Supply Chain & Logistics Terminology

Backhaul

The return trip of a transportation vehicle, often used to describe when a truck returns to its origin point after making a delivery, ideally with a new load to maximize efficiency.

Batch Processing

The execution of data transactions or updates in groups (batches) rather than one by one in real-time. In TMS, batch processing might be used to update shipment status for multiple loads at once.

Benchmark

A standard or reference point used to measure performance, typically in terms of cost, efficiency, or service level in logistics operations.

Best in Class

Industry-leading operations, practices, or technologies that set the standard for excellence in the logistics and supply chain industry.

Bill of Lading (BOL)

A legal document issued by a carrier that details the type, quantity, and destination of goods being shipped. It also serves as a receipt for the shipment.

BOL Number

A unique identifier assigned to a Bill of Lading used to track the shipment and manage related documentation.

Blanket Order (Blanket Purchase Order)

An agreement to purchase a specific quantity of goods over a period, reducing the need for multiple purchase orders.

Blanket Rate

A negotiated shipping rate that applies to all shipments during a specified period, regardless of individual shipment characteristics.

Bonded Warehouse

A storage facility where goods can be stored without the payment of customs duties until they are either exported or cleared for domestic use.

Broker

An intermediary who arranges transportation services between shippers and carriers, often negotiating rates and securing capacity.

Bullwhip Effect

A supply chain phenomenon where small fluctuations in demand at the consumer level cause increasingly larger fluctuations in orders upstream.

Buyer

The individual or organization responsible for purchasing goods or services on behalf of a company.

Capacity

The available space or resources (e.g., trucks, warehouse slots) for moving or storing goods in the supply chain.

Cargo

Goods or merchandise transported by air, sea, or land.

Carriage

The act of transporting goods from one place to another, usually by truck, ship, or rail.

Carriage and Insurance Paid to (CIP)

Similar to CPT, but the seller is also required to obtain insurance for the goods during transit to the specified destination. Risk transfers to the buyer once the goods are handed to the carrier, but the seller covers transport and insurance costs.

Carriage Paid to (CPT)

The seller covers the costs of delivering the goods to a specified destination, but risk transfers to the buyer once the goods are handed over to the carrier.

Carrier

A company or individual responsible for transporting goods, such as a trucking company, airline, or ocean freight carrier.

Carrier Portal

An online platform where carriers can interact with shippers, manage loads, provide status updates, and handle documentation.

Certificate of Insurance (COI)

A document that provides proof of insurance coverage, often required by logistics providers to ensure protection during transport.

Certificate of Origin (CO)

A document certifying where a product was manufactured, used to determine tariffs and other trade policies.

Change Management

The process of guiding an organization through changes in processes, systems, or technologies, ensuring successful adoption and minimal disruption.

Channel Partners

Businesses that work together in the supply chain to move products from manufacturer to end customer, such as distributors and wholesalers.

Claim

A formal request made to a carrier or insurance provider for compensation due to damage, loss, or delay of goods during transit.

Class Rates

Standardized rates for shipping goods based on their classification, which factors in weight, size, and commodity type.

Classification

The process of categorizing goods for shipping based on factors like weight, size, and fragility, influencing shipping costs.

Closed-Loop (Supply Chain)

A supply chain model that incorporates feedback loops and product returns for recycling, remanufacturing, or reuse. In a closed-loop supply chain, goods and materials are tracked even after reaching the end customer, with mechanisms in place for returning used products back into the supply chain, enhancing sustainability and reducing waste by reintroducing materials into production processes.

Cloud Based

A software deployment model where the TMS is hosted on remote servers and accessed over the internet, eliminating the need for local installations and offering scalability, flexibility, and lower maintenance costs compared to on-premise systems.

Collect Freight

A shipping term where the receiver is responsible for paying the transportation charges upon delivery.

Comma-Separated Values (CSV)

A file format commonly used for exchanging data between systems, where information is stored in plain text separated by commas. It is often used in TMS for importing/exporting shipment data, reports, and more.

Commercial Invoice

A document issued by a seller to a buyer, detailing the sale transaction, including the goods, price, and payment terms. Often used in international shipments.

Commodities

Basic goods that are interchangeable with others of the same type, such as oil, grains, or metals, commonly traded in bulk.

Compliance

Adhering to regulations, standards, or policies, particularly those related to safety, customs, and legal requirements in logistics.

Consignee

The person or entity to whom goods are shipped.

Consignment

A batch of goods sent to a consignee by a consignor, where the consignor retains ownership until the goods are sold.

Consignor

The person or entity that sends goods to a consignee, typically the seller or shipper.

Consolidation

The process of combining multiple shipments into one to optimize transportation costs and efficiency.

Constraint

Any factor or limitation that restricts the performance of a logistics process, such as capacity constraints or regulatory restrictions.

Cost and Freight (CFR)

The seller covers the cost of transporting the goods to the destination port, but risk transfers to the buyer once the goods are loaded onto the ship. The buyer is responsible for insurance and further transportation from the port.

Cost Center

A department or unit within an organization where costs are tracked and allocated, often related to shipping, transportation, and warehousing.

Cost Insurance and Freight (CIF)

Similar to CFR, but the seller is also required to provide insurance for the goods during transport. Risk transfers to the buyer once the goods are on board the ship, though the seller covers the freight and insurance to the destination port.

Country of Destination

The country where goods are being shipped to and will be delivered.

Country of Origin

The country where a product was manufactured, which can impact tariffs and import regulations.

Courier Service

A company that provides fast and reliable transportation of documents, small packages, or parcels, typically with same-day or next-day delivery.

Cross Dock

A facility or designated area within a warehouse where cross docking operations take place. In a cross dock, incoming shipments are directly transferred from inbound vehicles to outbound vehicles without being stored for long periods. The goal of a cross dock is to reduce storage time, streamline the distribution process, and quickly move goods through the supply chain to their final destinations.

Cross Docking

A logistics practice where goods are unloaded from inbound transportation, sorted, and immediately reloaded onto outbound transportation with minimal or no storage in between. Cross docking is designed to streamline the supply chain, reduce handling and storage costs, and improve delivery speed by moving goods directly from receiving to shipping areas. This method is commonly used in retail and distribution to accelerate the flow of products to market.

Cube Out

When a shipping container or trailer reaches its maximum capacity by volume, rather than weight, affecting shipping costs and load planning.

Customer

The individual or business entity that receives goods or services as part of the supply chain. In logistics, a customer can refer to the party that places orders, expects deliveries, and is the end recipient of the products being transported. The customer may be a retailer, distributor, or end consumer, and their satisfaction is critical to the success of the logistics operation.

Customer Relationship Manager (CRM)

A software system that helps businesses manage interactions and relationships with current and potential customers. In the context of TMS, CRM integration enables better communication and coordination with clients, providing insights into customer preferences, shipment histories, and service feedback to enhance customer service and satisfaction.

Customs

Government authorities responsible for regulating and facilitating international trade, including collecting tariffs and enforcing import/export laws.

Customs Broker

A licensed individual or company that assists importers and exporters in meeting customs regulations, filing paperwork, and clearing goods through customs.

Customs Clearance

The process of obtaining approval from customs authorities to move goods across international borders, ensuring compliance with laws and payment of duties.

CWT (Hundredweight)

A unit of measurement used in shipping and freight pricing, representing 100 pounds.

Dashboard (Digital)

A visual display of key performance indicators (KPIs) and data, often used in TMS or logistics software to monitor supply chain activities.

Database

A structured set of data held electronically, used in logistics to manage information such as inventory, orders, and shipments.

Data Integration

The process of combining data from different sources into a unified view, enabling seamless data flow between the TMS and other systems such as ERP, WMS, and financial software.

Data Mapping

The process of defining how data fields from one system correspond to fields in another system during integration. Proper data mapping ensures that information (e.g., addresses, shipment details) is accurately transferred between software systems.

Data Syncing

The process of ensuring that data remains consistent across multiple systems by continuously or periodically updating all systems with the latest information. In logistics, this ensures that inventory levels, order statuses, and shipment details are always up-to-date.

Deadhead

The movement of an empty truck or container, typically after a delivery has been made, representing inefficient use of resources.

Declared Value

The value assigned to a shipment for customs and insurance purposes, used to calculate duties and compensation in case of loss or damage.

Deconsolidator

A logistics provider that specializes in breaking down consolidated shipments for delivery to multiple destinations.

Delivered at Place (DAP)

The seller is responsible for delivering the goods to a specified location at the buyer’s destination. Risk transfers to the buyer once the goods are available for unloading at that location, but the seller does not handle unloading or import duties.

Delivered at Place Unloaded (DPU)

The seller is responsible for delivering the goods to a specified location and unloading them at the buyer’s destination. Risk transfers to the buyer after unloading, but the buyer is responsible for import duties and clearance.

Delivered Duty Paid (DDP)

The seller is responsible for delivering the goods to the buyer’s location, including paying all transportation, duties, and taxes. Risk transfers to the buyer once the goods are delivered and available for unloading at the destination.

Delivery Terms

The agreed-upon conditions between a buyer and seller that specify the responsibilities, costs, and risks associated with the delivery of goods. Delivery terms dictate when ownership of the goods transfers from the seller to the buyer, who pays for transportation and insurance, and who is responsible for import/export duties. Common delivery terms are defined by Incoterms, such as FOB (Free on Board), DDP (Delivered Duty Paid), and CIF (Cost, Insurance, and Freight), each outlining different responsibilities in the shipping process.

Demand Planning Systems

Software tools used to forecast demand and plan inventory levels, ensuring that supply meets future demand in an efficient way.

Demurrage

A fee charged by a carrier to the shipper or consignee for the extended use of transportation equipment, such as a container or cargo vessel, beyond the agreed-upon free time. This charge compensates the carrier for the loss of use of their assets due to delays in unloading or returning the equipment. Demurrage fees are common in both ocean freight and rail transportation when containers are held at ports, terminals, or consignee locations for longer than permitted.

Density

The ratio of a shipment’s weight to its volume, used to calculate shipping rates, particularly in less-than-truckload (LTL) shipping.

Detention

A charge assessed to shippers or consignees for keeping a carrier’s equipment, such as a truck or container, longer than the agreed-upon free time.

Dimensionalizer

A device used to automatically measure the dimensions (length, width, height) and weight of freight or parcels to calculate their dimensional weight (DIM weight). This data is used to optimize shipping costs, as carriers often charge based on the greater of the actual weight or the dimensional weight. Dimensionalizers are commonly used in warehouses and distribution centers to ensure accurate freight billing and load planning.

Direct-to-Consumer (DTC)

A business model where manufacturers or retailers sell products directly to consumers, bypassing traditional distribution channels like wholesalers or retailers.

Dispatch

The process of scheduling and sending out vehicles to pick up or deliver goods, ensuring that shipments move on time.

Distribution

The process of delivering products from manufacturers or suppliers to end customers, often through intermediaries like distributors and retailers.

Distribution Center

A warehouse facility where goods are stored, processed, and distributed to customers or retailers.

Dock Scheduling

The process of coordinating when trucks will arrive at and leave from a loading dock to avoid congestion and optimize load/unload times.

Door to Door

A shipping service where goods are picked up from the sender’s location and delivered directly to the recipient’s location, without additional handling.

Door to Port

A shipping service where goods are picked up from the sender’s location and delivered to a port, where the consignee is responsible for further transportation.

Downstream

Refers to the flow of goods, information, or finances in a supply chain, from the manufacturer to the end customer.

Drop Deck

A type of flatbed trailer with a lower deck height to accommodate taller cargo that cannot fit in a standard container.

Drop Ship

A fulfillment strategy where a retailer doesn’t hold inventory but instead forwards customer orders directly to the supplier, who ships the products directly to the customer.

Drop Trailer

A trailer that is left at a shipper’s or receiver’s facility for loading or unloading, allowing the driver to pick up another load in the meantime.

DUNS Number

A unique identifier for businesses, issued by Dun & Bradstreet, often used in global trade to identify companies in commercial transactions.

Duty

A tax imposed by a government on imported goods, often based on the value or quantity of the goods.

Dunnage

Materials used to protect and secure cargo during transportation, such as air pillows, foam, or wood.

E-Commerce

The buying and selling of goods or services online, often involving complex logistics for order fulfillment, shipping, and returns.

Economy of Scale

The cost advantage that arises when production or transportation volume increases, resulting in lower per-unit costs.

ELD (Electronic Logging Device)

A device used in commercial motor vehicles to record driving hours, ensuring compliance with regulations on driver work hours.

End User

The final recipient of a product or service, typically the consumer in a supply chain.

Enroute

Refers to goods that are currently in transit to their destination.

Enterprise Resource Planning (ERP)

A type of software that integrates core business processes, such as finance, inventory, and order management, into a single system.

Equipment

In logistics, equipment refers to the vehicles, containers, and tools used to transport, store, and handle goods.

Estimated Time of Arrival (ETA)

The expected time when a shipment or vehicle will arrive at its destination, often used to manage logistics operations and communicate with customers.

Ex Works (EXW)

An Incoterm where the seller makes goods available at their premises, and the buyer is responsible for all transportation and customs costs.

Expedited Shipment

A shipping service where goods are delivered faster than standard transit times, often involving higher costs.

Export

The process of sending goods or services to another country for sale or trade.

Extensible Markup Language (XML)

A markup language used to structure data for sharing between different systems, often used in EDI and logistics software.

Extract, Transform, Load (ETL)

A process used in data integration where data is extracted from one system, transformed into a compatible format, and then loaded into another system. This is critical for integrating TMS with data warehouses or reporting tools.

Fabricator

A company that manufactures components or products by cutting, shaping, and assembling materials.

Final Destination

The ultimate location where a shipment is delivered to the consignee or end user.

Final Mile (Last Mile)

The last leg of the delivery process, where goods are transported from a distribution center or transportation hub to their final destination, typically the customer’s doorstep. Final mile logistics is crucial in e-commerce and retail, as it directly impacts delivery speed, customer satisfaction, and costs. Challenges in final mile delivery include urban congestion, high delivery expectations, and optimizing routes for multiple stops.

Firewall

A security system that controls incoming and outgoing network traffic, often used to protect logistics software and data.

First In, First Out (FIFO)

An inventory management method where the oldest stock is used or sold first, reducing the risk of obsolescence.

Flatbed

A type of trailer with a flat, open deck used to transport large or oversized goods that cannot be shipped in a standard container.

Forecasting

The process of predicting future demand for products based on historical data, trends, and market analysis.

Free Alongside Ship (FAS)

The seller is responsible for delivering the goods alongside the vessel at the port of shipment. Risk transfers to the buyer once the goods are placed alongside the ship, and the buyer handles export formalities and shipping.

Free Carrier (FCA)

The seller is responsible for delivering the goods to a specified location and clearing them for export. Risk transfers from the seller to the buyer once the goods are handed over to the carrier at the agreed location.

Free on Board (FOB)

The seller is responsible for delivering the goods on board the vessel at the port of shipment. Risk transfers to the buyer once the goods are on the ship, and the buyer is responsible for freight and insurance.

Freight

Goods transported in bulk by car, truck, train, ship, or plane.

Freight-All-Kinds (FAK)

A shipping classification where multiple types of freight are consolidated into a single shipment for pricing purposes.

Freight Audit & Pay

The process of reviewing freight bills and invoices to ensure accuracy before payment is made to carriers or logistics providers.

Freight Auditing

The process of reviewing and verifying freight bills to ensure that charges align with contract terms and that there are no errors.

Freight Bill

An invoice issued by a carrier for the transportation of goods, detailing charges for the shipment.

Freight Class

A system used to categorize goods for shipping based on density, value, handling, and liability, influencing the shipping cost.

Freight Forwarder

A company that arranges the transportation and logistics for shipping goods on behalf of shippers, often handling documentation, customs clearance, and consolidation.

Fuel Surcharge (FSC)

An additional charge added to freight costs to cover the fluctuating price of fuel, often calculated as a percentage of the total shipping cost.

Gain Sharing

A performance-based incentive program where cost savings or operational efficiencies are shared between a company and its supply chain partners.

Gross Weight

The total weight of a shipment, including the goods, packaging, and any additional materials used to secure the load.

Handling Costs

Expenses incurred for activities such as loading, unloading, and moving goods within a warehouse or transportation process.

Hazardous Material (Hazmat)

Substances that pose risks to health, safety, or the environment, requiring special handling and transportation procedures.

Hopper Cars

A type of railcar used for transporting bulk materials such as grain, coal, or sand, with openings at the bottom for unloading.

Horizontal Integration

A strategy where a company expands its operations by acquiring or merging with other companies at the same level of the supply chain. This allows the business to consolidate its market position, increase scale, reduce competition, and potentially gain greater control over distribution or production. In logistics, horizontal integration can involve acquiring competitors or complementary businesses, leading to increased market share and operational efficiencies.

Hub

A central location used in transportation networks for sorting and redistributing shipments to their final destinations.

Hundredweight (CWT)

A unit of measurement used in shipping and freight pricing, representing 100 pounds.

Import

The process of bringing goods or services into a country from abroad for sale or trade.

Inbound Logistics

The transportation, storage, and receipt of goods coming into a business from suppliers or vendors.

Incoterms

International commercial terms that define the responsibilities of buyers and sellers in the shipping process, including who pays for transportation, insurance, and customs duties.

Inspection Certificate

A document certifying that goods have been inspected and meet the required standards, often used in international trade.

Insurance Certificate

A document that provides proof of insurance coverage for goods in transit, protecting against loss or damage.

Integration

The process of linking a TMS with other software systems (e.g., WMS, ERP, or CRM) to share data and improve operational efficiency.

Interface

The part of a software system that users interact with, such as dashboards, forms, or reports, allowing users to input data, run processes, and access information within the TMS.

Interline

The process where multiple carriers share responsibility for transporting a shipment across different segments of a route.

Intermodal

The use of more than one mode of transportation to move goods, such as combining truck and rail, or ship and rail.

In-Transit

Refers to goods that are currently being transported between origin and destination.

Inventory

The stock of goods and materials held by a business, either for sale or use in production.

Inventory Management System (IMS)

Software used to track and manage inventory levels, orders, sales, and deliveries, ensuring optimal stock levels.

Just In Time (JIT)

An inventory management strategy where goods are produced or ordered only as needed, reducing the need for large inventories and minimizing holding costs.

Key Performance Indicator (KPI)

A measurable value used to evaluate the efficiency or effectiveness of logistics and supply chain operations, such as on-time delivery or inventory turnover.

Landed Costs

The total cost of a product once it has arrived at its destination, including the original price, transportation fees, taxes, duties, and any additional costs.

Last In First Out (LIFO)

An inventory management method where the most recently added stock is used or sold first, often used in industries with rapidly changing goods.

Layover

A stop during a shipment where goods are temporarily held before being moved to their final destination, or where a driver waits between deliveries.

Lead Time

The time it takes from the placement of an order until the goods are delivered to the customer.

Less Than Truckload (LTL)

A shipping method where multiple shippers share space in a single truck, typically for smaller shipments that don’t require a full truckload.

Line-Haul Shipment

The transportation of goods over long distances, typically between cities or large distribution hubs.

Line Item

An individual item or product listed on an invoice, purchase order, or shipping document.

Load

The amount of freight being transported in a single trip, typically measured in weight or volume.

Load Board

An online platform where shippers, freight brokers, and carriers post and search for available loads and trucks. Load boards facilitate the matching of carriers with shippers who have freight that needs to be transported, helping both parties optimize their operations by filling empty trucks (reducing deadhead) and moving freight more efficiently. Load boards are widely used in the logistics industry to improve capacity utilization and reduce transportation costs.

Load Tender

A formal request sent from a shipper to a carrier, asking the carrier to accept and transport a specific shipment.

Logistics

The process of planning, implementing, and controlling the efficient movement of goods and services from the point of origin to the point of consumption.

Lumper Fee

A charge assessed by third-party workers, or lumpers, who are hired to load or unload freight at a warehouse or distribution center.

Managed Transportation

A service where a third-party logistics provider (3PL) or transportation management company takes over the planning, execution, and optimization of a shipper’s transportation needs. Managed transportation services (MTS) include carrier selection, routing, load planning, freight bill auditing, and real-time tracking. This approach helps shippers improve operational efficiency, reduce transportation costs, and gain better visibility into their logistics operations while allowing them to focus on core business activities.

Manifest

A document that lists all the goods being transported on a shipment, along with their description, weight, and destination.

Material Requirement Planning (MRP)

A system that calculates the materials and components needed to manufacture a product, ensuring that production schedules align with demand.

Middleware

Software that facilitates communication and data exchange between different applications or systems. In logistics, middleware helps ensure that platforms like TMS, WMS, and ERP can seamlessly interact, allowing for smoother integration and data flow without requiring direct connections between every system. It acts as a bridge, translating data formats and managing interactions between disparate systems.

Mileage Rate

The cost charged per mile for transporting goods, commonly used in trucking and shipping contracts.

Multi-Currency

The ability of a logistics system to handle transactions in multiple currencies, enabling global trade and payment processing.

Multi-Drop Shipment

A delivery route where the carrier makes multiple stops to deliver goods to different recipients along the same trip.

National Motor Freight Classification (NMFC)

A standardized system used in the U.S. to classify freight based on factors like weight, size, and value, which determines shipping rates.

Net Weight

The weight of the goods being shipped, excluding the weight of any packaging or containers.

Node

A point in a supply chain where goods are stored, processed, or transferred, such as a warehouse, distribution center, or terminal.

Non Vessel Operating Common Carrier (NVOCC)

A company that arranges ocean freight shipments for customers but does not operate its own vessels, acting as an intermediary between shippers and ocean carriers.

Nonconformity 

A situation where goods or processes do not meet specified standards or expectations, often requiring corrective action.

North American Free Trade Agreement (NAFTA)

A trade agreement between the U.S., Canada, and Mexico that reduced tariffs and barriers to trade, replaced by the USMCA in 2020.

Notify Party

The person or company listed on a Bill of Lading that should be informed when the goods arrive at their destination.

Notification

The act of informing relevant parties about the status of a shipment, delivery, or other logistics events.

Ocean Carrier

A company that transports goods by sea, using container ships, bulk carriers, or tankers.

On-Premise (Software)

A software deployment model where the software is installed on the company’s local servers and infrastructure. This approach requires significant upfront costs for hardware, software licenses, and dedicated IT staff to manage maintenance, updates, and security. Unlike cloud-based solutions (SaaS), on-premise systems can be less flexible, harder to scale, and may involve longer implementation times, making it less suitable for businesses looking for agility and ease of management.

On-Time In-Full (OTIF)

A metric that measures the percentage of shipments that are delivered on time and complete, without shortages or delays.

Open Database Connectivity (ODBC)

A standard API used to access database management systems, allowing the TMS to connect with various databases to retrieve and manipulate data.

Open-Loop (Supply Chain)

A supply chain model where materials, products, and information flow in one direction—from supplier to manufacturer, to distributor, to customer—without any mechanisms for feedback or recycling. Once the products reach the end customer, they are no longer tracked or returned into the supply chain for reuse or recycling, leading to potential inefficiencies and waste.

Optimization

The process of improving logistics operations to maximize efficiency, reduce costs, and meet customer demands.

Order Management

The process of receiving, tracking, and fulfilling customer orders, often managed through specialized software systems.

Order Management System (OMS)

Software used to automate the order fulfillment process, including tracking orders, inventory levels, and customer communications.

Origin

The starting point of a shipment, where the goods are picked up or manufactured.

Outbound Logistics

The transportation, storage, and distribution of goods from a company to its customers or end users.

Outlier

A data point that significantly deviates from the norm, often analyzed for its impact on logistics performance.

Outsource

The practice of contracting external companies to perform logistics functions, such as transportation, warehousing, or order fulfillment.

Over, Short and Damaged (OS&D)

A term used in shipping to describe discrepancies in the quantity or condition of goods delivered, compared to what was ordered or shipped.

Over-The-Road (OTR)

A type of freight transportation where goods are shipped long distances by truck across regional or national routes.

Owner / Operator

A truck driver who owns and operates their own vehicle, often contracted by larger logistics companies to haul freight.

Packing List

A document that details the contents of a shipment, including item descriptions, quantities, and packaging information, used for inventory control and customs clearance.

Pallet

A flat structure used to support goods in a stable manner while being lifted or transported, typically made of wood, plastic, or metal.

Parcel Shipment

The transportation of smaller packages or parcels, typically under 150 pounds, often handled by courier or parcel delivery services.

PAPS (Pre-Arrival Processing System)

A U.S. Customs system that allows for the electronic pre-clearance of shipments, speeding up the border crossing process.

PARS (Pre-Arrival Review System)

A Canadian system that allows for the pre-clearance of shipments before they reach the border, reducing delays at customs.

Permit

An official document that grants authorization to transport specific types of goods, often required for hazardous materials or oversized loads.

Pick / Pack

The process of selecting items from inventory (picking) and preparing them for shipment (packing).

Pick List

A document used in warehouse operations that lists the items and quantities to be picked from inventory to fulfill a customer order.

Point to Point Rate

A transportation rate calculated based on the distance between two specific points, often used in long-haul trucking or rail transport.

Pool Distribution (Pooling)

A shipping strategy where multiple small shipments are consolidated into a larger load for transportation, reducing costs and improving efficiency.

Port

A facility where ships load and unload cargo, often serving as a hub for the movement of goods in and out of a country or region.

Port Authority

A government or semi-government agency responsible for managing and regulating operations at a port, including logistics, security, and customs enforcement.

Port of Discharge

The port where cargo is unloaded from a ship and transferred to another mode of transportation for delivery to its final destination.

Port of Entry

The location where goods first enter a country, typically where customs clearance and duties are processed.

Port of Loading

The port where cargo is loaded onto a vessel for international transportation.

Postponement

A supply chain strategy where final assembly or customization of a product is delayed until customer demand is clearer, reducing excess inventory.

Power Only Carrier

A freight arrangement where a carrier provides only the tractor (power unit) and driver to haul a pre-loaded trailer owned by the shipper or a third party. This allows shippers or brokers to move their trailers without needing to hire a full-service carrier with both tractor and trailer. Power only is commonly used in situations where shippers have their own trailers or need to reposition empty trailers.

Prepaid Freight

A shipping term where the sender is responsible for paying the transportation costs before the goods are shipped.

Private Trucking Fleet

A fleet of trucks owned and operated by a company to transport its own goods, rather than contracting with external carriers.

Private Warehouse

A warehouse facility owned and operated by a company to store its own goods, rather than using a public or third-party warehouse.

Procurement

The process of sourcing and purchasing goods and services needed for a company’s operations, including negotiations with suppliers.

Product

A tangible item or good that is produced, transported, and sold to customers.

Product ID

A unique identifier assigned to a product, used for tracking and managing inventory in a logistics system.

Pro-Forma

A preliminary invoice or document provided before the actual sale or shipment, outlining the details of a transaction for approval or review.

Pro-Forma Invoice

A detailed estimate or quote provided to a buyer before a sale is finalized, often used in international trade to confirm the value of goods for customs purposes.

Public Warehouse

A third-party warehouse that provides storage services to multiple customers, offering flexible space and services based on demand.

Quality Control

The process of ensuring that products meet specific quality standards before they are distributed to customers. This involves inspecting and testing products to identify and correct defects or non-conformities during manufacturing or handling.

Quotation (Quote)

A formal statement provided by a supplier or service provider detailing the price and terms for the provision of goods or services, often used in logistics to outline shipping rates and service levels.

Raw Materials

Unprocessed materials used in manufacturing or production, often stored in warehouses before being used to make finished goods.

Real-Time

Refers to the immediate availability of data or information, allowing logistics professionals to make quick and informed decisions.

Receiving (Receiver)

The process of accepting and checking goods that have been delivered to a warehouse or distribution center, ensuring they match the purchase order.

Reefer (Refrigerated Carrier)

A truck, trailer, or container equipped with a refrigeration unit used to transport perishable goods like food or pharmaceuticals.

Request for Information (RFI)

A document issued by a company to gather information from potential suppliers, typically as a preliminary step in the procurement process.

Request for Proposal (RFP)

A document issued by a company to solicit bids from suppliers or service providers, outlining the scope of work and evaluation criteria.

Request for Quote (RFQ)

A document used to request pricing information from suppliers or service providers for specific products or services.

REST API (Representational State Transfer)

A type of API that uses HTTP requests to perform operations (GET, POST, PUT, DELETE) on data. REST APIs are widely used in TMS for integrating with external systems such as carrier platforms or other logistics tools.

Return Goods

Products returned by customers to a retailer or manufacturer, often due to defects, damage, or dissatisfaction.

Retailer

A business that sells products directly to consumers, typically as the final step in the supply chain.

Reverse Logistics

The process of managing the return, repair, recycling, or disposal of goods after they have been delivered to the customer.

Routing Guide

A set of instructions that outlines preferred carriers, transportation routes, and shipping methods, used by companies to manage logistics operations.

Routing Optimization

The process of determining the most efficient routes for transporting goods, taking into account factors such as distance, traffic, delivery windows, fuel costs, and vehicle capacity. In logistics, routing optimization uses algorithms and software to minimize transportation costs, reduce delivery times, and improve overall fleet efficiency. It plays a crucial role in maximizing productivity while ensuring timely deliveries and reducing the environmental impact of transportation.

Rules (Business Rules)

A set of predefined conditions or guidelines that govern how logistics processes are executed, often used in automated systems like TMS or WMS.

Scalability

The ability of a logistics operation or system to handle increasing volumes or demands without sacrificing performance.

Scorecard

A tool used to evaluate the performance of suppliers, carriers, or other logistics partners based on key metrics like on-time delivery, cost, and service quality.

Seasonality

The fluctuation in demand for products or services based on seasonal changes, such as holiday shopping or agricultural harvests.

Secure File Transfer Protocol (SFTP)

A protocol used to securely transfer files over a network, ensuring data integrity and privacy during transmission.

Serial Number

A unique identifier assigned to an individual product or component, often used to track warranty information or manage recalls.

Service Level

A measure of the quality of service provided by a logistics provider, typically evaluated based on delivery time, accuracy, and customer satisfaction.

Shipper

The person or company responsible for sending goods to a destination, often working with carriers to transport products to customers.

Shipping

The process of moving goods from one location to another, typically from a manufacturer or supplier to a retailer or customer.

Shipping Lane

A specific route or corridor used by carriers to transport goods, often optimized for efficiency and cost-effectiveness.

Shipping Manifest

A document listing the contents of a shipment, including the description, quantity, and destination of each item, used for tracking and customs clearance.

Short Shipment

A shipment that contains fewer items than originally ordered or expected, often due to inventory shortages or shipping errors.

Simple Object Access Protocol (SOAP)

A protocol used for exchanging structured information in web services, allowing applications to communicate over the internet. It is often used in integrating TMS with other enterprise systems.

Single Sign-On (SSO)

A user authentication process that allows individuals to log in to multiple related systems or applications using a single set of credentials. In a TMS, SSO simplifies user access by allowing employees, carriers, and partners to access various systems (e.g., TMS, WMS, CRM) with one secure login, improving efficiency and security.

Software-as-a-Service (SaaS)

A software delivery model where applications are hosted in the cloud and accessed over the internet, commonly used for logistics software like TMS, WMS, or ERP.

Spot Market

A marketplace for buying and selling transportation services on an as-needed basis, often used for last-minute shipments or capacity shortages.

Standard Carrier Alpha Code (SCAC)

A unique two-to-four-letter code used to identify transportation companies, specifically carriers, in the United States. Issued by the National Motor Freight Traffic Association (NMFTA), SCAC codes are used in various logistics operations, including freight billing, tracking, and Electronic Data Interchange (EDI) transactions, to ensure clear and standardized identification of carriers across the supply chain.

Standard Operating Procedure (SOP)

A set of step-by-step instructions that outline how specific tasks or processes should be performed, often used in logistics to ensure consistency and compliance.

Standing Order (Blanket Order)

An ongoing order placed with a supplier for regular deliveries of goods, typically used to simplify procurement for frequently used items.

Statement of Work (SOW)

A document that outlines the scope, deliverables, and timeline for a project or contract, often used in logistics outsourcing agreements.

Staging

The process of organizing and preparing goods for shipment or loading, often involving the temporary storage of items in a specific area before they are moved.

Stock Keeping Unit (SKU)

A unique identifier assigned to a specific product or item, used for tracking inventory and managing sales.

Sub Optimization

A situation where one part of a logistics process is improved at the expense of the overall supply chain efficiency.

Supplier

A company or individual that provides goods or services to another business, often playing a key role in the supply chain.

Supply Chain

The entire process of producing, transporting, and delivering goods to customers, including all the organizations, people, and resources involved.

Supply Chain Digitalization

The use of digital technologies to improve visibility, efficiency, and coordination within the supply chain.

Supply Chain Management (SCM)

The coordination of all activities involved in sourcing, production, and distribution to ensure that goods are delivered to customers efficiently and cost-effectively.

SWOT Analysis

A strategic planning tool used to identify strengths, weaknesses, opportunities, and threats, often used to evaluate logistics operations.

Tare Weight

The weight of an empty container or vehicle, used to calculate the net weight of goods being transported.

Tariff

A tax imposed by a government on imported or exported goods, often based on the value or quantity of the items.

Tender

A formal offer made by a carrier to transport goods, often in response to a load tender from a shipper.

Tender Acceptance Rate (TAR)

A metric that measures the percentage of load tenders accepted by a carrier, indicating their willingness to take on shipments.

Terms and Conditions

The rules and guidelines that govern a contract or agreement, including payment terms, delivery timelines, and responsibilities of each party.

Terminal

A facility where goods are transferred between different modes of transportation, such as from a truck to a ship or from a train to a truck.

Third-Party Logistics Provider (3PL)

A company that provides outsourced logistics services, such as transportation, warehousing, and distribution, on behalf of other businesses.

Third Party Warehouse

A warehouse facility operated by a third-party provider that offers storage, handling, and distribution services to multiple clients.

Track and Trace

The process of monitoring the location and status of shipments as they move through the supply chain, often using GPS or barcode scanning.

Tractor

The engine-powered vehicle used to pull a trailer in trucking, typically used in long-haul transportation.

Trailer

A large container or platform attached to a tractor for transporting goods by road.

Trailer Drop

The practice of leaving a loaded or empty trailer at a customer’s location for later pickup, allowing for more flexible scheduling.

Transit Time

The amount of time it takes for a shipment to travel from its origin to its destination, including any stops or delays.

Transportation Management System (TMS)

A software system that helps companies plan, execute, and optimize the movement of goods, including selecting carriers, managing routes, and tracking shipments.

Transportation Mode

The method used to move goods from one location to another, such as by truck, ship, train, or plane.

Transportation Planning

The process of determining the best way to move goods, including selecting routes, carriers, and modes of transport to meet cost and time constraints.

Two-Way Sync

A form of data synchronization where updates made in one system are automatically reflected in another, and vice versa. This ensures consistency across all integrated systems.

Uniform Product Code (UPC)

A barcode used to identify individual products, commonly used in retail to track sales and manage inventory.

Unit of Measure (UoM)

A standard unit used to quantify and track products, such as kilograms, liters, or units.

Uptime

The measure of system availability and reliability. Uptime is crucial for integrated systems to ensure continuous communication between platforms without disruptions.

User Interface

The visual part of the TMS that users interact with to perform tasks such as booking shipments, tracking deliveries, or generating reports. A well-designed UI is intuitive and easy to use.

User Roles and Permissions

A security feature in a TMS that controls what actions different users can perform within the system based on their role (e.g., administrator, dispatcher, carrier).

Value Added Network (VAN)

A private network provider that offers EDI services, allowing companies to securely exchange business documents electronically.

Value Chain

The entire series of activities that add value to a product as it moves through the supply chain, from raw materials to final delivery.

Value Proposition

The unique benefits or advantages that a company offers to customers, often used to differentiate logistics services from competitors.

Variable Cost

Costs that fluctuate based on the volume of goods transported, such as fuel, labor, and transportation charges.

Vendor

A company or individual that supplies goods or services to another business, often playing a key role in sourcing and procurement.

Velocity

The speed at which goods move through the supply chain, often used to measure the efficiency of inventory turnover and order fulfillment.

Vertical Integration

A supply chain strategy where a company controls multiple stages of production or distribution, reducing reliance on third-party suppliers or distributors.

Visibility

The ability to track and monitor the status of goods as they move through the supply chain, providing real-time insights into inventory and shipments.

Voyage

A trip or journey made by a ship or vessel, often referring to the movement of goods by ocean freight.

Warehouse

A facility used for the storage of goods before they are distributed to retailers or customers.

Warehouse Management System (WMS)

Software that helps manage warehouse operations, including inventory tracking, order fulfillment, and labor management.

Warehouse Network

A system of multiple warehouse facilities used to store and distribute goods, often designed to optimize delivery times and costs across regions.

Webhooks

Automated messages sent from one system to another when an event occurs. Webhooks are often used in TMS integration to trigger updates, such as sending a notification when a shipment status changes.

Weight

The measurement of how heavy a shipment is, often influencing shipping costs, transportation methods, and load planning.

Weight Break

A shipping term that refers to the point at which the weight of a shipment results in a lower per-unit transportation cost, often used to encourage full truckloads.

White Glove Delivery

A premium delivery service that goes beyond standard curbside delivery by including extra services such as unpacking, assembly, installation, and removal of packaging materials. White glove delivery is often used for fragile, high-value, or bulky items like furniture, appliances, or electronics, ensuring careful handling and a high level of customer service. It is commonly chosen for residential deliveries or specialized business needs where additional care and setup are required.

Wholesaler

A company that buys goods in bulk from manufacturers and sells them to retailers, often serving as an intermediary in the supply chain.

Workflow Automation

The creation of automated sequences of tasks or processes that are triggered by specific conditions or events within integrated systems. In logistics, workflow automation can optimize tasks like load tendering, carrier selection, and invoicing.

X-Docking (Cross Docking)

Another abbreviation for cross-docking, a logistics process where goods are transferred directly from inbound to outbound transportation without being stored in a warehouse.

XML (Extensible Markup Language)

A markup language used to structure data for sharing between different systems, often used in EDI and logistics software.

Yard Management System (YMS)

Software that helps manage the movement of trucks, trailers, and containers in a yard, ensuring efficient loading and unloading operations.

Zip to Zip Rate

A rate used to calculate shipping costs based on the distance between the origin and destination zip codes.

Zone

A geographical area used to define shipping rates, often used in parcel delivery services to calculate costs based on distance.

Zone Skipping

A logistics strategy where a company consolidates multiple shipments bound for the same region into a single large shipment to bypass intermediate shipping zones. Once the consolidated shipment reaches a regional hub closer to the destination, the packages are sorted and delivered individually. Zone skipping helps reduce shipping costs and transit times by avoiding charges associated with passing through multiple shipping zones, especially in parcel shipping.