by carriers, freight forwarders, 3PLs and other logistics providers to store and maintain their trailers, chassis, and other equipment. Yards can be located near transportation hubs, such as ports, rail yards, or airports, and they can provide a central location for managing the movement of goods.