There has been little doubt as to the important role the shipping and transportation industry has in the supply chain network. What has caught some people by surprise is the speed at which domestic and global supply chains have surged with the growing popularity of e-commerce and online shipping. As more consumers make purchases online and the need for fast, reliable shipping grows, the pressure on logistics managers has reached unprecedented levels — especially when dealing with imports and inventory management. With import volumes 25% higher from January to August 2021, BBC News reports the supply chain is expected to continue enduring disruption through 2022. However, knowledge is power. And knowing the common shipping terms that are thrown around on a regular basis will go a long way in improving every level of shipping service and performance of your supply chain solutions.
Common Shipping Terms to Know
Accessorial Charge: An additional bill for special services, including flat-fee, layover, and detention.
All-in Line Haul: A haul line and an FSC.
Backhaul (Head haul): A transportation vehicle leaving the delivery point to return to the original location.
Bill of Lading (BOL): A receipt for the transportation of goods between a shipper and carrier. A bill that states the cargo, the weight, size and how many individual pieces, the country of origin, and the destination.
Blockchain: A decentralized public ledger system that documents all changes to a record in real-time, Blockchain can help make logistics companies more efficient via a public ledger system that records the motions of each shipping container.
BOPIS: Buy online pay in store.
Broker (freight): A person or company that serves as the liaison between another individual or company needing shipping services. The broker will figure out the shipper’s needs and connect them with a carrier.
Bulk Carrier: Carriers that haul loose freight without packaging.
Bulk Freight: Cargo shipped unpackaged and in larger volumes. Examples include grain, sand, and crushed stone.
Cargo Insurance: Coverage that protects the cargo that is shipped to help in the event something is lost or damaged.
Carrier: Uses trucks or other types of transportation to move product to the destination.
Carrier Liability: This amount dictates the maximum amount a carrier can transport and take liability for if loss, damage, or shipping delays occur.
Carrier Network: A national network of qualified carriers that are registered with the Federal Motor Carrier Safety Administration (FMCSA).
Coil Racks: Wool or steel cradles that are prefabricated and hold rolled coils to ensure the coils do not roll off a trailer.
Cold Chain: A low temperature-controlled supply chain, used primarily for the transport of fresh or frozen foods and pharmaceuticals. Cold chain solutions pertain to the transportation used to transport the goods, usually a refrigerated truck.
Compliance, Safety, and Accountability (CSA): The safety compliance and enforcement program of the FMCSA that holds motor carriers and drivers accountable for their role in safety. This program also offers safety tips on how to avoid vehicle crashes, injuries, and fatalities.
Commodity: A product or item of commerce. This includes products that are raw, manufactured, and grown.
Consignee: Where or to whom the shipment is delivered.
Container (Shipping Container): A box typically used for transporting products by truck, rail, and ship. This standard-sized box averages 20’-40’ and meets the International Standards Organization (ISO) standards.
Cross Border: Freight that will cross borders into another country and must go through customs.
Cross-docking: Situation where cargo is transferred from incoming to outgoing cargo containers.
Customs: The authorities responsible for checking cargo at international borders to control the flow of goods coming into and out of the country.
Distribution Center (DC): Where the product is held until a carrier takes it to the final destination.
Deadheading: A truck on the road without cargo.
Declared Value: The value placed upon imported goods by the importer for clearance through the customhouse. It is also the value per unit of a shipment as stated by the shipper upon delivery to a carrier usually to obtain a released or lower rate..
Dedicated Fleet: Shippers use a group of trucks to focus on the move of all the freight. Can offer guaranteed capacity, timely service, and set rates for a higher cost. Dedicated fleet services can provide essential turnaround time with numerous types of transportation modes.
Dedicated Team: Drivers that take turns for a specific truck.
Dedicated Truck: A load for one specific customer only on the truck with no partial loads.
Department of Transportation (DOT): Observes the U.S. highway, air, railroad, and other transportation functions.
Detention/Demurrage: Carrier charges due to extra retention on equipment usually from unloading or loading not efficiently.
Door-to-Door: Handling shipment between the shipper to consignee.
D.O.T. Number: License for carriers from the Department of Transportation, different from a Motor Carrier Number.
Double Drop: The lowest deck on a flatbed, usually used for oversized loads.
Dropshipping: Situation where the seller handling the customer orders does not keep goods in stock at all times. Instead, they purchase items from a third party supplier and have it shipped directly to the customer.
Dry van: Another name for standard enclosure trailers pulled by semi trucks for road transport.
Dunnage: Filler material to keep cargo from moving, usually in the form of foam padding or inflatable bags.
Duty Status: Drivers must track and document workday activities in a 24-hour logbook . At the end of the week, drivers must present the book to law enforcement on demand.
Electronic Logging Device (ELD): Digital device for truckers that tracks drive time, mileage, speed, and more. There is an ELD mandate in the U.S. and Canada.
Escorts: Separate vehicles assisting in moving oversized shipments to ensure the truck has plenty of room to operate. Escorts also help alert traffic of the oversized shipment..
Excess Value: A declared value amount that is above the carrier’s liability limit for shipment.
Expedited: Shipping at a faster rate than normal that may include team drivers, overnight workload, and air services.
Federal Motor Carrier Safety Administration (FMCSA): A federal agency that works with the Department of Transportation to prevent motor-vehicle fatalities and injuries through safety regulations and improved safety systems.
Freight Audit: A company’s freight bills are checked, adjusted, and verified for accuracy.
Freight Bill: Also known as freight invoice, the final bill of service is sent to the shipper from the carrier.
Freight Class: The National Motor Freight Traffic Association defines the category of freight, including the size, value, and difficulty level for transportation. Also, the determining factor for carrier shipping charges.
Freight Finance: The cost to have products transported, the price including insurance,, and the actual cost.
Freight Forwarder: Handles international goods for a third party, similar to a carrier, and is responsible for claims and loss of cargo.
Freight Payment: Organized services that help cover the costs of freight transportation and related fees.
Freight Settlement: A collaborative contract that helps shippers and carriers agree on prices ahead of time for better planning.
Fuel Surcharge (FSC): The cost of freight varies with the price of fuel. Transportation companies often add FSC to the cost to move freight, either by cents per mile or a percentage of the line haul amount.
Full Truckload (FTL or FT in logistics terminology): A full capacity use of a dry van, flatbed, or reefer truck. By leveraging freight consolidation, small shipments like LTL and parcels can add up to a full truckload.
Hazmat: Hazardous materials specified by the U.S. Environmental Protection Agency (EPA) and transportation regulations through U.S. D.O.T.
Hot Shot: Smaller trailers averaging 24’-40’ in length pulled by a decent-sized pickup truck, and common for LTL shipments. Hot-Shot shipping benefits time-sensitive freight loads for a variety of industries and products.
Hours of Service (HOS): Limits and regulations regarding when and for how long a driver can operate a vehicle.
Inbound Logistics: The way materials and products are transported, stored, and received into the business. Inbound logistics focuses on the supply aspect of the supply chain and the steps needed for products.
Incoterms: A set of international standards that help govern shipping and transportations services.
Interchange Agreement: Two companies agree to switch control of trailers for pickup and delivery shipments through the contract or agreement, and more common with border towns.
Intermodal: A container shipped through multiple modes of transportation during the route, such as truck and railroad. Final-mile delivery and drayage services benefit from using intermodal transportation.
Just in Time (JIT): A manufacturing system that must keep on-site supplies to a minimum with small frequent deliveries.
Lane: Companies often have a “dedicated lane,” which they regularly use to move from one point to the next.
Last Mile (Final Mile): The final step in the delivery process to the final destination. This can pertain to an entire load or single parcel.
Layover: A driver is required to wait overnight or for 24 hours till the next pickup or delivery of a shipment. Layovers usually involve fees.
Line Haul: The movement of goods by any mode of transportation at a set rate per mile, usually in dollars and cents.
Less-Than-Truckload (LTL): A shipment that has less than the required amount of cargo for a full truckload or does not meet truckload capacity. Less-than-truckload services can easily be customized to meet industry and carrier needs.
Load Board: An online matching system that helps shippers and/or freight brokers find carriers for cargo.
Logbooks: Truck drivers use these to record hours of service for each 24-hour period. U.S. D.O.T. makes them a requirement in interstate commercial trucking.
Managed Transportation: When a 3PL manages the shipping and handling requirements throughout a delivery.
Mobile Payment: Transactions conducted using a mobile device. Some companies have payment applications on a platform accessible through a phone.
Motor Carrier Number (MC#): Commonly known as USDOT number, the Federal Motor Carrier Safety Administration (FMCSA) administrates these licenses to carriers.
National Motor Freight Classification (NMFC): The standard 18 commodity classes and comparisons based on density, handling, storability, and liability.
Non-Vessel Operating Common Carrier (NVOCC): An ocean carrier for delivery that provides all services without operating vessels.
Owner-Operator: A person that operates and owns the trucks.
Over-Dimensional (Wide Load): A load of cargo that goes over the legal limits for width, length, height, and weight and cannot be broken down.
Pallet Jack: A tool used to lift and move pallets; similar in form to a forklift.
Parcel: A small package that weighs no more than 150 pounds; this is the most common order in e-commerce.
Partial: Truck used for multiple shipments to fill the truck capacity. Usually has longer transit times due to frequent stops.
Payment Clock: How long it takes the carrier to receive payment from the shipper. In general, shippers want to extend payment terms while carriers want to shorten the payment clock.
Peak Season: The time of year when retailers push products due to more consumer demand. This time includes back-to-school, Black Friday, and the holiday season that immediately follows Black Friday.
Permits: The state’s permission for carriers to transport freight exceeding legal weight and size limits.
Placard: Hazardous material warning signs on all four sides of a trailer.
Project Logistics Management: Project logistics is planning, organizing, and managing resources to successfully transport cargo.
Proof of Delivery (POD): Documentation signed either physically or electronically that acknowledges the shipment was received at the delivery destination.
PRO Number: The carrier assigns a number to the shipment for reference and tracking.
Pup Trailer: A semitrailer often 26’-32’ long on a single axle.
Rail: Transportation by train.
Ramps: Usually found on step decks of hauling cars and drivable equipment; helps with loading and unloading.
Rate Confirmation: Documentation confirming the cost of service between the shipper and carrier.
Reefer: A trailer containing insulated walls and a refrigeration unit used for cold chains.
Removable Gooseneck (RGN): A heavy-haul flatbed trailer providing on or off-road accessibility.
Reverse Logistics: The process of goods moving from the final destination to the manufacturer, distributor, or repair vendor, for the purposes of product returns, repairs, refurbishment, or end-of-life recycling.
Software-as-a-Service (SaaS): Software that offers a subscription-based payment model to improve the management and organization of any system.
Shipper: Usually the seller on the bill of lading.
Sliding Tandem: Allows a tandem axle to move at the rear of a semi-trailer for distribution of weight.
Spread Axle (Spread Tandem): Tandem axle with spaces that are further than 54” apart.
Standard Carrier Alpha Code (SCAC): A 2-4 letter code used to identify transportation companies. Issued by the National Motor Freight Traffic Association.
Step Deck: A type of loading and transport trailer that is commonly used for freight shipments.
Straps: Vinyl straps for securing and tying down freight on a trailer.
Supply Chain Optimization: Supply chain optimization process allows shippers and carriers to decrease operational expenses and increase gross profit.
Tanker: Used to haul dry or wet bulk, such as concrete mix, gasoline, and cooking oil.
Tandem Axle: Axles and associated suspension are often located closely together.
Team (Driver Team): Two drivers who alternate between driving and resting, most likely used for expedited shipments.
Third-Party Logistics/Freight Broker: A company that serves as facilitator for another company in need of shipping services. Freight brokers can offer beneficial service packages to improve visibility and capacity for shippers.
Thru Trailer Service (TTS): The same trailer shipping international cargo.
Trans-Load: A product moving from one trailer to another, often standard practice at international borders if the carrier can operate only in a certain country.
Truckload: Large capacity loads that take up half or more of the available space in a trailer.
Truck-Mounted Crane: A machine with the ability to self-propel loading and unloading.
Truck Order Not Used (TONU): When a shipper orders a truck but then cancels after the truck has already been dispatched.
Transportation Management System (TMS): A system with the ability to track shipments, tender loads, and communicate with others in the network.
Van: A vehicle with rear doors, used for transporting products.
Warehousing: Where goods are held prior to order fulfillment.
Warehouse Management System (WMS): A system that keeps track of records in the warehouse and can combine with a TMS to improve transparency and integration.
White-Glove Logistics: A specialized form of order fulfillment, a premium delivery service marked by special attention to details, providing damage-free delivery and installation, debris removal, and extra care.
Yard Management System (YMS): A software solution that makes it easier to monitor the movement of trailers in a shipping yard, distribution center, or warehouse.
Ensure Your Team Is Ready for Success by Partnering With Wicker Park Logistics
As consumers continue to embrace e-commerce trends and make purchases online, and as the demand for fast and affordable shipping remains, the need for advanced shipping services will continue to be in high demand. The supply chain is expected to continue enduring disruptions and be faced with shipping service crunches for the foreseeable future. Understanding shipping terms is the first step towards improved shipping services. Contact Wicker Park Logistics today to get started.
