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Industry Terms Glossary

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"Stale" Bill of Lading

Often the expensive result of an error or hold-up in the issuing of a B/L, or of its loss! If the consignment arrives at the final destination, but cannot be handed over to the consignee, because the B/L is not available, then the expression "stale B/L" is used.



2-way pallet

See Pallet




A '3PL' or third-party logistics provider; a supplier of outsourced logistics services that primarily uses its own assets and resources.




A '4PL' or fourth-party logistics provider; a supplier of outsourced supply chain coordination and management services that generally does not own or operate the underlying logistical assets and resources. See also 3PL and lead logistics provider.

4-way pallet

See Pallet



C & F

See Cost and Freight

C&F Terms of Sale, or INCOTERMS

Obsolete, albeit heavily used, term of sale meaning "cargo and freight" whereby Seller pays for cost of goods and freight charges up to destination port. In July, 1990 the International Chamber of Commerce replaced C&F with CFR.


Water transportation term applicable to shipments between ports of a nation; commonly refers to coast-wise or inter-coastal navigation or trade. Many nations, including the United States, have cabotage laws which require national flag vessels to provide domestic interport service.

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


See Cash Against Documents.


Abbreviation for "Currency Adjustment Factor." A charge, expressed as a percentage of a base rate, that is applied to compensate ocean carriers of currency fluctuations.

See Currency Adjustment Factor.


(1) A secure enclosed area for storing highly valuable items, (2) a pallet-sized platform with sides that can be secured to the tines of a forklift and in which a person may ride to inventory items stored well above the warehouse floor.


A site where multiple distribution centres share resources, such as employees and transport, to maximise time and cost efficiencies. See also shared-user.

Cantilever Rack

Racking system in which the shelving supports are connected to vertical supports at the rear of the rack. There are no vertical supports on the face of the rack allowing for storage of very long pieces of material such as piping and lumber. Also see Racking Pics Page.

Capacity requirements planning

Process for determining the amount of machine and labor resources required to meet production.


The resources, or money, available for investing in assets that produce output.


Computer-Aided Planned Stowage and Networking system.

Captain's Protest

A document prepared by the captain of a vessel on arriving at port; shows conditions encountered during voyage, generally for the purpose of relieving ship owner of any loss to cargo and shifting responsibility for reimbursement to the insurance company.

Car Pooling

Use of individual carrier/rail equipment through a central agency for the benefit of carriers and shippers.

Car Seal

Metal strip and lead fastener used for locking freight car or truck doors. Seals are numbered for record purposes.


Cargo Agents Reservation Air Waybill Issuance and Tracking.


A barge equipped with tracks on which up to about 12 railroad cars are moved in harbors or inland waterways.


Freight loaded into a ship.

Merchandise carried by a means of transportation.

Cargo Manifest

A manifest that lists all cargo carried on a specific vessel voyage.

Cargo NOS

Cargo Not Otherwise Specified. Usually the rate entry in a tariff that can apply to commodities not covered under a specific item or sub_item in the applicable tariff.

Cargo Preference

Cargo reserved by a Nation's laws for transportation only on vessels registered in that Nation. Typically the cargo is moving due to a direct or indirect support or activity of the Government.

Cargo Tonnage

Most ocean freight is billed on the basis of weight or measurement tons (W/M). Weight tons can be expressed in short tons of 2000 pounds, long tons of 2240 pounds or metric tons of 1000 kilos (2204.62 pounds). Measurement tons are usually expressed as cargo measurement of 40 cubic feet (1.12 meters) or cubic meters (35.3 cubic feet.)

Carload Rate

A rate applicable to a carload of goods.

Carmack Amendment

An Interstate Commerce Act amendment that delineates the liability of common carriers and the bill of lading provisions.


A Customs document permitting the holder to temporarily carry or send merchandise into certain foreign countries (for display, demonstration or similar purposes) without paying duties or posting bonds. Any of various Customs documents required for crossing some international borders.

A customs document allowing special categories of goods to cross international borders without payment of duties.


Type of automated material handling equipment generally used for high-volume small-parts order-picking operations. Horizontal carousels are a version of the same equipment used by dry cleaners to store and retrieve clothing. They have racks hanging from them that can be configured to accommodate various size storage bins. Vertical carousels consist of a series of horizontal trays on a vertical carousel. Vertical carousels are frequently used in laboratories and specialty manufacturing operations. More info on carousels on Automated Equipment Pics Page. See article on Order Picking.

A rotating system of layers of bins and/or drawers that can store many small items using relatively little floor space.


See Transportation.


Any person or entity who, in a contract of carriage, undertakes to perform or to procure the performance of carriage by rail, road, sea, air, inland waterway or by a combination of such modes.

A firm which transports goods or people. An enterprise engaged in the business of transporting goods.

Carrier Assets

Items that a carrier owns (technically or outright) to facilitate the services they provide.

Carrier Certificate and Release Order

Used to advise customs of the shipment's details. By means of this document, the carrier certifies that the firm or individual named in the certificate is the owner or consignee of the cargo.

Carrier liability

A common carrier is liable for all shipment loss, damage, and delay with the exception of that caused by act of God, act of a public enemy, act of a public authority, act of the shipper, and the goods' inherent nature.

Carrier's Certificate

A certificate required by U.S. Customs to release cargo properly to the correct party.

Carrying cost

Also called holding cost, carrying cost is the cost associated with having inventory on hand. It is primarily made up of the costs associated with the inventory investment and storage cost. For the purpose of EOQ calculations, if the cost does not change based upon the quantity of inventory on hand it should not be included in carrying cost. Carrying cost is represented as the annual cost per average on-hand inventory unit. See article on EOQ for more detailed info on carrying cost.


Usually refers to intra_city hauling on drays or trucks.

There are two definitions for this term: 1) charge for pick-up and delivery of goods 2) movement of goods locally (short distances).


Customs form permitting in_bond cargo to be moved from one location to another under Customs control, within the same Customs district. Usually in motor carrier's possession while draying cargo.

Carton clamp

Lift truck attachment that operates like a paper roll clamp except the clamping surface is flat rather than circular.

Carton flow rack

A storage rack consisting of multiple lines of gravity flow conveyors.

Cash Against Documents (CAD)

Method of payment for goods in which documents transferring title are given the buyer upon payment of cash to an intermediary acting for the seller, usually a commission house.

Cash in Advance (CIA)

A method of payment for goods in which the buyer pays the seller in advance of the shipment of goods. Usually employed when the goods, such as specialized machinery, are built to order.

Cash With Order (CWO)

A method of payment for goods in which cash is paid at the time of order and the transaction becomes binding on both buyer and seller.


Generally describes an unfinished item made of metal that is produced through pouring molten metal into a mold. A casting is later machined into a finished or semi-finished item. Also describes the process used to produce castings.

Catch weight

Used primarily in the food industry for products such as seafood, meats, and cheeses; catch weights refer to the actual weight of variable-weight items that use weight as the sales unit of measure. Catch weights are generally recorded during the order picking or shipping process. Systems using catch weights must be able to correctly process sales order line items based on the catch weights being within specific tolerances of the "order quantity".


Abbreviation for "Cubic Meter."


see Charged Coupled Device


Abbreviation for "Consumption Entry." The process of declaring the importation of foreign_made goods for use in the United States.


The construction system employed in container vessels; permits ship containers to be stowed in a vertical line with each container supporting the one above it.

Center of Gravity

The point of equilibrium of the total weight of a containership, truck, train or a piece of cargo.

Central processing unit (CPU)

The physical part of the computer that does the actual computing.

Centralized authority

The restriction of authority to make decisions to few managers.


The document issued by the U.S. Coast Guard certifying an American flag vessel's compliance with applicable laws and regulations.

Certificate of Insurance

A negotiable document indicating that insurance has been secured under an open policy to cover loss or damage to a shipment while in transit.

Certificate of Origin

A certified document showing the origin of goods; used in international commerce.

A document containing an affidavit to prove the origin of imported goods. Used for customs and foreign exchange purposes.

Certificate of public convenience and necessity

The grant of operating authority that common carriers receive. A carrier must prove that a public need exists and that the carrier is fit, willing, and able to provide the needed service. The certificate may specify the commodities the carrier may haul, and the routes it may use.

Certificated carrier

A for-hire air carrier that is subject to economic regulation and requires an operating certification to provide service.

CFR OR C&F (Cost and Freight)

A Term of Sale where the seller pays the costs and freight necessary to bring the goods to the named port of destination, Terms of Sale but the risk of loss of or damage to the goods, as (continued) well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment. The CFR term requires the seller to clear the goods for export.


Abbreviation for "Container Freight Station." A shipping dock where cargo is loaded ("stuffed") into or unloaded ("stripped") from containers. Generally, this involves less than containerload shipments, although small shipments destined to same consignee are often consolidated. Container reloading from/to rail or motor carrier equipment is a typical activity.

Channel of Distribution

A means by which a manufacturer distributes products from the plant to the ultimate user, including warehouses, brokers, wholesalers, retailers, etc.

Chargeable Weight

The shipment weight used in determining freight charges. The chargeable weight may be the dimensional weight or, for container shipments, the gross weight of the shipment less the tare weight of the container.


chargebacks are becoming more common these days as customers become more specific with their agreements with suppliers. A chargeback is basically a financial penalty placed against a supplier by a customer when a shipment to the customer does not meet the agreed upon terms and conditions. Examples of where suppliers may be charged back would include late shipments, lack of proper packaging and labeling (compliance labels), incorrect shipping terms (shipping collect instead of prepaid or not using the correct carrier or account).

Charged coupled device

used to describe a type of barcode scanner that acts like a small digital camera taking a digital image of the barcode as opposed to the standard barcode scanner that uses a laser. CCD scanners are a low cost option for scanning barcodes at a short distance (usually within a few inches).

Charging Area

A warehouse area where a company maintains battery chargers and extra batteries to support a fleet of electrically powered materials handling equipment. The company must maintain this area in accordance with government safety regulations.

Charter Party

A written contract between the owner of a vessel and the person desiring to employ the vessel (charterer); sets forth the terms of the arrangement such as duration of agreement, freight rate and ports involved in the trip.


A frame with wheels and container locking devices in order to secure the container for movement.


A piece of wood or other material placed at the side of cargo to prevent rolling or moving sideways.

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.


Abbreviation for "Cost and Insurance." A price that includes the cost of the goods, the marine insurance and all transportation charges except the ocean freight to the named point of destination.


See Cash In Advance.

CIF (Cost, Insurance and Freight)

A Term of Sale where the seller has the same obligations as under the CFR but also has to procure marine insurance against the buyer's risk of loss or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The CIF term requires the seller to clear the goods for export.

Abbreviation for "Cost, Insurance, Freight." (Named Port) Same as C&F or CFR except seller also provides insurance to named destination.


Price includes commission as well as CIF.


Abbreviation for "Cost, Insurance, Freight And Exchange."


Abbreviation for "Cost, Insurance, Freight, Collection And Interest."


Cost, Insurance, Freight, Interest and Exchange.

City Driver

A motor carrier driver who drives a local route as opposed to a long-distance, intercity route.

Civil Aeronautics Board

A federal regulatory agency that implemented economic regulatory controls over air carriers.


Abbreviation for "Completely Knocked Down." Parts and subassemblies being transported to an assembly plant.


Abbreviation for "Carload" and "Containerload".

Carload rail service requiring shipper to meet minimum weight.


If upon delivery, you notice damaged or missing items you should mark the delivery receipts and inventory accordingly. You must then notify the insurer's of your intent to make a claim within 45 days of delivery.

A demand made upon a transportation line for payment on account of a loss sustained through its alleged negligence. A charge made against a carrier for loss, damage, delay, or overcharge.

Class I carrier

A classification of regulated carriers based upon annual operating revenues--motor carriers of property; $5 million; railroads; $50 million; motor carriers of passengers; $3 million.

Class II carrier

A classification of regulated carriers based upon annual operating revenues--motor carriers of property: $1-$5 million; railroads: $10-$50 million; motor carriers of passengers: $3 million.

Class III carrier

A classification of regulated carriers based upon annual operating revenues--motor carriers of property: $1 million; railroads $10 million.

Class Rates

A grouping of goods or commodities under one general heading. All the items in the group make up a class. The freight rates that apply to all items in the class are called "class rates."


A publication,such as Uniform Freight Classification (railroad) or the National Motor Freight Classification (motor carrier), that assigns ratings to various articles and provides bill of lading descriptions and rules.

Classification Rating

The designation provided in a classification by which a class rate is determined.

Classification Yard

A railroad yard with many tracks used for assembling freight trains.

A railroad terminal area where railcars are grouped together to form train units.


An alphabetical listing of commodities, the class or rating into which the commodity is placed, and the minimum weight necessary for the rate discount; used in the class rate structure.

Clayton Act

An anti_trust act of the U.S. Congress making price discrimination unlawful.

Clean Bill of Lading

A clean Bill of Lading states that the consignment is in apparent good order and condition when shipped on board, and the carrier accepts the liability of delivering the goods in this same condition to the consignee.

A receipt for goods issued by a carrier with an indication that the goods were received in "apparent good order and condition," without damage or other irregularities. If no notation or exception is made, the B/L is assumed to be "cleaned."

Cleaning in Transit

The stopping of articles, such as peanuts, etc., for cleaning at a point between the point of origin and destination.

Clear height

Distance measured from the floor to the bottom of the lowest hanging overhead obstruction. Sometimes realtors will use the distance to the bottom of the roof trusses to calculate clear height even though portions of the building may have lower clear heights due to HVAC units or other equipment suspended from the roof.


The size beyond which cars or loads cannot use Limits bridges, tunnels, etc.

A document stating that a shipment is free to be imported into the country after all legal requirements have been met.


A strip of wood or metal used to afford additional strength, to prevent warping, or to hold in place.


Refrigeration equipment attachable to an insulated container that does not have its own refrigeration unit.


Abbreviation for "Cubic Meter" (capital letters).

Coastal Carriers

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


Water transportation along the coast.


Abbreviation for: Collect (cash) on Delivery. Carried on Docket (pricing).


Abbreviation for the Railway Service "Container On Flat Car."


Cost of Goods Sold (see separate listing)


Carriage of Goods by Sea Act. U.S. federal codification passed in 1936 which standardizes carrier's liability under carrier's bill of lading. U.S. enactment of The Hague Rules.

Collect Freight

Freight payable to the carrier at the port of discharge or ultimate destination. The consignee does not pay the freight charge if the cargo does not arrive at the destination.


A bank that acts as an agent to the seller's bank (the presenting bank). The collecting bank assumes no responsibility for either the documents or the merchandise.


A draft drawn on the buyer, usually accompanied by documents, with complete instructions concerning processing for payment or acceptance.

Collective Paper

All documents (commercial invoices, bills of lading, etc.) submitted to a buyer for the purpose of receiving payment for a shipment.

Combi Aircraft

An aircraft specially designed to carry unitized cargo loads on the upper deck of the craft, forward of the passenger area.

Combination Export Mgr.

A firm that acts as an export sales agent for more than one noncompeting manufacturer.

Combination Rate

A rate made up of two or more factors, separately published.

Commercial Invoice

Represents a complete record of the transaction between exporter and importer with regard to the goods sold. Also reports the content of the shipment and serves as the basis for all other documents about the shipment.

A document created by the seller. It is an official document which is used to indicate, among other things, the name and address of the buyer and seller, the product(s) being shipped, and their value for customs, insurance, or other purposes.

Commercial Zone

The area surrounding a city or town to which rate carriers quote for the city or town also apply; the ICC defines the area.

Committee of American Steamship Lines

An industry association representing subsidized U.S. flag steamship firms.

Commodities Clause

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


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


In inventory management, the term Commodity has a couple of definitions. Standard products commonly available from various sources are often called "commodity items". Specialized or custom products not widely available or proprietary products only available from a small number of sources would not be considered commodity items. The term Commodity is also used to describe classifications of inventory. In this case, "commodity codes" are used to distinguish groups of inventory items to be used for reporting and analysis. Note that commodity classifications can be used to describe any inventory item and are not limited to items that fall under the previous definition of commodity items.

Article shipped. For dangerous and hazardous cargo, the correct commodity identification is critical.

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.

Commodity Rate

A rate published to apply to a specific article or articles.

A rate for a specific commodity and its origin-destination.

Common Carrier

A transportation company which provides service to the general public at published rates

A for-hire carrier that holds itself out to transport goods and serve the general public at reasonable rates and without discrimination.

Common Carrier Duties

Common carriers must serve, deliver, charge reasonable rates, and not discriminate.

Common Cost

A cost that a company cannot directly assign to particular segments of the business; a cost that the company incurs for the business as a whole.

Common Law

Law that derives its force and authority from precedent, custom and usage rather than from statutes, particularly with reference to the laws of England and the United States.


An exempt for-hire air carrier that publishes a time schedule on specific routes; a special type of air taxi.

Comparative Advantage

A principle based on the assumption that an area will specialize in producing goods for which it has the greatest advantage or the least comparative disadvantage.

Compliance Labels

Standardized label formats used by trading partners. Compliance labels are used as shipping labels, container/pallet labels, carton labels, or piece labels, and usually contain bar codes. Many bar-code labeling software products now have the more common compliance label standards set up as templates.

Concealed Damage

Damage that is not evident from viewing the unopened package.


An association of ship owners operating in the same trade route who operate under collective conditions and agree on tariff rates.

A group of vessel operators joined for the purpose of establishing freight rates.

Conference Carrier

An ocean carrier who is a member of an association known as a "conference." The purpose of the conference is to standardize shipping practices, eliminate freight rate competition, and provide regularly scheduled service between specific ports.

Configuration processing

software functionality that allows a product to be defined by a selecting various pre-defined options, rather than having every possible combination of options pre-defined as specific SKUs. Placing an order for a computer and specifying hard drive, processor, memory, graphics card, sound card, etc. would be an example of configuration processing.


A letter of credit, issued by a foreign bank, whose validity has been confirmed by a domestic bank. An exporter with a confirmed letter of credit is assured of payment even if the foreign buyer or the foreign bank defaults.


The bank that adds its confirmation to another bank's (the issuing bank's) letter of credit and promises to pay the beneficiary upon presentation of documents specified in the letter of credit.

Connecting Carrier

A carrier which has a direct physical connection with, or forms a link between two or more carriers.


The Consolidated Rail Corporation established by the Regional Reorganization Act of 1973 to operate the bankrupt Penn Central Railroad and other bankrupt railroads in the Northeast; the 4-R Act of 1976 provided funding.


A person or company to whom commodities are shipped.

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

Consignee Mark

A symbol placed on packages for identification purposes; generally a triangle,square, circle, etc. with letters and/or numbers and port of discharge.


One or more items that a carrier has accepted for shipment at a given time.

A stock of merchandise advanced to a dealer and located at his place of business, but with title remaining in the source of supply. 2. A shipment of goods to a consignee.

Consignment Inventory

Inventory that is in the possession of the customer, but is still owned by the supplier. Consignment inventory is used as a marketing tool to make it easier for a customer to stock a specific supplier's inventory. Read my article on Consignment Inventory.


A person or company shown on the bill of lading as the shipper.

The party who originates a shipment of goods (shipper). The sender of a freight shipment, usually the seller.


The combination of two or more consignments to create a more economical freight solution.

Combining two or more shipments in order to realize lower transportation rates. Inbound consolidation from vendors is called makebulk consolidation; outbound consolidation to customers is called breakbulk consolidation.

Consolidation Center

A warehouse or distribution centre in which goods are assembled into larger units for onward distribution.

Consolidation Point

The location where consolidation takes place.

Collecting smaller shipments to form a larger quantity in order to realize lower transportation rates.


A person or firm performing a consolidation service for others. The consolidator takes advantage of lower full carload (FCL) rates, and savings are passed on to shippers.

An enterprise that provides services to group shipments, orders, and/or goods to facilitate movement.

Consolidator's Bill of Lading

A bill of lading issued by a consolidator as a receipt for merchandise that will be grouped with cargo obtained from other shippers. See also House Air Waybill.

Construction Differential Subsidy

A program whereby the U.S. government attempted to offset the higher shipbuilding cost in the U.S. by paying up to 50% of the difference between cost of U.S. and non_U.S. construction. The difference went to the U.S. shipyard. It is unfunded since 1982.


A government official residing in a foreign country who represents the interests of her or his country and its nationals.

Consular Declaration

A formal statement describing goods to be shipped; filed with and approved by the consul of the country of destination prior to shipment.

Consular Declaration

A formal statement made to the consul of a country describing merchandise to be shipped to that consul's country. Approval must be obtained prior to shipment.

Consular Documents

Special forms signed by the consul of a country to which cargo is destined.

Consular Invoice

A document, certified by a consular official, is required by some countries to describe a shipment. Used by Customs of the foreign country, to verify the value, quantity and nature of the cargo.

A document, required by some foreign countries, describing a shipment of goods and showing information such as the consignor, consignee, and value of the shipment. Certified by a consular official of the foreign country, it is used by the country's custom

Consular Visa

An official signature or seal affixed to certain documents by the consul of the country of destination.

Consumer Goods

Products sold to non-business end users. Clothing, food, Music CDs, are examples of consumer goods.

Consumer Packaged Goods

Describes inventory that is in such a form that is ready for sale to consumers (end-users).

Consumption Entry (CE)

The process of declaring the importation of foreign-made goods into the United States for use in the United States.


This term is associated with more than one definition: 1) anything in which goods are packed 2) a single rigid receptacle without wheels that is used for the transport of goods (a type of carrier equipment into which freight is loaded). A truck trailer body that can be detached from the chassis for loading into a vessel, a rail car or stacked in a container depot. Containers may be ventilated, insulated, refrigerated, flat rack, vehicle rack, open top, bulk liquid or equipped with interior devices. A container may be 20 feet, 40 feet, 45 feet, 48 feet or 53 feet in length, 8'0" or 8'6" in width, and 8'6" or 9'6" in height.

Although a container can be anything designed to hold (contain) materials for storage or transport, the most common definition for Container in logistics refers to the specific types of containers used for intermodal transportation, often referred to as "Ocean Containers". Standard external dimensions for containers are width of 8', height of 8' 6" or 9' 6" (High Cube), and lengths of 20', 40', 45' (deduct 4" from width, 9" from height and 7" to 9" from length to determine inside demensions). More specs and info on containers at Seaboard Marine, Maersk Sealand, and a nice independent site The Intermodal Container FAQ put out by a commercial photographer.

Container Booking

Arrangements with a steamship line to transport containerized cargo.

Container Chassis

A vehicle built for the purpose of transporting a container so that, when a container and chassis are assembled, the produced unit serves as a road trailer.

Container Depot

The storage area for empty containers.

Container Freight Station (CFS)

The location designated by carriers for receipt of cargo to be packed into containers/equipment by the carrier. At destination, CFS is the location designated by the carrier for unpacking of cargo from equipment/containers.

A type of steamship-line service in which cargo is transported between container freight stations, where containers may be stuffed, stripped, or consolidated. Usually used for less-than-container load shipments.

Container I.D

An identifier assigned to a container by a carrier. See also Equipment ID.

Container Load

A load sufficient in size to fill a container either by cubic measurement or by weight.

Container Manifest

Document showing contents and loading sequence of a container.

Container on Flat Car (COFC)

A carriage of intermodal containers detached from their chassis on rail flat cars.

Container Pool

An agreement between parties that allows the efficient use and supply of containers. A common supply of containers available to the shipper as required.

Container Terminal

An area designated for the stowage of cargoes in container; usually accessible by truck, railroad and marine transportation. Here containers are picked up, dropped off, maintained and housed.

An area designated to be used for the stowage of cargo in containers that may be accessed by truck, rail, or ocean transportation.

Container Vessel

A vessel specifically designed for the carriage of containers.

Container Yard (CY)

A materials_handling/storage facility used for completely unitized loads in containers and/or empty containers. Commonly referred to as CY.

The location designated by the carrier for receiving, assembling, holding, storing, and delivering containers, and where containers may be picked up by shippers or redelivered by consignees.

Container Yard to Container Yard (CY/CY)

A type of steamship-line service in which freight is transported from origin container yard to destination container yard.

Containerizable Cargo

Cargo that will fit into a container and result in an economical shipment.


from the JIT movement in manufacturing, containerization refers to using standardized containers for the storage and transport of materials within a manufacturing facility as well as between vendors and manufacturers. Materials are ordered in multiples of the container quantity often using Kanban. The benefits of containerization include reduced product damage, reduced waste (by using reusable containers), less handling, and greater levels of inventory accuracy by simplifying counting processes.

The technique of using a boxlike device in which a number of packages are stored, protected, and handled as a single unit in transit.

Contingency Planning

Preparing to deal with calamities (e.g., floods) and noncalamitous situations (e.g., strikes) before they occur.

Continuous Replenishment Planning (CRP)

A program that triggers the manufacturing and movement of product through the supply chain when the identical product is purchased by an end user.

A system used to reduce customer inventories and improve service usually to large customers.

Continuous-flow, fixed-path equipment

Materials handling devices that include conveyors and drag lines.


Cargo that is prohibited.


A legally binding agreement between two or more persons/organizations to carry out reciprocal obligations or value.

Contract Carrier

Any person not a common carrier who, under special and individual contracts or agreements, transports passengers or property for compensation.

A for-hire carrier that does not serve the general public but serves shippers with whom the carrier has a continuing contract. The contract carrier must secure a permit to operate.

Contract logistics

The process of outsourcing product flow management, storage and related information transfer services, usually under long-term contract, with the objective of increasing efficiency and control.

Contract warehouse

a contract warehouse is a business that handles shipping, receiving, and storage of products on a contract basis. Contract warehouses will generally require a client to commit to a specific period of time (generally in years) for the services. Contracts may or may not require clients to purchase or subsidize storage and material-handling equipment. Fees for contract warehouses may be transaction and storage based, fixed, cost plus, or any combination. Also see Public Warehouse and 3PL.

Control Tower

Bespoke packages of information services used to manage and control supply chain activities on behalf of customers and suppliers. Also known as logistics or transport control tower.

Controlled Atmosphere

Sophisticated, computer_controlled systems that manage the mixtures of gases within a container throughout an intermodal journey reducing decay.


The application used to describe the function of a vehicle of transfer.


A materials handling device that moves freight from one warehouse area to another. Roller conveyors utilize gravity, whereas belt conveyors use motors.

Cooperative Associations

Groups of firms or individuals having common interests; agricultural cooperative associations may haul up to 25 percent of their total interstate nonfarm, nonmember goods tonnage in movements incidental and necessary to their primary business.

Coordinated Transportation

Two or more carriers of different modes transporting a shipment.


Contract packing. See packing.


The term coproduct is used to describe multiple items that are produced simultaneously during a production run. Coproducts are often used to increase yields in cutting operations, such as die cutting or sawing, when it is found that scrap can be reduced by combining multiple sized products in a single production run. Coproducts are also used to reduce the frequency of machine setups required in these same types of operations. Coproducts, also known as byproducts, are also common in process manufacturing such as in chemical plants. Although the concept of coproducts is fairly simple, the programming logic required to provide for planning and processing of coproducts is very complicated and most off-the-shelf manufacturing software will have problems with coproduct processing.


Common Object Request Broker Architecture.

Core Competency

One of a company's primary functions which is considered essential to its success.

Corner Posts

Vertical frame components fitted at the corners of the container, integral to the corner fittings and connecting the roof and floor structures. Containers are lifted and secured in a stack using the castings at the ends.

Correspondent Bank

A bank that, in its own country, handles the business of a foreign bank.

Cost and Freight (C & F)

The seller quotes a price that includes the cost of transportation to a specific point. The buyer assumes responsibility for loss and damage and pays for the insurance of the shipment.

Cost of Capital

The cost to borrow or invest capital.

Cost of goods sold

Accounting term used to describe the total value (cost) of products sold during a specific time period. Since inventory is an asset, it is not expensed when it is purchased or produced. It instead goes into an asset account (usually called Inventory). When product is sold, the value of the product (the cost, not the sell price) is moved form the asset account to an expense account called cost of goods sold or COGS. COGS appears on the profit-and-loss statement and is also used for calculating inventory turns.

Cost of lost sales

The forgone profit companies associate with a stockout.

Cost trade-off

The interrelationship among system variables in which a change in one variable affects other variables' costs. A cost reduction in one variable may increase costs for other variables, and vice versa.

Cost, Insurance and Freight (CIF)

Cost of goods, marine insurance and all transportation (freight) charges are paid to the foreign point of delivery by the seller.

The price quote that the seller offers to the buyer, which includes cost of the goods, insurance of the goods, and transportation charges.

Costing method

Refers to the calculations used to determine inventory cost. See also Average Cost, Current Cost, Standard Cost, Actual Cost, Landed Cost, First-in-first-out, Last-in-last-out.

Council of Logistics Management (CLM)

A professional organization in the logistics field that provides leadership in understanding the logistics process, awareness of career opportunities in logistics, and research that enhances customer value and supply chain performance.


A reciprocal trading agreement that includes a variety of transactions involving two or more parties.

Countervailing Duty

An additional duty imposed to offset export grants, bounties or subsidies paid to foreign suppliers in certain countries by the government of that country for the purpose of promoting export.

Special duties imposed on imports to offset the benefits of subsidies to producers or exporters of the exporting country.

Country of Destination

The country that will be the ultimate or final destination for goods.

Country of Origin

The country where the goods were manufactured.

Courier Service

A fast, door-to-door service for high-valued goods and documents; firms usually limit service to shipments weighing fifty pounds or less.


Consumer Packaged Goods (see separate listing)


A materials handling device that lifts heavy items. There are two types: bridge and stacker.

Credit Terms

The agreement between two or more enterprises concerning the amount and timing of payment for goods or services.

Critical Value Analysis

A modified ABC analysis in which a company assigns a subjective critical value to each item in an inventory.

Cross Dock

An enterprise that provides services to transfer goods from one piece of transportation equipment to another.

Cross Member

Transverse members fitted to the bottom side rails of a container, which support the floor.

Cross-belt sorter

Conveyor sorting system that uses a series of devices (carriers) mounted on a conveyor to sort materials. Each device has a small belt conveyor mounted on top of it that runs perpendicular to the direction of the main conveyor. When it arrives at a sort point, the conveyor on the carrier will spin, moving the materials to the side of the main conveyor (usually onto another conveyor, dropping down a chute, or into a container).


In its purest form cross-docking is the action of unloading materials from an incoming trailer or rail car and immediately loading these materials in outbound trailers or rail cars, thus eliminating the need for warehousing (storage). In reality, pure cross-docking is rare outside of transportation hubs and hub-and-spoke type distribution networks. Many "cross-docking" operations require large staging areas where inbound materials are sorted, consolidated, and stored until the outbound shipment is complete and ready to ship. This staging may take hours, days, or even weeks in which case the "staging area" is essentially a "warehouse".

The direct flow of goods from receipt to shipping/delivery, bypassing storage. Used to reduce costs and lead times for fast-moving and perishable goods.


Capacity requirements planning (see separate listing)


Communications Support Group.


An abbreviation for "Cubic." A unit of volume measurement.


A measure of the volume of rectangular shaped three-dimensional objects or spaces. Cube is calculated my multiplying the length times the width times the height of the object or space.

Cube logic

Term used in Warehouse Management Systems. Cube logic is often incorporated but seldom used in WMS systems because of its tendency to treat your product as liquid (fitting a round peg in a square hole). See article on Warehouse Management Systems.

Cube Out

When a container or vessel has reached its volumetric capacity before its permitted weight limit.

The situation when a piece of equipment has reached its volumetric capacity before reaching the permitted weight limit.

Cube utilization

In warehousing and logistics, cube utilization refers to the use of space within storage area, trailer, or container. Cube utilization is generally calculated as a percentage of total space or of total "usable" space.

Cubed out

describes a condition where all space in a trailer or container has been completely filled. The term "cubed out" is often used when you have completely filled the trailer or container but are still below the weight capacity. Also see Weighted out.

Cubic Capacity

The carrying capacity of a piece of equipment according to measurement in cubic feet.

Cubic Foot

1,728 cubic inches. A volume contained in a space measuring one foot high, one foot wide and one foot long.

Currency Adjustment Factor (CAF)

A surcharge imposed by a carrier on ocean freight charges to offset foreign currency fluctuations.

Current cost

Inventory costing method that applies the cost of the most recent receipt to all inventory of a specific item.

Customer Order

The seller's internal translation of their buyer's Purchase Order. The document contains much of the same information as the purchase order but may use different Product IDs for some or all of the line items. It will also determine inventory availability

Customer Service

The series of activities involved in providing the full range of services to customers


An enterprise that uses the services as provided by another enterprise.


A government office where duties are paid, import documents filed, etc., on foreign shipments.

Customhouse Broker

A person or firm, licensed by the treasury department of their country when required, engaged in entering and clearing goods through Customs for a client (importer).


Government agency charged with enforcing the rules passed to protect the country's import and export revenues.

The authorities designated to collect duties levied by a country on imports and exports.

Customs Bonded Warehouse

A warehouse authorized by Customs to receive duty-free merchandise.

Customs Broker / Customhouse Broker

A firm that represents importers/exporters in dealings with customs. Normally responsible for obtaining and submitting all documents for clearing merchandise through customs, arranging inland transport, and paying all charges related to these functions.

Customs broking

The handling of customs formalities around the import and export of goods.

Customs Clearance

The act of obtaining permission to import merchandise from another country into the importing nation.

Customs Entry

All countries require that the importer make a declaration on incoming foreign goods. The importer then normally pays a duty on the imported merchandise. The importer's statement is compared against the carrier's vessel manifest to ensure that all foreign goods are properly declared.

Customs Invoice

A form requiring all data in a commercial invoice along with a certificate of value and/or a certificate of origin. Required in a few countries (usually former British territories) and usually serves as a seller's commercial invoice.

A document that contains a declaration by the seller, the shipper, or the agent as to the value of the shipment.

Customs of the Port

A phrase often included in charter parties and freight contracts referring to local rules and practices which may impact upon the costs borne by the various parties.

Customs Value

The value of the imported goods on which duties will be assessed.

Cut-Off Time

The latest time cargo may be delivered to a terminal for loading to a scheduled train or ship.


See Cash with Order.


The abbreviation for hundredweight, which is the equivalent of 100 pounds.

Hundred weight (United States, 100 pounds: U.K.,112)


Abbreviation for Container Yard.


See Container Yard to Container Yard.

Cycle count

refers to process of regularly scheduled inventory counts (usually daily) that "cycles" through your inventory. User determines how often certain items/locations are counted. Read my article on Cycle Counting and check out my book on cycle counting.

Cycle inventory

An inventory system where counts are performed continuously, often eliminating the need for an annual overall inventory. It is usually set up so that A items are counted regularly (i.e., every month), B items are counted semi-regularly (every quarter or six months), and C Items are counted perhaps only once a year.

Cycle Time

The amount of time it takes to complete a business process.

The elapsed time between commencement and completion of a process.




A wood or fiber cover placed around such containers as cans and bottles.

Jackpot Line

this is one of those funky terms that has somehow achieved widespread acceptance in the material handling industry. Usually used with automated systems such as automated conveyor systems, a Jackpot Line refers to an area where exceptions are routed. Exceptions may include orders that could not be completed (shortages or WMS error), orders requiring special processing, or weight or size exceptions. The terms Jackpot Lane, or Jackpot Area are also used to describe similar exception areas.

Jacob's Ladder

A rope ladder suspended from the side of a vessel and used for boarding.


Act of throwing cargo or equipment (jetsam) overboard when a ship is in danger.


Just-in-time. Term usually thought of as describing inventory arriving or being produced just in time for the shipment or next process. Actually, JIT is a process for optimizing manufacturing processes by eliminating all process waste including wasted steps, wasted material, excess inventory, etc.

Abbreviation for "Just In Time." In this method of inventory control, warehousing is minimal or non_existent; the container is the movable warehouse and must arrive "just in time;" not too early nor too late.

Joint cost

A common cost in cases where a company produces products in fixed proportions and the cost the company incurs to produce one product entails producing another; the backhaul is an example.

Joint Rate

A rate applicable from a point on one transportation line to a point on another line, made by agreement and published in a single tariff by all transportation lines over which the rate applies.

A rate over a route that requires two or more carriers to transport the shipment.


A combination of just-in-time delivery with production line sequencing of delivered items. A customer will notify a supplier of the items needed and the sequence based on the customer's manufacturing schedule, the supplier will then put together the shipment with the items in the appropriate sequence and deliver them to the customer (sometimes directly to the assembly line). This is most common in the automotive and similar assembly line industries where each unit on the assembly line can be configured differently (component options).

Just-in-time (JIT)

A comprehensive stock and manufacturing control system in which materials are purchased, manufactured or supplied only when required. In logistics, JIT uses pull replenishment to ensure deliveries are completed at the right time in order to meet production and client schedules.

Just-in-time (JIT) inventory system

An inventory control system that attempts to reduce inventory levels by coordinating demand and supply to the point where the desired item arrives just in time for use.

Just-in-Time Logistics (or Quick Response)

The process of minimizing the times required to source, handle, produce, transport, and deliver products in order to meet customer requirements.




used as part of a Just-In-Time production operation where components and sub-assemblies are produced based upon notification of demand from a subsequent operation. Historically, Kanban has been a physical notification such as a card (kanban cards) or even an empty hopper or tote sent up the line to the previous operation. Kanban is actually a simplistic means of both signaling the need for inventory as well as controlling the inventory levels (by limiting kanban cards or containers).

Kanban system

A just-in-time inventory system used by Japanese manufacturers.


Delivery to and/or collection from the roadside.


1,000 grams or 2.2046 pounds.

King Pin

A coupling pin centered on the front underside of a chassis; couples to the tractor.


The process where components are assembled and supplied to the production floor on a job by job basis.

Light assembly of components or parts into defined units.

Knocked Down (KD)

Articles which are taken apart to reduce the cubic footage displaced or to make a better shipping unit and are to be re-assembled.


One nautical mile (6,076 feet or 1852 meters) per hour. In the days of sail, speed was measured by tossing overboard a log which was secured by a line. Knots were tied into the line at intervals of approximately six feet. The number of knots measured was then compared against time required to travel the distance of 1000 knots in the line.

Known Loss

A loss discovered before or at the time of delivery of a shipment.


Kilo or metric ton. 1,000 Kilos or 2,204.6 pounds.




Abbreviation for "Letter of Credit."


Loaded aboard a vessel.


Refers to the freight shipped; the contents of a shipment.

The cargo carried in a transportation vehicle.

Land bridge

The movement of containers by ship-rail-ship on Japan-to-Europe moves; ships move containers to the U.S. Pacific Coast, rails move containers to an East Coast port, and ships deliver containers to Europe.

Movement of cargo by water from one country through the port of another country, thence, using rail or truck, to an inland point in that country or to a third country. As example, a through movement of Asian cargo to Europe across North America.

Land grants

Grants of land given to railroads to build tracks during their development stage.

Landed Cost

The total cost of a good to a buyer, including the cost of transportation.

Inventory costing method that includes the purchased cost plus transportation costs, import fees, duties, taxes, and other costs incurred in obtaining the inventory.

Landing Certificate

Certificate issued by consular officials of some importing countries at the point or place of export when the subject goods are exported under bond.

Landing Gear

A support fixed on the front part of a chassis (which is retractable); used to support the front end of a chassis when the tractor has been removed.

Laser scanner

device that uses a moving laser to read bar codes. Devices can be portable hand-held units, or fixed units.


guidance system used with AGVs that uses a rotating laser (mounted on top of the vehicle) to determine the vehicles location. Reflective targets need to be strategically placed along the vehicle's route. Must always maintain clear line-of-site to reflective targets for the system to work properly.


A maritime industry abbreviation for "Lighter Aboard Ship." A specially constructed vessel equipped with an overhead crane for lifting specially designed barges and stowing them into cellular slots in an athwartship position.

lash barges

Covered barges that carriers load on board oceangoing ships for movement to foreign destinations.

LASH Vessel

A ship measuring at least 820 feet long with a deck crane able to load and unload barges through a stern section that projects over the water. The acronym LASH stands for Lighter (barge) Aboard Ship.

Last 50 yards/metres

Typically the transfer of goods from the rear of the delivery vehicle to the store shelf.

Last Updated

A date and time stamp that is recorded when a field or record was last modified by the user.


Laydays/Cancelling (date) Range of dates within the hire contract must start.


Abbreviation for "Less than Container Load." The quantity of freight which is less than that required for the application of a container load rate. Loose Freight.

For use with smaller shipments, boxes, crates etc. The shipment is then delivered to a forwarder's or shipping line's consolidation point to be shipped on a specific vessel.

Lead logistics provider / partner (LLP)

A lead logistics provider co-ordinates and integrates its own logistics services with those of others with complementary or supporting capabilities. See also 4PL.

Lead time

amount of time required for an item to be available for use from the time it is ordered. Lead time should include purchase order processing time, vendor processing time, in transit time, receiving, inspection, and any prepack times. However, based on the way many inventory systems work, there may be problems incorporating internal factors such as post-receipt processing in Lead-time, so in many systems, the lead time just represents the period of time from which the item is ordered to the time it arrives at your dock. Also see Effective 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.

Lead-time demand

forecasted demand during the lead-time period. For example, if your forecasted demand is 3 units per day and your lead time is 12 days, your lead-time demand would be 36 units.

Lean manufacturing

alternate term used to describe the philosophies and techniques associated with Just-in-time (JIT) manufacturing.


A leg 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.

Legacy system

implies a business computer/information system that is old or outdated. Often used to describe home-grown (custom built) mainframe systems, however, software companies will use the term legacy system to define any system that is not based on the current version of a business software package.

Less than Truck Load (LTL)

The same as Less than Container Load, but in reference to trucks instead of containers. transportation term that describes shipments that are less than a trailer load in size. LTL also is used to describe the carriers that handle these loads. LTL carriers generally use strategically placed hubs to sort and consolidate LTL shipments into full-truck-load shipments.


A person or firm to whom a lessor grants a lease.


A person or firm that grants a lease.


A document, issued by a bank per instructions by a buyer of goods, authorizing the seller to draw a specified sum of money under specified terms, usually the receipt by the bank of certain documents within a given time.

Letter of Credit (LC) - Back-to-Back

A new letter of credit issued to another beneficiary on the strength of a primary credit. The second L/C uses the first L/C as collateral for the bank. Used in a three-party transaction.

Letter of Credit (LC) - Clean

A letter of credit that requires the beneficiary to present only a draft or a receipt for specified funds before receiving payment.

Letter of Credit (LC) - Confirmed

An L/C guaranteed by both the issuing and advising banks of payment so long as seller's documents are in order, and the L/C terms are met. Only applied to irrevocable L/C's. The confirming bank assumes the credit risk of the issuing bank.

Letter of Credit (LC) - Deferred Payment

A letter of credit issued for the purchase and financing of merchandise, similar to acceptance-type letter of credit, except that it requires presentation of sight drafts payable on an installment basis.

Letter of Credit (LC) - Irrevocable

An instrument that, once established, cannot be modified or cancelled without the agreement of all parties concerned.

Letter of Credit (LC) - Non cumulative

A revolving letter of credit that prohibits the amount not used during the specific period from being available afterwards.

Letter of Credit (LC) - Restricted

A condition within the letter of credit which restricts its negotiation to a named bank.

Letter of Credit (LC) - Revocable

An instrument that can be modified or cancelled at any moment without notice to and agreement of the beneficiary, but customarily includes a clause in the credit to the effect that any draft negotiated by a bank prior to the receipt of a notice of revocation or amendment will be honored by the issuing bank. Rarely used since there is no protection for the seller.

Letter of Credit (LC) - Revolving

An irrevocable letter issued for a specific amount; renews itself for the same amount over a given period.

Letter of Credit (LC) - Straight

A letter of credit that contains a limited engagement clause which states that the issuing bank promises to pay the beneficiary upon presentation of the required documents at its counters or the counters of the named bank.

Letter of Credit (LC) - Transferable

A letter of credit that allows the beneficiary to transfer in whole or in part to another beneficiary any amount which, in aggregate, of such transfers does not exceed the amount of the credit. Used by middlemen.

Letter of Credit (LC) - Unconfirmed

A letter of credit forwarded to the beneficiary by the advising bank without engagement on the part of the advising bank.

Letter of Indemnity

In order to obtain the clean bill of lading, the shipper signs a letter of indemnity to the carrier on the basis of which may be obtained the clean bill of lading, although the dock or mate's receipt showed that the shipment was damaged or in bad condition.

License Plate

License plates are often used with warehouse management systems. They are basically an ID number placed on a pallet, tote, carton or other container, and are used to track the contents of that container as it moves through the warehouse. The license plate will almost always have a bar code that contains this ID number. So by scanning a single bar code on the pallet you can initiate or complete movement transactions for all items and quantities on that pallet.


Some governments require certain commodities to be licensed prior to exportation or importation. Clauses attesting to compliance are often required on the B/L. Various types issued for export (general, validated) and import as mandated by government(s).


A legal claim upon goods for the satisfaction of some debt or duty.

LIFO, Last-in-first-out

in warehousing, describes the method for using the newest inventory first (I've never seen an operation that uses this). In accounting, it's a term used to describe an inventory costing method. See FIFO

Lift on, Lift off (LO/LO)

A method by which cargo is loaded onto and unloaded from an ocean vessel, which in this case is with a crane.

Lift truck

vehicles used to lift, move, stack, rack, or otherwise manipulate loads. Material handling workers use a lot of terms to describe lift trucks; some terms describe specific types of vehicles, others are slang terms or trade names that people often mistakenly use to describe trucks. Terms include, industrial truck, forklift, reach truck, motorized pallet trucks, turret trucks, counterbalanced forklift, walkie, rider, walkie rider, walkie stacker, straddle lift, side loader, order pickers, high lift, cherry picker, Jeep, Towmotor, Yale, Crown, Hyster, Raymond, Clark, Drexel. See Lift Truck Pics and articles on Lift Truck Basics and Lift Truck Safety for more info.


A vessel discharges part of its cargo at anchor into a lighter to reduce the vessel's draft so it can then get alongside a pier.


An open or covered barge towed by a tugboat and used mainly in harbors and inland waterways to carry cargo to/from alongside a vessel.


A barge-type vessel used to carry cargo between shore and cargo ship. 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.


Refers to carriage of goods by lighter and the charge assessed therefrom.


The cost of loading or unloading a vessel by means of barges.

Lights-out warehouse

a.k.a. Lights-out facility. Describes fully-automated facilities. The idea being that if the facility requires no human operators, you can run it with no lights. Use of AS/RS units, AGVs, automated conveyors, robots, etc makes this possible.

Line functions

The decision-making areas companies associate with daily operations. Logistics line functions include traffic management, inventory control, order processing, warehousing, and packaging.

Line item

a single detail record. The term line item is most commonly used to describe the detail (each line that reflects an item and a quantity) on sales orders or purchase orders. For example, if a customer orders 20 red pens, 50 black pens, and 10 green pens, this equates to an order with three line items.

A specific and unique identifier assigned to a product by the responsible enterprise.


Transportation from one city to another as differentiated from local switching service.

A shipment that moves between cities and over distances more than 100 to 150 miles in length.


A vessel sailing between specified ports on a regular basis.

Liner service

International water carriers that ply fixed routes on published schedules.


The transportation method a company uses to connect nodes (plants, warehouses) in a logistics system.

Liquidated Damages

The penalty a seller must pay if the construction project does not meet contractual standards or deadlines.


The amount in degrees that a vessel tilts from the vertical.


1.06 liquid U.S. quarts or 33.9 fluid ounces.


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

Lloyds' Registry

An organization maintained for the surveying and classing of ships so that insurance underwriters and others may know the quality and condition of the vessels offered for insurance or employment.


See Lift on, Lift off.


in manufacturing, describes the amount of production scheduled against a plant or machine. In warehousing, describes the materials being handled by a piece of equipment. In transportation, describes the materials being transported.

Load factor

A measure of operating efficiency used by air carriers to determine a plane's utilized capacity percentage or the number of passengers divided by the total number of seats.

Load locks

adjustable support bars used inside trailers to prevent movement of the load. a.k.a Load bars, Cargo bars.

Load Ratio

The ratio of loaded miles to empty miles.

Load Tender (pick-up request)

An offer of cargo for transport by a shipper. Load tender terminology is primarily used in the motor industry.

Loading allowance

A reduced rate that carriers offer to shippers and/or consignees who load and/or unload LTL or AQ shipments.

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. Schedule D is used by U.S. companies when exporting to determine which tariff is used to freight rate the cargo for carriers with more than one tariff.


See Letter of Credit.

Local Cargo

Cargo delivered to/from the carrier where origin/destination of the cargo is in the local area.

Local rate

A rate published between two points served by one carrier.

Local service carriers

A classification of air carriers that operate between less-populated areas and major population centers. These carriers feed passengers into the major cities to connect with major carriers. Local service carriers are now classified as national carriers.

Localized raw material

A raw material found only in certain locations.

Locational determinant

The factors that determine a facility's location. For industrial facilities, the determinants include logistics.

Locator system

locator systems are inventory-tracking systems that allow you to assign locations to your inventory to facilitate greater tracking and the ability to store product randomly. Prior to locator systems, warehouses needed to store product in some logical manner in order to be able to find it (stored in item number sequence, by vendor, by product description, etc.) By using locator systems you can increase space utilization by slotting your product by matching the physical characteristics of the product to a location whose physical characteristics match that of the product. You can also increase productivity by locating fast moving product to closer, more accessible locations, and increase accuracy by separating similar items. Location functionality in software can range from a simple text field attached to an item that notes a single location, to systems that allow multiple locations per item and track inventory quantities by location. Warehouse management systems (WMS) take locator systems to the next level by adding functionality to direct the movement between locations. See article on Warehouse Management Systems, also check out My book on inventory accuracy which covers locator systems in more detail. a.k.a. Location system, Bin locations.

Lockout / Tagout

the process of disabling (lockout) and identifying (tagout) equipment and energy sources during maintenance or service to prevent injury of personnel from an unexpected startup or power up.


A daily record of the hours an interstate driver spends driving, off duty, sleeping in the berth, or on duty but not driving.


The process of planning, implementing and controlling the efficient and cost-effective flow and storage of raw materials, in-process stocks, finished goods and related information from the point of origin to the point of consumption for customers. Put more simply, it is the science and art of ensuring that the right products reach the right place in the right quantity at the right time in order to satisfy consumer demand. Logistics encompasses warehousing, transport, added-value/pre-retailing services and IT solutions and covers inbound, outbound, internal, international and reverse product flows.

Logistics channel

The network of intermediaries engaged in transfer, storage, handling, and communications functions that contribute to the efficient flow of goods.

Logistics control tower (LCT)

See control tower.

Logistics Costs

The factors associated with the acquisition, storage, movement, and disposition of goods.

Logistics data interchange (LDI)

A computerized system that electronically transmits logistics information.

Logistics outsourcing

See outsourcing.

Logistics re-engineering

The study and re-design of logistics processes to achieve significant improvements in performance.

Logistics service provider (LSP)

An organisation that offers 3PL, 4PL or lead logistics provider services.

Long Ton

2,240 pounds.

Longitudinal flue space

term used by fire codes to describe the space between the rows of back-to-back racking. Flue spaces allow the water from an overhead sprinkler system to reach lower levels of the rack. Normally a longitudinal flue space of at least 6 inches is required. It is important to note that the flue space is measured as the distance between the loads, not the distance between the racks. Also see Transverse Flue Space See article Warehouse Fire Safety.


Individual employed in a port to load and unload ships.


Without packing.

Lot for lot

an order method that is driven by forecast periods. Order quantities will match demand in each specific forecast period.

Lot size

The quantity of goods a company purchases or produces in anticipation of use or sale in the future.


A trailer or semi-trailer with no sides and with the floor of the unit close to the ground.


Less-than-truckload (see separate listing).


The act of assisting a motor carrier owner-operator in the loading and unloading of property; quite commonly used in the food industry.




Organization of Economic Cooperation and Development, headquartered in Paris with membership consisting of the world's developed nations.


Overseas Private Investment Corporation.

Obsolete Inventory

inventory that has had no sales or usage activity for a specific period of time. The period of time varies by company and industry and may even vary by product line within a specific company and may range from weeks to years. a.k.a . Dead Inventory. See also Excess Inventory.

Ocean Bill of Lading (Ocean B/L)

A contract for transportation between a shipper and a carrier. It also evidences receipt of the cargo by the carrier. A bill of lading shows ownership of the cargo and, if made negotiable, can be bought, sold or traded while the goods are in-transit.

Ocean Bill of Lading

The bill of lading issued by the ocean carrier to its customer.

Ocean Carrier

An enterprise that offers service via ocean (water) transport.

Ocean freight

The transport of goods by sea.


See "Overland Common Points."


Abbreviation for "Operating Differential Subsidy." An amount of money the U.S. government paid U.S. shipping companies that qualify for this subsidy. The intent was to help offset the higher subsidy. The intent was to help ofset the higher cost of operating a U.S.-flag vessel. The ODS program is administered by the U.S. Maritime Administration and is being phased out.


See Tender.

On Board

A notation on a bill of lading that cargo has been loaded on board a vessel. Used to satisfy the requirements of a letter of credit, in the absence of an express requirement to the contrary.

On Deck

A notation on a bill of lading that the cargo has been stowed on the open deck of the ship.

On-line receiving

A system in which computer terminals are available at each receiving bay and operators enter items into the system as they are unloaded.

Open Account

A trade arrangement in which goods are shipped to a foreign buyer without guarantee of payment.

Open Insurance Policy

A marine insurance policy that applies to all shipments made by an exporter over a period of time rather than to one shipment only.

Open Policy

See Marine Cargo Insurance.

Open Source

Software that has the source code freely available for modification. In most cases, open source software is also "Free software" in that it requires no licensing fees. The Linux operating system, Apache web server, PHP programming language, MySQL database, and OpenOffice office suite are among the best known free open source products. However, when in comes to business software (such as ERP systems), I've noticed that some of the products that advertise (that's a clue) as open source, are not exactly free. Some have licensing fees, while others are built on databases or other programs that have licensing fees.

Open Top Container

A container fitted with a solid removable roof, or with a tarpaulin roof so the container can be loaded or unloaded from the top.

Operating Differential Subsidy (ODS)

A payment to an American-flag carrier by the U.S. government to offset the difference in operating costs between U.S. and foreign vessels.

Operating Ratio

A comparison of a carrier's operating expense with its net sales. The most general measure of operating efficiency.

A measure of operating efficiency defined as Operating expenses divided by the Operating revenues x 100.


I use the term operation frequently in my writings with two very distinct meanings. At a general level, an operation is the overall work environment that includes the facility(s) and all activities that occur within it. When discussing MRP and related topics, an operation is a specific step that exists in the routing of a manufacturing process.


guidance system that uses a special strip (taped or painted) on the floor to guide an AGV.


The process of making something as good or as effective as possible with given resources and constraints.

Optimum Cube

The highest level of cube utilization that can be achieved when loading cargo into a container.

Optional replenishment

the action of ordering or producing up to the Max in a Min-Max system even though inventory has not reached the Min. May be used to avoid down time on machines etc.

Order cost

also known as purchase cost or set up cost, order cost is the sum of the fixed costs that are incurred each time an item is ordered. These costs are not associated with the quantity ordered but primarily with physical activities required to process the order. For purchased items, these would include the cost to enter the purchase order and/or requisition, any approval steps, the cost to process the receipt, incoming inspection, invoice processing and vendor payment, and in some cases a portion of the inbound freight may also be included in order cost. In manufacturing, the order cost would include the time to initiate the work order, time associated with picking and issuing components excluding time associated with counting and handling specific quantities, all production scheduling time, machine set up time, and inspection time. Order cost is used as part of most cost-based order quantity/lot sizing calculations. See article on EOQ for more detailed info on order cost.

Order cycle

also called replenishment cycle, order cycle refers to the time between orders of a specific item. Most easily calculated by dividing the order quantity by the annual demand and multiplying by the number of days in the year.

The time and process involved from the placement of an order to the receipt of the shipment.

Order cycle time

The time that elapses from placement of order until receipt of order. This includes time for order transmittal, processing, preparation, and shipping.

Order Fill

A measure of the number of orders processed without stockouts, or the need to back order, expressed as a percentage of all orders processed in the distribution center or warehouse.

Order picking

Assembling a customer's order from items in storage.

Order point

See Reorder point.

Order Processing

Activities associated with filling customer orders.

Order profile

data describing the characteristics of inbound, outbound, or internal orders (outbound is most common). Examples of characteristics incorporated into an order profile could include line items per order, pieces per order, weight per order, cube per order, time of day, destination, shipment method, order type, etc. Characteristics are often broken into logical groups such as breaking line items per order into groups of 1 line item, 2-4 line items, 5-10 line items, 11- 25, 26+.

Order selector

a.k.a. Order Picker. Lift truck designed specifically for manual handling of less than pallet load quantities in racking. Man-up design has fixed forks attached to a platform that elevates the load and the operator to facilitate manual loading and unloading from racking.Order selectors are very-narrow-aisles vehicles that operate in aisles of less than 6' Also see Lift Truck Pics, Lift Truck Basics, and The Aisle Decision for more info.


A type of request for goods or services.

Ordering cost

The cost of placing an inventory order with a supplier.

Order-Notify (O/N)

A bill of lading term to provide surrender of the original bill of lading before freight is released; usually associated with a shipment covered under a letter of credit.


Abbreviation for "Origin Rail Freight Station." Same as CFS at origin except an ORFS is operated by the rail carrier participating in the shipment.


Location where shipment begins its movement.

Origin services

Support/added-value functions offered at the point of origin of merchandise or materials. Can include buying, purchase order management, vendor compliance, quality inspection, document management, container optimisation, pick-and-pack, pallet loading, customs processes and consolidation.


The place where a shipment begins its movement.

Original Bill of Lading (OBL)

A document which requires proper signatures for consummating carriage of contract. Must be marked as "original" by the issuing carrier.


Abbreviation for "Over, Short or Damaged" Usually discovered at cargo unloading.


Over, Short, and Damaged.

Out Gate

Transaction or interchange that occurs at the time a container leaves a rail or water terminal.

Outbound Consolidation (Break-Bulk)

Consolidation of a number of small shipments for various customers into a larger load. Shipped to a location near the customers; then the small shipments are distributed to the customers.

Outbound Logistics

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

Out-of-pocket cost

The cost directly assignable to a particular unit of traffic and which a company would not have incurred if it had not performed the movement.

Outside operation

term describing a step in the manufacturing process that is performed by an outside vendor. System setup for outside operations can get fairly complicated and generally requires linking a purchase order for the outside processing to a specific operation in the routing. The integration of the purchase order process and the work order process to ensure accounting, production planning, and inventory management’s needs are met can be confusing and is often problematic.


To utilize a third-party provider to provide services previously performed in-house.

The sub-contracting to external companies of tasks considered to be outside an organisation's core competence. Logistics outsourcing is one of the most popular forms.


To charge more than the proper amount according to the published rates.

Overheight Cargo

Cargo more than eight feet high which thus cannot fit into a standard container.

Overland Common Point (OCP)

A term stated on the bills of lading offering lower shipping rates to importers east of the Rockies, provided merchandise from the Far East comes in through the West Coast ports. OCP rates were established by U.S. West Coast steamship companies in conjunction with western railroads so that cargo originating or destined for the American Midwest and East would be competitive with all-water rates via the U.S. Atlantic and Gulf ports. Applies to eastern Canada.


A motor carrier operation that reflects long-distance, intercity moves; the opposite of local operations.

Owner Code (SCAC)

Standard Carrier Abbreviation Code identifying an individual common carrier. A three letter carrier code followed by a suffix identifies the carrier's equipment. A suffix of "U" is a container and "C" is a chassis.


A trucking operation in which the truck's owner is also the driver.




Abbreviation for "Transportation and Exportation." Customs form used to control cargo movement from port of entry to port of exit, meaning that the cargo is moving from one country, through the United States, to another country.


Rear of a container or trailer-opposite the front or nose.

Tally sheet

A printed form on which companies record, by making an appropriate mark, the number of items they receive or ship. In many operations, tally sheets become a part of the permanent inventory records.


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

Refers to the rear tandem axles (the back 8 wheels on an 18 wheeler) on a trailer that can be adjusted forward or backward on the trailer to even out load weights or make for more stable loading (tandems all the way back).

Tank cars

Railcars designed to haul bulk liquid 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

In railcar or container shipments, the weight of the empty railcar or empty container.

The weight of the vehicle when it is empty.

Tariff (Trf.)

A publication setting forth the charges, rates and rules of transportation companies.

A tax assessed by a government on goods entering or leaving a country. The term is also used in transportation in reference to the fees and rules applied by a carrier for its services.

Tariff Service

The type of service required, such as House to House, Pier to Pier, Pier to House, etc.

Task interleaving

term used in describing functionality of Warehouse Management Systems to mix tasks to reduce travel time. Sending a forklift driver to put away a pallet on his way to his next pick is an example of task interleaving.


To Be Nominated. (When the name of a ship is still unknown.)


Used for sending messages to outside companies. Messages are transmitted via Western Union, ITT and RCA. Being replaced by fax and internet.

Temperature Recorder

A device to record temperature in a container while cargo is en route.

Temperature-controlled / temperature-assured

The storage and distribution of goods within a certain temperature range as required by the product type; for example, chilled or frozen. Products can include pharmaceuticals as well as food.

Temporary authority

Temporary operating authority as a common carrier granted by the ICC for up to 270 days.


The offer of goods for transportation or the offer to place cars or containers for loading or unloading.

A request for space and equipment with a motor carrier.


Time and date for payment of a draft.


An assigned area in which containers are prepared for loading into a vessel, train, truck, or airplane or are stacked immediately after discharge from the vessel, train, truck, or airplane.

A location or facility for the handling and/or temporary storage of cargo as it is loaded/unloaded or transferred between enterprises.

Terminal Charge

A charge made for a service performed in a carrier's terminal area.

Terminal delivery allowance

A reduced rate that a carrier offers in return for the shipper or consignee tendering or picking up the freight at the carrier's terminal.

Terminal emulation

software used on desktop and portable computers that allows the computer to act like a terminal connected to a mainframe system. If you have a networked desktop PC and are accessing mainframe programs ( a.k.a. green screen programs) you are using terminal emulation. Terminal emulation is also a common method used to connect portable computers (as in warehouse bar code data collection systems) to mainframe software. Also see Screen Mapping.

Terminal Operator

The enterprise responsible for the operation of facilities for one or more modes of transportation.

Terminal Pass

A document provided to the delivering carrier by the terminal operator to allow admission into the operator's facility.

Terminal Receipt

A document used to accept materials or equipment at a terminal. This provides the delivering carrier with proof of delivery and the terminal with a verification of receipt.

Terms of Sale

The point at which sellers have fulfilled their obligations so the goods in a legal sense could be said to have been delivered to the buyer. They are shorthand expressions that set out the rights and obligations of each party when it comes to transporting the goods. Following, are the thirteen terms of sale in international trade as Terms of Sale reflected in the recent amendment to the International chamber of Commerce Terms of Trade (INCOTERMS), effective July 1990 exw, fca, fas, fob, cfr, cif, cpt, cip, daf, des, deq, ddu and ddp.

Terms of Sale - CFR (Cost and Freight) (...Named Port of Destination)

A Term of Sale where the seller pays the costs and freight necessary to bring the goods to the named port of destination, Terms of Sale but the risk of loss of or damage to the goods, as (continued) well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel, is transferred from the seller to the buyer when the goods pass the ship's rail in the port of shipment. The CFR term requires the seller to clear the goods for export.

Terms of Sale - CIF (Cost, Insurance and Freight) (...Named Place of Destination)

A Term of Sale where the seller has the same obligations as under the CFR but also has to procure marine insurance against the buyer's risk of loss or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The CIF term requires the seller to clear the goods for export.

Terms of Sale - CIP (Carriage and Insurance Paid To) (...Named Place of Destination)

A Term of Sale which means the seller has the same obligations as under CPT, but with the addition that the seller has to procure cargo insurance against the buyer's risk of loss of or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The buyer should note that under the CIP term the seller is required to obtain insurance only on minimum coverage. The CIP term requires the seller to clear the goods for export.

Terms of Sale - Cost and Freight (C&F)

The seller quotes a price that includes the cost of transportation to a specific point. The buyer assumes responsibility for loss/damage and purchases insurance for the shipment.

Terms of Sale - Cost, Insurance & Freight (CIF)

The price quote the seller offers to transportation charges.

Terms of Sale - CPT (Carriage Paid To) (...Named Place of Destination)

A Term of Sale which means the seller pays the freight for the carriage of the goods to the named destination. The risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered to the carrier, is transferred from the seller to the buyer when the goods have been delivered into the custody of the carrier. If subsequent carriers are used for the carriage to the agreed upon destination, the risk passes when the goods have been delivered to the first carrier. The CPT term requires the seller to clear the goods for export.

Terms of Sale - DAF (Delivered At Frontier) (...Named Place)

A Term of Sale which means the sellers fulfill their obligation to deliver when the goods have been made available, cleared for export, at the named point and placed at the frontier, but before the customs Terms of Sale border of the adjoining country. (continued)

Terms of Sale - DDP (Delivered Duty paid) (...Named Port of Destination)

Delivered Duty Paid means that the seller fulfills his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the risks and costs, including duties, taxes and other charges of delivering the goods thereto, clear for importation. While the EXW term represents the minimum obligation for the seller, DDP represents the maximum.

Terms of Sale - DDU (Delivered Duty Unpaid) (...Named Port of Destination)

A Term of Sale where the seller fulfills his obligation to deliver when the goods have been made available at the named place in the country of importation. The seller has to bear the costs and risks involved in bringing the goods thereto (excluding duties, taxes and other official charges payable upon importation) as well as the costs and risks of carrying out customs formalities. The buyer has to pay any additional costs and to bear any risks caused by failure to clear the goods for in time.

Terms of Sale - DEQ (Delivered Ex Quay, [Duty Paid]) (...Named Port of Destination)

A Term of Sale which means the DDU term has been fulfilled when the goods have been available to the buyer on the quay (wharf) at the named port of destination, cleared for importation. The seller has to bear all risks and costs including duties, taxes and other charges of delivering the goods thereto.

Terms of Sale - DES (Delivered Ex Ship) (...Named Port of Destination)

A Term of Sale where the seller fulfills his/her obligation to deliver when the goods have been made available to the buyer on board the ship, uncleared for import at the named port of destination. The seller has to bear all the costs and risks involved in bringing the goods to the named port destination.

Terms of Sale - Ex Works

The price that the seller quotes applies only at the point of origin. The buyer takes possession of the shipment at the point of origin and bears all the costs and risks associated with transporting the goods to the destination.

Terms of Sale - EXW (Ex Works) (...Named Place)

A Term of Sale which means that the seller fulfills the obligation to deliver when he or she has made the goods available at his/her premises (i.e., works, factory, warehouse, etc.) to the buyer. In particular, the seller is not responsible for loading the goods in the vehicle provided by the buyer or for clearing the goods for export, unless otherwise agreed. The buyer bears all costs and risks involved in taking the goods from the seller's premises to the desired destination. This term thus represents the minimum obligation for the seller.

Terms of Sale - F.O.B. Destination

The seller agrees to deliver the goods to the destination point. The buyer assumes all responsibility (risk) at the destination point.

Terms of Sale - F.O.B. Origin

The seller agrees to deliver the goods to the point of origin. The buyer assumes all responsibility and risk from the point of origin.

Terms of Sale - F.O.B. Port

The seller agrees to deliver the goods to the port as indicated by the exchange point. The buyer assumes all responsibility (risk) from the port as indicated by the exchange point.

Terms of Sale - FAS (Free Alongside Ship) (...Named Port of Shipment)

A Term of Sale which means the seller fulfills his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the named port of shipment.This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment.

Terms of Sale - FCA (Free Carrier) (... Named Place)

A Term of Sale which means the seller fulfills their obligation when he or she has handed over the goods, cleared for export, into the charge of the carrier named by the buyer at the named place or point. If no precise point is indicated by the buyer, the seller may choose, within the place or range stipulated, where the carrier should take the goods into their charge.

Terms of Sale - FOB (Free On Board) (...Named Port of Shipment)

An International Term of Sale that means the seller fulfills his or her obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks to loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export.

Terms of Sale - Free Along Side

The seller agrees to deliver the goods to the dock alongside the overseas vessel that will carry the shipment. The seller pays the cost of getting the shipment to the dock. The buyer is responsible for contracting the carrier, obtaining.

Terms of Sale - Free on Board (F.O.B.) (exchange point)

This expression will be followed by an exchange point. The exchange point indicates the point at which the responsibility (risk) moves from the buyer to the seller.


Or 20ft equivalent unit; the default measurement for ocean freight containers. Most containers used today are 40ft long.

Abbreviation for "Twenty foot Equivalent Unit."

Third party

A firm that supplies logistics services to other companies.

Third-party logistics

(abbreviated 3PL) describes businesses that provide one or many of a variety of logistics-related services. Types of services would include public warehousing, contract warehousing, transportation management, distribution management, freight consolidation. A 3PL provider may take over all receiving, storage, value added, shipping, and transportation responsibilities for a client and conduct them in the 3PL's warehouse using the 3PL's equipment and employees, or may manage one or all of these functions in the client's facility using the client's equipment, or any combination of the above. Another term, 4PL is sometimes used to describe businesses that manage a variety of logistics related services for clients by using 3PLs. Also see Public Warehouse and Contract Warehouse or visit International Warehouse Logistics Association (IWLA) site.

Transportation, warehousing and other logistics related services provided by companies employed to assume tasks that were previously performed in-house by the client.

Three-layer framework

A basic structure and operational activity of a company; the three layers include operational systems, control and administrative management, and master planning.

Through Bill of Lading

A single bill of lading covering both the domestic (inland) and international carriage of an export shipment.

Through Rate

The total rate from the point of origin to final destination.


A measure of warehousing output volume (weight, number of units). Also, the total amount of units received plus the total amount of units shipped, divided by two.

A warehousing output measure that considers the volume (weight, number of units) of items stored during a given time period.

Throughput Charge

The charge for moving a container through a container yard off or onto a ship.

Tilt-tray sorter

conveyor sorting system that uses a series of tilting devices (carriers) to sort materials. Each tilting carrier has a tray and is mounted on a conveyor, as the carrier passes the drop-off point, it will tilt allowing the materials to fall onto another conveyor, down a chute, or into some type of container a.k.a Tilt-tray conveyor.

Time buckets

term sometimes used to describe forecast periods.

Time Charter

A contract for leasing between the ship owners and the lessee. It would state, e.g., the duration of the lease in years or voyages.

Time Draft

A draft that matures either a certain number of days after acceptance or a certain number of days after the date of the draft.

Time fence

period of time prior to the scheduled production date beyond which changes can be made without significant adverse effects.

Time utility

A value created in a product by having the product available at the time desired. Transportation and warehousing create time utility.

Time/service rate

A rail rate that is based upon transit time.


A freight or distribution service that specifies or guarantees delivery on a particular day or time of day.

Time-Definite Services

Delivery is guaranteed on a specific day or at a certain time of the day.


Time schedules of departures and arrivals by origin and destination; typically used for passenger transportation by air, bus, and rail.


"Transport International par la Route." Road transport operating agreement among European governments and the United States for the international movement of cargo by road. Display of the TIR carnet allows sealed containerloads to cross national frontie.


Abbreviation for "Trailer Load."

TL (truckload)

A shipment weighing the minimum weight or more. Carriers give a rate reduction for shipping a TL-size shipment.


Transportation management system (see separate listing).


Abbreviation for "Trailer on Flat Car." The movement of a highway trailer on a railroad flatcar. Also known as Piggyback.

TOFC (trailer-on-flatcar)

Also known as piggyback.


A unit used in comparing freight earnings or expenses. The amount earned from the cost of hauling a ton of freight one mile. Also, the movement of a ton of freight one mile.

A freight transportation output measure that reflects the shipment's weight and the distance the carrier hauls it; a multiplication of tons hauled and distance traveled.


100 cubic feet.

Top-Air Delivery

A type of air circulation in a container. In top air units, air is drawn from the bottom of the container, filtered through the evaporator for cooling and then forced through the ducted passages along the top of the container. This type of airflow requires a special loading pattern.

Total Average Inventory

Average normal use stock, plus average lead stock, plus safety stock.

Total Cost Analysis

A decision-making approach that considers minimization of total costs and recognizes the interrelationship among system variables such as transportation, warehousing, inventory, and customer service.

Total quality management (TQM)

A management approach in which managers constantly communicate with organizational stakeholders to emphasize the importance of continuous quality improvement.

Toto authority

A private motor carrier receiving operating authority as a common carrier to haul freight for the public over the private carrier's backhaul; the ICC granted this type of authority to the Toto Company in 1978.


The charge made for towing a vessel.

Towline Conveyor

material handling system that uses a towline (usually a chain) recessed beneath the floor to pull wheeled carts along a fixed path. Towline conveyors have been used for more than 50 years in manufacturing facilities.


Determining a shipment's location during the course of a move.


The process of recording the progress of a consignment through the supply chain, usually in or near real-time, in order to track its status or trace its movements. Sophisticated control tower systems function as a single point of control, delivering centralised command of the supply chain, with full visibility.

Tracking and Tracing

Monitoring and recording shipment movements from origin to destination.


A carrier's system of recording movement intervals of shipments from origins to destinations.


Unit of highway motive power used to pull one or more trailers/containers.

Trade Acceptance

A time or a date draft that has been accepted by the buyer (the drawee) for payment at maturity.

Trade Lane

The combination of the origin and destination points.


A term used to define a geographic area or specific route served by carriers.


An enterprise that operates a for-profit business arranging for the purchase and/or sale of goods/services.

Trading Partner

Any party either company or person involved in the supply chain order, fulfillment or shipping process.


Persons and property carried by transport lines.

Traffic Management

The management and controlling of transportation modes, carriers and services.

The buying and controlling of transportation services for a shipper or consignee, or both.


a.k.a. Semi Trailer, Tractor Trailer. Generally describes enclosed trailers used to transport materials between locations. Standard lengths for trailers are 45', 48', and 53, with standard internal width of 98" to 99" and internal height of 105" to 110". Refrigerated trailers, also known as "reefers," have smaller internal widths of between 90" and 96" and heights of 96" to 100". Other types of trailers include flatbeds, low boys, and container chassis. Also see Container.

The truck unit into which freight is loaded as in tractor trailer combination. See Container.

Trailer creep

Trailer creep (also known as trailer walk, dock walk) occurs when the lateral and vertical forces exerted each time a lift truck enters and exits the trailer cause the trailer to slowly move away from the dock resulting in separation from the dock leveler. Factors that affect trailer creep are the weight and speed of the lift truck and load, the grade of the drive the trailer is parked on, the softness of the suspension, the type of transition (dock levelers, dock boards) being used, and whether the trailer has been dropped off (spotted) or if it is still connected to the tractor. Read my article on Dock Safety.

Trailer On Flat Car (TOFC)

Carriage of intermodal containers when the container is still attached to the chassis, and both chassis and container are loaded on a rail flat car.

Tramp Line

An ocean carrier company operating vessels not on regular runs or schedules. They call at any port where cargo may be available.


An international water carrier that has no fixed route or published schedule; a shipper charters a tramp ship for a particular voyage or a given time period.


Communication from one partner to another.

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 still pay the through rate.

Transit Time

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

Transmittal Letter

A letter from the shipper to its agent that lists the particulars of a shipment, the documents being transmitted, and instructions for the disposition of those documents.


To move cargo from one place to another.

See Transportation.

Transportation & Exit (T&E)

Allows foreign merchandise arriving at one port to be transported in bond through the U.S. to be exported from another port, without paying duty.

Transportation (Transport or Carriage)

The movement of goods from one place to another.

Transportation Association of America

An association that represents the entire U.S. transportation system--carriers, users, and the public; now defunct.

Transportation management system

Category of operations software that may include products for shipment manifesting, rate shopping, routing, fleet management, yard management, carrier management, freight cost management. Also see Shipping Manifest System.

Transportation method

A linear programming technique that determines the least-cost means of shipping goods from plants to warehouses or from warehouses to customers.

Transportation requirements planning (TRP)

Utilizing computer technology and information already available in MRP and DRP databases to plan transportation needs based on field demand.

Transportation Research Board

A division of the National Academy of Sciences which pertains to transportation research.

Transportation Research Forum

A professional association that provides a forum for the discussion of transportation ideas and research techniques.

Transportation Services

Services offered by the transport provider.


To transfer goods from one transportation line to another, or from one ship to another.

Transshipment Port

Place where cargo is transferred to another carrier.

Transshipment problem

A variation of the linear programming transportation method that considers consolidating shipments to one destination and reshipping from that destination.


The shipment of merchandise to the point of destination in another country on more than one vessel or vehicle. The liability may pass from one carrier to the next, or it may be covered by Through Bills of Lading issued by the first carrier.

Transverse flue space

term used by fire codes to describe the space to either side of pallet in racked storage. Flue spaces allow the water from an overhead sprinkler system to reach lower levels of the rack. Normally a transverse flue space of at least 3 inches is required. Also see Longitudinal Flue Space. See article Warehouse Fire Safety.

Travel agent

A firm that provides passenger travel information; air, rail, and steamship ticketing; and hotel reservations. The carrier and hotel pay the travel agent a commission.


See FTL and LTL above.

Truckload Carriers (TL)

Trucking companies which move full truckloads of freight directly from the point of origin to destination.

Trunk lines

Oil pipelines used for the long-distance movements of crude oil, refined oil, or other liquid products.

Trust Receipt

Release of merchandise by a bank to a buyer while the bank retains title to the merchandise. The goods are usually obtained for manufacturing or sales purposes. The buyer is obligated to maintain the goods (or the proceeds from their sales) distinct from the remainder of the assets and to hold them ready for repossession by the bank.


Trans-Pacific Stabilization Agreement.


In water transportation, the time it takes between the arrival of a vessel and its departure.

Turret truck

turret trucks are a man-up lift truck similar to an order selector with the exception that rather than fixed forks the forks are mounted on an additional mast and carriage that operates as a turret, turning 90 degrees in either direction facilitating picking and stocking on either side of the aisle. The man-up design makes it easer to handle loads in very tall racking. Very-narrow-aisle trucks are generally recommended to be used in conjunction with a guidance system (wire, rails, optical) within the aisles to increase safety and reduce property damage. Also Turret Trucks require that the floor be perfectly flat and level to operate correctly. Also see Lift Truck Pics , Lift Truck Basics, and The Aisle Width Decision for more info.

Twenty-foot Equivalent Unit (TEU)

Used to measure a vessel's capacity based on the number of twenty-foot containers the vessel can carry.

Twist Locks

A set of four twistable bayonet type shear keys used as part of a spreader to pick up a container or as part of a chassis to secure the containers.

Two-bin system

An inventory ordering system in which the time to place an order for an item is indicated when the first bin is empty. The second bin contains supply sufficient to last until the company receives the order

Two-Way Pallet

A pallet so designed that the forks of a fork lift truck can be inserted from two sides only.



U.S. Consular Invoice

A document required on merchandise imported into the United States.


A raw material that is found at all locations.


Abbreviation for the "Uniform Customs and Practice for Documentary Credits," published by the International Chamber of Commerce. This is the most frequently used standard for making payments in international trade; e.g., paying on a Letter of Credit. It is most frequently referred to by its shorthand title UCP No. 500. This revised publication reflects recent changes in the transportation and banking industries, such as electronic transfer of funds.

Rules for letters of credit drawn up by the Commission on Banking Technique and Practices of the International Chamber of Commerce in consultation with the banking associations of many countries. See Terms of Payment.


Abbreviation for "Uniform Freight Classification."


See Unit Load Device.


The space not filled with liquid in a drum or tank.

Umbrella rate

An ICC ratemaking practice that held rates to a particular level to protect another mode's traffic.


United Nations EDI for Administration, Commerce and Transport. EDI Standards are developed and supported by the UN for electronic message (data) interchange on an international level.

Unclaimed Freight

Freight that has not been called for or picked up by the consignee or owner.


To charge less than the proper amount.


United Nations Economic Commission for Europe.

Uniform Warehouse Receipts Act

The act that sets forth the regulations governing public warehousing. The regulations define a warehouse manager's legal responsibility and define the types of receipts he or she issues.

Unit cost

The total cost of producing a single unit.

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.

Unit load

material handling term that describes any configuration of materials that allow it to be moved by material handling equipment as a single unit. While smaller manually handled configurations could be considered unit loads, the term generally defines larger configurations that would be moved by a lift truck such as palletized loads, crates, bales, etc. a.k.a. unitized load

Packages loaded on a pallet, in a crate or any other way that enables them to be handled at one time as a unit.

Unit Load Device (ULD)

Refers to airfreight containers and pallets.

Unit of measure

(abbreviated U/M) describes how the quantity of an item is tracked in your inventory system. The most common unit of measure is "eaches" (EA), which simply means that each individual item is considered one unit. An item that uses "cases" (CA or CS) as the unit of measure would be tracked by the number of cases rather than by the actual piece quantity. Other examples of units of measure would include pallets (PL), pounds (LB), ounces (OZ), linear feet (LF), square feet (SF), cubic feet (CF), gallons , thousands, hundreds, pairs, dozens. Also see Unit-of-measure Conversion.

Unit Train

A train of a specified number of railcars, perhaps 100, which remain as a unit for a designated destination or until a change in routing is made.

An entire, uninterrupted locomotive, car, and caboose movement between an origin and destination.

United States Railway Association

The planning and funding agency for Conrail; created by the 3-R Act of 1973.


Loading one or more large items of Cargo onto A single piece of equipment, such as a pallet.


To consolidate several packages into one unit; carriers strap, band, or otherwise attach the several packages together.

Unit-of-measure conversions

a unit-of-measure conversion is needed whenever you work with multiple units of measure. For example, if you purchased an item in cases (meaning that your purchase order stated a number of cases rather than a number of pieces) and then stocked the item in eaches, you would require a conversion to allow your system to calculate how many eaches are represented by a quantity of cases. This way, when you received the cases, your system would automatically convert the case quantity into an each quantity.


Removal of a shipment from a vessel.


See reverse logistics.

Urban Mass Transportation Administration

A U.S. Department of Transportation agency that develops comprehensive mass transport systems for urban areas and for providing financial aid to transit systems.



Validated Export License

A document issued by the U.S. government; authorizes the export of commodities for which written authorization is required by law.


Authentication of B/L and when B/L becomes effective.

Valuation Charges

Transportation charges to shippers who declare a value of goods higher than the value of the carriers' limits of liability.

Value Added

Increased or improved value, worth, functionality or usefulness.

Value-added services

See added-value services.


Enclosed in the Insurance Proposal Form is a valued inventory list. Simply list the number of each particular item to be included in your shipment and declare the full replacement value at destination. The more specific you can be, then the greater the likelihood of a swift and full settlement in the event of a claim.

Value-of-service pricing

Pricing according to the value of the product the company is transporting; third-degree price discrimination; demand-oriented pricing; charging what the traffic will bear.


A term for stowing cargo in a container.

Variable Cost

Costs that vary directly with the level of activity within a short time. Examples include costs of moving cargo inland on trains or trucks, stevedoring in some ports, and short-term equipment leases. For business analysis, all costs are either defined as variable or fixed. For a business to break even, all fixed costs must be covered. To make a profit, all variable and fixed costs must be recovered plus some extra amount.

A cost that fluctuates with the volume or activity level of business.

Vehicle restraint systems

devices that prevent trailers from moving away from the loading dock. One of the most popular is the ICC bar type restraint system. These systems incorporated a device that engages the ICC bar (rear impact guard) on the rear of the trailer preventing it from moving away from the dock. These devices may be mechanically or hydraulically operated and may vary in design and functionality from one manufacturer to another. There are also other types of restraints such as those that automatically engage the rear wheels of the trailer. As with the ICC bar restraints, the wheel engagement restraints also vary significantly from one manufacturer to another. There is not a one-system-fits-all solution for vehicle restraints, ICC bar systems may not work with damaged ICC bars, lift gates, and low-boy trailers. Wheel engagement systems are more expensive and may have problems in northern climates due to snow or ice. See article on Dock Safety and Dock Equipment Pics for more info.

Vendor consolidation

The process of managing various vendors in order to consolidate multiple LTL shipments into a single or smaller number of consignments to reduce costs and improve delivery efficiency.

Vendor managed inventories (VMI)

A customer service strategy used to manage inventory of customers to lower cost and improve service.


A firm or individual that supplies goods or services; the seller.

Vendor-managed inventory (VMI)

phrase used to describe the process of a supplier managing the inventory levels and purchases of the materials he supplies. This process can be very low tech, such as an office supplies supplier or maintenance supplies supplier coming into your facility once per week to visually check stock levels and place a re-supply order, or high tech, such as an electronic component supplier having remote access to your inventory management and MRP system and producing and automatically shipping to meet your production schedule. Vendor-managed inventory reduces internal costs associated with planning and procuring materials and enables the vendor to better manage his inventory through higher visibility to the supply chain. Vendor-managed inventory may be owned by the vendor (consignment inventory) or the customer.


The sellers of products and services.

Ventilated Container

A container designed with openings in the side and/or end walls to permit the ingress of outside air when the doors are closed.

Very narrow aisle

Lift trucks that operate in aisles less than six feet and often use guidance systems (wire, rail, or optical) to travel within the aisles. Types of VNA trucks include order selectors, swing mast, pivot, mast, and turret trucks. See also article The Aisle Width Decision.

Vessel Manifest

The international carrier is obligated to make declarations of the ship's crew and contents at both the port of departure and arrival. The vessel manifest lists various details about each shipment by B/L number. Obviously, the B/L serves as the core source from which the manifest is created.

A list of all cargoes on a vessel.

Vessel Supplies for Immediate Exportation (VSIE)

Allows equipment and supplies arriving at one port to be loaded on a vessel, aircraft, etc., for its exclusive use and to be exported from the same port.


A floating structure designed for transport.


The ability to view detailed information about supply chain management processes, typically in real or near real-time.

The ability to access or view pertinent data or information as it relates to logistics and the supply chain.


Namely. Used in tariffs to specify commodities.


Very narrow aisle (see separate listing)

Voice directed

See Speech-based technology

Von Thunen's belts

A series of concentric rings around a city to identify where agricultural products would be produced according to von Thunen's theory.


The trip designation (trade route and origin/destination) identifier, usually numerically sequential.


Vessel Sharing Agreement.



Agency for International Development.


American Trucking Association.


Actual time of arrival.


Actual time of departure.


Always Afloat (In some ports the ship aground when approaching, or at berth)


Abbreviation for:- Against All Risks (insurance clause). - Association of American Railroads.


A point beyond the midpoint of a ships length, towards the rear or stern.


A proceeding wherein a shipper/consignee seeks authority to abandon all or parts of their cargo.


A discount allowed for damage or overcharge in the payment of a bill.

ABC analysis

Classification of items in an inventory according to importance defined in terms of criteria such as sales volume and purchase volume.

ABC stratification

Method used to categorize inventory into groups based upon certain activity characteristics. Examples of ABC stratifications would include ABC by velocity (times sold), ABC by sales dollars, ABC by quantity sold / consumed, ABC by average inventory investment, ABC by margin. ABC stratifications are used to develop inventory planning policies, set count frequencies for cycle counting, slot inventory for optimized order picking, and other inventory management activities.


U.S. Customs' "Automated Broker Interface," by which brokers file importers' entries electronically.


Referring to cargo being put, or laden, onto a means of conveyance.


One carrier assumes the charges of another without any increase in charges to the shipper.


A time draft (or bill of exchange) that the drawee (payer) has accepted and is unconditionally obligated to pay at maturity. - Broadly speaking, any agreement to purchase goods under specified terms.


A carrier's ability to provide service between an origin and a destination.

Accessorial Charges

Charges that are applied to the base tariff rate or base contract rate, e.g., bunkers, container, currency, destination/delivery.

A carrier's charge for accessorial services such as loading, unloading, pickup, and delivery.


When a bill of lading is accepted or signed by a shipper or shipper's agent without protest, the shipper is said to acquiesce to the terms, giving a silent form of consent.


A written receipt in full, in discharge from all claims.

ACS (A.C.S.)

U.S. Customs' master computer system, "Automated Commercial Systems."


An act beyond human control, such as lightning, flood or earthquake.

Action Message

An alert that an MRP or DRP system generates to inform the controller of a situation requiring his or her attention.

Active Stock

Goods in active pick locations and ready for order filling.

Activity-Based Costing (ABC)

An accounting system that measures the cost and performance of specific activities performed in an organization.

A method of cost management that identifies business activities performed, accumulates costs associated with these activities, and uses various cost drivers to trace costs of activities to the products.

Actual Cost

Inventory costing method used in manufacturing environments that uses the actual materials costs, machine costs, and labor costs reported against a specific work order to calculate the cost of the finished items.

Ad Valorem

A term from Latin meaning, "according to value."


Automated data collection. See Automated Data Collection

Added-value processes / services

Complementary processes or services applied to a product or service to increase its value to internal or external customers.

Administrative Law Judge

A representative of a government commission or agency vested with power to administer oaths, examine witnesses, take testimony, and conduct hearings of cases submitted to, or initiated by, that agency. Also called Hearing Examiner.

Admiralty (Adm.)

Refers to marine matters such as an Admiralty Court.


To move cargo up line to a vessel leaving sooner than the one booked. (See "Roll.")

Advanced Charge

Transportation charge advanced by one carrier to another to be collected by the later carrier from the consignor or consignee.

Advanced planning and scheduling

Software system designed to integrate with ERP and MRP systems to enhance the short term production planning and scheduling systems that are notoriously inadequate in MRP systems. APS systems have extensive programming logic that allows them to be more effective in dealing with rapid changes in customer demands.

Advanced Shipment Notice (ASN)

Detailed shipment information transmitted to a customer or consignee in advance of delivery, designating the contents and nature of the shipment.

A list transmitted to a customer or consignor designating items shipped. May also include expected time of arrival.

Advanced shipment notification

Advanced shipment notifications (ASNs) are used to notify a customer of a shipment. ASNs will often include PO numbers, SKU numbers, lot numbers, quantity, pallet or container number, carton number. ASNs may be paper-based, however, electronic notification is preferred. Advanced shipment notification systems are usually combined with bar-coded compliance labeling which allows the customer to receive the shipment into inventory through the use of bar-code scanners and automated data collection systems.


Shipment of goods on shipper's own account. A bill of adventure is a document signed by the master of the ship that carries goods at owner' risk.

Advice of Shipment

A notice sent to a local or foreign buyer advising that shipment has gone forward and containing details of packing, routing, etc. A copy of the invoice is often enclosed and, if desired, a copy of the bill of lading.

Advising Bank

A bank operating in the seller's country, that handles letters of credit in behalf of a foreign bank.

Affreightment, Contract of

An agreement by an ocean carrier to provide cargo space on a vessel at a specified time and for a specified price to accommodate an exporter or importer.


Movement toward the stern (back end) of a ship.


Activities completed after the sales process, such as the replacement and servicing of parts; particularly prevalent in the automotive industry.

Agency Tariff

A tariff published by an agent on behalf of several carriers.

A rate bureau publication that contains rates for many carriers.

Agent (Agt.)

A person authorized to transact business for and in the name of another person or company. Types of agent are: (1) brokers, (2) commission merchants, (3) resident buyers, (4) sales agents, 5) manufacturer's representatives.

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


A net advantage a company gains by sharing a common location with other companies.

Aggregate Shipment

Numerous shipments from different shippers to one consignee that are consolidated and treated as a single consignment.

Aggregate tender rate

A reduced rate offered to a shipper who tenders two or more class-related shipments at one time and one place.

Agreed valuation

The value of a shipment agreed upon in order to secure a specific freight rate.

Agreed Weight

The weight prescribed by agreement between carrier and shipper for goods shipped in certain packages or in a certain number.


All inclusive.


Automatic identification & data collection. See Automated Data Collection

Air Cargo

Freight that is moved by air transportation.

Air Carrier

An enterprise that offers transportation service via air.

Air freight

The transportation of goods by air.

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 Transport Association of America

A U.S. airline industry association.


An Air Waybill is not a title document, it is not negotiable. An Air Waybill is a document which has the same importance in airfreight as a Bill of Lading has in sea freight, but, whereas a B/L is a title document, (i.e. it is a document which proves ownership of the goods mentioned in the B/L, and which can be bought and sold, entitling the buyer to ownership of the goods), an AWB cannot be used in this way.

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. The forwarding agreement or carrying agreement between shipper and air carrier and is issued only in nonnegotiable form.

Aircargo Agent

An agent appointed by an airline to solicit and process international airfreight shipments.

Aircargo Containers

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

Airport and Airway Trust Fund

A federal fund that collects passenger ticket taxes and disburses those funds for airport facilities.

All In

The total price to move cargo from origin to destination, inclusive of all charges.

All in rate

Freight rate which is inclusive of all surcharges and extras.

All Water

Term used when the transportation is completely by water.

All-cargo carrier

An air carrier that transports cargo only.


Allocations in inventory management refer to actual demand created by sales orders or work orders against a specific item. The terminology and the actual processing that controls allocations will vary from one software system to another. A standard allocation is an aggregate quantity of demand against a specific item in a specific facility, I have heard standard allocations referred to as normal allocations, soft allocations, soft commitments, regular allocations. Standard allocations do not specify that specific units will go to specific orders. A firm allocation is an allocation against specific units within a facility, such as an allocation against a specific location, lot, or serial number. Firm allocations are also referred to as specific allocations, frozen allocations, hard allocations, hard commitments, holds, reserved inventory. Standard allocations simply show that there is demand while firm allocations reserve or hold the inventory for the specific order designated.


A phrase referring to the side of a ship. Goods delivered "alongside" are to be placed on the dock or barge within reach of the transport ship's tackle so that they can be loaded.

Alternative Rates

Privilege to use the rate producing the lowest charge.

Ambient Temperature

The temperature of a surrounding body. The ambient temperature of a container is the atmospheric temperature to which it is exposed.

American Bureau of Shipping

U.S. classification society which certifies seagoing vessels for compliance to standardized rules regarding construction and maintenance.

American National Standards Institute (ANSI)

ANSI was founded in 1918 to coordinate national standards in the U.S. ANSI is the central body responsible for the identification of a single consistent set of voluntary standards called American National Standards. ANSI provides an open forum for the identification of standards requirements, development of plans to meet those requirements, and agreement on standards. ANSI itself does not develop standards. In 1979 ANSI chartered a new committee, which in now known as Accredited Standards Committee (ASC) X12 Electronic Data Interchange, to develop uniform standards for electronic interchange of business transactions.

American Society of Transportation & Logistics

A professional organization in the field of logistics.

American Trucking Association, Inc.

A motor carrier industry association composed of sub-conferences representing various motor carrier industry sectors.

American Waterway Operators

A domestic water carrier industry association representing barge operators on inland waterways.


The U.S. Customs' "Automated Manifest System."


The National Railroad Passenger Corporation, a federally created corporation that operates most of the United States' intercity passenger rail service.


See American National Standards Institute

Anti-Dumping Duty

A tariff imposed to discourage sale of foreign goods, subsidized to sell at low prices detrimental to local manufacturers.

Any Quantity (A.Q.)

Usually refers to a rating that applies to an article regardless of size or quantity.

A rate that applies to any size shipment tendered to a carrier; no discount rate is available for large shipments.


Application Programming Interface

Apparent Good Order

When freight appears to be free of damage so far as a general survey can determine.


Determination of the dutiable value of imported merchandise by a Customs official who follows procedures outlined in their country's tariff, such as the U.S. Tariff Act of 1930.

Appraiser's Stores

The warehouse or public stores to which samples of imported goods are taken to be inspected, analyzed, weighed, etc. by examiners or appraisers.


See Advanced Planning and Scheduling


Arbitrary charge. Charge for added expense, such as transshipment charges or ice-breaking charges.


A stated amount over a fixed rate to one point to make a rate to another point.


A notification by carrier of ship's arrival to the consignee, the "Notify Party," and - when applicable - the "Also Notify Party." These parties in interest are listed in blocks 3, 4 and 10, respectively, of the Bill of Lading.

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

Artificial intelligence

A field of research seeking to understand and computerize the human thought process.


American Standards Committee X12 responsible for developing EDI standards for the United States.


Advanced Shipment Notifications

ASP, Application service provider

a twist in software marketing in which the software licenses are owned by the ASP and reside on their system while the client rents the rights to use the software. The ASP may be the software manufacturer or a third party business. The benefits to an using an ASP are lower upfront costs, quicker implementations, and the reduction of the need for internal IS personnel and mainframe/server hardware. It is hoped that ASPs will allow small to midsize businesses greater access to technology than was previously available. More recently the terms SaaS (Software as a Service) and On-demand Software have emerged to describe this same scenario.


See Automated Storage a Retrieval Systems


A term commonly used in connection with a bill of lading. It involves the transfer of rights, title and interest in order to assign goods by endorsing the bill of lading.

The transfer of rights, duties, responsibilities, and benefits of an agreement, contract, or financial instrument to a third party.

Association of American Railroads

A railroad industry association that represents the larger U.S. railroads.


Behind a vessel. Move in a reverse direction.


Any time Day or Night Sundays & Holidays Included.


Automated Tariff Filing Information System


A direction across the width of a vessel.


In reference to freight bills, the term audit is used to determine the accuracy of freight bills.


Determining the correct transportation charges due the carrier; auditing involves checking the freight bill for errors, correct rate, and weight.


the functionality of a bar-code reader to recognize the bar-code symbology being scanned, thus allowing a reader to read several different symbologies consecutively. Read my article ADC Basics

Automated Broker Interface (ABI)

The U.S. Customs program to automate the flow of customs-related information among customs brokers, importers, and carriers.

Automated data collection

Systems of hardware and software used to process transactions in warehouses and manufacturing operations. Data collection systems may consist of fixed terminals, portable terminals and computers, Radio frequency (RF) terminals, and various types of bar code scanners. a.k.a. Automated data capture, AIDC, Automatic identification & data collection Read my article ADC Basics.

Automated guided vehicle system (AGVS)

Describes systems of vehicles that can be programmed to automatically drive to designated points and perform preprogrammed functions. Guidance system may consist of a wire embedded in the floor, optical system or other types of guidance. Automated guided vehicle (AGV) More info on Automated Equipment Pics Page.

A computer-controlled materials handling system consisting of small vehicles (carts) that move along a guideway.

Automated storage and retrieval system (ASRS)

An automated, mechanized system for moving merchandise into storage locations and retrieving it when needed.

a system of rows of rack, each row having a dedicated retrieval unit that moves vertically and horizontally along the rack picking and putting away loads. a.k.a. ASRS, AS/RS, Unit-load ASRS and Mini-load ASRS. More info on Automated Equipment Pics Page.


Refers to the status of inventory as it relates to its ability to be sold or consumed. Availability calculations are used to determine this status. Availability calculations vary from system to system but basically subtract any current allocations of holds on inventory from the current on-hand balance. An example of an availability calculation would be: [Quantity Available] = [Quantity On Hand] -[ Quantity On Hold] - [Quantity Allocated To Sales Orders] - [Quantity Allocated to Production Orders].

Available to promise

available to promise takes the simple availability calculation, adds time phasing and takes into account future scheduled receipts. Available to promise may be calculated for each day or broken down into larger time buckets. The first time period will take on-hand inventory and add any scheduled receipts for that period. It will then deduct any allocations scheduled prior to the next scheduled receipt (which may be several periods in the future). Subsequent periods without any scheduled receipts will have the same available to promise as the previous period. Subsequent periods with scheduled receipts will generally start with a fresh calculation, ignoring any remaining available to promise from previous periods. There are many variations on exactly how available to promise is calculated and it is also important to note that available to promise often works independently of allocation systems. This can sometimes create conflicts. See also Available, Allocations.

Average cost

Inventory costing method that recalculates an item's cost at each receipt by averaging the actual cost of the receipt with the cost of the current inventory.

Total cost, fixed plus variable, divided by total output.

Average Inventory

The average inventory level over a period of time.


See Marine Cargo Insurance

Avoirdupois Pound

Same as 0.4535924277 kilograms.


See Air Waybill


Always within Institute Warranties Limits (Insurance purpose).




Abbreviation for "Dangerous and Hazardous" cargo.


Abbreviation for "Doing Business As." A legal term for conducting business under a registered name.


Department of Transportation.

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.

Data collection

See Automated Data Collection (ADC)


Distribution Center


Abbreviation for "Destination Delivery Charge." A charge, based on container size, that is applied in many tariffs to cargo. This charge is considered accessorial and is added to the base ocean freight. This charge covers crane lifts off the vessel, drayage of the container within the terminal and gate fees at the terminal operation.


One leg of a move without a paying cargo load. Usually refers to repositioning an empty piece of equipment.


The number of tons of 2,240 pounds that a vessel can transport of cargo, stores and bunker fuel. It is the difference between the number of tons of water a vessel displaces "light" and the number of tons it displaces when submerged to the "load line."

Deadweight Cargo

A long ton of cargo that can be stowed in less than 40 cubic feet.

Decentralized authority

A situation in which a company management gives decision-making authority to managers at many organizational levels.

Decision Support System (DSS)

A set of computer oriented tools designed to assist managers in making decisions.

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 for Carriage

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.

Deconsolidation Point

Place where loose or other non-containerized cargo is ungrouped for delivery.


An enterprise that provides services to un-group shipments, orders, goods, etc., to facilitate distribution.

Dedicated Contract Carriage

Defective goods inventory (DGI)

Those items that have been returned, have been delivered damaged and have a freight claim outstanding, or have been damaged in some way during warehouse handling.

Deficit Weight

The weight by which a shipment is less than the minimum weight.

Delivery Appointment

The time agreed upon between two enterprises for goods or transportation equipment to arrive at a selected location.

Delivery Instructions

Order to pick up goods at a named place and deliver them to a pier. Usually issued by exporter to trucker but may apply to a railroad, which completes delivery by land. Use is limited to a few major U.S. ports. Also known as shipping delivery order.

A document issued to a carrier to pick up goods at a location and deliver them to another location. See also Delivery Order.

Delivery Order

A document issued by the customs broker to the ocean carrier as authority to release the cargo to the appropriate party.

Delta Nu Alpha

A professional association of transportation and traffic practitioners.


the need for a specific item in a specific quantity. See Dependent Demand and Independent Demand.

Demand chain

Another name for the supply chain, where the processes employed are viewed in terms of demand (pull) rather than supply (push). The demand chain is therefore driven by consumers and end-users, not manufacturers of goods. See also pull replenishment.


Demurrage/Despatch money. (Under vessel chartering terms, the amount to be paid if the ship is loading/discharging slower/faster than foreseen.)


A penalty charge against shippers or consignees for delaying the carrier's equipment beyond the allowed free time. The free time and demurrage charges are set forth in the charter party or freight tariff.


The weight of cargo per cubic foot or other unit.

A physical characteristic measuring a commodity's mass per unit volume or pounds per cubic foot; an important factor in ratemaking, since density affects the utilization of a carrier's vehicle.

Density rate

A rate based upon the density and shipment weight.

Dependent demand

demand generated from scheduled production of other items.

Depot, Container

Container freight station or a designated area where empty containers can be picked up or dropped off.


Revisions or complete elimination of economic regulations controlling transportation. The Motor Carrier Act of 1980 and the Staggers Act of 1980 revised the economic controls over motor carriers and railroads, and the Airline Deregulation Act of 1978 eliminated economic controls over air carriers.

Derived demand

The demand for a product's transportation is derived from the product's demand at some location.


An incentive payment paid to a carrier to loading and unloading the cargo faster than agreed. Usually negotiated only in charter parties.


the place where carrier actually turns over cargo to consignee or his agent.

The location designated as a receipt point for goods/shipment.

Destination Control Statements

Various statements that the U.S. government requires to be displayed on export shipments. The statements specify the authorized destinations.


A penalty charge against shippers or consignees for delaying carrier's equipment beyond allowed time. Demurrage applies to cargo; detention applies to equipment. See Per Diem.

The penalty for exceeding free time allowed for loading/unloading under the terms of the agreement with the carrier. Detention is the term used in the motor industry; demurrage is used in the rail and ocean industry.


The unloading of a container or cargo van.

The unloading of cargo from a container or other piece of equipment. See Stripping.

DF Car

Damage_Free Car. Boxcars equipped with special bracing material.


See Duty Free Zone.


An amount added or deducted from base rate to make a rate to or from some other point or via another route.

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

Dim weight

see Dimensional weight

Dimensional weight

Formula used to determine freight charges when the minimum weight to volume ratio has not been met. Actual weight and dim weight are compared, and the larger weight is used for the freight calculation. Dim weight is calculated by Dim weight= (Length x Width x Height)/194 . All dimensional measurements are in inches. a.k.a. Dim weight

Direct product profitability (DPP)

Calculation of the net profit contribution attributable to a specific product or product line.

Direct ship

direct shipping and drop shipping are two terms generally used interchangeably. They describe a process whereby three parties interact with the sales transaction (the buyer, the seller, and the supplier). The buyer initiates a purchase from the seller, who then arranges with the supplier to ship the product directly to the buyer. The seller does not carry inventory of the product and the supplier does not have any direct communication with the buyer. The buyer pays the seller and the seller pays the supplier. Though both terms (direct ship and drop ship) are generally used to describe the same process, I've always considered a small distinction between the two that relates to where you are in the supply chain. To the seller, direct shipping describes both the process and an inventory/sales strategy, however, the supplier will frequently just use the term "drop ship" to describe the process whereby he is shipping the product to an address other than that of his customer (the business that is paying him for the product). Sometimes the term drop ship also describes the process of shipping to any location that is different from the customer's normal shipping location. This subtle distinction is sometimes evident in the terminology used in software documentation. Direct shipment, Drop shipment.

Direct store delivery (DSD)

A logistics strategy to improve services and lower warehouse inventories.


Data Interchange Standards Association.

Discharge Port

The name of the port where the cargo is unloaded from the export vessel. This is the port reported to the U.S. Census on the Shipper's Export Declaration, Schedule K, which is used by U.S. companies when exporting. This can also be considered the first discharge port.

Discrepancy Letter of Credit

When documents presented do not conform to the requirements of the letter of credit (L/C), it is referred to as a "discrepancy." Banks will not process L/C's which have discrepancies. They will refer the situation back to the buyer and/or seller and await further instructions.

Discrete manufacturing

describes manufacturing of distinct items (items you can easily count, touch, see) such as a pencil, a light bulb, a telephone, a bicycle, a fuel pump, etc. Discrete as opposed to Process manufacturing. Also see Process Manufacturing.


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


The weight, in tons of 2,240 pounds, of the vessel and its contents. Calculated by dividing the volume of water displaced in cubic feet by 35, the average density of sea water.


The process of storing and transporting finished goods between the end of the production line and the final customer.

Describes the process of storing, shipping, and transporting goods. Also describes the facilities (distribution operations, distribution centers) that conduct these activities. In statistical analysis, describes the measurement of a group of events or occurrences (see Normal distribution).

Distribution centre (DC)

A facility that accepts inbound consignments of raw materials, components or finished goods, divides and then recombines them in different ways into outbound shipments. Many DCs also contain specialised handling/storage equipment and IT systems and also serve as warehouses. Also regional DC (or RDC), national DC (or NDC) and international DC (or IDC).

Distribution Channel Management

The organizational and pipeline strategy for getting products to customers. Direct channels involve company sales forces, facilities, and/or direct shipments to customers; indirect channels involve the use of wholesalers, distributors, and/or other parties to supply the products to customers. Many companies use both strategies, depending on markets and effectiveness.

Distribution Channel

The route by which a company distributes goods.

Distribution requirements planning

Process for determining inventory requirements in a multiple plant/warehouse environment. DRP may be used for both distribution and manufacturing. In manufacturing, DRP will work directly with MRP. DRP may also be defined as Distribution Resource Planning which also includes determining labor, equipment, and warehouse space requirements.

A computer system that uses MRP techniques to manage the entire distribution network and to link it with manufacturing planning and control.

Distribution warehouse

A finished goods warehouse from which a company assembles customer orders.


An enterprise that offers services to buy and sell goods on their own account.


A change made either in the route of a shipment in transit (see Reconsignment) or of the entire ship.

The process of changing the destination and/or the consignee while the shipment is enroute.


Carriers' practice of dividing revenue received from through rates where joint hauls are involved. This is usually according to agreed formulae.


for land transportation, A loading or unloading platform at an industrial location or carrier terminal.

Dock leveler

device that provides a bridge to the trailer as well as a ramp to facilitate the transition in height from dock to trailer. Dock levelers are rated by weight capacity and by the service range. The service range, also known as the height differential, rates the safe range above and below dock level you can use the leveler to transition to the trailer height. See also article Dock Safety.

Dock Receipt

A form used to acknowledge receipt of cargo and often serves as basis for preparation of the ocean bill of lading.

A document used to accept materials or equipment at an ocean pier or accepted location. Provides the ocean carrier with verification of receipt and the delivering carrier with proof of delivery.


Present a rate proposal to a conference meeting for adoption as a conference group rate.


The papers attached or pertaining to goods requiring transportation and/or transfer of ownership.

Documents Against Acceptance (D/A)

Instructions given by a shipper to a bank indicating that documents transferring title to goods should be delivered to the buyer only upon the buyer's acceptance of the attached draft.

An indication on a draft that the documents attached are to be released to the drawee only on payment.


A set of wheels that support the front of a container; used when the automotive unit is disconnected.

Domestic trunk line carrier

A classification for air carriers that operate between major population centers. These carriers are now classified as major carriers.

Door to Door

The through-transport of goods from consignor to consignee.

Through transportation of a container and its contents from consignor to consignee. Also known as House to House. Not necessarily a through rate.

Door to Port

The through transport service from consignor to port of importation.

Double bottoms

A motor carrier operation that involves one tractor pulling two trailers.

Double-deep rack

a type of pallet rack designed to be used with double-deep reach trucks that allow storage of palletized loads 2-deep in rack. Double-deep rack may be a unique design (designed specifically for double-deep storage) or may just be a double-deep configuration of standard selective pallet rack. Also see Reach truck and check out article on Aisle Widths.

Double-pallet jack

A mechanized device for transporting two standard pallets simultaneously.


To merge temporary files containing a day's or week's worth of information with the main data base in order to update it.


an unconditional order in writing, addressed by one party (drawer) to Another party (drawee), requiring the drawee to pay at A fixed or determinable future date A specified sum in lawful currency to the order of A specified person.


An order issued by a seller against a purchaser; directs payment, usually through an intermediary bank. Typical bank drafts are negotiable instruments and are similar in many ways to checks on checking accounts in a bank.

Draft, Clean

A draft to which no documents are attached.

Draft, Date

A draft that matures on a fixed date, regardless of the time of acceptance.

Draft, Discounted

A time draft under a letter of credit that has been accepted and purchased by a bank at a discount.

Draft, Sight

A draft payable on demand upon presentation.

Draft, Time

A draft that matures at a fixed or determinable time after presentation or acceptance.


A partial refund of an import fee. Refund usually results because goods are re-exported from the country that collected the fee.

See Duty Drawback.


The individual or firm that issues a draft and thus stands to receive payment.


Charge made for local hauling by dray or truck. Same as Cartage.

The service offered by a motor carrier for pick-up and delivery of ocean containers or rail containers. Drayage agents usually handle full-load containers for ocean and rail carriers.


Abbreviation for "Destination Rail Freight Station." Same as CFS at destination, except a DRFS is operated by the rail carrier participating in the shipment.

Drive-in rack

racking system designed to allow a lift truck to drive into the bay creating very high density storage for non-stackable loads. Useful for operations with limited SKUs and high quantities of pallets per SKU. FIFO is difficult to maintain in drive-in racking systems. a.k.a. Drive-thru Rack. Also see Racking Pics Page.

Driving time regulations

U.S. Department of Transportation rules that limit the maximum time a driver may drive in interstate commerce; the rules prescribe both daily and weekly maximums.

Drop ship

see Direct ship.

Drop shipment

The direct shipment of goods from a manufacturer to a dealer or consumer, bypassing the wholesaler.

A request for the goods to go to the retailer directly from the manufacturer when the invoice comes from another party in the transaction, typically the distributor from whom the retailer would normally receive the goods.


A situation in which an equipment operator deposits a trailer or boxcar at a facility at which it is to be loaded or unloaded.


Distribution requirements planning (see separate listing)

Drum-handling attachments describes the various designs of lift-truck attachment used to handle 55 gallon drums. Some are smaller versions of a paper roll clamp while others may engage the upper rim of the drum, or the lower rings. Some drum attachments are capable of picking up multiple drums at the same time.

Dry Cargo

Cargo that is not liquid and normally does not require temperature control.

Dry-Bulk Container

A container constructed to carry grain, powder and other free-flowing solids in bulk. Used in conjunction with a tilt chassis or platform.


See Decision Support System


Delay in Startup Insurance is a policy to protect the seller of a construction project from penalties if the project is not completed on time. See "Liquidated Damages."

Dual operation

A motor carrier that has both common and contract carrier operating authority.

Dual rate system

An international water carrier pricing system in which a shipper signing an exclusive use agreement with the conference pays a rate 10 to 15 percent lower than nonsigning shippers do for an identical shipment.


Attempting to import merchandise into a country at a price less than the fair market value, usually through subsidy by exporting country.

When a product is sold below cost in a foreign market and/or when a product is sold at a lower price in the foreign market than in a domestic market, with the intention of driving out competition in the foreign market.


fill material. Types of dunnage include loose fill (packing peanuts), papar, bubble wrap, foam, and air pillows.

DUNS Number

A coded, numerical representation assigned to a specific company (USA).

Duty Drawback

A refund of duty paid on imported merchandise when it is exported later, whether in the same or a different form.

Duty Free Zone (DFZ)

An area where goods or cargo can be stored without paying import customs duties while awaiting manufacturing or future transport.


A tax imposed by a government on merchandise imported from another country.

Dynamic slotting

this is a term sometimes used by WMS providers to describe a higher level of slotting functionality. Unfortunately, there is not a standard definition for this, but it usually refers to the ability to change slotting recommendations as item profiles, order profiles, or other operational characteristics change.




Food and Drug Administration.


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."


See "Free of Particular Average."


A factor is an agent who will, at a discount (usually five to 8% of the gross), buy receivables.

Fair Return

A profit level that enables a carrier to realize a rate of return on investment or property value that the regulatory agencies deem acceptable for that level of risk.

Fair Value

The value of the carrier's property; the calculation basis has included original cost minus depreciation, replacement cost, and market value.


Abbreviation for "Freight All Kinds." Usually refers to full container loads of mixed shipments.

False Billing

Misrepresenting freight or weight on shipping documents.


Abbreviation for "Free Alongside Ship."

Fast Charging

Method for quickly recharging lift truck batteries on the vehicle during short periods where the vehicle is not being used (lunches, breaks, shift changes, etc). This process for "opportunity charging" eliminates the need to change batteries in multi-shift operations. Fast charging requires special chargers (called fast chargers). Fast chargers are significantly more expensive than standard battery chargers and there is still debate as to whether or not fast charging causes any harm to the batteries. The cost of the fast chargers can be offset by labor and equipment savings related to the elimination of changing batteries.

Fast Moving Consumer Goods

(FMCG) description of common high volume products such as food, hygiene product, or cleaning supplies. These would be products that the average consumer would frequently purchase such as soda, toothpaste, or dish soap.


Sole use of a steamship metal container. Normally come in 20ft or 40ft lengths. Can be loaded and sealed at or near your residence. (subject to access) and after Customs clearance at destination may be delivered direct to your residence for unloading (subject to local Customs / Agricultural laws).


Abbreviation for "Free Discharge."

Federal Aviation Administration

The federal agency that administers federal safety regulations governing air transportation.

Federal Maritime Commission

Regulatory agency responsible for rates and practices of ocean carriers shipping to and from the United States.

Feeder Service

Cargo to/from regional ports are transferred to/from a central hub port for a long-haul ocean voyage.

Feeder Vessel

A short-sea vessel which transfers cargo between a central "hub" port and smaller "spoke" ports.


Abbreviation for "Forty-Foot Equivalent Units." Refers to container size standard of forty feet. Two twenty-foot containers or TEU's equal one FEU.

Forty-foot equivalent unit, a standard size intermodal container.

Field Warehouse

A warehouse that stores goods on the goods' owner's property while the goods are under a bona fide public warehouse manager's custody. The owner uses the public warehouse receipts as collateral for a loan.


First-in-first-out. In warehousing describes the method of rotating inventory to used oldest product first. Actually an accounting term used to describe an inventory costing method. See LIFO.

Fifth Wheel

The semi-circular steel coupling device mounted on a tractor which engages and locks with a chassis semi-trailer.

Fill rate

Sales order processing measurement that quantifies the ability to fill orders.There are various ways of measuring fill rate. Line fill compares the number of line items shipped complete to the total number of lines ordered ( 95 line items shipped complete out of 100 lines ordered would result in a 95% line fill rate). Order fill compares the number of orders shipped complete to the total number of orders shipped. Other examples of fill rates would include dollar fill rate (comparing dollars shipped to dollars ordered), unit fill rate (comparing units shipped to units ordered). In fulfillment operations and some distribution operations where orders are generally shipped within 24 hours of receipt of order, fill rates reflect the ability to immediately ship from stock. In manufacturing operations and distribution operations that have lead-times for products, fill rates reflect the ability to ship to an agreed-to date. In these environments fill rate measurements are sometimes called On-time-and-Complete (OTC) or On-time Delivery (OTD) measurement. Tolerances are sometimes used in fill rate measurements to allow lines or orders that are not shipped complete but are within the tolerance to be considered as "shipped complete". The tolerances may be based on units, dollars, lines, or dates (shipped within certain tolerance of required date).

The percentage of order items that the picking operation actually fills within a given period of time.

Final Destination

The last stopping point for a shipment.

Finance Lease

An equipment-leasing arrangement that provides the lessee with a means of financing for the leased equipment; a common method for leasing motor carrier trailers.

Financial Responsibility

Motor carriers must have bodily injury and property damage (not cargo) insurance of not less than $500,000 per incident per vehicle; higher financial responsibility limits apply for motor carriers transporting oil or hazardous materials.

Finished Goods Inventory (FGI)

Products completely manufactured, packaged, stored, and ready for distribution.


See Free In and Out.


Federal Information Processing Standards.


A capacity measurement equal to one-fourth of a barrel.

Firm Planned Order

In a DRP or MRP system, a planned order whose status has been updated to a fixed order.

Fixed Costs

Costs that do not vary with the level of activity. Some fixed costs continue even if no cargo is carried. Terminal leases, rent and property taxes are fixed costs.

Costs which do not fluctuate with business volume in the short run.

Fixed Quantity Inventory Model

A setup wherein a company orders the same(fixed) quantity each time it places an order for an item.

Flat Car

A rail car without a roof and walls.

A railcar without sides, used for hauling machinery.

Flat Rack/Flat Bed Container

A container with no sides and frame members at the front and rear. Container can be loaded from the sides and top.

Flex conveyor

portable conveyor that can be expanded, contracted, and flexed around curves. See Conveyer Pics.

Flexible-Path Equipment

Materials handling devices that include hand trucks and forklifts.

Flight Number

An identifier associated with the air equipment (plane). Typically a combination of two letters, indicating the airline, and three or four digits indicating the number of the voyage.

Floor load

a method of loading trucks, trailers, or containers where you load the goods directly on the floor rather than using pallets or other containers. Floor loading tends to be very labor intensive, but provides the greatest opportunity for utilizing the full cube of the truck, trailer, or container.

Flow rack

racking system that incorporates sections of conveyor to allow the cartons or pallets to flow to the face of the rack. Stocking is performed from the rear of the rack. Also see Racking Pics Page.

Flow Rack

A storage method where product is presented to picking operations at one end of a rack and replenished from the opposite end.

Flue space

See Longitudinal flue space and Transverse flue space.

FMC (F.M.C.)

Federal Maritime Commission. The U.S. Governmental regulatory body responsible for administering maritime affairs including the tariff system, Freight Forwarder Licensing, enforcing the conditions of the Shipping Act and approving conference or other carrier agreements.


Fast Moving Consumer Goods (see separate listing)

FOB (Free On Board)

An International Term of Sale that means the seller fulfills his or her obligation to deliver when the goods have passed over the ship's rail at the named port of shipment. This means that the buyer has to bear all costs and risks to loss of or damage to the goods from that point. The FOB term requires the seller to clear the goods for export.

Contractual terms between a buyer and a seller which define where title transfer takes place.

FOB Destination

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

FOB Freight Allowed

the same as FOB named inland carrier, except the buyer pays the transportation charge and the seller reduces the invoice by A like amount.

FOB Freight Prepaid

the same as FOB named inland carrier, except the seller pays the Freight charges of the inland carrier.

FOB named point of Exportation

seller is responsible FOR the cost of placing the goods at A named point of exportation. Some European buyers use This Form when they actually mean FOB vessel.

FOB Origin

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

FOB vessel

seller is responsible FOR goods and preparation of export documentation until actually placed aboard the vessel.


Abbreviation for "Free on Rail."

Force Majeure

The title of a common clause in contracts, exempting the parties for non-fulfillment of their obligations as a result of conditions beyond their control, such as earthquakes, floods or war.

Fore and Aft

The direction on a vessel parallel to the center line.

Forecast consumption

describes the method(s) your inventory management software uses to reduce forecasted demand by the actual demand that occurs during the forecast period. Incorrectly set up forecast consumption parameters or lack of functionality related to forecast consumption can often create serious problems with planning systems.

Forecast error

the difference between the forecast quantity for a period and the actual demand experienced during that period. Forecast error is calculated after the period has passed and is used to evaluate the forecast and make adjustments.


A Forecast is an estimation of future demand. Most forecasts use historical demand to calculate future demand. Adjustments for seasonality and trend are often necessary.

Foreign Sales Corporation

Under U.S. tax law, a corporation created to obtain tax exemption on part of the earnings of U.S. products in foreign markets. Must be set-up as a foreign corporation with an office outside the USA.

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.

A site sanctioned by the U.S. Customs Service in which imported goods are exempted from duties until withdrawn for domestic sale or use. Such zones are used by commercial warehouses or assembly plants.


generally describes an unfinished item made of metal that is produced through a process that heats the metal (not to melting point) then uses pressure or hammering to change the shape of the metal into a shape that closely resembles the finished item that will ultimately be made (through machining processes) from the forging.

For-Hire Carrier

A carrier that provides transportation service to the public on a fee basis.

Fork Lift

A machine used to pick up and move goods loaded on pallets or skids.

Fork positioner

Lift truck attachments that allow the operator to adjust the distance between the forks without getting off of the truck. Used primarily in high volume operations where there is a great variety of pallet and crate sizes handled.


a.k.a Fork Lift. See Lift Trucks.

Forklift Truck

A machine-powered device used to raise and lower freight and to move freight to different warehouse locations.

Forklift-free plants

A strategy to eliminate or reduce forklift use in operations. Used mainly in manufacturing operations, forklift-free usually involves finding ways to eliminate forklift use in specific areas (mainly the production areas). A key benefit is the safety of workers, but other benefits such as better space utilization and reduction of costs associated with lift trucks may also be factors.

Form Utility

The value the production process creates in a good by changing the item's form.

Forwarder Compensation

See Brokerage.

Forwarder's Bill of Lading

See Consolidator's Bill of Lading.

Foul Bill of Lading

A receipt for goods issued by a carrier with an indication that the goods were damaged when received. Compare Clean Bill of Lading.

Four-Way Pallet

A pallet designed so that the forks of a fork lift truck can be inserted from all four sides. See Fork lift.


Free of Particular Average. See Marine Cargo Insurance.

Free Along Side (FAS)

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 Astray

An astray shipment (a lost shipment that is found) sent to its proper destination without additional charge.

Free In and Out (FIO)

Cost of loading and unloading a vessel is borne by the charterer/shipper.

Free of Particular Average (FPA)

A marine insurance term meaning that the assurer will not allow payment for partial loss or damage to cargo shipments except in certain circumstances, such as stranding, sinking, collision or fire.

Free on Board (F.O.B.) (exchange point)

This expression follows an exchange point. The exchange point indicates the transition of responsibility (risk) from the buyer to the seller. See also Terms of Sale. For example F.O.B. Origin The seller agrees to deliver the goods to the point of origin.

Free on Board (FOB - U.S. Domestic Use)

Shipped under a rate that includes costs of delivery to and the loading onto a carrier at a specified point.

Free on Board (Int'l Use)

See Terms of Sale.

Free Out (FO)

Cost of unloading a vessel is borne by the charterer.

Free Port

A restricted area at a seaport for the handling of duty-exempted import goods. Also called a Foreign Trade Zone.

Free Sale Certificate

The U.S. government does not issue certificates of free sale. However, the Food and Drug Administration, Silver Spring, Maryland, will issue, upon request, a letter of comment to the U.S. manufacturers whose products are subject to the Federal Food, Drug and Cosmetic Act or other acts administered by the agency. The letter can take the place of the certificate.

Free Time

That amount of time that a carrier's equipment may be used without incurring additional charges. (See Storage, Demurrage or Per Diem.)

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

Free Trade Zone

A port designated by the government of a country for duty-free entry of any non-prohibited goods. Merchandise may be stored, displayed, used for manufacturing, etc., within the zone and re-exported without duties.

A commercial or industrial area usually near a port of entry where merchandise and raw material imports are not subject to customs charges or duties.


Refers to either the cargo carried or the charges assessed for carriage of the cargo.

Freight Alongside Ship

The point of embarkment chosen by the buyer, from where a carrier transports goods. Under this designation, a seller is obligated to pay the cost and assume all risks for transporting goods from a place of business to the FAS point.

Freight Bill

A document issued by the carrier based on the bill of lading and other information; used to account for a shipment operationally, statistically, and financially. An Invoice.

The carriers invoice for payment of transport services rendered.

Freight Charge

The rate established for transporting freight.

Freight Collect

The freight and charges to be paid by the consignee.

Freight forwarder

A person or company involved in the collection, consolidation, shipping and distribution of goods from overseas territories. Typically, freight forwarders clear freight through customs, prepare documents and arrange shipping, warehousing and delivery.

A person whose business is to act as an agent on behalf of the shipper. A freight forwarder frequently makes the booking reservation.

Freight Forwarders Institute

The freight forwarder industry association.

Freight management

The management of third-party carriers to ensure the swift, safe and cost-efficient delivery of shipments - often involving the integration of a range of services.

Freight Prepaid

The freight and charges to be paid by the consignor.

Freight Quotation

A quotation from a carrier or forwarder covering the cost of transport between two specified locations.

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.


See Ships.


See Full Truck Load.


Foreign Trade Zone (also known as Free Trade Zone), is similar to a Bonded Warehouse in that it has a special status that allows products to be imported into it without taxes or duties being paid. However, a Foreign Trade Zone actually has less restrictions placed upon it than a standard bonded warehouse and activities such as manufacturing can occur within an FTZ. Also see Bonded Warehouse.


The activity of processing customer shipments. Though most manufacturig and warehouse operations will process customer shipments, this term usually refers to operations that ship many small orders (usually parcels) to end users as opposed to operations that process larger shipments to other manufacturers, wholesalers, or resellers. Examples of fulfillment operations would include operations that process shipments for mail-order catalogs, internet stores, or repair parts.

Full Container Load (FCL)

A term used when goods occupy a whole container.

Full Truck Load (FTL)

Same as Full Container Load, but in reference to motor carriage instead of containers.

Where goods being shipped occupy a complete truck.

Full-Service Leasing

An equipment-leasing arrangement that includes a variety of services to support leased equipment (i.e., motor carrier tractors).

Full-time Connection

A communication link between two (or more) entities which is normally maintained continuously.

Fully Allocated Cost

The variable cost associated with a particular output unit plus a common cost allocation.




Middlewest Motor Freight Bureau.


An organization's central computer system.

Maintenance, repair, and operating inventory

(MRO). Inventory used to maintain equipment as well as miscellaneous supplies such as office cleaning supplies.

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.


A carrier giving a customer illegal preference to attract cargo. This can take the form of a money refund (rebate); using lower figures than actual for the assessment of freight charges (undercubing); misdeclaration of the commodity shipped to allow the assessment of a lower tariff rate; waiving published tariff charges for demurrage, CFS handling or equalization; providing specialized equipment to a shipper to the detriment of other shippers, etc.

Management of All Logistics

The effective management of all costs associated with logistics functions and activities so as to minimize their sum across the product supply chain.


A writ issued by a court; requires that specific things be done.


Document that lists in detail all the bills of lading issued by a carrier or its agent or master for a specific voyage. A detailed summary of the total cargo of a vessel. Used principally for Customs purposes.

A list of all cargoes that pertain to a specific shipment, grouping of shipments, or piece of equipment. Ocean carriers will prepare a manifest will prepare a manifest per container, etc.

Manufacturing execution system

software systems designed to integrate with enterprise systems to enhance the shop-floor-control functionality that is usually inadequate in ERP systems. MES provides for shop floor scheduling, production and labor reporting, integration with computerized manufacturing systems such as automatic data collection and computerized machinery.

Manufacturing Resource Planning (MRP II)

The process of identifying, performing a needs analysis, and committing the resources needed to produce a product.


term used to describe lift trucks designed to raise the operator with the load. Order selectors and turret trucks are the most common types of man-up vehicles.

Mar Ad

See Maritime Administration.

Marginal Cost

The cost to produce one additional unit of output. The change in total variable cost resulting from a one-unit change in output.

Marine Cargo Insurance - Average

Average- A term in marine cargo insurance signifying loss or damage to merchandise.

Marine Cargo Insurance - FPA

FPA- Free of Particular Average. A provision in a marine cargo insurance policy that no claim shall be paid for damage to goods in the course of a voyage unless a loss is sustained that totals or exceeds a certain percentage of the value as specified in the policy. The object of such a provision is the avoidance of petty claims.

Marine Cargo Insurance - General Average

A loss arising out of a voluntary sacrifice made of any part of a shipment or cargo to prevent loss of the whole and for the benefit of all persons concerned.

Marine Cargo Insurance - Open Policy

A contract b/t an insurance company and the exporter in which all shipments made by the insured are automatically protected from the time the merchandise leaves the initial shipping point until delivery at destination.

Marine Insurance

Broadly, insurance covering loss or damage of goods at sea. Marine insurance typically compensates the owner of merchandise for losses sustained from fire, shipwreck, etc., but excludes losses that can be recovered from the carrier.


Business pertaining to commerce or navigation transacted upon the sea or in seaports in such matters as the court of admiralty has jurisdiction.

Maritime Administration (Mar Ad)

A U.S. government agency, not actively involved in vessel operation, that administers laws for maintenance of a merchant marine for the purposes of defense and commerce.

Market dominance

The absence of effective competition for railroads from other carriers and modes for the traffic to which the rail rate applies. The Staggers Act stated that market dominance does not exist if the rate is below the revenue-to-variable-cost ratio of 160 percent in 1981 and 170 percent in 1983.


Letters, numbers, and other symbols placed on cargo packages to facilitate identification. Also known as marks.

Marks and Numbers

Marks and numbers placed on goods used to identify a shipment or parts of a shipment.


A pointed metal spike, used to separate strands of rope in splicing.

Master Air Waybill (MAWB)

The bill of lading issued by air carriers to their customers.

Master Inbond

U.S. Customs' automated program under AMS. It allows for electronic reporting of inbound (foreign) cargoes in the U.S.

Master production schedule (MPS)

Production schedule specifying specific items, quantities, and dates at which production is expected to take place. The primary purpose of an MPS is to manage capacity when you have some time periods where demand is expected to exceed capacity. You will then use MPS to produce some products in advance of demand (forecasted or actual orders) during periods when capacity exceeds demand.

Material index

The ratio of the sum of the localized raw material weights to the weight of the finished product.

Materials Handling

The physical handling of products and materials between procurement and shipping.

Materials handling

Short-distance movement of goods within a storage area.

Materials Management

Inbound logistics from suppliers through the production process. The movement and management of materials and products from procurement through production.

Materials management

The movements and storage functions associated with supplying goods to a firm.

Materials planning

The materials management function that attempts to coordinate materials supply with materials demand.

Materials Requirements Planning (MRP)

A decision-making methodology used to determine the timing and quantities of materials to purchase.

The process used to determine the amount of material to purchase and when to purchase it.

Mate's Receipt

An archaic practice. An acknowledgement of cargo receipt signed by a mate of the vessel. The possessor of the mate's receipt is entitled to the bill of lading, in exchange for that receipt.

Matrix organization

An organizational structure that emphasizes the horizontal flow of authority; the company treats logistics as a project, with the logistics manager overseeing logistics costs but traditional departments controlling operations.


See Master Air Waybill.


1,000 board feet. One MBM equals 2,265 C.M.


Abbreviation for "Master Container Freight Station." See CFS.

Measurement Cargo

Freight on which transportation charges are calculated on the basis of volume measurement.

Measurement Ton

40 cubic feet.

Forty cubic feet; used in water transportation ratemaking.

Mechanically Ventilated Container

A container fitted with a means of forced air ventilation.

Memorandum Bill of Lading

An in-house bill of lading. A duplicate copy.

Memorandum Freight Bill

See Multiple Containerload Shipment.


The combination of two or more carriers into one company that will own, manage, and operate the properties that previously operated separately.


Manufacturing execution system (see separate listing).


39.37 inches (approximately).

Metric Ton

2,204.6 pounds or 1,000 kilograms.


a tiered structure within a building used to provide worker access to various levels. Mezzanines can be free-standing structures supported by posts and trusses, or can be a series of walkways supported by storage equipment (rack-supported mezzanine).


A cargo movement in which the water carrier provides a through service between an inland point and the port of load/discharge. The carrier is responsible for cargo and costs from origin on to destination. Also known as IPI or Through Service.

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, nonport city, or vice versa for exports from a nonport city.


A unit equal to 5,280 feet on land. A nautical mile is 6076.115.

Mileage allowance

An allowance, based upon distance, that railroads give to shippers using private railcars.

Mileage rate

A rate based upon the number of miles the commodity is shipped.

Milk run

I've encountered may variations on the definition of this term but basically a milk run consists of a pickup and/or delivery route where several stops are made. Usually it refers to a regularly run route, but it may also refer to a one-time run where several stops are made. Some consider a milk run to mean a route where shipments are delivered and inbound materials picked up in the same run.

Mini Landbridge

An intermodal system for transporting containers by ocean and then by rail or motor to a port previously served as an all_water move (e.g., Hong Kong to New York over Seattle).

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.

Minimum Bill of Lading

A clause in a Bill of lading which specifies the least charge that the carrier will make for issuing a lading. The charge may be a definite sum or the current charge per ton for any specified quantity.

Minimum Charge

The lowest charge that can be assessed to transport a shipment.

Minimum weight

The shipment weight the carrier's tariff specifies as the minimum weight required to use the TL or CL rate; the rate discount volume.


a simplistic inventory system in which a minimum quantity and maximum quantity are set for an item. When the quantity drops below Min you order up to the Max. Also see Optional replenishment.

Mixed Container Load

A containerload of different articles in a single consignment.

Mixed loads

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


Abbreviation for "Mini Landbridge."

Modal split

The relative use that companies make of transportation modes; the statistics include ton-miles, passenger-miles, and revenue.

Modified Atmosphere

A blend of gases tailored to replace the normal atmosphere within a container.

Motor Carrier

An enterprise that offers service via motor carriage.

Motorized pallet truck

motorized pallet trucks are the motorized version of the pallet jack. They come in "Walkie" versions or "Rider" versions. As you would expect, the walkie is designed for the operator to walk along with the truck as they move loads, while the rider has a small platform that the operator stands on. The riders work great for frequent moving of loads over extended distances within warehouses and manufacturing operations. a.k.a. Walkie, Walkie-rider, Rider. Also see Lift Truck Pics and Lift Truck Basics for more info.

Movement of Goods

The transfer of goods from one location to another.


Master production schedule (see separate listing).


Maintenance, repair, and operating inventory (see separate listing).

MRP generation

term used to describe the running of the programs that convert demand into planned orders. Depending on the operation, MRP Generation may be run daily, weekly, or even monthly. Since this processing requires a lot of system resources it is generally confined to off hours or weekend processing.


See Manufacturing Resource Planning.

MRP/MRPII, Manufacturing resource planning

process for determining material, labor and machine requirements in a manufacturing environment. MRPII is the consolidation of Material Requirements Planning (MRP), Capacity Requirements Planning (CRP), and Master Production Scheduling (MPS). MRP was originally designed for materials planning only. When labor and machine (resources) planning were incorporated it became known as MRPII. Today the definition of MRPII is generally associated with MRP systems.


See Materials Requirement Planning.


Abbreviation for "Metric Ton."


Synonymous for all practical purposes with "Intermodal."

Shipping that includes at least two different modes of transport. See intermodal.

Multinational company

A company that both produces and markets products in different countries.

Multiple-car rate

A railroad rate that is lower for shipping more than one carload at a time.

MultiTank Container

A container frame fitted to accommodate two or more separate tanks for liquids.


Typically, a warehouse or storage facility used by a variable number of unrelated customers. See also shared-user.



P & D

Pickup and delivery.


Abbreviation for "Protection and Indemnity," an insurance term.


The materials used in packing. Can be reusable.


The process of placing a product or products in protective packaging. Outsourced packing is often known as co-packing.

Packing List

Itemized list of commodities with marks/numbers but no cost values indicated.

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.


Abbreviation for "Please Authorize Delivery Against Guarantee." A request from the consignee to the shipper to allow the carrier or agent to release cargo against a guarantee, either bank or personal. Made when the consignee is unable to produce original bills of lading.

Paired Ports

A U.S. Customs program wherein at least two designated Customs ports will enter cargo that arrives at either port without the necessity of an in-bound document.


A flat wooden or plastic tray that can be picked up by a fork-lift truck - used for transporting and storing goods.

A platform with or without sides, on which a number of packages or pieces may be loaded to facilitate handling by a lift truck.

Pallet inverter

a type of stationary equipment used to transfer product between different types of pallets such as transferring from wood to plastic pallets, or from pallets to slipsheets. A load on a pallet is placed in the pallet inverter and the entire load is rotated 180 degrees allowing you to remove the original pallet and replace it with another.

Pallet wrapping machine

A machine that wraps a pallet's contents in stretch-wrap to ensure safe shipment.

Paper Ramp

A technical rail ramp, used for equalization of points not actually served.

Paper Rate

A published rate that is never assessed because no freight moves under it.


when referring to processing in the warehouse (paperless picking, paperless receiving) or on the shop floor, paperless generally suggests that the direction of tasks and execution of transactions are conducted electronically without the use of paper documents. This is usually accomplished through the use of fixed or portable computers, bar code scanners, RFID readers, light-signaling technology (pick-to-light), or voice technology. Or maybe it just means you ran out of paper.

Paper-roll clamp

designed specifically for the handling of large paper rolls, the paper roll clamp is a lift truck attachment that clamps around the roll and also allows for a full 360 degree rotation.

Parcel Receipt

An arrangement whereby a steamship company, under rules and regulations established in the freight tariff of a given trade, accepts small packages at rates below the minimum bill of lading, and issues a parcel receipt instead of a bill of lading.

Partial Shipments

Under letters of credit, one or more shipments are allowed by the phrase "partial shipments permitted."

Particular Average

See Insurance, Particular Average.

Particular Average

See Marine Cargo Insurance.


A measure of output for passenger transportation that reflects the number of passengers transported and the distance traveled; a multiplication of passengers hauled and distancetraveled.


A party named in an instrument as the beneficiary of the funds. Under letters of credit, the payee is either the drawer of the draft or a bank.


A party responsible for the payment as evidenced by the given instrument. Under letters of credit, the payer is the party on whom the draft is drawn, usually the drawee bank.

Payment Collection

Obtaining money, or other agreed upon medium, for provision of goods or services.


The transfer of money, or other agreed upon medium, for provision of goods or services.

Peak demand

The time period during which customers demand the greatest quantity.


A technique in which a DRP system traces demand for a product by date, quantity, and warehouse location.

Per Diem

A charge, based on a fixed daily rate.

Per diem

A payment rate one railroad makes to use another's cars.

Perils of the Sea

Those causes of loss for which the carrier is not legally liable. The elemental risks of ocean transport.

Period order quantity

an order method that uses a fixed period of time to calculate order quantities. Period order quantity is generally stated in days and will be compared to the forecast at time of reorder to calculate the appropriate order quantity.


A grant of authority to operate as a contract carrier.

Personal computer (PC)

An individual unit an operator uses for creating and maintaining programs and files; can often access the mainframe simultaneously.

Personal discrimination

Charging different rates to shippers with similar transportation characteristics, or, charging similar rates to shippers with differing transportation characteristics.

Phantom bill of material

a fictitious bill of material created for common subassemblies or kits that you do not want to produce as separate items. For example, if you have a number of products that all use the same hardware kit you can create a phantom bill for the hardware kit and then just put the phantom item on the bills for all products that use it. Your MRP system will treat the phantom bill components as though they were part of the bill for the higher level item (rather than treating it as a separate item that needs to be produced). Phantom items never actually exist, they are just a means for simplifying the management of your bills of materials.

Physical distribution

The movement and storage of finished goods from manufacturing plants to warehouses to customers; used synonymously with business logistics.

Physical inventory

refers to the process of counting all inventory in a warehouse or plant. Operations are usually shut down during a physical inventory. See physical inventory page at for more information, also read my article on physical inventories.

Physical supply

The movement and storage of raw materials from supply sources to the manufacturing facility.

Phytosanitary Inspection Certificate

A certificate issued by the U.S. Department of Agriculture to satisfy import regulations of foreign countries; indicates that a U.S. shipment has been inspected and found free from harmful pests and plant diseases.

Pick module

can describe anything from a large area of a warehouse designated for order picking (such as a multi-level mezzanine picking area) to the individual sections of flow rack or other storage media that make up the picking area. I think the implication here is that a "pick module" somehow has a level of sophistication above that of a "warehouse area used for order picking". It's really just a marketing term used by equipment suppliers and consultants to try to impress their clients.


Picking of product from inventory and packing into shipment containers.

The process by which goods are picked against customers' orders and then packed for onward distribution.


See Zone Picking

Picking by aisle

A method by which pickers pick all needed items in an aisle regardless of the items' ultimate destination; the items must be sorted later.

Picking by source

A method in which pickers successively pick all items going to a particular destination regardless of the aisle in which each item is located.


for parcel shippers, pick-to-carton logic uses item dimensions/weights to select the shipping carton prior to the order picking process. Items are then picked directly into the shipping carton. When picking is complete, dunnage is added and the carton sealed eliminating a formal packing operation. This logic works best when picking/packing products with similar size/weight characteristics. In operations with a very diverse product mix it's much more difficult to get this type of logic to work effectively.


method often used in warehouse management systems that directs picking to the locations with the smallest quantities on hand.


Pick-to light systems consist of lights and LED displays for each pick location. The system uses software to light the next pick and display the quantity to pick. Pick-to-light systems have the advantage of not only increasing accuracy, but also increasing productivity. Since hardware is required for each pick location, pick-to-light systems are easier to cost justify where very high picks per SKU occur. Carton flow rack and horizontal carousels are good applications for pick to light. In batch picking, put-to-light is also incorporated into the cart or rack that holds the cartons or totes that you are picking into. The light will designate which order you should be placing the picked items in. See article on Order Picking, also check out My book on inventory accuracy.


The act of calling for freight by truck at the consignor's shipping platform.

Pick-Up Order

A document indicating the authority to pick up cargo or equipment from a specific location.


The structure perpendicular to the shoreline to which a vessel is secured for the purpose of loading and unloading cargo.


A shipment loaded into a container at the pier or terminal, thence to the consignee's facility.


Containers loaded at port of loading and discharged at port of destination.

Piggy Packer

A mobile container-handling crane used to load/unload containers to/from railcars.


A transportation arrangement in which truck trailers with their loads are moved by train to a destination. Also known as Rail Pigs.

A rail-truck service. A shipper loads a highway trailer, and a carrier drives it to a rail terminal and loads it on a rail flatcar; the railroad moves the trailer-on-flatcar combination to the destination terminal, where the carrier offloads the trailer.

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 person from moving the trailer.


See Pinwheeling


refers to a method for loading trailers where you alter the direction of every other pallet. Basically you use pinwheeling to load more pallets on a trailer when the depth of the pallet is longer than half the trailer width, but the depth plus the width is less than the trailer width. You can also use it as a productivity/space utilization compromise or to reduce load shifting when loading pallets where the depth of the pallet is less than half the trailer width. See article on Trailer Loading Techniques.

Place of Delivery

Place where cargo leaves the care and custody of carrier.

Place of Receipt

Location where cargo enters the care and custody of carrier.

Place utility

A value that logistics creates in a product by changing the product's location. Transportation creates place utility.

Planned order

term used within MRP and DRP systems for system-generated planned order quantities. Planned orders only exist within the computer system and serve multiple functions. One function is to notify the materials/planner or buyer to produce or order materials, which is done by converting a planned order into an purchase order, shop order, or transfer order. Another function is used by the MRP or DRP system to show demand which is used by subsequent MRP and DRP programs to generate additional planned orders. (MRP/DRP systems sometimes run several programs in a specific sequence to generate all planned orders, one program may convert forecasts or customer orders into planned orders which creates the demand the next program uses this demand to create additional planned orders).

In DRP and MRP systems, a future order the system plans in response to forecasted demand.

Planning bill

See Planning bill of material.

Planning bill of material

A fictitious bill of material used to group options of a family of products. For example, you may have a line of notebook computers whereby most of the components are the same, but some will have different hard drives, processors, memory, etc. Rather than creating separate bills for each possible combination and then forecasting each possible combination, you create one large planning bill that contains all possible components but uses the "quantity per" to manage the options. If you expect half of the computers to have 40 GB drives, 25% to have 60GB drives, and 25% to have 80 GB drives, you would set up each drive on the bill and use 0.50, 0.25, and 0.25 respectively as the quantity per. You would then proceed to do the same for all other options. Your higher level forecast would be for the total demand for all computers in this family. Planning bills are sometimes referred to as Super Bills or Pseudo Bills.


Programmable logic controller. Computerized device used to control functions of machines. PLCs are used in automation of manufacturing equipment and material handling equipment such as automated conveyor systems.

Plimsoll Mark

A series of horizontal lines, corresponding to the seasons of the year and fresh or saltwater, painted on the outside of a ship marking the level which must remain above the surface of the water for the vessel's stability.


plugging is used with electric industrial vehicles to reduce speed, stop, or change direction, without using the brake. Most commonly used with vehicles with hand throttles such as motorized pallet trucks and order selectors, the operator simply switches between forward and reverse to control speed. Though this sounds like something you shouldn't be doing, many electric trucks are designed to allow for this.


See Purchase Order.


Abbreviation for Port of Discharge, or Port of Destination.

Point of Sale Information

Price and quantity data from retail locations as sales transactions occur.

Police powers

The United States' constitutionally granted right for the states to establish regulations to protect their citizens' health and welfare; truck weight; speed, length, and height laws are examples.

Pomerene Act, Also known as (U.S.) Federal Bill of Lading Act of 1916.

U.S. federal law enacting conditions by which a B/L may be issued. Penalties for issuing B/L's containing false data include monetary fines and/or imprisonment.


An agreement among carriers to share the freight to be hauled or to share profits. The Interstate Commerce Act outlawed pooling agreements, but the Civil Aeronautics Board has approved profit pooling agreements for air carriers during strikes.

Pop-up sorter

sorting equipment integrated into conveyor to move materials off of conveyor at fixed points. Pop-up sorters are installed in fixed positions and may consist of a series of wheel or small belts that are normally located slightly below the conveyor rollers. The wheels or belts are momentarily raised (pop up) to enable diverting materials off of the conveyor.


Left side of A ship when facing forward. Also opening in a ship's side for handling freight.

Port authority

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

Port of Call

Port where a ship discharges or receives traffic.

Port of Entry

Port where cargo is unloaded and enters a country.

Port of Exit

Place where cargo is loaded and leaves a country.


A harbor where ships will anchor.


Point of Shipment.

Possession utility

The value created by marketing's effort to increase the desire to possess a good or benefit from a service.


a Manufacturing / Distribution strategy where specific operations associated with a product are delayed until just prior to shipping. Storing product in a generic state and then applying custom labels or packaging before shipping is an example of postponement.

The delay of final activities (i.e., assembly, production, packaging, etc.) until the latest possible time.

Powered industrial truck

according to OSHA, a "powered industrial truck is defined as a mobile, power-driven vehicle used to carry, push, pull, lift, stack, or tier material". Pretty much covers any type of lift truck as well as vehicles used to tow materials. See Lift Truck.

Pratique Certificate

Lifts temporary quarantine of a vessel; granted pratique by Health Officer.


A process employed in the shipment of citrus fruits and other perishable commodities. The fruit is packed and placed in a cold room from which the heat is gradually extracted. The boxes of fruit are packed in containers that have been thoroughly cooled and transported through to destination without opening the doors.


A freight term which indicates that charges are to be paid by the shipper.

Freight charges paid by the consignor (shipper) prior to the release of the bills of lading by the carrier.

Prepaid Freight

Freight paid by the shipper to the carrier when merchandise is tendered for shipment that is not refundable if the merchandise does not arrive at the intended destination.


The process of preparing merchandise in the DC or retail store for transfer to and display at the shelf or rail. Can include the removal of transit packaging, transfer of garments from boxed to hanging format, ticketing, and assembly of merchandise into store-floor or store-shelf order.

Present Value

Today's value of future cash flows, discounted at an appropriate rate.


Activities completed before goods are transported by sea.

Primary-business test

A test the ICC uses to determine if a trucking operation is bona fide private transportation; the private trucking operation must be incidental to and in the futherance of the firm's primary business.

Private carrier

A carrier that provides transportation service to the firm that owns or leases the vehicles and does not charge a fee. Private motor carriers may haul at a fee for wholly owned subsidiaries.

Private warehousing

The storage of goods in a warehouse owned by the company that has title to the goods.

Pro Forma

A Latin term meaning "For the sake of form."


An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value, and specifications (weight, size, etc.)

Basically a fake invoice created to show a buyer what the details of the actual invoice will look like. You can think of it as a draft invoice. Pro forma invoices are commonly used with international transactions to provide the buyer with the information they will need to pay for the goods (prepayment is common with international transactions) and arrange for import.

Pro Rata

A Latin term meaning "In proportion."

Process Improvement

Designs or activities which improve quality or reduce costs, often through the elimination of waste or non-value-added tasks.

Process manufacturing

type of manufacturing where a product is produced or transformed through mixing, chemical reactions, etc. Examples of process manufacturing would be refining crude oil into gasoline, extracting copper from ore, combining materials to make paint. Process as opposed to discrete manufacturing. Also see Discrete manufacturing.


The act of acquiring goods.

Product Description

The user's description of the product.

Product ID

A method of identifying a product without using a full description. These can be different for each document type and must, therefore, be captured and related to the document in which they were used. They must then be related to each other in context (also known as SKU, Item Code or Number, or other such name).


Something that has been or is being produced.

Production plan

generally used to describe a long-term plan of what will be produced at a family level.

Production planning

The decision-making area that determines when and where and in what quantity a manufacturer is to produce goods.


A measure of resource utilization efficiency defined as the sum of the outputs divided by the sum of the inputs.

Profit ratio

The percentage of profit to sales--that is, profit divided by sales.

Program generator

Program generators are software programs that generally provide graphical user interfaces and tools that allow a user to create a program without having to write actual computer code. Currently these programs are more frequently referred to as "Development Tools" and are usually designed to write code for specific applications such as data-collection programs for portable computers. While a user does not need to be a programmer to use this software, the user does need to have a higher level of technical skills than that of most standard software users. a.k.a. Code generator, Development tools.

Project Rate

Single tariff item, established to move multiple commodities needed for a specified project, usually construction.

Proof of Delivery

A document required from the Carrier or driver FOR proper payment.

Information supplied by the carrier containing the name of the person who signed for the shipment, the time and date of delivery, and other shipment delivery related information.

Proportional rate

A rate lower than the regular rate for shipments that have prior or subsequent moves; used to overcome combination rates' competitive disadvantages.


Used to describe equipment or technologies that do not follow an open standard design that would allow them to easily integrate with other equipment or technologies. Proprietary equipment and technologies are usually patented or otherwise protected making it difficult or impossible for other companies to offer similar or complementary products.

Psuedo bill of material

See Planning bill of material

Public Service Commission

A name usually given to a State body having control or regulation of public utilities.

Public warehouse

A business that provides short or long-term storage to a variety of businesses, usually on a month-to-month basis. A public warehouse will generally use their own equipment and staff, however, agreements may be made where the client either buys or subsidizes equipment. Public warehouse fees are usually a combination of storage fees (per pallet or actual sq. footage) and transaction fees (inbound and outbound). Public warehouses are most often used to supplement space requirements of a private warehouse. Also see Contract Warehouse and 3PL.

Public warehouse receipt

The basic document a public warehouse manager issues as a receipt for the goods a company gives to the warehouse manager. The receipt can be either negotiable or nonnegotiable.

Public warehousing

The storage of goods by a firm that offers storage service for a fee to the public.

Publishing Agent

Person authorized by transportation lines to publish tariffs or rates, rules, and regulations for their account.

Pull ordering system

A system in which each warehouse controls its own shipping requirements by placing individual orders for inventory with the central distribution center.

Pull replenishment

The customer-driven flow of materials and merchandise through the supply chain. See also demand chain.

Pulp Temperature

Procedure where carrier tests the temperature of the internal flesh of refrigerated commodities to assure that the temperature at time of shipment conforms to prescribed temperature ranges.


A short semi-trailer used jointly with a dolly and another semi-trailer to create a twin trailer.

Purchase order

A document used to approve, track, and process purchased items. A purchase order is used to communicate a purchase to a supplier. It is also used as an authorization to purchase. A purchase order will state quantities, costs, and delivery dates. The purchase order is also used to process and track receipts and supplier invoices/payments associated with the purchase.

A document created by a buyer to officially request a product or service from a seller. It contains, among other things, the name and address of the buyer, the ship-to address, the quantity, product code [and expected price], requested ship or receipt date, sales and shipping terms, and other appropriate information.

Purchase price discount

A pricing structure in which the seller offers a lower price if the buyer purchases a larger quantity.


The functions associated with buying the goods and services the firm requires.

Pure raw material

A raw material that does not lose weight in processing.

Push ordering system

A situation in which a firm makes inventory deployment decisions at the central distribution center and ships to its individual warehouses accordingly.

Push sorter

a very simple fixed-position sorting device used with conveyor systems. A push sorter may use a swinging arm or a simple piston-type pushing device to push materials across the conveyor.

Push-back rack

racking system that incorporates a carriage or other sliding device to allow you to feed multiple pallets into the same location "pushing back" the previous pallet. Also see Racking Pics Page.


technology similar to pick-to-light, however, the light modules are used do direct which tote, bin, or carton, the item is to be picked into, rather than directing which locations to pick from.



Rack-supported building

warehouse design that uses structural pallet rack to support the roof of a building, eliminating the need for posts. Rack-supported buildings are usually designed for AS/RS systems or turret truck systems where racking is 40 to 100 ft in height.

Radio frequency

in warehousing, refers to the portable data collection devices that use radio frequency (RF) to transmit data to host system.

Radio frequency identification


Rag Top

A slang term for an open-top trailer or container with a tarpaulin cover.

Rail Carrier

An enterprise that offers service via rail carriage.

Rail Division

The amount of money an ocean carrier pays to the railroad for overland carriage.

Rail freight

The transportation of goods by rail.

Rail Grounding

The time that the container was discharged (grounded) from the train.

Rail Waybill

The bill of lading issued by rail carriers to their customers.


guidance system used with very-narrow-aisle vehicles such as order selectors and turret trucks. A steel rail is mounded on each side of the aisle, and rollers are mounted on the lift truck to guide it between the rails.


Railroad terminal where containers are received or delivered and trains loaded or discharged. Originally, trailers moved onto the rearmost flatcar via a ramp and driven into position in a technique known as "circus loading." Most modern rail facilities use lifting equipment to position containers onto the flatcars.


A movement where the load initiates at an origin rail ramp and terminates at a consignee's door.


A movement of equipment from an origin rail ramp to a destination rail ramp only.

Random access memory (RAM)

Temporary memory on micro chips. Users can store data in RAM or take it out at high speeds. However, any information stored in RAM disappears when the computer is shut off.

Random location storage

refers to storage method where a product may be stored in any location. Random storage has higher space utilization and generally lower accuracy than fixed location storage.

Rate Basis

A formula of the specific factors or elements that control the making of a rate. A rate can be based on any number of factors (i.e., weight, measure, equipment type, package, box, etc.).

Rate basis number

The distance between two rate basis points.

Rate basis point

The major shipping point in a local area; carriers consider all points in the local area to be the rate basis point.

Rate bureau

A carrier group that assembles to establish joint rates, to divide joint revenues and claim liabilities, and to publish tariffs. Rate bureaus have published single line rates, which were prohibited in 1984.

Rated Bill of Lading

See Freight Bill.


Established charges for the transport of goods.

Reach truck

a.k.a. Stand-up reach, Straddle reach , Double-deep reach. The reach truck is a narrow-aisle (8'-10') lift truck designed specifically for racked pallet storage. It consists of outriggers in front and telescoping forks that use a hydraulic scissors-type mechanism that allow you to pick up the load and retract it over the outriggers reducing the overall truck and load length, allowing you to turn in a narrower aisle. Double-deep reach trucks use an extended reach mechanism that allows you to store pallets two-deep in specially designed double-deep rack. Reach trucks are designed for racking areas only and do not work for loading trucks or quickly moving loads over distances. Also see Lift Truck Pics and Lift Truck Basics for more info.


A real-time system provides an immediate response to external events. Often used in relation to tracking; see also track-and-trace.

Real-time locator system

real-time locator system (RTLS) uses RFID technology that provides the objects they are attached to the ability to transmit their current location. System requires some type of RFID tag to be attached to each object that needs to be tracked, and RF transmitters/receivers located throughout the facility to determine the location and send information to computerized tracking system. While it sounds like a great way to eliminate "lost" inventory, the systems are still too costly for most inventory tracking operations and are more likely to be used to track more valuable assets.

Reasonable rate

A rate that is high enough to cover the carrier's cost but not high enough to enable the carrier to realize monopolistic profits.


Under ICC and common law, the requirement that a rate not be higher than is necessary to reimburse the carrier for the actual cost of transporting the traffic and allow a fair profit.


An illegal form of discounting or refunding that has the net effect of lowering the tariff price. See also Malpractice.

Recapture Clause

A provision of the 1920 Transportation Act that provided for self-help financing for railroads. Railroads that earned more than the prescribed return contributed one-half of the excess to the fund from which the ICC made loans to less profitable railroads. The Recapture Clause was repealed in 1933.

Receipt Location

A location that will receive goods.

Receipt Point

The place where cargo enters the care and custody of the carrier.


An enterprise that receives goods/services.


The practice by which governments extend similar concessions to each other.


Changing the consignee or destination on a bill of lading while shipment is still in transit. Diversion has substantially the same meaning.

A carrier service that permits a shipper to change the destination and/or consignee after the shipment has reached its originally billed destination and to still pay the through rate from origin to final destination.


A right claim against the guarantors of a loan or draft or bill of exchange.

Red Label

A label required on shipments of flammable articles.

Reed-Bulwinkle Act

Legislation that legalized common carrier joint ratemaking through rate bureaus; extended antitrust immunity to carriers participating in a rate bureau.


Refrigerated container.

A container with a self-contained refrigeration unit, used for the transportation of perishable cargo.


A fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in performance.

Refrigerated warehouse

A warehouse that is used to store perishable items requiring controlled temperatures.

Regional carrier

A for-hire air carrier, usually certificated, that has annual operating revenues of less than $75 million; the carrier usually operates within a particular region of the country.

Regional distribution centre (RDC)

See distribution centre.

Regular-route carrier

A motor carrier that is authorized to provide service over designated routes.

Related Points

A group of points to which rates are made the same as or in relation to rates to other points in group.


To transfer containers from one ship to another when both vessels are controlled by the same network (carrier) manager.

Relay terminal

A motor carrier terminal that facilitates the substitution of one driver for another who has driven the maximum hours permitted.

Release Approval A document to advise that goods are available for further movement or action.
Released-value rates

Rates based upon the shipment's value. The maximum carrier liability for damage is less than the full value, and in return the carrier offers a lower rate.


A carrier selection criterion that considers the carrier transit time variation; the consistency of the transit time the carrier provides.


Funds sent by one person to another as payment.

Reorder point

The inventory level set to trigger reorder of a specific item. Reorder point is generally calculated as the expected usage (demand) during the lead time plus safety stock. Fixed reorder point implies the reorder point is a static number plugged into the system. Dynamic reorder point implies there is some system logic calculating the order point. Generally this would be comparing current inventory to the forecasted demand during the lead time plus safety stock.

A predetermined inventory level that triggers the need to place an order. This minimum level provides inventory to meet the demand a firm anticipates during the time it takes to receive the order.


A situation in which the ICC requires a railroad to repay users the difference between the rate the railroad charges and the maximum rate the ICC permits when the ICC finds a rate to be unreasonable or too high.


The process of moving or re-supplying inventory from a reserve storage location to a primary picking location, or to another mode of storage in which picking is performed.

Replenishment cycle

See Order Cycle.


An appeal for a transaction of goods/services between two enterprises.

Requested Arrival Date

The date the shipment must arrive at the destination.

Restricted Articles

Articles handled only under certain conditions.

An airline term referring to a hazardous material as defined by Title 49, Code of Federal Regulations (U.S.) and Air Transport Restricted Articles Circular 6-D. Restricted articles transported domestically may be classified as dangerous goods when transported domestically may be classified as dangerous goods when transported internationally by air.


An action taken by a country to restrain its imports from another country that has increased a tariff or imposed other measures that adversely affect the first country's exports.

Revenue Ton (RT)

A ton on which the shipment is freighted. If cargo is rated as weight or measure (W/M), whichever produces the highest revenue will be considered the revenue ton. Weights are based on metric tons and measures are based on cubic meters. RT=1 MT or 1 CBM.

Reverse IPI

An inland point provided by an all_water carrier's through bill of lading in the U.S. by first discharging the container in an East Coast port.

Reverse logistics

The process of collecting, handling and transporting used, damaged, unwanted and end-of-life (EOL) goods and/or packaging for the purposes of their disposal, recycling or recovery. Can also refer to the return of re-usable transit equipment - for example pallets and containers to a point further up the supply chain (that is, upstream).

Fancy term for Returns. Reverse Logistics covers activities related to returned product, returned pallets and containers, returned materials for disposal or recycling.

Radio frequency identification. Refers to devices attached to an object that transmit data to an RFID receiver. These devices can be large pieces of hardware the size of a small book, like those attached to ocean containers, or very small devices inserted into a label on a package. RFID has advantages over barcodes, such as the ability to hold more data, the ability to change the stored data as processing occurs, does not require line-of-site to transfer data and is very effective in harsh environments where bar code labels won't work. Read my articles ADC Basics and RFID Update, also check out My book on inventory accuracy and its related RFID Updates and RFID Links.

RFID / smart labels

RFID is radio-frequency identification, a system that uses radio signals to locate and identify merchandise, batched products or transportation assets fitted with special electronic tags. The tags - also known as smart labels or intelligent tags - enable the automatic track-and-trace of merchandise/assets throughout the supply chain.


Request for quotation.

Right of eminent domain

A concept that, in a court of law, permits a carrier to purchase land it needs for transportation right-of-way; used by railroads and pipelines.


A shortening of the term, "Roll On/Roll Off." A method of ocean cargo service using a vessel with ramps which allows wheeled vehicles to be loaded and discharged without cranes.

See Roll-on/Roll-off.


See kerbside.


To re-book cargo to a later vessel.

Roller conveyor

type of conveyor that uses rollers to move materials. Roller conveyor may be automated (live roller) or simply use gravity (gravity roller) to move materials. See Conveyor Pics.


The side-to-side (athwartship) motion of a vessel.


Ships specially designed to carry wheeled containers or trailers using interior ramps.

Roll-on-roll-off (RO-RO)

A type of ship designed to permit cargo to be driven on at origin and off at destination; used extensively for the movement of automobiles.

Rough-cut capacity

used to determine estimated load on key pieces of equipment or resources. May use production plan or master production schedule. Rough-cut capacity is usetd as a check to verify that manufacturing resources are adequate to execute the production plan.


A complete movement of a shipment from its origin to its destination by a carrier.


The process of determining and arranging the optimal course of goods for transport.


Rapid Response Manufacturing.


Real-time locator system (see separate listing).

Rule of eight

Before the Motor Carrier Act of 1980, the ICC restricted contract carriers requesting authority to eight shippers under contract. The number of shippers has been deleted as a consideration for granting a contract carrier permit.

Rule of ratemaking

A regulatory provision directing the regulatory agencies to consider the earnings a carrier needs to provide adequate transportation.

Running Gear

Complementary equipment for terminal and over_the_road handling containers.


Abbreviation for "Released Value Not Exceeding." Usually used to limit the value of goods transported.The limitation refers to carrier liability when paying a claim for lost or damaged goods.



Walkie or Walkie-rider

See Motorized Pallet Truck.

War Risk

Insurance coverage for loss of goods resulting from any act of war.

Warehouse / warehousing

A covered place for the reception and storage of goods. See also distribution centre.

A place for the reception, delivery, consolidation, distribution, and storage of goods/cargo.

Warehouse Control System

software used to control automated systems such as sortation systems, AS/RS, AGV's, and carousells in the warehouse. A WCS may also have functionality similar to a WMS just as some WMS's have WCS functionality.

Warehouse Entry

Document that identifies goods imported when placed in a bonded warehouse. The duty is not imposed on the products while in the warehouse but will be collected when they are withdrawn for delivery or consumption.

Warehouse management system

computer software designed specifically for managing the movement and storage of materials throughout the warehouse. WMS functionality is generally broken down into the following three operations Putaway, Replenishment, and Picking. The key to these systems is the logic to direct these operations to specific locations based on user defined criteria. WMSs are often set up to integrate with data-collection systems. Read my article on Warehouse Management Systems.

Warehouse Withdrawal for Transportation (WDT)

Allows merchandise that has been withdrawn from a bonded warehouse at one port to be transported in bond to another port, where a superseding entry will be filed.

Warehouse Withdrawal for Transportation Exportation (WDT&E)

Allows merchandise that has been withdrawn from a bonded warehouse at one port to be transported in bond through the U.S. to be exported from another port, without paying duty.

Warehouse Withdrawal for Transportation Immediate Exportation (WDEX)

Allows merchandise that has been withdrawn from a bonded warehouse at one U.S. port to be exported from the same port exported without paying duty.

Warsaw Convention / Warsaw Agreement

Each mode of international transport is regulated by a Convention or international agreement which standardises the documentation and the contract of carriage, and rules on legal questions concerning international transport of baggage, goods or persons. The convention which applies to air transport is the Warsaw Convention (as amended at the Hague in 1955). Section 3 (Article 5-11) of this convention deals with the Air Waybill, (definition, number of originals, details which must be included, function of the AWB).

Waterway use tax

A per-gallon tax assessed barge carriers for waterway.

Wave picking

variation on zone picking where rather than orders moving from one zone to the next for picking, all zones are picked at the same time and the items are later sorted and consolidated into individual orders/shipments. Wave picking is the quickest method for picking multi item orders however the sorting and consolidation process can be tricky. Picking waves are often designed to isolate shipments to specific carriers, routes, etc. See also batch picking, zone picking A more general definition of wave picking would simply be a method where a group of orders is released to the warehouse for picking and the next group (wave) is not released until the first wave has processed through the pick area. See article on Order Picking.

Waybill (WB)

A document prepared by a transportation line at the point of a shipment; shows the point of the origin, destination, route, consignor, consignee, description of shipment and amount charged for the transportation service. It is forwarded with the shipment or sent by mail to the agent at the transfer point or waybill destination.

A non-negotiable document prepared by or on behalf of the carrier at the point of shipment origin. The document shows point of origin, destination, route, consignor, consignee, description of shipment, and amount charged for the transport service.


Warehouse control system (see separate listing).

Weight break

The shipment volume at which the LTL charges equal the TL charges at the minimum weight.

Weight Unit Qualifier

The unit of measure that the user wants to see for weight.

Weighted out

Describes a condition where the weight capacity of a trailer or container has been met. The term "weighted out" is most likely used when you have met the weight capacity of the trailer or container but still have physical space left in the trailer or container. Also see Cubed out.

Weight-losing raw material

A raw material that loses weight in processing.

Weights and Measures

Measurement ton 40 cubic ft or one cubic meter. Net ton, or short ton 2,000 lbs. Gross ton/long ton 2,240 lbs. Metric ton/kilo ton 2,204.6 lbs. Cubic meter 35.314 cubic ft.


The charges assessed by pier personnel for the handling of incoming or outgoing cargo.


term used to describe vehicles that use a wire embedded in the floor to guide the vehicles. Wire guidance systems are frequently used with order selectors and turret trucks in very narrow aisle applications. They are also used with automated guided vehicles.


Warehouse management system (see separate listing).

Work in process (WIP)

Parts and subassemblies in the process of becoming completed assembly components. These items, no longer part of the raw materials inventory and not yet part of the finished goods inventory, may constitute a large inventory by themselves and create extra expense for the firm.

Generally describes inventory that is currently being processed in an operation, or inventory that has been processed through one operation and are awaiting another operation. WIP is actually an inventory account that represents the value of materials, labor, and overhead that has been issued to manufacturing but has not yet produced a stockable item. Depending on how your accounting and inventory systems are set up, it may also include components picked for production usage or finished products awaiting final inspection.


With particular average. See Marine Cargo Insurance.



Abbreviation for "Bill of Lading."

Back Haul

The return movement of a means of transport that has provided a transport service in one direction.

Back Order

Product ordered but out of stock and promised to ship when the product becomes available.

The process a company uses when a customer orders an item that is not in inventory; the company fills the order when the item becomes available.


Method for issuing (reducing on-hand quantities) materials to a manufacturing order. With backflushing, the material is issued automatically when production is posted against an operation. The backflushing program will use the quantity completed to calculate through the bill of material the quantities of the components used, and reduce on-hand balances by this amount. There are usually options during the backflush process to report scrap. In operations using backflushing it is advisable to set up specific machine locations and have materials transferred from storage locations to machine locations when they are physically picked for production. The backflush operation will then issue the material from the machine locations. Read my article on Backflushing.


Transportation term that describes the activity of picking up, transporting, and delivering a new load on a return trip from delivering another load (known as the fronthaul, though the term fronthaul is not used very frequently).

The return movement of a vehicle from its original destination to its original point of origin, especially when carrying goods back over all or part of the same route. To haul a shipment back over part of a route it has traveled.

Backstage areas

Behind-the-scenes areas of malls and shops where stock is held and logistics support and pre-retailing services are undertaken.


Making a duplicate copy of a computer file or a program on a disk or cassette so that the material will not be lost if the original is destroyed; a spare copy.


Abbreviation for "Bunker Adjustment Factor." Used to compensate steamship lines for fluctuating fuel costs. Sometimes called "Fuel Adjustment Factor" or FAF.

Balance of Trade

The surplus or deficit which results from comparing a country's exports and imports of merchandise only.


A large compressed, bound, and often wrapped bundle of a commodity, such as cotton or hay.

Balloon Freight

Light, bulky articles.

Bank Guarantee

Guarantee issued by a bank to a carrier to be used in lieu of lost or misplaced original negotiable bill of lading.

Bar Code

A symbol consisting of a series of printed bars representing values. A system of optical character reading, scanning, and tracking of units by reading a series of printed bars for translation into a numeric or alphanumeric identification code.

A series of lines of various widths and spacings that can be scanned electronically to identify a carton or individual item.

Bar code scanner

A device to read bar codes and communicate data to computer systems.

Bar Coding

A method of encoding data for fast and accurate readability. Bar codes are a series of alternating bars and spaces printed or stamped on products, labels, or other media, representing encoded information which can be read by electronic readers called bar.


The cargo-carrying vehicle which may or may not have its own propulsion mechanism for the purpose of transporting goods. Primarily used by Inland water carriers, basic barges have open tops, but there are covered barges for both dry and liquid cargoes.


An act committed by the master or mariners of a vessel, for some unlawful or fraudulent purpose, contrary to their duty to the owners, whereby the latter sustain injury. It may include negligence, if so gross as to evidence fraud.

Barrel (BBL)

A term of measure referring to 42 gallons of liquid at 60o F.


The exchange of commodities or services for other commodities or services rather than the purchase of commodities or services with money.

Base Currency

The currency whose value is "one" whenever a quote is made between two currencies.

Base Rate

A tariff term referring to ocean rate less accessorial charges, or simply the base tariff rate.

Basing-point pricing

A pricing system that includes a transportation cost from a particular city or town in a zone or region even though the shipment does not originate at the basing point.

Batch picking

order picking method where orders are grouped into small batches, an order picker will pick all orders within the batch in one pass. Batch picking is usually associated with pickers with multi-tiered picking carts moving up and down aisles picking batches of usually 4 to 12 orders, however, batch picking is also very common when working with automated material handling equipment such as carousels. See also Zone picking, Wave picking. Article Order Picking

The picking of items from storage for more than one order at a time.


Ballast Bonus (Special payment above the Chartering price when the ship has to sail a long way on ballast to reach the loading port.)


Abbreviation for "Beneficial Cargo Owner." Refers to the importer of record, who physically takes possession of cargo at destination and does not act as a third party in the movement of such goods.


The width of a ship.

Belt Line

A switching railroad operating within a commercial area.


The process of comparing performance against the practices of other leading companies for the purpose of improving performance. Companies also benchmark internally by tracking and comparing current performance with past performance.

A management tool for comparing performance against an organization that is widely regarded as outstanding in one or more areas, in order to improve performance.


Entity to whom money is payable. The entity for whom a letter of credit is issued. The seller and the drawer of a draft.

Benefit-cost ratio

An analytical tool used in public planning; a ratio of total measurable benefits divided by the initial capital cost. see Cost Benefit Analysis.

Berth Terms

Shipped under rate that includes cost from end of ship's tackle at load port to end of ship's tackle at discharge port.

Best Practice

State-of-industry performance or application.


Used with reference to charges assessed for cargo movement past a line-haul terminating point.


A contract term meaning both parties agree to provide something for the other.

Bill of Exchange

In the United States, commonly known as a "Draft." However, bill of exchange is the correct term.

Bill of Lading (BOL)

A document issued by an entity providing transportation services that serves three purposes: 1) serves as receipt for the goods delivered to the carrier for shipment, 2) defines the contract of carriage of the goods from the point of origin to the point of destination according to the responsibilities of the service provider listed on the bill of lading, 3) under certain conditions, provides evidence of title for the goods.

A document that establishes the terms of a contract between a shipper and a transportation company. It serves as a document of title, a contract of carriage and a receipt for goods. Multi-use documents that are essential to conduct the day-to-day operations when transportation of supplies, materials, and personal property is required. These primary documents are used to procure freight and express transportation and related services from commercial carriers, including freight forwarders.

Bill of Lading Number

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

Bill of Lading Port of Discharge

Port where cargo is discharged from means of transport.

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.

Bill of material

Lists materials (components or ingredients) required to produce an item. Multilevel BOMs also show subassemblies and their components. Other information such as scrap factors may also be included in the BOM for use in materials planning and costing.

Bill of Sale

Confirms the transfer of ownership of certain goods to another person in return for money paid or loaned.

Bill to Party

Customer designated as party paying for services.

Billed Weight

The weight shown in a waybill and freight bill, i.e, the invoiced weight.


A carrier terminal activity that determines the proper rate and total charges for a shipment and issues a freight bill.


A strip of cardboard, thin wood, burlap, or similar material placed between layers of containers to hold a stack together.

Blanket Bond

A bond covering a group of persons, articles or properties.

Blanket order

a type of purchase order that commits to purchase a specific quantity over a specific period of time, but does not necessarily provide specific dates for shipments. Blanket orders are placed for the quantity of an item (or group of items) that you expect to purchase over extended period of time (3 months, 6 months, a year, etc). A blanket purchase order may provide estimated required dates for specific quantities, but actual releases to ship against the blanked order are triggered by separate requests from the customer to the supplier; the specific quantities and dates of these separate requests (releases) may or may not be similar to the estimated dates and quantities. Providing a blanket order to a supplier may reduce lead times and increase on-time shipments from the supplier and may provide a greater discount on purchases.

Blanket Rate

A rate applicable to or from a group of points. A special rate applicable to several different articles in a single shipment.

A rate that does not increase according to the distance a commodity is shipped.

Blanket Waybill

A waybill covering two or more consignments of freight.


generally describes discrete units (usually uniform sized units) that are usually produced through a cutting process but are not yet finished items. For example, if a die cutting machine cuts sheets of steel into small rectangular pieces that will later be machined and painted, the unfinished rectangular pieces may be referred to as blanks. Stampings are sometimes referred to as blanks, however, all blanks are not necessarily stampings. See also Stamping

Blind counts

describes method used in cycle counting and physical inventories where you provide your counters with item number and location but no quantity information. See article on Cycle Counting, also check out My book on inventory accuracy.

Blind Shipment

A B/L wherein the paying customer has contracted with the carrier that shipper or consignee information is not given.

Block Stowage

Stowing cargo destined for a specific location close together to avoid unnecessary cargo movement.

Blocked Trains

Railcars grouped in a train by destination so that segments (blocks) can be uncoupled and routed to different destinations as the train moves through various junctions. Eliminates the need to break up a train and sort individual railcars at each junction.

Blocking or Bracing

Wood or metal supports (Dunnage) to keep shipments in place to prevent cargo shifting.


Abbreviation for "Bales."


To gain access to a vessel.

Board Feet

The basic unit of measurement for lumber. One board foot is equal to a one_inch board, 12 inches wide and one foot long. Thus, a board ten feet long, 12 inches wide, and one inch thick contains ten board feet.


Movement of a tractor, without trailer, over the highway.


A set of wheels built specifically as rear wheels under the container.


A device fitted on a chassis or railcar to hold and secure the container.


See Bill of material

Bond Port

Port of initial Customs entry of a vessel to any country. Also known as First Port of Call.

Bond, In

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

Bonded Freight

Freight moving under a bond to U.S. Customs or to the Internal Revenue Service, and to be delivered only under stated conditions.

Bonded Warehouse

a facility or a dedicated portion of a facility where imported goods are stored prior to customs duties and taxes being paid. These facilities are often used to delay the payment of import fees until the products are actually sold/shipped (when they physically leave the bonded facility). This can be particularly useful when products are received well in advance of sale or when a portion of the product received may eventually be returned or scrapped (thus preventing paying import fees on items not sold). Bonded warehouses are licensed by the government. I believe the same concept can also be applied to specially taxed domestic products such as alcohol and tobacco products. See also FTZ (Foreign Trade Zone)

A warehouse, distribution centre or consolidation centre that is authorised by customs to store goods; where duties and taxes are only payable once items are dispatched.

Bonded warehousing

A type of warehousing in which companies place goods in storage without paying taxes or tariffs. The warehouse manager bonds himself or herself to the tax or tariff collecting agency to ensure payment of the taxes before the warehouse releases the goods.


See Bond, In.

Bookable Leg

See Leg.


Arrangements with a carrier for the acceptance and carriage of freight; i.e., a space reservation.

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

Booking Number

Reservation number used to secure equipment and act as a control number prior to completion of a B/L.

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

Bottom Side Rails

Structural members on the longitudinal sides of the base of the container.

Bottom-Air Delivery

A type of air circulation in a temperature control container. Air is pulled by a fan from the top of the container, passed through the evaporator coil for cooling, and then forced through the space under the load and up through the cargo. This type of airflow provides even temperatures.


The front of a vessel.

Box car

A closed freight car.

An enclosed railcar, typically forty to fifty feet long, used for packaged freight and some bulk commodities.


To secure a shipment inside a carrier's vehicle to prevent damage.

Break Bulk

To unload and distribute A portion or all of the contents of A rail car, container, or trailer.

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.

Break Bulk Cargo

Cargo that is shipped as a unit or package (for example: palletized cargo, boxed cargo, large machinery, trucks) but is not containerized.

Break Bulk Vessel

A vessel designed to handle break bulk cargo.

Bridge Point

An inland location where cargo is received by the ocean carrier and then moved to a coastal port for loading.

Bridge Port

A port where cargo is received by the ocean carrier and stuffed into containers but then moved to another coastal port to be waded on a vessel.

Broken Stowage

The loss of space caused by irregularity in the shape of packages.


A person who arranges for transportation of loads for a percentage of the revenue from the load.

There are 3 definitions for the term "broker": 1) an enterprise that owns & leases equipment 2) an enterprise that arranges the buying & selling of transp., goods, or services 3) a ship agent who acts for the ship owner or charterer in arranging charters.


Freight forwarder/broker compensation as specified by ocean tariff or contract.

Browser-based applications

software designed to run within a web browser (i.e. Internet Explorer). This allows a user to access the application from any location that has internet access and a web browser (no additional software is needed on the computer accessing the application). Read my article on Software Selection for additional information.

Buffer Stock

A quantity of goods or articles kept in storage to safeguard against unforeseen shortages or demands.


The classic use of the term bulk (bulk materials, bulk inventory, bulk storage) in inventory management and distribution refers to raw materials such as coal, iron ore, grains, etc. that are stored or transported in large quantities. This would include rail cars, tanker trucks, or silos full of a single material. However, this term can also have a variety of other definitions based upon the specific industry or facility. For example, a small-parts picking operation may refer to a case storage area as "bulk", while a case-picking operation may refer to the full-pallet area as the "bulk area".

Bulk Area

A storage area for large items which at a minimum are most efficiently handled by the palletload.

Bulk Cargo

Not in packages or containers; shipped loose in the hold of a ship without mark and count." Grain, coal and sulfur are usually bulk freight.

Goods not in packages or containers. See also, Break Bulk Cargo.

Bulk container

Bulk container

Bulk-Freight Container

A container with a discharge hatch in the front wall; allows bulk commodities to be carried.


A partition separating one part of A ship, Freight car, aircraft or truck from Another part.

Bull Rings

Cargo-securing devices mounted in the floor of containers; allow lashing and securing of cargo.


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

Bunker Charge

An extra charge sometimes added to steamship freight rates; justified by higher fuel costs. (Also known as Fuel Adjustment Factor or FAF.)


A Maritime term referring to Fuel used aboard the ship. Coal stowage areas aboard a vessel in the past were in bins or bunkers.

Business Logistics

The process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.


An enterprise that arranges for the acquisition of goods or services and agrees to payment terms for such goods or services.




Eastern Central Motor Carriers Association.


The Estimated Time of Arrival.


The Estimated Time of Departure.


Eastern Weighing and Inspection Bureau.

Economic Order Quantity (EOQ)

An inventory model that determines how much to order by determining the amount that will meet customer service levels while minimizing total ordering and holding costs.

Result of a calculation that determines the most cost effective quantity to order (purchased items) or produce (manufactured items). The formula basically finds the point at which the combination of order cost and carrying cost is the least. The standard formula is EOQ = Square Root [2 * (Annual Usage) * (Order Cost) / (Annual Carrying Cost/unit)]. The difficult part of implementing the formula is getting accurate values for order cost and carrying cost. See my article Optimizing EOQ for more info.

Economic Value Added (EVA)

A measurement of shareholder value as a company's operating profits after tax, less an appropriate charge for the capital used in creating the profits.

Economy of Scale

The lowering of costs with added output due to allocation of fixed costs over more units.

Edge Protector

An angle piece fitted over the edge of boxes, crates, bundles and other packages to prevent the pressure from metal bands or other types from cutting into the package.


Abbreviation for "Electronic Data Interface." Generic term for transmission of transactional data between computer systems. EDI is typically via a batched transmission, usually conforming to consistent standards.

EDI (Electronic Data Interchange)

The paperless exchange of standard business transactions or information by electronic computer-to-computer transfer, generally requiring little or no human intervention.

Computer-to-computer communication between two or more companies that such companies can use to generate bills of lading, purchase orders, and invoices. It also enables firms to access the information systems of suppliers.

EDI Interchange

Communication between partners in the form of a structured set of messages and service segments starting with an interchange control header and ending with an interchange control trailer. In the context of X.400 EDI messaging, the contents of the primary body of an EDI message.


International data interchange standards sponsored by the United Nations. See UN/EDIFACT.

EDI for Administration Commerce and Transport.

Effective lead time

Effective lead time represents a period of time that includes the lead time (see Lead time), plus additional time factors that may occur between the time the need for an order in known, and the inventory is in stock and available. For example, a fixed ordering schedule (orders are only placed on specific days for specific vendors) may add some time to the lead time, as may some internal processing.

Efficient Consumer Response (ECR)

A demand driven replenishment system designed to link all parties in the logistics channel to create a massive flow-through distribution network. Replenishment is based upon consumer demand and point of sale information.

A customer-driven system where distributors and suppliers work together as business allies to maximize consumer satisfaction and minimize cost.

Electronic product code

EPC is the RFID version of the UPC barcode. EPC is intended to be used for specific product identification. However, EPC goes beyond UPC by not only identifying the product as an SKU, but also providing access to additional data about the origin and history of the specific units. The EPC tag itself identifies the manufacturer, product, version, and serial number. It's the serial number that takes EPC to the next level. This is the key to data related to specific lots/batches as well as potentially tracking the specific unit's history as it moves through the supply chain. This data is stored somewhere else (the internet or other network) but a standardized architecture allows you to access the data much like you would access a web page (though this would be happening automatically behind the scenes). See my article on RFID for more info.


charges assessed for the handling of grain through grain elevators.

Elkins Act

An act of Congress (1903) prohibiting rebates, concession, misbilling, etc. and providing specific penalties for such violations.


Order to restrict the hauling of freight.

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

Eminent Domain

The sovereign power to take property for a necessary public use, with reasonable compensation.

Empty Repo

Contraction for Empty Repositioning. The movement of empty containers.

End User

The final buyer of the product who purchases the product for immediate use.

End-of-life (EOL)

Goods that have reached the end of their operational or shelf life. Can include obsolete items or products that cannot be repaired.


A legal signature usually placed on the reverse of a draft; signifies transfer of rights from the holder to another party.


A term used for goods in transit or on the way to a destination.

Enterprise resource planning

Describes software systems designed to manage most or all aspects of a manufacturing or distribution enterprise (an expanded version of MRP systems). ERP systems are usually broken down into modules such as Financials, Sales, Purchasing, Inventory Management, Manufacturing, MRP, DRP. The modules are designed to work seamlessly with the rest of the system and should provide a consistent user interface between them. These systems usually have extensive set-up options that allow you to customize their functionality to your specific business needs. Unfortunately, in the real world, ERP systems rarely are sufficient to meet all business needs and a myriad of other software packages such as Customer Relationship Management (CRM), Manufacturing Execution Systems (MES), Advanced Planning and Scheduling (APS), Warehouse Management Systems (WMS) and Transportation Management Systems (TMS) are being sold to make up for these deficiencies.

A cross-functional/regional planning process supporting regional forecasting, distribution planning, operations centers planning, and other planning activities. ERP provides the means to plan, analyze, and monitor the flow of demand/supply alignment and to allocate critical resources to support the business plan.


Customs documents required to clear an import shipment for entry into the general commerce of a country.

Entry Form

The document that must be filed with Customs to obtain the release of imported goods and to allow collection of duties and statistics. Also called a Customs Entry Form or Entry.


Economic order quantity (see separate listing).


Electronic product code (see separate listing).


A monetary allowance to the customer for picking up or delivering at a point other than the destination shown on the bill of lading. This provision is covered by tariff publication.

Equipment I.D

An identifier assigned by the carrier to a piece of equipment. See also Container ID.

Equipment Interchange Receipt (EIR)

A document transferring a container from one carrier to another, or to/from a terminal.

Equipment Positioning

The process of placing equipment at a selected location.


The rolling stock carriers use to facilitate the transportation services that they provide, including containers, trucks, chassis, vessels, and airplanes, among others.


Enterprise resource planning (see separate listing).


Early suppression fast response. Sprinkler system technology that executes faster and with a substantially greater volume of water. ESFR sprinklers may eliminate the need for in-rack sprinkler systems in many warehouses, thus reducing the cost of installation and, more importantly, the risk of water damage caused by damage to in-rack sprinklers. Retrofitting ESFR into older warehouses is not always feasible due to limited water pressure in old systems.


Estimated time of arrival.


A gas produced by many fruits and vegetables that accelerates the ripening and aging processes.

Event management

software functionality that triggers specific actions based upon the occurrence of a specific event or combination of events. This is another one of those terms used primarily by software vendors and consultants to push "new" technology. In reality, business software has been providing event-management functionality for years. If inventory dropping below a predetermined level (reorder point) triggers a message to a planner (or even a listing on a reorder report), this is essentially event management.

Ex - "From"

When used in pricing terms such as "Ex Factory" or "Ex Dock," it signifies that the price quoted applies only at the point of origin indicated.

Ex Dec

Contraction for "Shipper's Export Declaration."

Ex Works

The price that the seller quotes applies only at the point of origin. The buyer takes possession of the shipment at the point of origin and bears all costs and risks associated with transporting the goods to the destination.


Notations made when the cargo is received at the carrier's terminal or loaded aboard a vessel. They show any irregularities in packaging or actual or suspected damage to the cargo. Exceptions are then noted on the bill of lading.

Exception Rate

A deviation from the class rate; changes (exceptions) made to the classification.

Excess Inventory

inventory quantities above a specific need. Some businesses may designate excess inventory as inventory beyond a certain time period of demand. For example, any inventory greater than 60 day's demand. Others may designate it as inventory beyond their current safety stock plus lot size (order quantity). The second method assumes you have formulas for adjusting safety stock and lot sizes as demand changes. This method basically calculates how much more inventory you have than you would have if you started with nothing and stocked based on current demand and ordering practices. You will generally use tolerances with the 2nd method. See also Obsolete Inventory.

Exclusive Patronage Agreements

A shipper agrees to use only a conference's member liner firms in return for a 10 to 15 percent rate reduction.

Exclusive Use

Vehicles that a carrier assigns to a specific shipper for its exclusive use.

Exempt Carrier

A for-hire carrier that is exempt from economic regulations.


Abbreviation for Export-Import Bank of the United States. An independent U.S. Government Agency which facilitates exports of U.S. goods by providing loan guarantees and insurance for repayment of bank-provided export credit.


Determining where an in-transit shipment is and attempting to speed up its delivery.

Expert System

A computer program that mimics a human expert.

Expiry Date

Issued in connection with documents such as letters of credit, tariffs etc. to advise that stated provisions will expire at a certain time.

Explosion-proof lift trucks

lift trucks designed to work in hazardous environments where highly combustible materials are present. Vehicles are designed to avoid sparks and components reaching combustible temperatures. Special electrical systems and materials are used to achieve this.


Shipment of goods to a foreign country.

To send goods and services to another country.

Export Broker

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

Export Declaration

A government document declaring designated goods to be shipped out of the country. To be completed by the exporter and filed with the U.S. Government.

A document required by the U.S. Treasury department and completed by the exporter to show the value, weight, consignee, destination, etc., pertinent to the export shipment. The document serves two purposes to gather trade statistics and to provide a control document if the goods require a valid export license.

Export License

A government document which permits the "Licensee" to engage in the export of designated goods to certain destinations.

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.

Export Management Company

A private firm that serves as the export department for several manufacturers, soliciting and transacting export business on behalf of its clients in return for a commission, salary, or a retainer plus commission.

Export Rate

A rate published on traffic moving from an interior point to a port for transshipment to a foreign country.

Export Sales Contract

The initial document in any international transaction; it details the specifics of the sales agreement between the buyer and seller.

Export Trading Company

A firm that buys domestic products for sale overseas. A trading company takes title to the goods; an export-management company usually does not.

Exporter Identification Number (EIN)

A number required for the exporter on the Shipper's Export Declaration. A corporation may use their Federal Employer Identification Number as issued by the IRS; individuals can use their Social Security Numbers.


generally describes an item made of metal or plastic that is produced by forcing the raw material through a die (extruding). The result being a long item with a uniform shape throughout the length. Extrusions will often (though not always) require cutting and other machining processes to turn them into a finished item.



Garments on hangers (GOH)

Transport and storage of garments in hanging format, minimising handling and pre-retailing requirements.


Industry-related A point at which freight moving from one territory to another is interchanged between transportation lines.

Gathering Lines

Oil pipelines that bring oil from the oil well to storage areas.


Abbreviation for "General Agreement on Tariffs and Trade." A multilateral treaty to help reduce trade barriers between the signatory countries and to promote trade through tariff concessions. The World Trade Organization (WTO) superseded GATT in 1994.

See General Agreement on Tariffs and Trade.


a large corrugated container usually sized to match the length and width dimensions of a pallet. Gaylord is actually a trade name that has become synonymous with this specific type of container. Alright Beavis, you can stop snickering now.


See Government Bill of Lading.


Abbreviation for "Government Bill of Lading."


Abbreviation for "General Department Store Merchandise." A classification of commodities that includes goods generally shipped by mass-merchandise companies. This commodity structure occurs only in service contracts.

General Agreement on Tariffs and Trade (GATT)

A multilateral trade agreement aimed at expanding international trade as a means of raising world welfare.

General Average

See Marine Cargo Insurance.

General Order (G.O.)

When U.S. Customs orders shipments without entries to be kept in their custody in a bonded warehouse.

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.

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 used to store goods that are readily handled, are packaged, and do not require a controlled environment.

Generator Set (Gen Set)

A portable generator which can be attached to a refrigerated container to power the refrigeration unit during transit.


The internationalisation of trade, by which domestic economies become inter-dependent.

The process of making something worldwide in scope or application.

GMA pallet

Also known as a Grocery Pallet, a GMA pallet is made to the specifications of the Grocery Manufacturer's Association. It is basically a 4-way pallet that is 40 inches wide, by 48 inches deep, by 5 inches in height and has the deck boards and bottom boards mounted flush with with the outside stringers (more detailed specs are available from the Grocery Manufacturer's Association). Also see Pallet.


See General Order.


In the Far East, a warehouse where goods are stored and delivered.

Going-Concern Value

The value that a firm has as an entity, as opposed to the sum of the values of each of its parts taken separately; particularly important in determining a reasonable railroad rate.


A railcar with a flat platform and sides three to five feet high, used for top loading long, heavy items.


A term associated with more than one definition 1) Common term indicating movable property, merchandise, or wares. 2) All materials which are used to satisfy demands. 3) Whole or part of the cargo received from the shipper, including any equipment supplied by the shipper.


The front rails of the chassis that raise above the plane of the chassis and engage in the tunnel of a container leading to the connection to tractor.

Government Bill of Lading (GB/L)

The bill of lading used for shipments made by U.S. Government agencies.

Grandfather Clause

A provision that enabled motor carriers engaged in lawful trucking operations before the passage of the Motor Carrier Act of 1935 to secure common carrier authority w/o proving public convenience and necessity; a similar provision exists for other modes.

Granger Laws

State laws passed before 1870 in midwestern states to control rail transportation.

Gravity conveyor

types of conveyor that use gravity to move materials. Skatewheel conveyer and roller conveyor are the most common types of gravity conveyor used, however, even a simple steel chute is essentially a gravity conveyor.

Great Lakes carriers

Water carriers that operate on the five Great Lakes.


Abbreviation for "General Rate Increase." Used to describe an across-the-board tariff rate increase implemented by conference members and applied to base rates.

Grid Technique

A quantitative technique to determine the least-cost center, given raw materials sources and markers, for locating a plant or warehouse.


Gross Margin Return on Inventory Investment. Calculation that shows your margin relative to your average inventory investment. Calculated by dividing your annual gross margin (dollars) by your average inventory (dollars). Particularly useful in determining which items provide the greatest profit potential relative to your investment in inventory. As with all calculations that use "gross margin" as an input, the output may be flawed if other costs not included in the gross calculation may vary significantly from one item to another.

Gross National Product (GNP)

A measure of a nation's output; the total value of all final goods and services a nation produces during a time period.

Gross Tonnage (GT)

Applies to vessels, not to cargo, (0.2+0.02 log10V) where V is the volume in cubic meters of all enclosed spaces on the vessel.

Gross Weight

Entire weight of goods, packaging and freight car or container, ready for shipment. Generally, 80,000 pounds maximum container, cargo and tractor for highway transport.

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


A consolidation service, putting small shipments into containers for shipment.


For use with smaller shipments. Freight delivers to a warehouse for consolidation with other freight moving to the same destination. The container is dispatched to the port as soon as there are enough consignments to fill the container. A very cost effective way to ship small to medium size shipments but will take longer than LCL shipments.


European Guidelines for Trade Data Interchange.

Guaranteed Loans

Railroad loans that the federal government cosigns and guarantees.


Graphical User Interface.

Guidance systems

guidance systems are used to guide automated guided vehicles through plants, guide lift trucks in very-narrow-aisle storage areas. Wire-guided and Rail-guided tend to be the most common guidance systems, but others including laser, optical systems, and magnetic tape are also available. See also Wire-guided, Rail-guided, Laser-guided, Optical-guided.


Abbreviation for "Gross Vehicle Weight." The combined total weight of a vehicle and its container, inclusive of prime mover.



Hague Rules, The

A multilateral maritime treaty adopted in 1921 (at The Hague, Netherlands). Standardizes liability of an international carrier under the Ocean B/L. Establishes a legal "floor" for B/L. See COGSA.

Handling Costs

The cost involved in moving, transferring, preparing, and otherwise handling inventory.

Harbor Master

An officer who attends to the berthing, etc., of ships in a harbor.

Hard copy

Computer output printed on paper.

Harmonized Commodity Description & Coding System(Harmonized Code)

An international classification system that assigns identification #s to specific products. The coding system ensures that all parties in int'l. trade use a consistent classification for the purposes of documentation, statistical control, and duty assessment.

Harmonized System of Codes (HS)

An international goods classification system for describing cargo in international trade under a single commodity-coding scheme. Developed under the auspices of the Customs Cooperations Council (CCC), an international Customs organization in Brussels, this code is a hierarchically structured product nomenclature containing approximately 5,000 headings and subheadings. It is organized into 99 chapters arranged in 22 sections. Sections encompass an industry (e.g., Section XI, Textiles and Textile Articles); chapters encompass the various materials and products of the industry (e.g., Chapter 50, Silk; Chapter 55, Manmade .Staple Fibers; Chapter 57, Carpets). The basic code contains four-digit headings and six-digit subheadings. Many countries add digits for Customs tariff and statistical purposes. In the United States, duty rates will be the eight-digit level; statistical suffixes will be at the ten-digit level. The Harmonized System (HS) is the current U.S. tariff schedule (TSUSA) for imports and is the basis for the ten-digit Schedule B export code.


The opening in the deck of a vessel; gives access to the cargo hold.


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


See House Air Waybill.


An industry abbreviation for "Hazardous Material."

Hazardous Goods

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

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.

Materials that the Department of Transportation has determined to be a risk to health, safety, and property; includes items such as explosives, flammable liquids, poisons, corrosive liquids, and radioactive material.

Heavy-Lift Charge

A charge made for lifting articles too heavy to be lifted by a ship's normal tackle.

High-Density Compression

Compression of a flat or standard bale of cotton to approximately 32 pounds per cubic foot. Usually applies to cotton exported or shipped coastwise.

High-density storage

describes storage methods where unitized loads are stored more than one unit deep and/or high. Stacked bulk floor storage, drive-in/drive-thru rack, push-back rack, flow rack, and, to a lesser extent, double-deep rack, are examples of high-density storage.

High-piled combustible storage

term used in fire codes to refer to codes relating to floor or racked storage exceeding 12 feet in height or high-hazard commodity storage exceeding 6 feet in height. See article Warehouse Fire Safety.

Highway Trust Fund

A fund into which highway users (carriers and automobile operators) pay; the fund pays for federal government's highway construction share.

Highway use taxes

Taxes that federal and state governments assess against highway users (the fuel tax is an example). The government uses the use tax money to pay for the construction, maintenance, and policing of highways.


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


The marrying of two or more portions of one shipment that originate at different locations, moving under one bill of lading, from one shipper to one consignee. Authority for this service must be granted by tariff publication. See Bill of Lading.

Home delivery

The transportation of goods to customers' locations of choice (including workplaces); can also refer to order fulfilment. Most e-commerce sales involve home delivery.


refers to the unused pallet positions in high-density storage that result when the number of unit-loads for an item does not completely fill the storage lane. Since mixing SKUs in high-density storage is normally not done, these unused pallet positions are not available to store other materials.

Hopper Barge

A barge which loads material dumped into it by a dredger and discharges the cargo through the bottom.

Hopper cars

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

House Air Waybill (HAWB)

A bill of lading issued by a forwarder to a shipper as a receipt for goods that the forwarder will consolidate with cargo from other shippers for transport.

House to House

See Door to Door.

House to Pier

See Door to Port.

Cargo loaded into a container by the shipper under shipper's supervision. When the cargo is exported, it is unloaded at the foreign pier destination.

Household goods warehouse

A warehouse that stores household goods.

Hub airport

An airport that serves as the focal point for the origin and termination of long-distance flights; flights from outlying areas meet connecting flights at the hub airport.


A central location to which traffic from many cities is directed and from which traffic is fed to other areas.


The process of connecting a moving rail car with a motionless rail car within a rail classification yard in order to make up a train. The cars move by gravity from an incline or "hump" onto the appropriate track.

Hundredweight (cwt)

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

The pricing unit used in transportation; a hundredweight is equal to 100 pounds.




International Maritime Consultative Organization. A forum in which most major maritime nations participate and through which recommendations for the carriage of dangerous goods, bulk commodities, and maritime regulations become internationally acceptable.

I.M.D.G. Code

International Maritime Dangerous Goods Code. The regulations published by the IMO for transporting hazardous materials internationally.


International Standards Organization which deals in standards of all sorts, ranging from documentation to equipment packaging and labeling.


Abbreviation for "Immediate Transport." The document (prepared by the carrier) allows shipment to proceed from the port of entry in the U.S. to Customs clearing at the destination. The shipment clears Customs at its final destination. Also called an "In-Transit" Entry.


Abbreviation for "Independent Action." The right of a conference member to publish a rate of tariff rule that departs from the Agreement's common rate or rule.


Abbreviation for (1) "Interstate Commerce Commission," (2) "International Chamber of Commerce."


Stands for "Immediate Exit." In the U.S., Customs IE Form is used when goods are brought into the U.S. and are to be immediately re-exported without being transported within the U.S.


Pallets and containers used in air transportation; the igloo shape fits the internal wall contours of a narrow-body airplane.


See International Maritime Bureau.

Immediate Exportation

An entry that allows foreign merchandise arriving at one port to be exported from the same port without the payment of duty.


See International Maritime Organization.

Impact alarm

a.k.a shock alarm, shock switch. Impact alarms are devices that can be attached to lift trucks to sense impacts (collisions). The reality of impact alarms is not near as wonderful as the concept. See my article on Lift Truck Safety for more details.


To receive goods from a foreign country.


A document required and issued by some national governments authorizing the importation of goods.

Importation Point

The location where goods will be cleared for importation into a country.

In Bond

Cargo moving under Customs control where duty has not yet been paid.

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.

In Gate

The transaction or interchange that occurs at the time a container is received by a rail terminal or water port from another carrier.

In Transit

In transit, or in passage.

Inbound and outbound quantities

in multi-branch environments, inbound and outbound quantities reflect open quantities on interbranch transfer orders.

Inbound logistics

The movement of raw materials and components from suppliers/vendors to production processes and storage facilities. International inbound logistics is the management of the international inbound supply chain, often on behalf of retailers.

The movement of materials from suppliers and vendors into production processes or storage facilities.


The sourcing and transport of goods and raw materials from their point of origin/manufacture through to the manufacturing or assembly facility.

Incentive Rate

A lower-than-usual tariff rate assessed because a shipper offers a greater volume than specified in the tariff. The incentive rate is assessed for that portion exceeding the normal volume.

A rate that induces the shipper to ship heavier volumes per shipment.

Inching pedal

on lift trucks with internal combustion (gasoline, liquid propane, diesel) engines it is necessary to rev the engine in order to get the power needed to lift a load with the hydraulics. An inching pedal acts like a combination of a clutch pedal and brake pedal. When slightly depressed, it puts the transmission in neutral allowing the operator to rev the engine. When completely depressed it engages the brakes. An inching pedal may be a separate pedal from the brake pedal or be part of the main brake pedal.


The recognized abbreviation for the International Chamber of Commerce Terms of Sale. These terms were last amended, effective July 1, 1990.

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

Indemnity Bond

An agreement to hold a carrier harmless with regard to a liability.

Independent Action

Setting rate within a conference tariff that is different from the rate(s) for the same items established by other conference members.

A carrier that is a rate bureau member may publish a rate that differs from the rate the rate bureau publishes.

Independent Demand

demand generated from forecasts, customer orders or service parts.

Independent Tariff

Any body of rate tariffs that are not part of an agreement or conference system.


Placing a port on a vessel's itinerary because the volume of cargo offered at that port justifies the cost of routing the vessel.

Industrial Truck

vehicles used for industrial purposes. Generally used to transport materials and personnel within industrial facilities. Lift trucks (forklifts) are the most well known type of industrial truck.

Information system (I/S)

Managing the flow of data in an organization in a systematic, structured way to assist in planning, implementing, and controlling.


The data, plus the interpretation necessary to understand it.

Inherent advantage

The cost and service benefits of one mode compared with other modes.

Inherent Vice

An insurance term referring to any defect or other characteristic of a product that could result in damage to the product without external cause (for example, instability in a chemical that could cause it to explode spontaneously). Insurance policies may exclude inherent vice losses.

Inland Bill of Lading

The carriage contract used in transport from a shipping point overland to the exporter's international carrier location.

Inland Carrier

A transportation line that hauls export or import traffic between ports and inland points.

An enterprise that offers overland service to or from a point of export.

Inspection Certificate

A certificate issued by an independent agent or firm attesting to the quality and/or quantity of the merchandise being shipped. Such a certificate is usually required in a letter of credit for commodity shipments.

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

Installment Shipments

Successive shipments are permitted under letters of credit. Usually they must take place within a given period of time.

In-store logistics

The provision of services such as pre-retailing, storage and unpacking within shops, usually undertaken in backstage areas, plus sales floor replenishment.

Insulated Container

A container insulated on the walls, roof, floor, and doors, to reduce the effect of external temperatures on the cargo.

Insulated Container Tank

The frame of a container constructed to hold one or more thermally insulated tanks for liquids.

Insurance Certificate

A document issued to the consignee to certify that insurance is provided to cover loss of or damage to the cargo while in transit.

Insurance with Average-clause

This type of clause covers merchandise if the damage amounts to three percent or more of the insured value of the package or cargo. If the vessel burns, sinks, collides, or sinks, all losses are fully covered. In marine insurance, the word average describes partial damage or partial loss.

Insurance, All-risk

This type of insurance offers the shipper the broadest coverage available, covering against all losses that may occur in transit.

Insurance, General-Average

In water transportation, the deliberate sacrifice of cargo to make the vessel safe for the remaining cargo. Those sharing in the spared cargo proportionately cover the loss.

Insurance, Particular Average

A Marine insurance term to refer to partial loss on an individual shipment from one of the perils insured against, regardless of the balance of the cargo. Particular_average insurance can usually be obtained, but the loss must be in excess of a certain percentage of the insured value of the shipment, usually three to five percent, before a claim will be allowed by the company.


A system of protection against loss under which a number of parties agree to pay certain sums (premiums) for a guarantee that they will be compensated under certain conditions for specified loss and damage.

Integrated Carrier

An airfreight company that offers a blend of transportation services such as 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.

Integrated logistics/supply chain

The management of multiple supply chain components as a single entity on a global or regional scale. The practice can result in a more efficient supply chain and lower costs.

Interchange Point

A location where one carrier delivers freight to another carrier.


The transfer of cargo and equipment from one carrier to another in a joint freight move.


Water service between two coasts; in the U.S., this usually refers to water service between the Atlantic and Pacific or Gulf Coasts.

Intercoastal carriers

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

Intercorporate hauling

A private carrier hauling a subsidiary's goods and charging the subsidiary a fee; this is legal if the subsidiary is wholly owned or if the private carrier has common carrier authority.

Interline Freight

Freight moving from origin to destination over the Freight lines of two or more transportation carriers.


Two or more motor carriers working together to haul a shipment to a destination. Carriers may interchange equipment but usually they rehandle the shipment without transferring the equipment.

Intermediate Destination

A stopping point for a shipment prior to the final destination.

Intermediate Point

A point located en route between two other points.

Intermittent-flow, fixed-path equipment

Materials handling devices that include bridge cranes, monorails, and stacker cranes.


Typically the handling of containers and swap-bodies between different forms of transport. See also multi-modal. Used to denote movements of cargo containers interchangeably between transport modes, i.e., motor, water, and air carriers, and where the equipment is compatible within the multiple systems.

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 marketing company (IMC)

An intermediary that sells intermodal services to shippers.

Intermodal Transportation

Transporting freight by using two or more transportation modes.

The use of two or more transportation modes to transport freight; for example, rail to ship to truck.

Internal water carriers

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

International Air Transport Association

IATA is a non-political international organisation, with headquarters in Montreal and in Geneva. Membership is open to all scheduled airlines registered in countries eligible for membership of the ICAO (International Civil Aviation Organisation this organisation is a branch of the United Nations). Charter companies are not eligible for membership.

An international air carrier rate bureau for passenger and freight movements.

International Civil Aeronautics Organization

An international agency responsible for air safety and for standardizing air traffic control, airport design, and safety features worldwide.

International Import Certificate

A document required by the importing country indicating that the importing country recognizes that a controlled shipment is entering their country. The importing country pledges to monitor the shipment and prevent its re-export, except in accordance with its own export control regulations.

International inbound logistics

See inbound logistics.

International Maritime Bureau (IMB)

A special division of the International Chamber of Commerce.

International Maritime Organization (IMO)

A United Nations-affiliated organization representing all maritime countries in matters affecting maritime transportation, including the movement of dangerous goods. The organization also is involved in deliberations on marine environmental pollution.

Interstate Commerce Commission (ICC)

An independent regulatory agency that implements federal economic regulations controlling railroads, motor carriers, pipelines, domestic water carriers, domestic surface freight forwarders, and brokers.

Interstate commerce

The transportation of persons or property between states; in the course of the movement, the shipment crosses a state boundary.

Interstate System

The National System of Interstate and Defense Highways, 42,000 miles of four-lane, limited-access roads connecting major population centers.

In-Transit Entry (I.T.)

Allows foreign merchandise arriving at one port to be transported in bond to another port, where a superseding entry is filed.

Intrastate commerce

The transportation of persons or property between points within a state. A shipment between two points within a state may be interstate if the shipment had a prior or subsequent move outside of the state and the shipper intended an interstate shipment at.


A list of raw materials, components, work in progress, finished goods or other supplies held in a warehouse or distribution centre.

Any quantifiable item that you can handle, buy, sell, store, consume, produce, or track can be considered inventory. This covers everything from office and maintenance supplies, to raw material used for manufacturing, to semi-finished and finished goods, to fuel used to power equipment used in the business.

Inventory Carrying Costs

A financial measurement that calculates all the costs associated with holding goods in storage, usually expressed as a percentage of the inventory value. It includes inventory-in-storage, warehousing, obsolescence, deterioration or spoilage, insurance, taxes, depreciation, and handling costs.

Inventory cost

The cost of holding goods, usually expressed as a percentage of the inventory value; includes the cost of capital, warehousing, taxes, insurance, depreciation, and obsolescence.

Inventory Deployment

A technique for strategically positioning inventory to meet customer service levels while minimizing inventory and storage levels. Excess inventory is replaced with information derived through monitoring supply, demand and inventory at rest as well as in motion.

Inventory in transit

Inventory in a carrier's possession, being transported to the buyer.

Inventory management

The direction and control of activities with the purpose of getting the right inventory in the right place at the right time in the right quantity in the right form at the right cost.

Inventory administration through planning, stock positioning, monitoring product age, and ensuring product availability.

Inventory Turn

number of times inventory is consumed or sold during a one year period. Generally calculated by dividing the average inventory level (or current inventory level) into the annual inventory usage (annual Cost of Goods Sold). In my opinion, Inventory Turns is probably the most overused, misused, and abused inventory metric. That's primarily because it doesn't really tell you a hell of a lot, yet companies insist on building order policies on it.

The cost of goods sold divided by the average level of inventory on hand. This ratio measures how many times a company's inventory has been sold during a period of time. Operationally, inventory turns are measured as total throughput divided by average level of inventory for a given period.

Inventory Velocity

The speed with which inventory moves through a defined cycle (i.e., from receiving to shipping).


The number of units and/or value of the stock of goods a company holds.


An itemized list of goods shipped to a buyer, stating quantities, prices, shipping charges, etc.

A detailed statement showing goods sold or shipped and amounts for each. The invoice is prepared by the seller and acts as the document that the buyer will use to make payment.

Inward Foreign Manifest (IFM)

A complete listing of all cargo entering the country of discharge. Required at all world ports and is the primary source of cargo control, against which duty is assessed by the receiving country.


Abbreviation for "Inland Point Intermodal." Refers to inland points (non-ports) that can be served by carriers on a through bill of lading.

Irregular route carrier

A motor carrier that may provide service utilizing any route.

Irrevocable Letter of Credit

Letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee and which cannot be revoked without joint agreement of both the buyer and the seller.


International Standards Organization.

Issuing Bank

Bank that opens a straight or negotiable letter of credit and assumes the obligation to pay the bank or beneficiary if the documents presented are in accordance with the terms of the letter of credit.

Issuing Carrier

The carrier issuing transportation documents or publishing a tariff.

The carrier whose name is printed on the bill of lading and with whom the contract of carriage exists.



Item Profile

Data that describes the characteristics of an item. May include physical characteristics such as size and weight, transactional characteristics such as times sold/consumed and units sold/consumed, or group characteristics such as sales channel, commodity, hazardous classification, etc. Item profiles are used in warehouse design and slotting.




National Committee on International Trade Documentation.


National Motor Freight Classification.

N.M.F.C.(National Motor Freight Classification)

A tariff which contains descriptions and classifications of commodities and rules for domestic movement by motor carriers in the U.S.


North Pacific Coast Freight Bureau.

Narrow aisle

describes lift trucks that operate in aisles of 8' to 10'. Narrow-aisle trucks are generally stand-up vehicles such as reach trucks. Also see Vary Narrow Aisle (VNA) and read article The Aisle Width Decision.

National carrier

A for-hire certificated air carrier that has annual operating revenues of $75 million to $1 billion; the carrier usually operates between major population centers and areas of lesser population.

National distribution centre (NDC)

See distribution centre (DC).

National Industrial Traffic League

An association representing shippers' and receivers' interests in matters of transportation policy and regulation.

National Motor Bus Operators Organization

An industry association representing common and charter bus firms; now known as the American Bus Association.

National Railroad Corporation

Also known as Amtrak, the corporation established by the Rail Passenger Service Act of 1970 to operate most of the United States' rail passenger service.


Public ownership, financing, and operation of a business entity.

Nautical Mile

Distance of one minute of longitude at the equator, approximately 6,076.115. The metric equivalent is 1852.


Abbreviation for "Not Elsewhere Classified."

Negative inventory

An inventory system (computer) condition whereby the on-hand inventory balance is listed as a quantity less than zero. Check out my article on negative inventory.

Negotiable BOL

Provides for the delivery of goods to a named enterprise or to their order (anyone they may designate), but only upon surrender of proper endorsement and the bill of lading to the carrier or the carrier's agents. Also known as an order bill of lading.

Negotiable Instruments

A document of title (such as a draft, promissory note, check, or bill of lading) transferable from one person to another in good faith for a consideration. Non-negotiable bills of lading are known as "straight consignment." Negotiable bills are known as "order b/l's."


A set of discussions between two or more enterprises to determine the business relationship.


Abbreviation for "Not Elsewhere Specified."


Articles packed so that one rests partially or entirely within another, thereby reducing the cubic-foot displacement.

Net Tare Weight

The weight of an empty cargo-carrying piece of equipment plus any fixtures permanently attached.

Net Tonnage (NT)

(0.2+0.02 log10(Vc)) Vc (4d/3D)2, for passenger ships the following formula is added 1.25 (GT+10000)/10000 (N1+(N2/10)), where Vc is the volume of cargo holds, D is the distance between ship's bottom and the uppermost deck, d is the draught N1 is the number of cabin passengers, and N2 is the number of deck passengers.) "Ton" is figured as an 100 cubic foot ton.

Net Weight

Weight of the goods alone without any immediate wrappings, e.g., the weight of the contents of a tin can without the weight of the can.

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

Neutral Air Waybill

Many airlines of their agents print their own Air Waybills electronically. They are allotted a set of AWB numbers, and print the serial numbers and identification number on the forms themselves. These "unmarked" AWBs can be called "neutral AWBs".

Neutral Body

An organization established by the members of an ocean conference acts as a self-policing force with broad authority to investigate tariff violations, including authority to scrutinize all documents kept by the carriers and their personnel. Violations are reported to the membership and significant penalties are assessed.

No location (No Loc)

A received item for which the warehouse has no previously established storage slot.


A fixed point in a firm's logistics system where goods come to rest; includes plants, warehouses, supply sources, and markets.


Abbreviation for "Not Otherwise Indexed."


Abbreviation for "Not Otherwise Indexed By Name."

Nomenclature of the Customs Cooperation Council

The Customs tariff used by most countries worldwide. It was formerly known as the Brussels Tariff Nomenclature and is the basis of the commodity coding system known as the Harmonized System.

Non Vessel Operating 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 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.

Noncertificated carrier

A for-hire air carrier that is exempt from economic regulation.

Non-Dumping Certificate

Required by some countries for protection against the dumping of certain types of merchandise or products.

Non-Negotiable BOL

Provides for the delivery of goods to a named enterprise and to no one else. Also known as a straight bill of lading.

Non-Vessel Operating Common Carrier (NVOCC)

A cargo consolidator in ocean trades who will buy space from a carrier and sub_sell it to smaller shippers. The NVOCC issues bills of lading, publishes tariffs and otherwise conducts itself as an ocean common carrier, except that it will not provide the actual ocean or intermodal service.

Non-vessel-owning common carrier (NVOCC)

A firm that consolidates and disperses international containers that originate at or are bound for inland ports.


Notice of Readiness. (When the ship is ready to load.)

Normal distribution

term used in statistical analysis to describe a distribution of numbers in which the probability of an occurrence, if graphed, would follow the form of a bell shaped curve. This is the most popular distribution model for determining probability and has been found to work well in predicting demand variability based upon historical data.


Abbreviation for "Not Otherwise Specified."


See Not otherwise specified/Not elsewhere specified.


Front of a container or trailer - opposite the tail.


Cargo which has been booked but does not arrive in time to be loaded before the vessel sails. See also "Windy Booking."

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.

Notify Party

The abbreviation of the name of an organization that should be notified when a shipment reaches its destination.


See Non-Vessel Operating Common Carrier.



Quality control

The management function that attempts to ensure that the goods or services in a firm manufacturers or purchases meet the product or service specifications.


There are various quantity elements in perpetual inventory systems. Below are definitions of the most common. Be aware that these definitions are fairly generic and that specific inventory systems may use completely different definitions or terminology.

Quantity allocated

also known as committed quantity, commitments, or allocations. Quantity allocated is the quantity that is on current open sales orders or production orders (as components), and may be relative to a specific time period. Also see Allocations.

Quantity available

is the result of a calculation that takes quantity on hand and reduces it by allocations (for sales orders, manufacturing orders, etc). Quantity available may or may not be date specific and therefore take into account future receipts. Quantity available calculations are sometimes very complicated and vary from one software product to another.

Quantity in transit

in multi-branch environments, quantity in transit reflects the quantity that has been shipped from one branch/facility to another branch/facility, but has not yet been received by that branch/facility. In operations that use advanced tracking of receipts, it may reflect quantities that have been shipped by outside vendors, but not yet received.

Quantity on hand

also known as onhand quantity, in stock, store quantity Quantity on hand describes the actual physical inventory in the possession of the business. When inventory is received or produced, it is added to quantity on hand, when inventory is sold or consumed, it is removed from quantity on hand.

Quantity on order

includes quantity on open purchase orders or manufacturing orders. May or may not include quantities on transfer orders from other branches.


A restraint placed on an operation to protect the public against a health hazard. A ship may be quarantined so that it cannot leave a protected point. During the quarantine period, the Q flag is hoisted.


A structure attached toland to which a vessel is moored. See also Pier and Dock.

Queue time

amount of time a job waits at an operation prior to set up or processing. Part of manufacturing lead time.

Quick Response

A business strategy for reducing inventory in the pipeline and shortening the cycle time for a product to be made, distributed and sold. Point of sale information is electronically transmitted back to the store supplier, who is responsible for adequate supply at the store.

A method of maximizing the efficiency of the supply chain by reducing inventory investment.


A wedge-shaped piece of timber used to secure barrels against movement.


The quantity of goods that may be imported without restriction during a set period of time.


An offer to sell goods at a stated price and under stated terms.




Abbreviation for Sight draft, or Sea Damage.

Safety lead time

safety lead time is a way to represent your safety stock as a number of days demand. Safety lead time can be beneficial when you want to “pad” your lead-time to compensate for supplier variability, transportation variability, or internal process variability. For example, if can take 2 or 3 days to get incoming materials processed through your receiving process, you may want to set your safety lead time to 2 or 3 days. This will calculate the requested dates for your purchase orders 2 or 3 days earlier than actual need. This is much cleaner than adding the 2 to 3 days to the suppliers lead time (which can be confusing when the supplier’s stated lead-time is different from what is in your system).

Safety stock

quantity of inventory used in inventory management systems to allow for deviations in demand or supply. Safety stock calculations will take into account historic deviations and use a required service level multiplier to determine the optimal safety stock level. See article on safety stock.

The inventory a company holds above normal needs as a buffer against delays in receipt of supply or changes in customer demand.

Said to contain"

In this case of containerized cargo, or of palleted consignments or large consignments of conventional cargo, the cargo cannot check the statements made by the shipper as to contents. By using the statement "said to contain" the carrier places responsibility for the correct description of contents on the shipper.

Sales Order

See Customer Order.

Salvage material

Unused material that has a market value and can be sold.


An embargo imposed by a Government against another country.


See Owner Code.

Schedule B

The Statistical Classification of Domestic and Foreign Commodities Exported from the United States.

Schedule Information

Data concerning the service provided by an enterprise.

Scrap material

Unusable material that has no market value.

Screen mapping

software that provides the functionality to change the arrangement of data fields on a computer screen that accesses a mainframe computer program. Screen Mapping is frequently used in combination with terminal emulation software to "Remap" data fields from a standard mainframe program to be used on the smaller screen of a portable handheld device. a.k.a. Screen scraping.

Sea Waybill

Document indicating the goods were loaded onboard when a document of title (b/L) is not needed. Typically used when a company is shipping goods to itself.

Sea-Bee Vessels

Ocean vessels constructed with heavy-duty submersible hydraulic lift or elevator system at the stern of the vessel. The Sea-Bee system facilitates forward transfer and positioning of barges. Sea-Bee barges are larger than LASH barges. The Sea-Bee system is no longer used.

Seal Number

The identifier assigned to the tag used to secure or mark the locking mechanism on closed containers.


fluctuations in demand that repeat with the same pattern over equivalent time periods.

Seasonality index

consists of a number for each specific forecast period that describes the relationship of each period’s demand to the average demand (level) over the complete seasonal cycle. A seasonality index is used to adjust the forecast to account for these cyclical changes in demand. The average demand is represented by the number “1”. If seasonality for a period results in demand greater than the average demand, it will be represented by a number greater than 1. For example, if December’s sales were, on average, 30% greater than the average monthly sales for the year, you would have a seasonality index of 1.3 ( 1 plus .30) for December. If January’s sales were, on average, 20% less than the average monthly sales for the year, you would have a seasonality index of 0.8 (1 minus .20).


The fitness of a vessel for its intended use.


U.S. Commerce Department document, "Shipper's Export Declaration."

Selective pallet rack

the term selective pallet rack implies standard single-deep pallet rack configurations (and rack designs) where each pallet is immediately accessible from an aisle. In contrast to double-deep rack, drive-in or drive-thru rack, or push-back rack where some loads will be stored behind other loads. See Equipment Pics Racking page for examples.


An enterprise that arranges for the supply transaction of goods/services with other enterprises.

Separable cost

A cost that a company can directly assign to a particular segment of the business.


A string of vessels which makes a particular voyage and serves a particular market.

Service Contract

As provided in the Shipping Act of 1984, a contract between a shipper (or a shippers association) and an ocean common carrier (or conference) in which the shipper makes a commitment to provide a certain minimum quantity of cargo or freight revenue over a fixed time period, and the ocean common carrier or conference commits to a certain rate or rate schedule as well as a defined service level (such as assured space, transit time, port rotation or similar service features). The contract may also specify provisions in the event of nonperformance on the part of either party.

A contract between a shipper and an ocean carrier or conference, in which the shipper makes a commitment to provide a minimum quantity of cargo over a fixed time period. The ocean carrier or conference also commits to a rate or rate schedule as well as a defined service level, such as space, transit item, port rotation, or other features.

Service factor

factor used as a multiplier with the Standard Deviation to calculate a specific quantity to meet the specified service level. See article on safety stock for more information on service factor.

Service Levels

A set standard of operating procedures and outcomes as agreed upon by one or more enterprises involved in a transaction.

Service logistics / service parts logistics

Logistics activities relating to the management of parts to and from end-users.

Service Provider

An enterprise that offers and supplies goods or services.

Service Request

A description of a specific service provided as an interface between layers (for example transfer data).

Service Response

A description of the response to a specific service request that reports the success or failure of the request.


The defined, regular pattern of calls made by a carrier in the pick up and discharge of cargo.

Setup costs

The costs a manufacturer incurs in staging the production line to produce a different item.


A storage or distribution facility used by a relatively stable group of compatible customers. See also multi-user.


Saturday and Holidays Excluded.


Saturday and Holidays Included.

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 consignee.

Ship Chandler

An individual or company selling equipment and supplies for ships.

Ship Demurrage

A charge for delaying a steamer beyond a stipulated period.


The tender of one lot of cargo at one time from one shipper to one consignee on one bill of lading.

A shipment is a user-defined unit containing goods (single or multiple units) and requires transportation from one location to another. A shipment becomes a shipment when it leaves the consignor's location. A shipment is complete when it arrives at the consignee's destination.

Shipment Available Date

The date the shipment will be available for transportation.

Shipment Gross Weight Qualifier

A weight qualifier for the estimated gross weight of LCL and/or FCL for a booking.

Shipment Identification

A free-text field that serves as a shipment identifier to uniquely identify a shipment to the user. This shipment ID is supplied by the user and allows loads to be consolidated into shipments.

Shipment Point

A specific location from where goods will depart for movement.


The person or company who is usually the supplier or owner of commodities shipped. Also called Consignor. A classification, storage or switching area.

The party which tenders goods for transportation.

Shipper's agent

A firm that primarily matches up small shipments, especially single-traffic piggyback loads, to permit shippers to use twin-trailer piggyback rates.

Shippers Association

A non-profit entity that represents the interests of a number of shippers. The main focus of shippers associations is to pool the cargo volumes of members to leverage the most favorable service contract rate levels.

Shipper's Export Declaration (SED,"Ex Dec")

A joint Bureau of the Census' International Trade Administration form used for compiling U.S. exports. It is completed by a shipper and shows the value, weight, destination, etc., of export shipments as well as Schedule B commodity code.

Shipper's Instructions

Shipper's communication(s) to its agent and/or directly to the international water-carrier. Instructions may be varied, e.g., specific details/clauses to be printed on the B/L, directions for cargo pickup and delivery.

Shipper's Letter of Instructions for issuing an Air Waybill

The document required by the carrier or freight forwarders to obtain (besides the data needed) authorization to issue and sign the air waybill in the name of the shipper.

Shipper's Load & Count (SL&C)

Shipments loaded and sealed by shippers and not checked or verified by the carriers.

Shipping Act of 1916

The act of the U.S. Congress (1916) that created the U.S. Shipping Board to develop water transportation, operate the merchant ships owned by the government, and regulate the water carriers engaged in commerce under the flag of the United States. As of June 18, 1984, applies only to domestic offshore ocean transport.

Shipping Act of 1984

Effective June 18, 1984, describes the law covering water transportation in the U.S. foreign trade.

Shipping Act of 1998

Amends the Act of 1984 to provide for confidential service contracts and other items.

Shipping Instructions

A document detailing the cargo and the requirements of its physical movement.

Shipping manifest system

software used to associate shipments with carrier, service, rate, etc. Shipping manifest systems will produce a report (physical or electronic) that is sent to the carrier to be used for billing purposes. Shipping systems will usually produce shipping documents such as compliance shipping labels, bill of ladings, Export documents, and Hazmat documentation. They may also have functionality related to rate shopping, freight policy execution, freight cost management. Also see Transportation Management System.

Shipping Order

Shipper's instructions to carrier for forwarding goods; usually the triplicate copy of the bill of lading.

Shipping Point

See Shipment Point.

Ships - Barge Carriers

Ships designed to carry barges; some are fitted to act as full containerships and can carry a varying number of barges and containers at the same time. At present this class includes two types of vessels LASH and Sea-Bee.

Ships - Bulk Carriers

All vessels designed to carry bulk cargo such as grain, fertilizers, ore, and oil.

Ships - Combination Passenger and Cargo Ships

Ships with a capacity for 13 or more passengers.

Ships – Freighters

Breakbulk vessels both refrigerated and unrefrigerated, containerships, partial containerships, roll_on/roll_off vessels, and barge carriers.

Ships - Full Containerships

Ships equipped with permanent container cells, with little or no space for other types of cargo.

Ships - General Cargo Carriers

Breakbulk freighters, car carriers, cattle carriers, pallet carriers and timber carriers.

Ships - Partial Containerships

Multipurpose containerships where one or more but not all compartments are fitted with permanent container cells. Remaining compartments are used for other types of cargo.

Ships - Roll-on/Roll-off vessels

Ships specially designed to carry wheeled containers or trailers using interior ramps.

Ships – Tankers

Ships fitted with tanks to carry liquid cargo such as crude petroleum and petroleum products; chemicals, Liquefied gasses(LNG and LPG), wine, molasses, and similar product tankers.

Ship's Bells

Measure time onboard ship. One bell sounds for each half hour. One bell means 12 30, two bells mean 1 00, three bells mean 1 30, and so on until 4 00 (eight bells). At 4 30 the cycle begins again with one bell.

Ship's Manifest

A statement listing the particulars of all shipments loaded for a specified voyage.

Ship's Tackle

All rigging, cranes, etc., utilized on a ship to load or unload cargo.


A prop or support placed against or beneath anything to prevent sinking or sagging.

Short Ton (ST)

2,000 pounds.

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.

Shrink Wrap

Polyethylene or similar substance heat-treated and shrunk into an envelope around several units, thereby securing them as a single pack for presentation or to secure units on a pallet.

Side Loader

A lift truck fitted with lifting attachments operating to one side for handling containers.

Side-Door Container

A container fitted with a rear door and a minimum of one side door.


a very common lift truck attachment, the sideshift device allows the fork carriage to slide left and right to allow more accurate placement of the load. Sideshifts will increase productivity and safety as well as reduce product damage by allowing the operator more flexibility in load placement.

Sight Draft

A draft payable upon presentation to the drawee.

A computer model that represents a real-life logistics operation with mathematical symbols and runs it for a simulated length of time to determine how proposed changes will affect the operation.
Skatewheel conveyor

type of conveyor that uses small wheels (usually made of steel) to move materials. See Conveyor Pics.


a portable platform designed to allow a forklift, pallet jack, or other material handling equipment lift, move, and store various loads. A skid is similar to a pallet but does not have bottom deck boards. A skid is preferred over a pallet when used with equipment that would have problems with the bottom deck boards. The down side is that a skid usually needs beefier materials (more expensive and heavier) in order to meet the strength requirements of a comparable pallet. Though not technically correct, the terms Skid and Pallet are often used interchangeably. Also see Pallet.


Battens, or a series of parallel runners, fitted beneath boxes or packages to raise them clear of the floor to permit easy access of forklift blades or other handling equipment.

SKU, Stock keeping unit

referring to a specific item in a specific unit of measure. For xample, if you distributed thirty-weight motor oil in both quarts and gallons you would maintain the inventory as two SKUs even though they are both thirty-weight motor oil. Also refers to the identification# assigned to each SKU.


See Stock Keeping Unit.


Shippers load and count. All three clauses are used as needed on the bill of lading to exclude the carrier from liability when the cargo is loaded by the shipper.


term used to describe an approach to complying with customer requirements for physical identification of shipped goods. Most recently, slap-an-ship has been used to describe complying with RFID requirements (such as those from Wal-Mart), however, it is also applicable to any compliance labeling requirement (such as compliance bar code labels). Slap-and-ship implies you are meeting the customer's requirement by applying the bar code labels or RFID tags, but are not utilizing the technology internally.

Sleeper team

Two drivers who operate a truck equipped with a sleeper berth; while one driver sleeps in the berth to accumulate mandatory off-duty time, the other driver operates the vehicle.


Loaded containers moving within the railroad system that are not clearly identified on any internally generated reports.

Slide-shoe sorter

type of conveyor sorting equipment that uses a series of sliding shoes to move materials off of the connveyor. The sliding shoes are part of the conveyor and travel with the materials, when the sorting point is reached, a several shoes will slide accross the conveyor, pushing the materials onto another conveyor or down a chute.


A wire or rope contrivance placed around cargo and used to load or discharge it to/from a vessel.


A vessel's berth between two piers.

Slip seat operation

A motor carrier relay terminal operation in which a carrier substitutes one driver 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.

Slip-sheet attachment

lift truck attachment used where slip sheets (a sheet of cardboard, paperboard, or plastic) are used rather than pallets. The slip-sheet attachment has a push/pull mechanism that clamps onto the slip sheet and pulls the load onto a thin platform and then pushes the load off of the platform when the truck reaches the destination.


the activities associated with optimizing product placement in pick locations in a warehouse. There are software packages designed just for slotting, and many WMS packages will also have slotting functionality. Slotting software will generally use item velocity (times picked), cube usage, and minimum pick face dimensions to determine best location.


Dry commodities that are made into a liquid form by the addition of water or other fluids to permit movement by pipeline.

Society of Logistics Engineers

A professional association engaged in the advancement of logistics technology and management.


A computer term that describes the system design and programming that the computer's effective use requires.

Solution sets

Packages of core services that cover multiple supply chain activities. Solution sets are based on standardised processes and pre-configured IT products.


A specific location or enterprise from where goods will be obtained.


The practice of locating and procuring raw materials, components, finished goods and services.

Abbreviation for "Subject to Particular Average." See also Particular Average.
Space and Equipment Reservation

A business transaction between two enterprises to arrange for services to facilitate the movement of goods via a carrier.

Space Request (Space and Equipment Request)

A business transaction between two enterprises. An enterprise that has goods to be moved will contact an entity that provides transport services to request space and equipment for an upcoming shipment. The request serves as the first action to launch a set of negotiations between the two enterprises.

Special Customs Invoice

In addition to a commercial invoice, some countries require a special customs invoice designed to facilitate the clearance of goods and the assessment of customs duties in that country.

Special-commodities carrier

A common carrier trucking company that has authority to haul a special commodity; the sixteen special commodities include household goods, petroleum products, and hazardous materials.

Special-commodity warehouses

A warehouse that is used to store products requiring unique facilities, such as grain (elevator), liquid (tank), and tobacco (barn).

Specific Duty

See Duty.

Speech-based technology

also known as voice technology is actually composed of two technologies Voice directed, which converts computer data into audible commands, and Speech recognition, which allows user voice input to be converted into data. Portable voice systems consist of a headset with a microphone and a wearable computer. See article on ADC for more info, also check out My book on inventory accuracy which provides greater detail on speech-based systems.

Spine Car

An articulated five-platform railcar. Used where height and weight restrictions limit the use of stack cars. It holds five 40-foot containers or combinations of 40- and 20-foot containers.


To move a trailer or boxcar into place for loading or unloading.


Placing a container where required to be loaded or unloaded.


A piece of equipment designed to lift containers by their corner castings.

Spur track

A railroad track that connects a company's plant or warehouse with the railroad's track; the user bears the cost of the spur track and its maintenance.


The force that holds a vessel upright or returns it to upright if keeled over. Weight in the lower hold increases stability. A vessel is stiff if it has high stability, tender if it has low stability.

Stack Car

An articulated five-platform rail car that allows containers to be double stacked. A typical stack car holds ten 40-foot equivalent units (FEU's).


A rail service whereby rail cars carry containers stacked two high on specially operated unit trains. Each train includes up to 35 articulated multi-platform cars. Each car is comprised of 5 well-type platforms upon which containers can be stacked. No chassis accompany containers.

Staff functions

The planning and analysis support activities a firm provides to assist line managers with daily operations. Logistics staff functions include location analysis, system design, cost analysis, and planning.


The act of locating goods at a specific location to prepare for movement.


generally describes an unfinished item made of metal that is produced through a process that uses pressure to form discrete units from larger raw materials. Also describes the process used to produce stampings. In some cases, stampings may also be referred to as "blanks".

Standard cost

inventory costing method used in manufacturing environments that uses the materials costs in the bill of materials combined with the labor costs (based on standard labor hours and rates per operation) and machine costs in the routing to calculate the cost of the finished or semi-finished item.

Standard deviation

used to describe the spread of the distribution of numbers. Standard deviation is calculated by the following steps.

Standard Industrial Classification (SIC)

A standard numerical code used by the U.S. Government to classify products and services.

Standard International Trade Classification (SITC)

A standard numeric code developed by the United Nations to classify commodities used in international trade, based on a hierarchy.


The right side of a ship when facing the bow.

Statistical process control (SPC)

A managerial control technique that examines a process's inherent variability.


Information concerning the state or location of a defined item.

Statute Of Limitation

A law limiting the time in which claims or suits may be instituted.


Said to contain.


Abbreviation for "Standard Transportation Commodity Code."

Steamship Conference

A group of vessel operators joined together for the purpose of establishing freight rates.

A voluntary, collective, rate-making body representing member steamship lines.

Steamship Guarantee

An indemnity issued to the carrier by a bank; protects the carrier against any possible losses or damages arising from release of the merchandise to the receiving party. This instrument is usually issued when the bill of lading is lost or is not available.

Steamship Line

A company that owns and/or operates vessels in maritime trade.


The end of a vessel. Opposite of bow.


Individual or firm that employs longshoremen and who contracts to load or unload the ship.


Standard Two Letter (code designation for airlines).

Stock Keeping Unit (SKU)

Numbering system which makes a product or item distinguishable from all others.

A method of identifying a product without using a full description.

Stockless purchasing

A practice whereby the buyer negotiates a purchase price for annual requirements of MRO items and the seller holds inventory until the buyer orders individual items.

Stockout cost

The opportunity cost that companies associate with not having supply sufficient to meet demand.


A situation in which the items a customer orders are currently unavailable.

Store-Door Pick-up Delivery

A complete package of pick up or delivery services performed by a carrier from origin to final consumption point.


The function associated with storing and issuing frequently used items.


A marine term referring to loading freight into ships' holds.

Straddle Carrier

Mobile truck equipment with the capacity for lifting a container within its own framework.

Straddle trucks
lift trucks that incorporate outriggers set wide enough to allow a pallet to fit between them. Common examples would include straddle reach trucks and straddle stackers.
Straight Bill of Lading

A non-negotiable bill of lading which states a specific identity to whom the goods should be delivered. See Bill of Lading.

Straight truck

delivery trucks that do not have a separate tractor and trailer. Straight trucks (also called box vans, or box trucks) usually only have 2 axles and generally have box lengths of between 12 and 30 feet (as opposed to tractor trailers that have 5 axles and trailer lengths of 45 to 53 feet).

Strategic planning

Looking one to five years into the future and designing a logistical system (or systems) to meet the needs of the various businesses in which a company is involved.

Strategic variables

The variables that effect change in the environment and logistics strategy. The major strategic variables include the economy, population, energy, and government.


A specific action to achieve an objective.


An elastic, thin plastic material that effectively adheres to itself, thereby containing product on a pallet when wrapped around the items.


Removing cargo from a container (devanning).

The unloading of cargo from a container or other piece of equipment. See Devanning.

Structural pallet rack

racking system that uses bolts or other mechanical fasteners (as opposed to Boltless Pallet rack). Structural Pallet Rack is sometimes used to support the roof of the structure (Rack-supported buildings), eliminating the need for posts.


Putting cargo into a container.


Said to weigh.

A unit that is assembled separately but which combines with other units in a finished product.

Decisions or activities in a part made at the expense of the whole.


To put in place of another; i.e., when an insurance company pays a claim it is placed in the same position as the payee with regard to any rights against others.


The economic benefit granted by a government to producers of goods or services often to strengthen their competitive position.


A buyer's ability to substitute different sellers' products.

Sufferance Wharf

A wharf licensed and attended by Customs authorities.

Super bill of material

type of planning bill of material that is created at a very high level tying together a larger and more complex family of products than a typical planning bill. See Planning bill of material.

Supplemental carrier

A for-hire air carrier having no time schedule or designated route; the carrier provides service under a charter or contract per plane per trip.

Supply chain

All the elements in the process of supplying a product to a customer. The chain begins with the sourcing of raw materials and ends with the delivery of finished merchandise to the end-user. It embraces vendors, manufacturing facilities, logistics service providers, distribution centres, distributors, wholesalers, other intermediaries, etc. See also demand chain.

A logistical management system which integrates the sequence of activities from delivery of raw materials to the manufacturer through to delivery of the finished product to the customer into measurable components. "Just in Time" is a typical value-added example of supply chain management.

Supply chain management

The co-ordinated management and control of the supply chain, from the acquisition of raw materials from vendors through their transformation into finished goods to the delivery of merchandise to the final customer. It involves information sharing, planning, resource synchronisation and performance measurement.

The management and control of all materials, funds, and related information in the logistics process from the acquisition of raw materials to the delivery of finished products to the end user.

Supply Chain(s)

A group of physical entities such as manufacturing plants, distribution centers, conveyances, retail outlets, people and information which are linked together through processes (such as procurement or logistics) in an integrated fashion, to supply goods or services from source through consumption.

Supply Warehouse

A warehouse that stores raw materials or components. Goods from different suppliers are picked, sorted, staged, or sequenced at the warehouse to assemble plant orders.


An extra or additional charge.

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 percent of variable cost.

Surface Transportation Board (STB)

The U.S. federal body charged with enforcing acts of the U.S. Congress that affect common carriers in interstate commerce. STB replaced the Interstate Commerce Commission (ICC) in 1997.


An additional extra tax.


A relatively lightweight, collapsible freight container, which cannot be stacked; used primarily in rail and road transport.

Switch engine

A railroad engine that is used to move railcars short distances within a terminal and plant.

Switching company

A railroad that moves railcars short distances; switching companies connect two mainline railroads to facilitate through movement of shipments.


A set of interacting elements, variable, parts, or objects that are functionally related to each other and form a coherent group.

Systems concept

A decision-making strategy that emphasizes overall system efficiency rather than the efficiency of each part.




A classification, storage or switching area.

York-Antwerp Rules of 1974

Established the standard basis for adjusting general average and stated the rules for adjusting claims.



Zone of Rate Flexibility

Railroads may raise rates by a percentage increase in the railroad cost index that the ICC determines; the railroads could raise rates by 6 percent per year through 1984 and 4 percent thereafter.

Zone of Rate Freedom

Motor carriers may raise or lower rates by 10 percent in one year without ICC interference; if the rate change is within the zone of freedom, the rate is presumed to be reasonable.

Zone of Reasonableness

A zone or limit within which air carriers may change rates without regulatory scrutiny; if the rate change is within the zone, the new rate is presumed to be reasonable.The constant price of a product at all geographic locations within a zone.

Zone Picking

Order picking method where a warehouse is divided into several pick zones, order pickers are assigned to a specific zone and only pick the items in that zone, orders are moved from one zone to the next (usually on conveyor systems) as they are picked (also known as "pick-and-pass"). See also batch picking, wave picking See article on Order Picking.

Zulu Time

Time based on Greenwich Mean Time.




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