National Motor Freight Classification.
A tariff which contains descriptions and classifications of commodities and rules for domestic movement by motor carriers in the U.S.
North Pacific Coast Freight Bureau.
describes lift trucks that operate in aisles of 8′ to 10′. Narrow-aisle trucks are generally stand-up vehicles such as reach trucks. Also see Vary Narrow Aisle
(VNA) and read article The Aisle Width Decision.
A for-hire certificated air carrier that has annual operating revenues of $75 million to $1 billion; the carrier usually operates between major population
centers and areas of lesser population.
See distribution centre (DC).
An association representing shippers’ and receivers’ interests in matters of transportation policy and regulation.
An industry association representing common and charter bus firms; now known as the American Bus Association.
Also known as Amtrak, the corporation established by the Rail Passenger Service Act of 1970 to operate most of the United States’ rail passenger service.
Public ownership, financing, and operation of a business entity.
Distance of one minute of longitude at the equator, approximately 6,076.115. The metric equivalent is 1852.
Abbreviation for “Not Elsewhere Classified.”
An inventory system (computer) condition whereby the on-hand inventory balance is listed as a quantity less than zero. Check out my article on negative inventory.
Provides for the delivery of goods to a named enterprise or to their order (anyone they may designate), but only upon surrender of proper endorsement and the bill
of lading to the carrier or the carrier’s agents. Also known as an order bill of lading.
A document of title (such as a draft, promissory note, check, or bill of lading) transferable from one person to another in good faith for a consideration.
Non-negotiable bills of lading are known as “straight consignment.” Negotiable bills are known as “order b/l’s.”
A set of discussions between two or more enterprises to determine the business relationship.
Abbreviation for “Not Elsewhere Specified.”
Articles packed so that one rests partially or entirely within another, thereby reducing the cubic-foot displacement.
The weight of an empty cargo-carrying piece of equipment plus any fixtures permanently attached.
(0.2+0.02 log10(Vc)) Vc (4d/3D)2, for passenger ships the following formula is added 1.25 (GT+10000)/10000 (N1+(N2/10)), where Vc is the volume of cargo holds,
D is the distance between ship’s bottom and the uppermost deck, d is the draught N1 is the number of cabin passengers, and N2 is the number of deck passengers.)
“Ton” is figured as an 100 cubic foot ton.
Weight of the goods alone without any immediate wrappings, e.g., the weight of the contents of a tin can without the weight of the can.
The weight of the merchandise, unpacked, exclusive of any containers.
Many airlines of their agents print their own Air Waybills electronically. They are allotted a set of AWB numbers, and print the serial numbers and
identification number on the forms themselves. These “unmarked” AWBs can be called “neutral AWBs”.
An organization established by the members of an ocean conference acts as a self-policing force with broad authority to investigate tariff violations,
including authority to scrutinize all documents kept by the carriers and their personnel. Violations are reported to the membership and significant penalties
are assessed.
A received item for which the warehouse has no previously established storage slot.
A fixed point in a firm’s logistics system where goods come to rest; includes plants, warehouses, supply sources, and markets.
Abbreviation for “Not Otherwise Indexed.”
Abbreviation for “Not Otherwise Indexed By Name.”
The Customs tariff used by most countries worldwide. It was formerly known as the Brussels Tariff Nomenclature and is the basis of the commodity coding system
known as the Harmonized System.
A firm that offers the same services as an ocean carrier, but which does not own or operate a vessel. NVOCCs usually act as consolidators, accepting small
shipments (LCL) and consolidating them into full container loads. They then act as a shipper, tendering the containers to ocean common carriers. They are required
to file tariffs with the Federal Maritime Commission and are subject to the same laws and statutes that apply to primary common carriers.
A for-hire air carrier that is exempt from economic regulation.
Required by some countries for protection against the dumping of certain types of merchandise or products.
Provides for the delivery of goods to a named enterprise and to no one else. Also known as a straight bill of lading.
A cargo consolidator in ocean trades who will buy space from a carrier and sub_sell it to smaller shippers. The NVOCC issues bills of lading, publishes tariffs
and otherwise conducts itself as an ocean common carrier, except that it will not provide the actual ocean or intermodal service.
A firm that consolidates and disperses international containers that originate at or are bound for inland ports.
Notice of Readiness. (When the ship is ready to load.)
term used in statistical analysis to describe a distribution of numbers in which the probability of an occurrence, if graphed, would follow the form of a bell
shaped curve. This is the most popular distribution model for determining probability and has been found to work well in predicting demand variability based
upon historical data.
Abbreviation for “Not Otherwise Specified.”
See Not otherwise specified/Not elsewhere specified.
Front of a container or trailer – opposite the tail.
Cargo which has been booked but does not arrive in time to be loaded before the vessel sails. See also “Windy Booking.”
This term often appears in ocean or airfreight tariffs respectively. If no rate for the specific commodity shipped appears in the tariff, then a general
class rate (for example printed matter NES) will apply. Such rates usually are higher than rates for specific commodities.
The abbreviation of the name of an organization that should be notified when a shipment reaches its destination.
See Non-Vessel Operating Common Carrier.
Pickup and delivery.
Abbreviation for “Protection and Indemnity,” an insurance term.
The materials used in packing. Can be reusable.
The process of placing a product or products in protective packaging. Outsourced packing is often known as co-packing.
Itemized list of commodities with marks/numbers but no cost values indicated.
A document containing information about the location of each Product ID in each package. It allows the recipient to quickly find the item he or she is looking
for without a broad search of all packages. It also confirms the actual shipment of goods on a line item basis.
Abbreviation for “Please Authorize Delivery Against Guarantee.” A request from the consignee to the shipper to allow the carrier or agent to release cargo against
a guarantee, either bank or personal. Made when the consignee is unable to produce original bills of lading.
A U.S. Customs program wherein at least two designated Customs ports will enter cargo that arrives at either port without the necessity of an in-bound document.
A flat wooden or plastic tray that can be picked up by a fork-lift truck – used for transporting and storing goods.
A platform with or without sides, on which a number of packages or pieces may be loaded to facilitate handling by a lift truck.
a type of stationary equipment used to transfer product between different types of pallets such as transferring from wood to plastic pallets, or from
pallets to slipsheets. A load on a pallet is placed in the pallet inverter and the entire load is rotated 180 degrees allowing you to remove the original
pallet and replace it with another.
A machine that wraps a pallet’s contents in stretch-wrap to ensure safe shipment.
A technical rail ramp, used for equalization of points not actually served.
A published rate that is never assessed because no freight moves under it.
when referring to processing in the warehouse (paperless picking, paperless receiving) or on the shop floor, paperless generally suggests that the direction of
tasks and execution of transactions are conducted electronically without the use of paper documents. This is usually accomplished through the use of fixed or
portable computers, bar code scanners, RFID readers, light-signaling technology (pick-to-light), or voice technology. Or maybe it just means you ran out of paper.
designed specifically for the handling of large paper rolls, the paper roll clamp is a lift truck attachment that clamps around the roll and also allows for a
full 360 degree rotation.
An arrangement whereby a steamship company, under rules and regulations established in the freight tariff of a given trade, accepts small packages at rates below
the minimum bill of lading, and issues a parcel receipt instead of a bill of lading.
Under letters of credit, one or more shipments are allowed by the phrase “partial shipments permitted.”
See Insurance, Particular Average.
See Marine Cargo Insurance.
A measure of output for passenger transportation that reflects the number of passengers transported and the distance traveled; a multiplication of
passengers hauled and distancetraveled.
A party named in an instrument as the beneficiary of the funds. Under letters of credit, the payee is either the drawer of the draft or a bank.
A party responsible for the payment as evidenced by the given instrument. Under letters of credit, the payer is the party on whom the draft is drawn,
usually the drawee bank.
Obtaining money, or other agreed upon medium, for provision of goods or services.
The transfer of money, or other agreed upon medium, for provision of goods or services.
The time period during which customers demand the greatest quantity.
A technique in which a DRP system traces demand for a product by date, quantity, and warehouse location.
A charge, based on a fixed daily rate.
A payment rate one railroad makes to use another’s cars.
Those causes of loss for which the carrier is not legally liable. The elemental risks of ocean transport.
an order method that uses a fixed period of time to calculate order quantities. Period order quantity is generally stated in days and will be compared
to the forecast at time of reorder to calculate the appropriate order quantity.
A grant of authority to operate as a contract carrier.
An individual unit an operator uses for creating and maintaining programs and files; can often access the mainframe simultaneously.
Charging different rates to shippers with similar transportation characteristics, or, charging similar rates to shippers with differing transportation characteristics.
a fictitious bill of material created for common subassemblies or kits that you do not want to produce as separate items. For example, if you have a number of
products that all use the same hardware kit you can create a phantom bill for the hardware kit and then just put the phantom item on the bills for all products
that use it. Your MRP system will treat the phantom bill components as though they were part of the bill for the higher level item (rather than treating it as a
separate item that needs to be produced). Phantom items never actually exist, they are just a means for simplifying the management of your bills of materials.
The movement and storage of finished goods from manufacturing plants to warehouses to customers; used synonymously with business logistics.
refers to the process of counting all inventory in a warehouse or plant. Operations are usually shut down during a physical inventory. See physical inventory page
at accuracybook.com for more information, also read my article on physical inventories.
The movement and storage of raw materials from supply sources to the manufacturing facility.
A certificate issued by the U.S. Department of Agriculture to satisfy import regulations of foreign countries; indicates that a U.S. shipment has been inspected
and found free from harmful pests and plant diseases.
can describe anything from a large area of a warehouse designated for order picking (such as a multi-level mezzanine picking area) to the individual sections
of flow rack or other storage media that make up the picking area. I think the implication here is that a “pick module” somehow has a level of sophistication
above that of a “warehouse area used for order picking”. It’s really just a marketing term used by equipment suppliers and consultants to try to impress their
clients.
Picking of product from inventory and packing into shipment containers.
The process by which goods are picked against customers’ orders and then packed for onward distribution.
See Zone Picking
A method by which pickers pick all needed items in an aisle regardless of the items’ ultimate destination; the items must be sorted later.
A method in which pickers successively pick all items going to a particular destination regardless of the aisle in which each item is located.
for parcel shippers, pick-to-carton logic uses item dimensions/weights to select the shipping carton prior to the order picking process. Items are then picked
directly into the shipping carton. When picking is complete, dunnage is added and the carton sealed eliminating a formal packing operation. This logic works best
when picking/packing products with similar size/weight characteristics. In operations with a very diverse product mix it’s much more difficult to get this type of
logic to work effectively.
method often used in warehouse management systems that directs picking to the locations with the smallest quantities on hand.
Pick-to light systems consist of lights and LED displays for each pick location. The system uses software to light the next pick and display the quantity to pick.
Pick-to-light systems have the advantage of not only increasing accuracy, but also increasing productivity. Since hardware is required for each pick location,
pick-to-light systems are easier to cost justify where very high picks per SKU occur. Carton flow rack and horizontal carousels are good applications for pick
to light. In batch picking, put-to-light is also incorporated into the cart or rack that holds the cartons or totes that you are picking into. The light will designate
which order you should be placing the picked items in. See article on Order Picking, also check out My book on inventory accuracy.
The act of calling for freight by truck at the consignor’s shipping platform.
A document indicating the authority to pick up cargo or equipment from a specific location.
The structure perpendicular to the shoreline to which a vessel is secured for the purpose of loading and unloading cargo.
A shipment loaded into a container at the pier or terminal, thence to the consignee’s facility.
Containers loaded at port of loading and discharged at port of destination.
A mobile container-handling crane used to load/unload containers to/from railcars.
A transportation arrangement in which truck trailers with their loads are moved by train to a destination. Also known as Rail Pigs.
A rail-truck service. A shipper loads a highway trailer, and a carrier drives it to a rail terminal and loads it on a rail flatcar; the railroad moves
the trailer-on-flatcar combination to the destination terminal, where the carrier offloads the trailer.
A hard piece of iron, formed to fit on a trailer’s pin, that locks in place with a key to prevent an unauthorized person from moving the trailer.
See Pinwheeling
refers to a method for loading trailers where you alter the direction of every other pallet. Basically you use pinwheeling to load more pallets on a trailer
when the depth of the pallet is longer than half the trailer width, but the depth plus the width is less than the trailer width. You can also use it as a
productivity/space utilization compromise or to reduce load shifting when loading pallets where the depth of the pallet is less than half the trailer width.
See article on Trailer Loading Techniques.
Place where cargo leaves the care and custody of carrier.
Location where cargo enters the care and custody of carrier.
A value that logistics creates in a product by changing the product’s location. Transportation creates place utility.
term used within MRP and DRP systems for system-generated planned order quantities. Planned orders only exist within the computer system and serve multiple functions.
One function is to notify the materials/planner or buyer to produce or order materials, which is done by converting a planned order into an purchase order,
shop order, or transfer order. Another function is used by the MRP or DRP system to show demand which is used by subsequent MRP and DRP programs to generate
additional planned orders. (MRP/DRP systems sometimes run several programs in a specific sequence to generate all planned orders, one program may convert forecasts
or customer orders into planned orders which creates the demand the next program uses this demand to create additional planned orders).
In DRP and MRP systems, a future order the system plans in response to forecasted demand.
See Planning bill of material.
A fictitious bill of material used to group options of a family of products. For example, you may have a line of notebook computers whereby most of the components
are the same, but some will have different hard drives, processors, memory, etc. Rather than creating separate bills for each possible combination and then forecasting
each possible combination, you create one large planning bill that contains all possible components but uses the “quantity per” to manage the options. If you expect
half of the computers to have 40 GB drives, 25% to have 60GB drives, and 25% to have 80 GB drives, you would set up each drive on the bill and use 0.50, 0.25, and
0.25 respectively as the quantity per. You would then proceed to do the same for all other options. Your higher level forecast would be for the total demand for all
computers in this family. Planning bills are sometimes referred to as Super Bills or Pseudo Bills.
Programmable logic controller. Computerized device used to control functions of machines. PLCs are used in automation of manufacturing equipment and material handling
equipment such as automated conveyor systems.
A series of horizontal lines, corresponding to the seasons of the year and fresh or saltwater, painted on the outside of a ship marking the level which must remain
above the surface of the water for the vessel’s stability.
plugging is used with electric industrial vehicles to reduce speed, stop, or change direction, without using the brake. Most commonly used with vehicles with hand
throttles such as motorized pallet trucks and order selectors, the operator simply switches between forward and reverse to control speed. Though this sounds like
something you shouldn’t be doing, many electric trucks are designed to allow for this.
See Purchase Order.
Abbreviation for Port of Discharge, or Port of Destination.
Price and quantity data from retail locations as sales transactions occur.
The United States’ constitutionally granted right for the states to establish regulations to protect their citizens’ health and welfare; truck weight; speed,
length, and height laws are examples.
U.S. federal law enacting conditions by which a B/L may be issued. Penalties for issuing B/L’s containing false data include monetary fines and/or imprisonment.
An agreement among carriers to share the freight to be hauled or to share profits. The Interstate Commerce Act outlawed pooling agreements, but the Civil Aeronautics
Board has approved profit pooling agreements for air carriers during strikes.
sorting equipment integrated into conveyor to move materials off of conveyor at fixed points. Pop-up sorters are installed in fixed positions and may consist of a
series of wheel or small belts that are normally located slightly below the conveyor rollers. The wheels or belts are momentarily raised (pop up) to enable diverting
materials off of the conveyor.
Left side of A ship when facing forward. Also opening in a ship’s side for handling freight.
A state or local government that owns, operates, or otherwise provides wharf, dock, and other terminal investments at ports.
Port where a ship discharges or receives traffic.
Port where cargo is unloaded and enters a country.
Place where cargo is loaded and leaves a country.
A harbor where ships will anchor.
Point of Shipment.
The value created by marketing’s effort to increase the desire to possess a good or benefit from a service.
a Manufacturing / Distribution strategy where specific operations associated with a product are delayed until just prior to shipping. Storing product in a generic
state and then applying custom labels or packaging before shipping is an example of postponement.
The delay of final activities (i.e., assembly, production, packaging, etc.) until the latest possible time.
according to OSHA, a “powered industrial truck is defined as a mobile, power-driven vehicle used to carry, push, pull, lift, stack, or tier material”. Pretty much
covers any type of lift truck as well as vehicles used to tow materials. See Lift Truck.
Lifts temporary quarantine of a vessel; granted pratique by Health Officer.
A process employed in the shipment of citrus fruits and other perishable commodities. The fruit is packed and placed in a cold room from which the heat is gradually
extracted. The boxes of fruit are packed in containers that have been thoroughly cooled and transported through to destination without opening the doors.
A freight term which indicates that charges are to be paid by the shipper.
Freight charges paid by the consignor (shipper) prior to the release of the bills of lading by the carrier.
Freight paid by the shipper to the carrier when merchandise is tendered for shipment that is not refundable if the merchandise does not arrive at the intended
destination.
The process of preparing merchandise in the DC or retail store for transfer to and display at the shelf or rail. Can include the removal of transit packaging,
transfer of garments from boxed to hanging format, ticketing, and assembly of merchandise into store-floor or store-shelf order.
Today’s value of future cash flows, discounted at an appropriate rate.
Activities completed before goods are transported by sea.
A test the ICC uses to determine if a trucking operation is bona fide private transportation; the private trucking operation must be incidental to and in the
futherance of the firm’s primary business.
A carrier that provides transportation service to the firm that owns or leases the vehicles and does not charge a fee. Private motor carriers may haul at a fee
for wholly owned subsidiaries.
The storage of goods in a warehouse owned by the company that has title to the goods.
A Latin term meaning “For the sake of form.”
An invoice provided by a supplier prior to the shipment of merchandise, informing the buyer of the kinds and quantities of goods to be sent, their value, and
specifications (weight, size, etc.)
Basically a fake invoice created to show a buyer what the details of the actual invoice will look like. You can think of it as a draft invoice. Pro forma invoices
are commonly used with international transactions to provide the buyer with the information they will need to pay for the goods (prepayment is common with
international transactions) and arrange for import.
A Latin term meaning “In proportion.”
Designs or activities which improve quality or reduce costs, often through the elimination of waste or non-value-added tasks.
type of manufacturing where a product is produced or transformed through mixing, chemical reactions, etc. Examples of process manufacturing would be refining
crude oil into gasoline, extracting copper from ore, combining materials to make paint. Process as opposed to discrete manufacturing. Also see Discrete
manufacturing.
The act of acquiring goods.
The user’s description of the product.
A method of identifying a product without using a full description. These can be different for each document type and must, therefore, be captured and related to
the document in which they were used. They must then be related to each other in context (also known as SKU, Item Code or Number, or other such name).
Something that has been or is being produced.
generally used to describe a long-term plan of what will be produced at a family level.
The decision-making area that determines when and where and in what quantity a manufacturer is to produce goods.
A measure of resource utilization efficiency defined as the sum of the outputs divided by the sum of the inputs.
The percentage of profit to sales–that is, profit divided by sales.
Program generators are software programs that generally provide graphical user interfaces and tools that allow a user to create a program without having to
write actual computer code. Currently these programs are more frequently referred to as “Development Tools” and are usually designed to write code for specific
applications such as data-collection programs for portable computers. While a user does not need to be a programmer to use this software, the user does need
to have a higher level of technical skills than that of most standard software users. a.k.a. Code generator, Development tools.
Single tariff item, established to move multiple commodities needed for a specified project, usually construction.
A document required from the Carrier or driver FOR proper payment.
Information supplied by the carrier containing the name of the person who signed for the shipment, the time and date of delivery, and other shipment delivery
related information.
A rate lower than the regular rate for shipments that have prior or subsequent moves; used to overcome combination rates’ competitive disadvantages.
Used to describe equipment or technologies that do not follow an open standard design that would allow them to easily integrate with other equipment or technologies.
Proprietary equipment and technologies are usually patented or otherwise protected making it difficult or impossible for other companies to offer similar or
complementary products.
See Planning bill of material
A name usually given to a State body having control or regulation of public utilities.
A business that provides short or long-term storage to a variety of businesses, usually on a month-to-month basis. A public warehouse will generally use
their own equipment and staff, however, agreements may be made where the client either buys or subsidizes equipment. Public warehouse fees are usually a combination
of storage fees (per pallet or actual sq. footage) and transaction fees (inbound and outbound). Public warehouses are most often used to supplement space requirements
of a private warehouse. Also see Contract Warehouse and 3PL.
The basic document a public warehouse manager issues as a receipt for the goods a company gives to the warehouse manager. The receipt can be either negotiable or
nonnegotiable.
The storage of goods by a firm that offers storage service for a fee to the public.
Person authorized by transportation lines to publish tariffs or rates, rules, and regulations for their account.
A system in which each warehouse controls its own shipping requirements by placing individual orders for inventory with the central distribution center.
The customer-driven flow of materials and merchandise through the supply chain. See also demand chain.
Procedure where carrier tests the temperature of the internal flesh of refrigerated commodities to assure that the temperature at time of shipment conforms
to prescribed temperature ranges.
A short semi-trailer used jointly with a dolly and another semi-trailer to create a twin trailer.
A document used to approve, track, and process purchased items. A purchase order is used to communicate a purchase to a supplier. It is also used as an authorization
to purchase. A purchase order will state quantities, costs, and delivery dates. The purchase order is also used to process and track receipts and supplier
invoices/payments associated with the purchase.
A document created by a buyer to officially request a product or service from a seller. It contains, among other things, the name and address of the buyer,
the ship-to address, the quantity, product code [and expected price], requested ship or receipt date, sales and shipping terms, and other appropriate information.
A pricing structure in which the seller offers a lower price if the buyer purchases a larger quantity.
The functions associated with buying the goods and services the firm requires.
A raw material that does not lose weight in processing.
A situation in which a firm makes inventory deployment decisions at the central distribution center and ships to its individual warehouses accordingly.
a very simple fixed-position sorting device used with conveyor systems. A push sorter may use a swinging arm or a simple piston-type pushing device to push
materials across the conveyor.
racking system that incorporates a carriage or other sliding device to allow you to feed multiple pallets into the same location “pushing back” the previous pallet.
Also see Racking Pics Page.
technology similar to pick-to-light, however, the light modules are used do direct which tote, bin, or carton, the item is to be picked into, rather
than directing which locations to pick from.
A document required on merchandise imported into the United States.
A raw material that is found at all locations.
Abbreviation for the “Uniform Customs and Practice for Documentary Credits,” published by the International Chamber of Commerce. This is the most frequently used
standard for making payments in international trade; e.g., paying on a Letter of Credit. It is most frequently referred to by its shorthand title UCP No. 500.
This revised publication reflects recent changes in the transportation and banking industries, such as electronic transfer of funds.
Rules for letters of credit drawn up by the Commission on Banking Technique and Practices of the International Chamber of Commerce in consultation with the banking
associations of many countries. See Terms of Payment.
Abbreviation for “Uniform Freight Classification.”
See Unit Load Device.
The space not filled with liquid in a drum or tank.
An ICC ratemaking practice that held rates to a particular level to protect another mode’s traffic.
United Nations EDI for Administration, Commerce and Transport. EDI Standards are developed and supported by the UN for electronic message (data) interchange on an
international level.
Freight that has not been called for or picked up by the consignee or owner.
To charge less than the proper amount.
United Nations Economic Commission for Europe.
The act that sets forth the regulations governing public warehousing. The regulations define a warehouse manager’s legal responsibility and define the types of
receipts he or she issues.
The total cost of producing a single unit.
The cost associated with a single unit of product. The total cost of producing a product or service divided by the total number of units.
material handling term that describes any configuration of materials that allow it to be moved by material handling equipment as a single unit. While smaller
manually handled configurations could be considered unit loads, the term generally defines larger configurations that would be moved by a lift truck such as
palletized loads, crates, bales, etc. a.k.a. unitized load
Packages loaded on a pallet, in a crate or any other way that enables them to be handled at one time as a unit.
Refers to airfreight containers and pallets.
(abbreviated U/M) describes how the quantity of an item is tracked in your inventory system. The most common unit of measure is “eaches” (EA), which simply means
that each individual item is considered one unit. An item that uses “cases” (CA or CS) as the unit of measure would be tracked by the number of cases rather than
by the actual piece quantity. Other examples of units of measure would include pallets (PL), pounds (LB), ounces (OZ), linear feet (LF), square feet (SF), cubic
feet (CF), gallons , thousands, hundreds, pairs, dozens. Also see Unit-of-measure Conversion.
A train of a specified number of railcars, perhaps 100, which remain as a unit for a designated destination or until a change in routing is made.
An entire, uninterrupted locomotive, car, and caboose movement between an origin and destination.
The planning and funding agency for Conrail; created by the 3-R Act of 1973.
Loading one or more large items of Cargo onto A single piece of equipment, such as a pallet.
To consolidate several packages into one unit; carriers strap, band, or otherwise attach the several packages together.
a unit-of-measure conversion is needed whenever you work with multiple units of measure. For example, if you purchased an item in cases (meaning that your
purchase order stated a number of cases rather than a number of pieces) and then stocked the item in eaches, you would require a conversion to allow your
system to calculate how many eaches are represented by a quantity of cases. This way, when you received the cases, your system would automatically convert
the case quantity into an each quantity.
Removal of a shipment from a vessel.
See reverse logistics.
A U.S. Department of Transportation agency that develops comprehensive mass transport systems for urban areas and for providing financial aid to transit systems.
A classification, storage or switching area.
Established the standard basis for adjusting general average and stated the rules for adjusting claims.
Railroads may raise rates by a percentage increase in the railroad cost index that the ICC determines;
the railroads could raise rates by 6 percent per year through 1984 and 4 percent thereafter.
Motor carriers may raise or lower rates by 10 percent in one year without ICC interference; if the rate
change is within the zone of freedom, the rate is presumed to be reasonable.
A zone or limit within which air carriers may change rates without regulatory scrutiny; if the rate
change is within the zone, the new rate is presumed to be reasonable.The constant price of a product at all geographic locations within a zone.
Order picking method where a warehouse is divided into several pick zones, order pickers are assigned to a specific zone and
only pick the items in that zone, orders are moved from one zone to the next (usually on conveyor systems) as they are picked (also known as “pick-and-pass”).
See also batch picking, wave picking See article on Order Picking.
Time based on Greenwich Mean Time.
Determining a shipment’s location during the course of a move.
The process of recording the progress of a consignment through the supply chain, usually in or near real-time, in order to track its status or trace its movements.
Sophisticated control tower systems function as a single point of control, delivering centralised command of the supply chain, with full visibility.
Monitoring and recording shipment movements from origin to destination.
National Motor Freight Classification.
A tariff which contains descriptions and classifications of commodities and rules for domestic movement by motor carriers in the U.S.
North Pacific Coast Freight Bureau.
describes lift trucks that operate in aisles of 8′ to 10′. Narrow-aisle trucks are generally stand-up vehicles such as reach trucks. Also see Vary Narrow Aisle
(VNA) and read article The Aisle Width Decision.
A for-hire certificated air carrier that has annual operating revenues of $75 million to $1 billion; the carrier usually operates between major population
centers and areas of lesser population.
See distribution centre (DC).
An association representing shippers’ and receivers’ interests in matters of transportation policy and regulation.
An industry association representing common and charter bus firms; now known as the American Bus Association.
Also known as Amtrak, the corporation established by the Rail Passenger Service Act of 1970 to operate most of the United States’ rail passenger service.
Public ownership, financing, and operation of a business entity.
Distance of one minute of longitude at the equator, approximately 6,076.115. The metric equivalent is 1852.
Abbreviation for “Not Elsewhere Classified.”
An inventory system (computer) condition whereby the on-hand inventory balance is listed as a quantity less than zero. Check out my article on negative inventory.
Provides for the delivery of goods to a named enterprise or to their order (anyone they may designate), but only upon surrender of proper endorsement and the bill
of lading to the carrier or the carrier’s agents. Also known as an order bill of lading.
A document of title (such as a draft, promissory note, check, or bill of lading) transferable from one person to another in good faith for a consideration.
Non-negotiable bills of lading are known as “straight consignment.” Negotiable bills are known as “order b/l’s.”
A set of discussions between two or more enterprises to determine the business relationship.
Abbreviation for “Not Elsewhere Specified.”
Articles packed so that one rests partially or entirely within another, thereby reducing the cubic-foot displacement.
The weight of an empty cargo-carrying piece of equipment plus any fixtures permanently attached.
(0.2+0.02 log10(Vc)) Vc (4d/3D)2, for passenger ships the following formula is added 1.25 (GT+10000)/10000 (N1+(N2/10)), where Vc is the volume of cargo holds,
D is the distance between ship’s bottom and the uppermost deck, d is the draught N1 is the number of cabin passengers, and N2 is the number of deck passengers.)
“Ton” is figured as an 100 cubic foot ton.
Weight of the goods alone without any immediate wrappings, e.g., the weight of the contents of a tin can without the weight of the can.
The weight of the merchandise, unpacked, exclusive of any containers.
Many airlines of their agents print their own Air Waybills electronically. They are allotted a set of AWB numbers, and print the serial numbers and
identification number on the forms themselves. These “unmarked” AWBs can be called “neutral AWBs”.
An organization established by the members of an ocean conference acts as a self-policing force with broad authority to investigate tariff violations,
including authority to scrutinize all documents kept by the carriers and their personnel. Violations are reported to the membership and significant penalties
are assessed.
A received item for which the warehouse has no previously established storage slot.
A fixed point in a firm’s logistics system where goods come to rest; includes plants, warehouses, supply sources, and markets.
Abbreviation for “Not Otherwise Indexed.”
Abbreviation for “Not Otherwise Indexed By Name.”
The Customs tariff used by most countries worldwide. It was formerly known as the Brussels Tariff Nomenclature and is the basis of the commodity coding system
known as the Harmonized System.
A firm that offers the same services as an ocean carrier, but which does not own or operate a vessel. NVOCCs usually act as consolidators, accepting small
shipments (LCL) and consolidating them into full container loads. They then act as a shipper, tendering the containers to ocean common carriers. They are required
to file tariffs with the Federal Maritime Commission and are subject to the same laws and statutes that apply to primary common carriers.
A for-hire air carrier that is exempt from economic regulation.
Required by some countries for protection against the dumping of certain types of merchandise or products.
Provides for the delivery of goods to a named enterprise and to no one else. Also known as a straight bill of lading.
A cargo consolidator in ocean trades who will buy space from a carrier and sub_sell it to smaller shippers. The NVOCC issues bills of lading, publishes tariffs
and otherwise conducts itself as an ocean common carrier, except that it will not provide the actual ocean or intermodal service.
A firm that consolidates and disperses international containers that originate at or are bound for inland ports.
Notice of Readiness. (When the ship is ready to load.)
term used in statistical analysis to describe a distribution of numbers in which the probability of an occurrence, if graphed, would follow the form of a bell
shaped curve. This is the most popular distribution model for determining probability and has been found to work well in predicting demand variability based
upon historical data.
Abbreviation for “Not Otherwise Specified.”
See Not otherwise specified/Not elsewhere specified.
Front of a container or trailer – opposite the tail.
Cargo which has been booked but does not arrive in time to be loaded before the vessel sails. See also “Windy Booking.”
This term often appears in ocean or airfreight tariffs respectively. If no rate for the specific commodity shipped appears in the tariff, then a general
class rate (for example printed matter NES) will apply. Such rates usually are higher than rates for specific commodities.
The abbreviation of the name of an organization that should be notified when a shipment reaches its destination.
See Non-Vessel Operating Common Carrier.
Organization of Economic Cooperation and Development, headquartered in Paris with membership consisting of the world’s developed nations.
Overseas Private Investment Corporation.
inventory that has had no sales or usage activity for a specific period of time. The period of time varies by company and industry and may even vary by product
line within a specific company and may range from weeks to years. a.k.a . Dead Inventory. See also Excess Inventory.
A contract for transportation between a shipper and a carrier. It also evidences receipt of the cargo by the carrier. A bill of lading shows ownership of the
cargo and, if made negotiable, can be bought, sold or traded while the goods are in-transit.
The bill of lading issued by the ocean carrier to its customer.
An enterprise that offers service via ocean (water) transport.
The transport of goods by sea.
See “Overland Common Points.”
Abbreviation for “Operating Differential Subsidy.” An amount of money the U.S. government paid U.S. shipping companies that qualify for this subsidy.
The intent was to help offset the higher subsidy. The intent was to help ofset the higher cost of operating a U.S.-flag vessel. The ODS program is administered
by the U.S. Maritime Administration and is being phased out.
See Tender.
A notation on a bill of lading that cargo has been loaded on board a vessel. Used to satisfy the requirements of a letter of credit, in the absence of an express
requirement to the contrary.
A notation on a bill of lading that the cargo has been stowed on the open deck of the ship.
A system in which computer terminals are available at each receiving bay and operators enter items into the system as they are unloaded.
A trade arrangement in which goods are shipped to a foreign buyer without guarantee of payment.
A marine insurance policy that applies to all shipments made by an exporter over a period of time rather than to one shipment only.
See Marine Cargo Insurance.
Software that has the source code freely available for modification. In most cases, open source software is also “Free software” in that it requires no licensing
fees. The Linux operating system, Apache web server, PHP programming language, MySQL database, and OpenOffice office suite are among the best known free open source
products. However, when in comes to business software (such as ERP systems), I’ve noticed that some of the products that advertise (that’s a clue) as open source,
are not exactly free. Some have licensing fees, while others are built on databases or other programs that have licensing fees.
A container fitted with a solid removable roof, or with a tarpaulin roof so the container can be loaded or unloaded from the top.
A payment to an American-flag carrier by the U.S. government to offset the difference in operating costs between U.S. and foreign vessels.
A comparison of a carrier’s operating expense with its net sales. The most general measure of operating efficiency.
A measure of operating efficiency defined as Operating expenses divided by the Operating revenues x 100.
I use the term operation frequently in my writings with two very distinct meanings. At a general level, an operation is the overall work environment that includes
the facility(s) and all activities that occur within it. When discussing MRP and related topics, an operation is a specific step that exists in the routing of a
manufacturing process.
guidance system that uses a special strip (taped or painted) on the floor to guide an AGV.
The process of making something as good or as effective as possible with given resources and constraints.
The highest level of cube utilization that can be achieved when loading cargo into a container.
the action of ordering or producing up to the Max in a Min-Max system even though inventory has not reached the Min. May be used to avoid down time on machines etc.
also known as purchase cost or set up cost, order cost is the sum of the fixed costs that are incurred each time an item is ordered. These costs are not associated
with the quantity ordered but primarily with physical activities required to process the order. For purchased items, these would include the cost to enter the purchase
order and/or requisition, any approval steps, the cost to process the receipt, incoming inspection, invoice processing and vendor payment, and in some cases a
portion of the inbound freight may also be included in order cost. In manufacturing, the order cost would include the time to initiate the work order, time associated
with picking and issuing components excluding time associated with counting and handling specific quantities, all production scheduling time, machine set up time,
and inspection time. Order cost is used as part of most cost-based order quantity/lot sizing calculations. See article on EOQ for more detailed info on order cost.
also called replenishment cycle, order cycle refers to the time between orders of a specific item. Most easily calculated by dividing the order quantity by the annual
demand and multiplying by the number of days in the year.
The time and process involved from the placement of an order to the receipt of the shipment.
The time that elapses from placement of order until receipt of order. This includes time for order transmittal, processing, preparation, and shipping.
A measure of the number of orders processed without stockouts, or the need to back order, expressed as a percentage of all orders processed in the distribution
center or warehouse.
Assembling a customer’s order from items in storage.
See Reorder point.
Activities associated with filling customer orders.
data describing the characteristics of inbound, outbound, or internal orders (outbound is most common). Examples of characteristics incorporated into an order
profile could include line items per order, pieces per order, weight per order, cube per order, time of day, destination, shipment method, order type, etc.
Characteristics are often broken into logical groups such as breaking line items per order into groups of 1 line item, 2-4 line items, 5-10 line items, 11- 25, 26+.
a.k.a. Order Picker. Lift truck designed specifically for manual handling of less than pallet load quantities in racking. Man-up design has fixed forks attached
to a platform that elevates the load and the operator to facilitate manual loading and unloading from racking.Order selectors are very-narrow-aisles vehicles that
operate in aisles of less than 6′ Also see Lift Truck Pics, Lift Truck Basics, and The Aisle Decision for more info.
A type of request for goods or services.
The cost of placing an inventory order with a supplier.
A bill of lading term to provide surrender of the original bill of lading before freight is released; usually associated with a shipment covered under a
letter of credit.
Abbreviation for “Origin Rail Freight Station.” Same as CFS at origin except an ORFS is operated by the rail carrier participating in the shipment.
Location where shipment begins its movement.
Support/added-value functions offered at the point of origin of merchandise or materials. Can include buying, purchase order management, vendor compliance,
quality inspection, document management, container optimisation, pick-and-pack, pallet loading, customs processes and consolidation.
The place where a shipment begins its movement.
A document which requires proper signatures for consummating carriage of contract. Must be marked as “original” by the issuing carrier.
Abbreviation for “Over, Short or Damaged” Usually discovered at cargo unloading.
Over, Short, and Damaged.
Transaction or interchange that occurs at the time a container leaves a rail or water terminal.
Consolidation of a number of small shipments for various customers into a larger load. Shipped to a location near the customers; then the small shipments are
distributed to the customers.
The process related to the movement and storage of products from the end of the production line to the end user.
The cost directly assignable to a particular unit of traffic and which a company would not have incurred if it had not performed the movement.
term describing a step in the manufacturing process that is performed by an outside vendor. System setup for outside operations can get fairly complicated and
generally requires linking a purchase order for the outside processing to a specific operation in the routing. The integration of the purchase order process and
the work order process to ensure accounting, production planning, and inventory management�s needs are met can be confusing and is often problematic.
To utilize a third-party provider to provide services previously performed in-house.
The sub-contracting to external companies of tasks considered to be outside an organisation’s core competence. Logistics outsourcing is one of the most popular forms.
To charge more than the proper amount according to the published rates.
Cargo more than eight feet high which thus cannot fit into a standard container.
A term stated on the bills of lading offering lower shipping rates to importers east of the Rockies, provided merchandise from the Far East comes in through the
West Coast ports. OCP rates were established by U.S. West Coast steamship companies in conjunction with western railroads so that cargo originating or destined for
the American Midwest and East would be competitive with all-water rates via the U.S. Atlantic and Gulf ports. Applies to eastern Canada.
A motor carrier operation that reflects long-distance, intercity moves; the opposite of local operations.
Standard Carrier Abbreviation Code identifying an individual common carrier. A three letter carrier code followed by a suffix identifies the carrier’s equipment.
A suffix of “U” is a container and “C” is a chassis.
A trucking operation in which the truck’s owner is also the driver.
The management function that attempts to ensure that the goods or services in a firm manufacturers or purchases meet the product or service specifications.
There are various quantity elements in perpetual inventory systems. Below are definitions of the most common. Be aware that these definitions are fairly generic
and that specific inventory systems may use completely different definitions or terminology.
also known as committed quantity, commitments, or allocations. Quantity allocated is the quantity that is on current open sales orders or production orders
(as components), and may be relative to a specific time period. Also see Allocations.
is the result of a calculation that takes quantity on hand and reduces it by allocations (for sales orders, manufacturing orders, etc). Quantity available may
or may not be date specific and therefore take into account future receipts. Quantity available calculations are sometimes very complicated and vary from one
software product to another.
in multi-branch environments, quantity in transit reflects the quantity that has been shipped from one branch/facility to another branch/facility, but has not yet
been received by that branch/facility. In operations that use advanced tracking of receipts, it may reflect quantities that have been shipped by outside vendors,
but not yet received.
also known as onhand quantity, in stock, store quantity Quantity on hand describes the actual physical inventory in the possession of the business. When inventory
is received or produced, it is added to quantity on hand, when inventory is sold or consumed, it is removed from quantity on hand.
includes quantity on open purchase orders or manufacturing orders. May or may not include quantities on transfer orders from other branches.
A restraint placed on an operation to protect the public against a health hazard. A ship may be quarantined so that it cannot leave a protected point. During
the quarantine period, the Q flag is hoisted.
A structure attached toland to which a vessel is moored. See also Pier and Dock.
amount of time a job waits at an operation prior to set up or processing. Part of manufacturing lead time.
A business strategy for reducing inventory in the pipeline and shortening the cycle time for a product to be made, distributed and sold. Point of sale information
is electronically transmitted back to the store supplier, who is responsible for adequate supply at the store.
A method of maximizing the efficiency of the supply chain by reducing inventory investment.
A wedge-shaped piece of timber used to secure barrels against movement.
The quantity of goods that may be imported without restriction during a set period of time.
An offer to sell goods at a stated price and under stated terms.
warehouse design that uses structural pallet rack to support the roof of a building, eliminating the need for posts. Rack-supported buildings are usually designed
for AS/RS systems or turret truck systems where racking is 40 to 100 ft in height.
in warehousing, refers to the portable data collection devices that use radio frequency (RF) to transmit data to host system.
See RFID
A slang term for an open-top trailer or container with a tarpaulin cover.
An enterprise that offers service via rail carriage.
The amount of money an ocean carrier pays to the railroad for overland carriage.
The transportation of goods by rail.
The time that the container was discharged (grounded) from the train.
The bill of lading issued by rail carriers to their customers.
guidance system used with very-narrow-aisle vehicles such as order selectors and turret trucks. A steel rail is mounded on each side of the aisle, and rollers are
mounted on the lift truck to guide it between the rails.
Railroad terminal where containers are received or delivered and trains loaded or discharged. Originally, trailers moved onto the rearmost flatcar via a ramp and
driven into position in a technique known as “circus loading.” Most modern rail facilities use lifting equipment to position containers onto the flatcars.
A movement where the load initiates at an origin rail ramp and terminates at a consignee’s door.
A movement of equipment from an origin rail ramp to a destination rail ramp only.
Temporary memory on micro chips. Users can store data in RAM or take it out at high speeds. However, any information stored in RAM disappears when the computer
is shut off.
refers to storage method where a product may be stored in any location. Random storage has higher space utilization and generally lower accuracy than fixed
location storage.
A formula of the specific factors or elements that control the making of a rate. A rate can be based on any number of factors (i.e., weight, measure, equipment
type, package, box, etc.).
The distance between two rate basis points.
The major shipping point in a local area; carriers consider all points in the local area to be the rate basis point.
A carrier group that assembles to establish joint rates, to divide joint revenues and claim liabilities, and to publish tariffs. Rate bureaus have published
single line rates, which were prohibited in 1984.
See Freight Bill.
Established charges for the transport of goods.
a.k.a. Stand-up reach, Straddle reach , Double-deep reach. The reach truck is a narrow-aisle (8′-10′) lift truck designed specifically for racked pallet storage.
It consists of outriggers in front and telescoping forks that use a hydraulic scissors-type mechanism that allow you to pick up the load and retract it over the
outriggers reducing the overall truck and load length, allowing you to turn in a narrower aisle. Double-deep reach trucks use an extended reach mechanism that
allows you to store pallets two-deep in specially designed double-deep rack. Reach trucks are designed for racking areas only and do not work for loading trucks
or quickly moving loads over distances. Also see Lift Truck Pics and Lift Truck Basics for more info.
A real-time system provides an immediate response to external events. Often used in relation to tracking; see also track-and-trace.
real-time locator system (RTLS) uses RFID technology that provides the objects they are attached to the ability to transmit their current location. System requires
some type of RFID tag to be attached to each object that needs to be tracked, and RF transmitters/receivers located throughout the facility to determine the location
and send information to computerized tracking system. While it sounds like a great way to eliminate “lost” inventory, the systems are still too costly for most
inventory tracking operations and are more likely to be used to track more valuable assets.
A rate that is high enough to cover the carrier’s cost but not high enough to enable the carrier to realize monopolistic profits.
Under ICC and common law, the requirement that a rate not be higher than is necessary to reimburse the carrier for the actual cost of transporting the traffic and
allow a fair profit.
An illegal form of discounting or refunding that has the net effect of lowering the tariff price. See also Malpractice.
A provision of the 1920 Transportation Act that provided for self-help financing for railroads. Railroads that earned more than the prescribed return contributed
one-half of the excess to the fund from which the ICC made loans to less profitable railroads. The Recapture Clause was repealed in 1933.
A location that will receive goods.
The place where cargo enters the care and custody of the carrier.
An enterprise that receives goods/services.
The practice by which governments extend similar concessions to each other.
Changing the consignee or destination on a bill of lading while shipment is still in transit. Diversion has substantially the same meaning.
A carrier service that permits a shipper to change the destination and/or consignee after the shipment has reached its originally billed destination and
to still pay the through rate from origin to final destination.
A right claim against the guarantors of a loan or draft or bill of exchange.
A label required on shipments of flammable articles.
Legislation that legalized common carrier joint ratemaking through rate bureaus; extended antitrust immunity to carriers participating in a rate bureau.
Refrigerated container.
A container with a self-contained refrigeration unit, used for the transportation of perishable cargo.
A fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in performance.
A warehouse that is used to store perishable items requiring controlled temperatures.
A for-hire air carrier, usually certificated, that has annual operating revenues of less than $75 million; the carrier usually operates within a particular
region of the country.
See distribution centre.
A motor carrier that is authorized to provide service over designated routes.
A group of points to which rates are made the same as or in relation to rates to other points in group.
To transfer containers from one ship to another when both vessels are controlled by the same network (carrier) manager.
A motor carrier terminal that facilitates the substitution of one driver for another who has driven the maximum hours permitted.
Rates based upon the shipment’s value. The maximum carrier liability for damage is less than the full value, and in return the carrier offers a lower rate.
A carrier selection criterion that considers the carrier transit time variation; the consistency of the transit time the carrier provides.
Funds sent by one person to another as payment.
The inventory level set to trigger reorder of a specific item. Reorder point is generally calculated as the expected usage (demand) during the lead time plus
safety stock. Fixed reorder point implies the reorder point is a static number plugged into the system. Dynamic reorder point implies there is some system logic
calculating the order point. Generally this would be comparing current inventory to the forecasted demand during the lead time plus safety stock.
A predetermined inventory level that triggers the need to place an order. This minimum level provides inventory to meet the demand a firm anticipates during the
time it takes to receive the order.
A situation in which the ICC requires a railroad to repay users the difference between the rate the railroad charges and the maximum rate the ICC permits when
the ICC finds a rate to be unreasonable or too high.
The process of moving or re-supplying inventory from a reserve storage location to a primary picking location, or to another mode of storage in which picking
is performed.
See Order Cycle.
An appeal for a transaction of goods/services between two enterprises.
The date the shipment must arrive at the destination.
Articles handled only under certain conditions.
An airline term referring to a hazardous material as defined by Title 49, Code of Federal Regulations (U.S.) and Air Transport Restricted Articles Circular 6-D.
Restricted articles transported domestically may be classified as dangerous goods when transported domestically may be classified as dangerous goods when
transported internationally by air.
An action taken by a country to restrain its imports from another country that has increased a tariff or imposed other measures that adversely affect the first
country’s exports.
A ton on which the shipment is freighted. If cargo is rated as weight or measure (W/M), whichever produces the highest revenue will be considered the revenue ton.
Weights are based on metric tons and measures are based on cubic meters. RT=1 MT or 1 CBM.
An inland point provided by an all_water carrier’s through bill of lading in the U.S. by first discharging the container in an East Coast port.
The process of collecting, handling and transporting used, damaged, unwanted and end-of-life (EOL) goods and/or packaging for the purposes of their disposal,
recycling or recovery. Can also refer to the return of re-usable transit equipment – for example pallets and containers to a point further up the supply chain
(that is, upstream).
Fancy term for Returns. Reverse Logistics covers activities related to returned product, returned pallets and containers, returned materials for disposal or
recycling.
RFID
Radio frequency identification. Refers to devices attached to an object that transmit data to an RFID receiver. These devices can be large pieces of hardware
the size of a small book, like those attached to ocean containers, or very small devices inserted into a label on a package. RFID has advantages over barcodes,
such as the ability to hold more data, the ability to change the stored data as processing occurs, does not require line-of-site to transfer data and is very
effective in harsh environments where bar code labels won’t work. Read my articles ADC Basics and RFID Update, also check out My book on inventory accuracy and
its related RFID Updates and RFID Links.
RFID is radio-frequency identification, a system that uses radio signals to locate and identify merchandise, batched products or transportation assets fitted with
special electronic tags. The tags – also known as smart labels or intelligent tags – enable the automatic track-and-trace of merchandise/assets throughout the
supply chain.
Request for quotation.
A concept that, in a court of law, permits a carrier to purchase land it needs for transportation right-of-way; used by railroads and pipelines.
A shortening of the term, “Roll On/Roll Off.” A method of ocean cargo service using a vessel with ramps which allows wheeled vehicles to be loaded and discharged
without cranes.
See Roll-on/Roll-off.
See kerbside.
To re-book cargo to a later vessel.
type of conveyor that uses rollers to move materials. Roller conveyor may be automated (live roller) or simply use gravity (gravity roller) to move materials.
See Conveyor Pics.
The side-to-side (athwartship) motion of a vessel.
Ships specially designed to carry wheeled containers or trailers using interior ramps.
A type of ship designed to permit cargo to be driven on at origin and off at destination; used extensively for the movement of automobiles.
used to determine estimated load on key pieces of equipment or resources. May use production plan or master production schedule. Rough-cut capacity is usetd as a
check to verify that manufacturing resources are adequate to execute the production plan.
A complete movement of a shipment from its origin to its destination by a carrier.
The process of determining and arranging the optimal course of goods for transport.
Rapid Response Manufacturing.
Real-time locator system (see separate listing).
Before the Motor Carrier Act of 1980, the ICC restricted contract carriers requesting authority to eight shippers under contract. The number of shippers has
been deleted as a consideration for granting a contract carrier permit.
A regulatory provision directing the regulatory agencies to consider the earnings a carrier needs to provide adequate transportation.
Complementary equipment for terminal and over_the_road handling containers.
Abbreviation for “Released Value Not Exceeding.” Usually used to limit the value of goods transported.The limitation refers to carrier liability when paying
a claim for lost or damaged goods.
A document issued by the U.S. government; authorizes the export of commodities for which written authorization is required by law.
Authentication of B/L and when B/L becomes effective.
Transportation charges to shippers who declare a value of goods higher than the value of the carriers’ limits of liability.
Increased or improved value, worth, functionality or usefulness.
See added-value services.
Enclosed in the Insurance Proposal Form is a valued inventory list. Simply list the number of each particular item to be included in your shipment and declare the
full replacement value at destination. The more specific you can be, then the greater the likelihood of a swift and full settlement in the event of a claim.
Pricing according to the value of the product the company is transporting; third-degree price discrimination; demand-oriented pricing; charging what the traffic
will bear.
A term for stowing cargo in a container.
Costs that vary directly with the level of activity within a short time. Examples include costs of moving cargo inland on trains or trucks, stevedoring in some
ports, and short-term equipment leases. For business analysis, all costs are either defined as variable or fixed. For a business to break even, all fixed costs
must be covered. To make a profit, all variable and fixed costs must be recovered plus some extra amount.
A cost that fluctuates with the volume or activity level of business.
devices that prevent trailers from moving away from the loading dock. One of the most popular is the ICC bar type restraint system. These systems incorporated a
device that engages the ICC bar (rear impact guard) on the rear of the trailer preventing it from moving away from the dock. These devices may be mechanically or
hydraulically operated and may vary in design and functionality from one manufacturer to another. There are also other types of restraints such as those that
automatically engage the rear wheels of the trailer. As with the ICC bar restraints, the wheel engagement restraints also vary significantly from one manufacturer
to another. There is not a one-system-fits-all solution for vehicle restraints, ICC bar systems may not work with damaged ICC bars, lift gates, and low-boy trailers.
Wheel engagement systems are more expensive and may have problems in northern climates due to snow or ice. See article on Dock Safety and Dock Equipment Pics for
more info.
The process of managing various vendors in order to consolidate multiple LTL shipments into a single or smaller number of consignments to reduce costs and improve
delivery efficiency.
A customer service strategy used to manage inventory of customers to lower cost and improve service.
A firm or individual that supplies goods or services; the seller.
phrase used to describe the process of a supplier managing the inventory levels and purchases of the materials he supplies. This process can be very low tech,
such as an office supplies supplier or maintenance supplies supplier coming into your facility once per week to visually check stock levels and place a re-supply
order, or high tech, such as an electronic component supplier having remote access to your inventory management and MRP system and producing and automatically
shipping to meet your production schedule. Vendor-managed inventory reduces internal costs associated with planning and procuring materials and enables the
vendor to better manage his inventory through higher visibility to the supply chain. Vendor-managed inventory may be owned by the vendor (consignment inventory)
or the customer.
The sellers of products and services.
A container designed with openings in the side and/or end walls to permit the ingress of outside air when the doors are closed.
Lift trucks that operate in aisles less than six feet and often use guidance systems (wire, rail, or optical) to travel within the aisles. Types of VNA trucks
include order selectors, swing mast, pivot, mast, and turret trucks. See also article The Aisle Width Decision.
The international carrier is obligated to make declarations of the ship’s crew and contents at both the port of departure and arrival. The vessel manifest
lists various details about each shipment by B/L number. Obviously, the B/L serves as the core source from which the manifest is created.
A list of all cargoes on a vessel.
Allows equipment and supplies arriving at one port to be loaded on a vessel, aircraft, etc., for its exclusive use and to be exported from the same port.
A floating structure designed for transport.
The ability to view detailed information about supply chain management processes, typically in real or near real-time.
The ability to access or view pertinent data or information as it relates to logistics and the supply chain.
Namely. Used in tariffs to specify commodities.
Very narrow aisle (see separate listing)
See Speech-based technology
A series of concentric rings around a city to identify where agricultural products would be produced according to von Thunen’s theory.
The trip designation (trade route and origin/destination) identifier, usually numerically sequential.
Vessel Sharing Agreement.
See Motorized Pallet Truck.
Insurance coverage for loss of goods resulting from any act of war.
A covered place for the reception and storage of goods. See also distribution centre.
A place for the reception, delivery, consolidation, distribution, and storage of goods/cargo.
software used to control automated systems such as sortation systems, AS/RS, AGV’s, and carousells in the warehouse. A WCS may also have functionality similar to a
WMS just as some WMS’s have WCS functionality.
Document that identifies goods imported when placed in a bonded warehouse. The duty is not imposed on the products while in the warehouse but will be collected
when they are withdrawn for delivery or consumption.
computer software designed specifically for managing the movement and storage of materials throughout the warehouse. WMS functionality is generally broken down
into the following three operations Putaway, Replenishment, and Picking. The key to these systems is the logic to direct these operations to specific locations
based on user defined criteria. WMSs are often set up to integrate with data-collection systems. Read my article on Warehouse Management Systems.
Allows merchandise that has been withdrawn from a bonded warehouse at one port to be transported in bond to another port, where a superseding entry will be filed.
Allows merchandise that has been withdrawn from a bonded warehouse at one port to be transported in bond through the U.S. to be exported from another port,
without paying duty.
Allows merchandise that has been withdrawn from a bonded warehouse at one U.S. port to be exported from the same port exported without paying duty.
Each mode of international transport is regulated by a Convention or international agreement which standardises the documentation and the contract of carriage,
and rules on legal questions concerning international transport of baggage, goods or persons. The convention which applies to air transport is the Warsaw
Convention (as amended at the Hague in 1955). Section 3 (Article 5-11) of this convention deals with the Air Waybill, (definition, number of originals,
details which must be included, function of the AWB).
A per-gallon tax assessed barge carriers for waterway.
variation on zone picking where rather than orders moving from one zone to the next for picking, all zones are picked at the same time and the items are later
sorted and consolidated into individual orders/shipments. Wave picking is the quickest method for picking multi item orders however the sorting and consolidation
process can be tricky. Picking waves are often designed to isolate shipments to specific carriers, routes, etc. See also batch picking, zone picking A more
general definition of wave picking would simply be a method where a group of orders is released to the warehouse for picking and the next group (wave) is not
released until the first wave has processed through the pick area. See article on Order Picking.
A document prepared by a transportation line at the point of a shipment; shows the point of the origin, destination, route, consignor, consignee,
description of shipment and amount charged for the transportation service. It is forwarded with the shipment or sent by mail to the agent at the
transfer point or waybill destination.
A non-negotiable document prepared by or on behalf of the carrier at the point of shipment origin. The document shows point of origin, destination, route,
consignor, consignee, description of shipment, and amount charged for the transport service.
Warehouse control system (see separate listing).
The shipment volume at which the LTL charges equal the TL charges at the minimum weight.
The unit of measure that the user wants to see for weight.
Describes a condition where the weight capacity of a trailer or container has been met. The term “weighted out” is most likely used when you have met the
weight capacity of the trailer or container but still have physical space left in the trailer or container. Also see Cubed out.
A raw material that loses weight in processing.
Measurement ton 40 cubic ft or one cubic meter. Net ton, or short ton 2,000 lbs. Gross ton/long ton 2,240 lbs. Metric ton/kilo ton 2,204.6 lbs. Cubic meter
35.314 cubic ft.
The charges assessed by pier personnel for the handling of incoming or outgoing cargo.
term used to describe vehicles that use a wire embedded in the floor to guide the vehicles. Wire guidance systems are frequently used with order selectors and
turret trucks in very narrow aisle applications. They are also used with automated guided vehicles.
Warehouse management system (see separate listing).
Parts and subassemblies in the process of becoming completed assembly components. These items, no longer part of the raw materials inventory and not yet part of
the finished goods inventory, may constitute a large inventory by themselves and create extra expense for the firm.
Generally describes inventory that is currently being processed in an operation, or inventory that has been processed through one operation and are awaiting
another operation. WIP is actually an inventory account that represents the value of materials, labor, and overhead that has been issued to manufacturing but has
not yet produced a stockable item. Depending on how your accounting and inventory systems are set up, it may also include components picked for production usage or
finished products awaiting final inspection.
With particular average. See Marine Cargo Insurance.
describes the method(s) your inventory management software uses to reduce forecasted demand by the actual demand that occurs during the forecast period.
Incorrectly set up forecast consumption parameters or lack of functionality related to forecast consumption can often create serious problems with planning systems.
the difference between the forecast quantity for a period and the actual demand experienced during that period. Forecast error is calculated after the period has
passed and is used to evaluate the forecast and make adjustments.
A Forecast is an estimation of future demand. Most forecasts use historical demand to calculate future demand. Adjustments for seasonality and trend are often
necessary.
Under U.S. tax law, a corporation created to obtain tax exemption on part of the earnings of U.S. products in foreign markets. Must be set-up as a foreign
corporation with an office outside the USA.
An area or zone set aside at or near a port or airport, under the control of the U.S. Customs Service, for holding goods duty-free pending customs clearance.
A site sanctioned by the U.S. Customs Service in which imported goods are exempted from duties until withdrawn for domestic sale or use. Such zones are used by
commercial warehouses or assembly plants.
generally describes an unfinished item made of metal that is produced through a process that heats the metal (not to melting point) then uses pressure or
hammering to change the shape of the metal into a shape that closely resembles the finished item that will ultimately be made (through machining processes)
from the forging.
A carrier that provides transportation service to the public on a fee basis.
A machine used to pick up and move goods loaded on pallets or skids.
Lift truck attachments that allow the operator to adjust the distance between the forks without getting off of the truck. Used primarily in high volume operations
where there is a great variety of pallet and crate sizes handled.
a.k.a Fork Lift. See Lift Trucks.
A machine-powered device used to raise and lower freight and to move freight to different warehouse locations.
A strategy to eliminate or reduce forklift use in operations. Used mainly in manufacturing operations, forklift-free usually involves finding ways to eliminate
forklift use in specific areas (mainly the production areas). A key benefit is the safety of workers, but other benefits such as better space utilization and
reduction of costs associated with lift trucks may also be factors.
The value the production process creates in a good by changing the item’s form.
See Brokerage.
See Consolidator’s Bill of Lading.
A receipt for goods issued by a carrier with an indication that the goods were damaged when received. Compare Clean Bill of Lading.
A pallet designed so that the forks of a fork lift truck can be inserted from all four sides. See Fork lift.
Free of Particular Average. See Marine Cargo Insurance.
The seller agrees to deliver the goods to the dock alongside the overseas vessel that is to carry the shipment. The seller pays the cost of getting the shipment
to the dock; the buyer contracts the carrier, obtains documentation, and assumes all responsibility from that point forward.
An astray shipment (a lost shipment that is found) sent to its proper destination without additional charge.
Cost of loading and unloading a vessel is borne by the charterer/shipper.
A marine insurance term meaning that the assurer will not allow payment for partial loss or damage to cargo shipments except in certain circumstances,
such as stranding, sinking, collision or fire.
This expression follows an exchange point. The exchange point indicates the transition of responsibility (risk) from the buyer to the seller. See also Terms of
Sale. For example F.O.B. Origin The seller agrees to deliver the goods to the point of origin.
Shipped under a rate that includes costs of delivery to and the loading onto a carrier at a specified point.
See Terms of Sale.
Cost of unloading a vessel is borne by the charterer.
A restricted area at a seaport for the handling of duty-exempted import goods. Also called a Foreign Trade Zone.
The U.S. government does not issue certificates of free sale. However, the Food and Drug Administration, Silver Spring, Maryland, will issue, upon request,
a letter of comment to the U.S. manufacturers whose products are subject to the Federal Food, Drug and Cosmetic Act or other acts administered by the agency.
The letter can take the place of the certificate.
That amount of time that a carrier’s equipment may be used without incurring additional charges. (See Storage, Demurrage or Per Diem.)
The period of time allowed for the removal or accumulation of cargo before charges become applicable.
A port designated by the government of a country for duty-free entry of any non-prohibited goods. Merchandise may be stored, displayed, used for manufacturing,
etc., within the zone and re-exported without duties.
A commercial or industrial area usually near a port of entry where merchandise and raw material imports are not subject to customs charges or duties.
Refers to either the cargo carried or the charges assessed for carriage of the cargo.
The point of embarkment chosen by the buyer, from where a carrier transports goods. Under this designation, a seller is obligated to pay the cost and assume all
risks for transporting goods from a place of business to the FAS point.
A document issued by the carrier based on the bill of lading and other information; used to account for a shipment operationally, statistically, and financially.
An Invoice.
The carriers invoice for payment of transport services rendered.
The rate established for transporting freight.
The freight and charges to be paid by the consignee.
A person or company involved in the collection, consolidation, shipping and distribution of goods from overseas territories. Typically, freight forwarders clear
freight through customs, prepare documents and arrange shipping, warehousing and delivery.
A person whose business is to act as an agent on behalf of the shipper. A freight forwarder frequently makes the booking reservation.
The freight forwarder industry association.
The management of third-party carriers to ensure the swift, safe and cost-efficient delivery of shipments – often involving the integration of a range of services.
The freight and charges to be paid by the consignor.
A quotation from a carrier or forwarder covering the cost of transport between two specified locations.
An approach to rate making whereby the ante is based only upon the shipment weight and distance; widely used in TOFC service.
See Ships.
See Full Truck Load.
Foreign Trade Zone (also known as Free Trade Zone), is similar to a Bonded Warehouse in that it has a special status that allows products to be imported into
it without taxes or duties being paid. However, a Foreign Trade Zone actually has less restrictions placed upon it than a standard bonded warehouse and activities
such as manufacturing can occur within an FTZ. Also see Bonded Warehouse.
The activity of processing customer shipments. Though most manufacturig and warehouse operations will process customer shipments, this term usually refers to
operations that ship many small orders (usually parcels) to end users as opposed to operations that process larger shipments to other manufacturers, wholesalers,
or resellers. Examples of fulfillment operations would include operations that process shipments for mail-order catalogs, internet stores, or repair parts.
A term used when goods occupy a whole container.
Same as Full Container Load, but in reference to motor carriage instead of containers.
Where goods being shipped occupy a complete truck.
An equipment-leasing arrangement that includes a variety of services to support leased equipment (i.e., motor carrier tractors).
A communication link between two (or more) entities which is normally maintained continuously.
The variable cost associated with a particular output unit plus a common cost allocation.
International Maritime Consultative Organization. A forum in which most major maritime nations participate and through which recommendations for
the carriage of dangerous goods, bulk commodities, and maritime regulations become internationally acceptable.
International Maritime Dangerous Goods Code. The regulations published by the IMO for transporting hazardous materials internationally.
International Standards Organization which deals in standards of all sorts, ranging from documentation to equipment packaging and labeling.
Abbreviation for “Immediate Transport.” The document (prepared by the carrier) allows shipment to proceed from the port of entry in the U.S. to Customs clearing
at the destination. The shipment clears Customs at its final destination. Also called an “In-Transit” Entry.
Abbreviation for “Independent Action.” The right of a conference member to publish a rate of tariff rule that departs from the Agreement’s common rate or rule.
Abbreviation for (1) “Interstate Commerce Commission,” (2) “International Chamber of Commerce.”
Stands for “Immediate Exit.” In the U.S., Customs IE Form is used when goods are brought into the U.S. and are to be immediately re-exported without being
transported within the U.S.
Pallets and containers used in air transportation; the igloo shape fits the internal wall contours of a narrow-body airplane.
See International Maritime Bureau.
An entry that allows foreign merchandise arriving at one port to be exported from the same port without the payment of duty.
See International Maritime Organization.
a.k.a shock alarm, shock switch. Impact alarms are devices that can be attached to lift trucks to sense impacts (collisions). The reality of impact alarms
is not near as wonderful as the concept. See my article on Lift Truck Safety for more details.
To receive goods from a foreign country.
A document required and issued by some national governments authorizing the importation of goods.
The location where goods will be cleared for importation into a country.
Cargo moving under Customs control where duty has not yet been paid.
Goods are held or transported In-Bond under customs control either until import duties or other charges are paid, or to avoid paying the duties or charges
until a later date.
The transaction or interchange that occurs at the time a container is received by a rail terminal or water port from another carrier.
In transit, or in passage.
in multi-branch environments, inbound and outbound quantities reflect open quantities on interbranch transfer orders.
The movement of raw materials and components from suppliers/vendors to production processes and storage facilities. International inbound logistics is the
management of the international inbound supply chain, often on behalf of retailers.
The movement of materials from suppliers and vendors into production processes or storage facilities.
The sourcing and transport of goods and raw materials from their point of origin/manufacture through to the manufacturing or assembly facility.
A lower-than-usual tariff rate assessed because a shipper offers a greater volume than specified in the tariff. The incentive rate is assessed for that portion
exceeding the normal volume.
A rate that induces the shipper to ship heavier volumes per shipment.
on lift trucks with internal combustion (gasoline, liquid propane, diesel) engines it is necessary to rev the engine in order to get the power needed to lift a
load with the hydraulics. An inching pedal acts like a combination of a clutch pedal and brake pedal. When slightly depressed, it puts the transmission in neutral
allowing the operator to rev the engine. When completely depressed it engages the brakes. An inching pedal may be a separate pedal from the brake pedal or be part
of the main brake pedal.
The recognized abbreviation for the International Chamber of Commerce Terms of Sale. These terms were last amended, effective July 1, 1990.
International terms of sale developed by the International Chamber of Commerce to define sellers’ and buyers’ responsibilities.
An agreement to hold a carrier harmless with regard to a liability.
Setting rate within a conference tariff that is different from the rate(s) for the same items established by other conference members.
A carrier that is a rate bureau member may publish a rate that differs from the rate the rate bureau publishes.
demand generated from forecasts, customer orders or service parts.
Any body of rate tariffs that are not part of an agreement or conference system.
Placing a port on a vessel’s itinerary because the volume of cargo offered at that port justifies the cost of routing the vessel.
vehicles used for industrial purposes. Generally used to transport materials and personnel within industrial facilities. Lift trucks (forklifts) are the
most well known type of industrial truck.
Managing the flow of data in an organization in a systematic, structured way to assist in planning, implementing, and controlling.
The data, plus the interpretation necessary to understand it.
The cost and service benefits of one mode compared with other modes.
An insurance term referring to any defect or other characteristic of a product that could result in damage to the product without external cause (for example,
instability in a chemical that could cause it to explode spontaneously). Insurance policies may exclude inherent vice losses.
The carriage contract used in transport from a shipping point overland to the exporter’s international carrier location.
A transportation line that hauls export or import traffic between ports and inland points.
An enterprise that offers overland service to or from a point of export.
A certificate issued by an independent agent or firm attesting to the quality and/or quantity of the merchandise being shipped. Such a certificate is
usually required in a letter of credit for commodity shipments.
A document certifying that merchandise (such as perishable goods) was in good condition immediately prior to shipment.
Successive shipments are permitted under letters of credit. Usually they must take place within a given period of time.
The provision of services such as pre-retailing, storage and unpacking within shops, usually undertaken in backstage areas, plus sales floor replenishment.
A container insulated on the walls, roof, floor, and doors, to reduce the effect of external temperatures on the cargo.
The frame of a container constructed to hold one or more thermally insulated tanks for liquids.
A document issued to the consignee to certify that insurance is provided to cover loss of or damage to the cargo while in transit.
This type of clause covers merchandise if the damage amounts to three percent or more of the insured value of the package or cargo. If the vessel burns,
sinks, collides, or sinks, all losses are fully covered. In marine insurance, the word average describes partial damage or partial loss.
This type of insurance offers the shipper the broadest coverage available, covering against all losses that may occur in transit.
In water transportation, the deliberate sacrifice of cargo to make the vessel safe for the remaining cargo. Those sharing in the spared cargo proportionately
cover the loss.
A Marine insurance term to refer to partial loss on an individual shipment from one of the perils insured against, regardless of the balance of the cargo.
Particular_average insurance can usually be obtained, but the loss must be in excess of a certain percentage of the insured value of the shipment, usually
three to five percent, before a claim will be allowed by the company.
A system of protection against loss under which a number of parties agree to pay certain sums (premiums) for a guarantee that they will be compensated under
certain conditions for specified loss and damage.
An airfreight company that offers a blend of transportation services such as air carriage, freight forwarding, and ground handling.
A comprehensive, system-wide view of the entire supply chain as a single process, from raw materials supply through finished goods distribution. All functions
that make up the supply chain are managed as a single entity, rather than managing individual functions separately.
The management of multiple supply chain components as a single entity on a global or regional scale. The practice can result in a more efficient supply chain
and lower costs.
A location where one carrier delivers freight to another carrier.
The transfer of cargo and equipment from one carrier to another in a joint freight move.
Water service between two coasts; in the U.S., this usually refers to water service between the Atlantic and Pacific or Gulf Coasts.
Water carriers that transport freight between East and West Coast ports, usually by way of the Panama Canal.
A private carrier hauling a subsidiary’s goods and charging the subsidiary a fee; this is legal if the subsidiary is wholly owned or if the private carrier
has common carrier authority.
Freight moving from origin to destination over the Freight lines of two or more transportation carriers.
Two or more motor carriers working together to haul a shipment to a destination. Carriers may interchange equipment but usually they rehandle the shipment
without transferring the equipment.
A stopping point for a shipment prior to the final destination.
A point located en route between two other points.
Materials handling devices that include bridge cranes, monorails, and stacker cranes.
Typically the handling of containers and swap-bodies between different forms of transport. See also multi-modal.
Used to denote movements of cargo containers interchangeably between transport modes, i.e., motor, water, and air carriers, and where the equipment is compatible
within the multiple systems.
A facility where cargo is transferred from one mode of transportation to another, usually from ship or truck to rail.
An intermediary that sells intermodal services to shippers.
Transporting freight by using two or more transportation modes.
The use of two or more transportation modes to transport freight; for example, rail to ship to truck.
Water carriers that operate over internal, navigable rivers such as the Mississippi, Ohio, and Missouri.
IATA is a non-political international organisation, with headquarters in Montreal and in Geneva. Membership is open to all scheduled airlines registered in
countries eligible for membership of the ICAO (International Civil Aviation Organisation this organisation is a branch of the United Nations). Charter
companies are not eligible for membership.
An international air carrier rate bureau for passenger and freight movements.
An international agency responsible for air safety and for standardizing air traffic control, airport design, and safety features worldwide.
A document required by the importing country indicating that the importing country recognizes that a controlled shipment is entering their country. The importing
country pledges to monitor the shipment and prevent its re-export, except in accordance with its own export control regulations.
See inbound logistics.
A special division of the International Chamber of Commerce.
A United Nations-affiliated organization representing all maritime countries in matters affecting maritime transportation, including the movement of dangerous
goods. The organization also is involved in deliberations on marine environmental pollution.
An independent regulatory agency that implements federal economic regulations controlling railroads, motor carriers, pipelines, domestic water carriers, domestic
surface freight forwarders, and brokers.
The transportation of persons or property between states; in the course of the movement, the shipment crosses a state boundary.
The National System of Interstate and Defense Highways, 42,000 miles of four-lane, limited-access roads connecting major population centers.
Allows foreign merchandise arriving at one port to be transported in bond to another port, where a superseding entry is filed.
The transportation of persons or property between points within a state. A shipment between two points within a state may be interstate if the shipment had a
prior or subsequent move outside of the state and the shipper intended an interstate shipment at.
A list of raw materials, components, work in progress, finished goods or other supplies held in a warehouse or distribution centre.
Any quantifiable item that you can handle, buy, sell, store, consume, produce, or track can be considered inventory. This covers everything from office and
maintenance supplies, to raw material used for manufacturing, to semi-finished and finished goods, to fuel used to power equipment used in the business.
A financial measurement that calculates all the costs associated with holding goods in storage, usually expressed as a percentage of the inventory value. It
includes inventory-in-storage, warehousing, obsolescence, deterioration or spoilage, insurance, taxes, depreciation, and handling costs.
The cost of holding goods, usually expressed as a percentage of the inventory value; includes the cost of capital, warehousing, taxes, insurance, depreciation,
and obsolescence.
A technique for strategically positioning inventory to meet customer service levels while minimizing inventory and storage levels. Excess inventory is replaced
with information derived through monitoring supply, demand and inventory at rest as well as in motion.
Inventory in a carrier’s possession, being transported to the buyer.
The direction and control of activities with the purpose of getting the right inventory in the right place at the right time in the right quantity in the right
form at the right cost.
Inventory administration through planning, stock positioning, monitoring product age, and ensuring product availability.
number of times inventory is consumed or sold during a one year period. Generally calculated by dividing the average inventory level (or current inventory level)
into the annual inventory usage (annual Cost of Goods Sold). In my opinion, Inventory Turns is probably the most overused, misused, and abused inventory metric.
That’s primarily because it doesn’t really tell you a hell of a lot, yet companies insist on building order policies on it.
The cost of goods sold divided by the average level of inventory on hand. This ratio measures how many times a company’s inventory has been sold during a period
of time. Operationally, inventory turns are measured as total throughput divided by average level of inventory for a given period.
The speed with which inventory moves through a defined cycle (i.e., from receiving to shipping).
The number of units and/or value of the stock of goods a company holds.
An itemized list of goods shipped to a buyer, stating quantities, prices, shipping charges, etc.
A detailed statement showing goods sold or shipped and amounts for each. The invoice is prepared by the seller and acts as the document that the buyer will
use to make payment.
A complete listing of all cargo entering the country of discharge. Required at all world ports and is the primary source of cargo control, against which duty
is assessed by the receiving country.
Abbreviation for “Inland Point Intermodal.” Refers to inland points (non-ports) that can be served by carriers on a through bill of lading.
A motor carrier that may provide service utilizing any route.
Letter of credit in which the specified payment is guaranteed by the bank if all terms and conditions are met by the drawee and which cannot be revoked without
joint agreement of both the buyer and the seller.
International Standards Organization.
Bank that opens a straight or negotiable letter of credit and assumes the obligation to pay the bank or beneficiary if the documents presented are in accordance
with the terms of the letter of credit.
The carrier issuing transportation documents or publishing a tariff.
The carrier whose name is printed on the bill of lading and with whom the contract of carriage exists.
See SKU
Data that describes the characteristics of an item. May include physical characteristics such as size and weight, transactional characteristics such as times
sold/consumed and units sold/consumed, or group characteristics such as sales channel, commodity, hazardous classification, etc. Item profiles are used in
warehouse design and slotting.
Abbreviation for “Transportation and Exportation.” Customs form used to control cargo movement from port of entry to port of exit, meaning that
the cargo is moving from one country, through the United States, to another country.
Rear of a container or trailer-opposite the front or nose.
A printed form on which companies record, by making an appropriate mark, the number of items they receive or ship. In many operations, tally sheets become a
part of the permanent inventory records.
A truck that has two drive axles or a trailer that has two axles.
Refers to the rear tandem axles (the back 8 wheels on an 18 wheeler) on a trailer that can be adjusted forward or backward on the trailer to even out load
weights or make for more stable loading (tandems all the way back).
Railcars designed to haul bulk liquid or gas commodities.
A rate that increases with distance but not in direct proportion to the distance the commodity is shipped.
In railcar or container shipments, the weight of the empty railcar or empty container.
The weight of the vehicle when it is empty.
A publication setting forth the charges, rates and rules of transportation companies.
A tax assessed by a government on goods entering or leaving a country. The term is also used in transportation in reference to the fees and rules applied by a
carrier for its services.
The type of service required, such as House to House, Pier to Pier, Pier to House, etc.
term used in describing functionality of Warehouse Management Systems to mix tasks to reduce travel time. Sending a forklift driver to put away a pallet on his
way to his next pick is an example of task interleaving.
To Be Nominated. (When the name of a ship is still unknown.)
Used for sending messages to outside companies. Messages are transmitted via Western Union, ITT and RCA. Being replaced by fax and internet.
A device to record temperature in a container while cargo is en route.
The storage and distribution of goods within a certain temperature range as required by the product type; for example, chilled or frozen. Products can include
pharmaceuticals as well as food.
Temporary operating authority as a common carrier granted by the ICC for up to 270 days.
The offer of goods for transportation or the offer to place cars or containers for loading or unloading.
A request for space and equipment with a motor carrier.
Time and date for payment of a draft.
An assigned area in which containers are prepared for loading into a vessel, train, truck, or airplane or are stacked immediately after discharge from the vessel,
train, truck, or airplane.
A location or facility for the handling and/or temporary storage of cargo as it is loaded/unloaded or transferred between enterprises.
A charge made for a service performed in a carrier’s terminal area.
A reduced rate that a carrier offers in return for the shipper or consignee tendering or picking up the freight at the carrier’s terminal.
software used on desktop and portable computers that allows the computer to act like a terminal connected to a mainframe system. If you have a networked desktop PC
and are accessing mainframe programs ( a.k.a. green screen programs) you are using terminal emulation. Terminal emulation is also a common method used to connect
portable computers (as in warehouse bar code data collection systems) to mainframe software. Also see Screen Mapping.
The enterprise responsible for the operation of facilities for one or more modes of transportation.
A document provided to the delivering carrier by the terminal operator to allow admission into the operator’s facility.
A document used to accept materials or equipment at a terminal. This provides the delivering carrier with proof of delivery and the terminal with a verification of
receipt.
The point at which sellers have fulfilled their obligations so the goods in a legal sense could be said to have been delivered to the buyer. They are shorthand
expressions that set out the rights and obligations of each party when it comes to transporting the goods. Following, are the thirteen terms of sale in international
trade as Terms of Sale reflected in the recent amendment to the International chamber of Commerce Terms of Trade (INCOTERMS), effective July 1990 exw, fca, fas, fob,
cfr, cif, cpt, cip, daf, des, deq, ddu and ddp.
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.
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.
A Term of Sale which means the seller has the same obligations as under CPT, but with the addition that the seller has to procure cargo insurance against the buyer’s
risk of loss of or damage to the goods during the carriage. The seller contracts for insurance and pays the insurance premium. The buyer should note that under the
CIP term the seller is required to obtain insurance only on minimum coverage. The CIP term requires the seller to clear the goods for export.
The seller quotes a price that includes the cost of transportation to a specific point. The buyer assumes responsibility for loss/damage and purchases insurance for
the shipment.
The price quote the seller offers to transportation charges.
A Term of Sale which means the seller pays the freight for the carriage of the goods to the named destination. The risk of loss of or damage to the goods,
as well as any additional costs due to events occurring after the time the goods have been delivered to the carrier, is transferred from the seller to the buyer
when the goods have been delivered into the custody of the carrier. If subsequent carriers are used for the carriage to the agreed upon destination, the risk passes
when the goods have been delivered to the first carrier. The CPT term requires the seller to clear the goods for export.
A Term of Sale which means the sellers fulfill their obligation to deliver when the goods have been made available, cleared for export, at the named point and
placed at the frontier, but before the customs Terms of Sale border of the adjoining country. (continued)
Delivered Duty Paid means that the seller fulfills his obligation to deliver when the goods have been made available at the named place in the country of importation.
The seller has to bear the risks and costs, including duties, taxes and other charges of delivering the goods thereto, clear for importation. While the EXW term
represents the minimum obligation for the seller, DDP represents the maximum.
A Term of Sale where the seller fulfills his obligation to deliver when the goods have been made available at the named place in the country of importation.
The seller has to bear the costs and risks involved in bringing the goods thereto (excluding duties, taxes and other official charges payable upon importation)
as well as the costs and risks of carrying out customs formalities. The buyer has to pay any additional costs and to bear any risks caused by failure to clear
the goods for in time.
A Term of Sale which means the DDU term has been fulfilled when the goods have been available to the buyer on the quay (wharf) at the named port of destination,
cleared for importation. The seller has to bear all risks and costs including duties, taxes and other charges of delivering the goods thereto.
A Term of Sale where the seller fulfills his/her obligation to deliver when the goods have been made available to the buyer on board the ship, uncleared for import
at the named port of destination. The seller has to bear all the costs and risks involved in bringing the goods to the named port destination.
The price that the seller quotes applies only at the point of origin. The buyer takes possession of the shipment at the point of origin and bears all the costs
and risks associated with transporting the goods to the destination.
A Term of Sale which means that the seller fulfills the obligation to deliver when he or she has made the goods available at his/her premises (i.e., works,
factory, warehouse, etc.) to the buyer. In particular, the seller is not responsible for loading the goods in the vehicle provided by the buyer or for clearing
the goods for export, unless otherwise agreed. The buyer bears all costs and risks involved in taking the goods from the seller’s premises to the desired destination.
This term thus represents the minimum obligation for the seller.
The seller agrees to deliver the goods to the destination point. The buyer assumes all responsibility (risk) at the destination point.
The seller agrees to deliver the goods to the point of origin. The buyer assumes all responsibility and risk from the point of origin.
The seller agrees to deliver the goods to the port as indicated by the exchange point. The buyer assumes all responsibility (risk) from the port as indicated by
the exchange point.
A Term of Sale which means the seller fulfills his obligation to deliver when the goods have been placed alongside the vessel on the quay or in lighters at the
named port of shipment.This means that the buyer has to bear all costs and risks of loss of or damage to the goods from that moment.
A Term of Sale which means the seller fulfills their obligation when he or she has handed over the goods, cleared for export, into the charge of the carrier
named by the buyer at the named place or point. If no precise point is indicated by the buyer, the seller may choose, within the place or range stipulated, where
the carrier should take the goods into their charge.
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.
The seller agrees to deliver the goods to the dock alongside the overseas vessel that will carry the shipment. The seller pays the cost of getting the shipment
to the dock. The buyer is responsible for contracting the carrier, obtaining.
This expression will be followed by an exchange point. The exchange point indicates the point at which the responsibility (risk) moves from the buyer to the seller.
Or 20ft equivalent unit; the default measurement for ocean freight containers. Most containers used today are 40ft long.
Abbreviation for “Twenty foot Equivalent Unit.”
A firm that supplies logistics services to other companies.
(abbreviated 3PL) describes businesses that provide one or many of a variety of logistics-related services. Types of services would include public warehousing,
contract warehousing, transportation management, distribution management, freight consolidation. A 3PL provider may take over all receiving, storage, value added,
shipping, and transportation responsibilities for a client and conduct them in the 3PL’s warehouse using the 3PL’s equipment and employees, or may manage one or all
of these functions in the client’s facility using the client’s equipment, or any combination of the above. Another term, 4PL is sometimes used to describe businesses
that manage a variety of logistics related services for clients by using 3PLs. Also see Public Warehouse and Contract Warehouse or visit International Warehouse
Logistics Association (IWLA) site.
Transportation, warehousing and other logistics related services provided by companies employed to assume tasks that were previously performed in-house by the client.
A basic structure and operational activity of a company; the three layers include operational systems, control and administrative management, and master planning.
A single bill of lading covering both the domestic (inland) and international carriage of an export shipment.
The total rate from the point of origin to final destination.
A measure of warehousing output volume (weight, number of units). Also, the total amount of units received plus the total amount of units shipped, divided by two.
A warehousing output measure that considers the volume (weight, number of units) of items stored during a given time period.
The charge for moving a container through a container yard off or onto a ship.
conveyor sorting system that uses a series of tilting devices (carriers) to sort materials. Each tilting carrier has a tray and is mounted on a conveyor,
as the carrier passes the drop-off point, it will tilt allowing the materials to fall onto another conveyor, down a chute, or into some type of container a.k.a
Tilt-tray conveyor.
term sometimes used to describe forecast periods.
A contract for leasing between the ship owners and the lessee. It would state, e.g., the duration of the lease in years or voyages.
A draft that matures either a certain number of days after acceptance or a certain number of days after the date of the draft.
period of time prior to the scheduled production date beyond which changes can be made without significant adverse effects.
A value created in a product by having the product available at the time desired. Transportation and warehousing create time utility.
A rail rate that is based upon transit time.
A freight or distribution service that specifies or guarantees delivery on a particular day or time of day.
Delivery is guaranteed on a specific day or at a certain time of the day.
Time schedules of departures and arrivals by origin and destination; typically used for passenger transportation by air, bus, and rail.
“Transport International par la Route.” Road transport operating agreement among European governments and the United States for the international movement of
cargo by road. Display of the TIR carnet allows sealed containerloads to cross national frontie.
Abbreviation for “Trailer Load.”
A shipment weighing the minimum weight or more. Carriers give a rate reduction for shipping a TL-size shipment.
Transportation management system (see separate listing).
Abbreviation for “Trailer on Flat Car.” The movement of a highway trailer on a railroad flatcar. Also known as Piggyback.
Also known as piggyback.
A unit used in comparing freight earnings or expenses. The amount earned from the cost of hauling a ton of freight one mile. Also, the movement of a ton of freight
one mile.
A freight transportation output measure that reflects the shipment’s weight and the distance the carrier hauls it; a multiplication of tons hauled and distance traveled.
100 cubic feet.
A type of air circulation in a container. In top air units, air is drawn from the bottom of the container, filtered through the evaporator for cooling and then
forced through the ducted passages along the top of the container. This type of airflow requires a special loading pattern.
Average normal use stock, plus average lead stock, plus safety stock.
A decision-making approach that considers minimization of total costs and recognizes the interrelationship among system variables such as transportation,
warehousing, inventory, and customer service.
A management approach in which managers constantly communicate with organizational stakeholders to emphasize the importance of continuous quality improvement.
A private motor carrier receiving operating authority as a common carrier to haul freight for the public over the private carrier’s backhaul; the ICC granted this
type of authority to the Toto Company in 1978.
The charge made for towing a vessel.
material handling system that uses a towline (usually a chain) recessed beneath the floor to pull wheeled carts along a fixed path. Towline conveyors have
been used for more than 50 years in manufacturing facilities.
