Get a Free Trial Get a Free Trial



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


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
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

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.


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.



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

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.



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

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.




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 PickingThe 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

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.


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.



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

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.



National Committee on International Trade Documentation.




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


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 ratesA 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.



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.