A quick guide to logistics and supply chain terminology
We're in an terminology-heavy industry, with a large amount of acronyms and industry phrases to learn. So, here's a cheat sheet of the most commonly used terms at Ligentia.
Supply chains come with a lot of acronyms and industry terms. This glossary explains the words we use most at Ligentia, from shipping documents and customs terms to the technology behind supply chain visibility.
Actual time of arrival (ATA) is the actual time that a shipment or transport vehicle arrives at its destination. The ATA is an important aspect of supply chain and logistics management, as it can impact delivery schedules, transit times, and other key performance indicators. In some cases, the ATA may differ from the scheduled time of arrival due to various factors, such as traffic, weather conditions, or equipment delays.
Actual time of departure (ATD) is the actual time that a shipment or transport vehicle leaves its origin location and begins its journey to the destination. The ATD is an important aspect of supply chain and logistics management, as it can impact delivery schedules, transit times, and other key performance indicators. In some cases, the ATD may differ from the scheduled time of departure due to various factors, such as traffic, weather conditions, or equipment delays.
An airway bill (AWB) is a document used in air cargo that serves as a receipt for the goods being shipped and acts as a contract between the shipper and carrier. The AWB contains information such as the origin and destination of the shipment, the quantity and type of goods, and the weight and dimensions of the shipment. It is used for tracking and customs clearance purposes.
Artificial intelligence (AI) is a branch of computer science focused on creating machines that can perform tasks that typically require human intelligence. In the supply chain and logistics industry, AI can be used for optimisation and automation of processes, such as demand forecasting, route planning, and inventory management.
An Automated Manifest System (AMS) is an electronic system used by US customs authorities to process and manage information about incoming and outgoing shipments. The AMS helps to streamline the customs clearance process by automating the submission and processing of required documentation and information.
A bill of lading (B/L) is a document that serves as a contract between a shipper and carrier and acts as a receipt for the goods being transported. The B/L contains information such as the origin and destination of the shipment, the quantity and type of goods, and the weight and dimensions of the shipment. It is used for tracking and customs clearance purposes and is considered to be a title document for the goods, as it provides evidence of ownership. In some cases, the B/L may also include instructions for the handling and delivery of the goods.
A blank sailing is the cancellation of one or more scheduled sailings of a shipping vessel without any replacement voyage. Blank sailings are often used by carriers as a way to adjust supply and demand in the market, reduce operational costs, and improve efficiency. Blank sailings can impact delivery schedules and transit times, and may require shippers to make alternative transportation arrangements.
A blind shipment is a shipment in which the recipient's identity is not disclosed to the carrier, the consignee, or other parties involved in the transportation of the goods. Blind shipments are often used to maintain the confidentiality of a product or the identity of the recipient. Blind shipments may require additional documentation and security measures to ensure the confidentiality of the shipment.
Bonded goods are goods that are stored in a bonded warehouse and are under the supervision of customs authorities. Bonded goods are typically imported goods that have not yet been cleared for entry into the country and are held in a bonded warehouse until the necessary duties and taxes have been paid. Bonded goods may also be goods that are being temporarily stored in a bonded warehouse while awaiting further transportation or processing. They are subject to certain regulations and restrictions, such as requirements for secure storage and record-keeping.
A bonded warehouse is a secure facility authorised by customs authorities where imported goods can be stored without paying duties and taxes until they are cleared for entry into the country or exported. Bonded warehouses are typically used by importers and carriers to temporarily store goods while awaiting clearance or further transportation. Bonded warehouses offer several benefits, such as reduced storage costs, increased efficiency, and improved compliance with customs regulations. They are subject to certain regulations and restrictions, such as requirements for secure storage and record-keeping.
Break bulk refers to a large shipment separated into smaller, individual units for easier handling and transportation. Break bulk typically involves the manual loading and unloading of goods, as opposed to containerisation and often refers to heavy or oversized cargo that cannot be shipped in a standard container or goods that require special handling or transportation arrangements.
Bulk cargo is unpackaged cargo that is shipped in large quantities and is often not easily divided into individual units. Bulk cargo is typically transported in bulk carriers, specialised ships designed to carry large quantities of loose materials such as coal, grain, or ore. This type of cargo may require special handling and storage arrangements and may be subject to different regulations and restrictions compared to packaged cargo. Examples of bulk cargo include grains, minerals, and construction materials.
A Bunker Adjustment Factor (BAF) is a surcharge imposed by shipping carriers to cover the cost of fuel used to power their vessels. The cost of fuel, also known as bunker fuel, is a major component of a shipping carrier's operating expenses, and can be subject to rapid and unpredictable changes. To mitigate the impact of fuel price fluctuations on their bottom line, carriers often impose a BAF, which is usually expressed as a percentage of the freight rate.
Buyers consolidation is a logistics service in which multiple shipments from different suppliers are consolidated into a single shipment to a common destination. Buyers consolidation is often used by companies to reduce the cost and complexity of shipping, as well as to improve inventory management and supply chain efficiency.
The C88 form is a form used in the UK for customs declaration purposes. The C88 form is used to declare the contents of a shipment, including information about the commodity, the origin and destination of the shipment, the value of the goods, and the applicable customs duties and taxes.
Carbon emissions are gases that are released into the atmosphere and contribute to climate change, including carbon dioxide (CO2), methane, nitrous oxide, and fluorinated gases. Companies and governments are increasingly focused on reducing carbon emissions in the supply chain and logistics industry in order to meet environmental sustainability goals and reduce the impact of human activities on the environment.
Carbon offsetting is a method of reducing the impact of carbon emissions on the environment by taking actions that remove an equivalent amount of carbon from the atmosphere. Carbon offsetting can take many forms, including the planting of trees, investment in renewable energy projects, or the development of carbon capture and storage technologies.
Cargo refers to goods that are transported by a carrier, typically by sea, air, or land. It refers to the physical goods that are being shipped, and may include raw materials, finished goods, or other items. The term cargo is also used to refer to the capacity of a ship, aircraft, or other transport vehicle to carry goods.
Cargo Ready Date (CRD) is the date on which a shipment is ready to be loaded and transported from its origin. The CRD is an important milestone in the transportation process, as it determines the schedule for loading the shipment and preparing it for transportation. It is often influenced by factors such as the availability of goods, the completion of any necessary inspections or certifications, and the readiness of the shipping carrier.
Cash on delivery (COD) is a payment term in which the recipient of a shipment pays the delivery company or the seller upon receipt of the goods, rather than paying in advance.
The certificate of origin is a document that certifies the country of origin of a product. The certificate of origin is used to prove the origin of goods to customs authorities and to meet the requirements of trade agreements and regulations. It is usually issued by a government agency, a trade association, or a chamber of commerce and it contains information such as the name and address of the manufacturer, the type of product, and the country of origin.
Chargeable weight is the weight used to determine the cost of shipping a shipment. It is typically either the actual weight of the shipment or the dimensional weight, whichever is greater. Dimensional weight takes into account the size and volume of the shipment, as well as its weight, as air and ocean carriers often charge for cargo space based on volume rather than weight.
A chassis is used to support and transport a container. They play an important role in the transportation of goods, as they provide the means to move containers from one mode of transportation to another, allowing for a seamless intermodal transportation process.
A chassis fee is charged by chassis providers for the use of a chassis to transport a container. The chassis fee is a separate cost from the cost of transportation itself and is usually billed to the customer in addition to the transportation charge.
A co-loader is a third party that collaborates with another third party to provide a complete door-to-door transportation service for a shipment. Co-loading is often used to reduce shipping costs, as it allows multiple shipments to be consolidated into a single container or vessel, reducing the per-unit cost of shipping.
A commercial invoice is a document used in international trade that serves as an invoice for goods being exported. The commercial invoice is an important document for customs purposes, as it provides a detailed description of the goods being shipped, their value, and the terms of sale. The commercial invoice is typically used by customs officials to determine the duties and taxes that should be applied to the shipment, and it is often used as the basis for calculating the value of the shipment for insurance purposes.
A container is a standardised unit of freight that is used to transport goods by sea, air, or land. Containers are typically made of metal and are designed to be loaded and unloaded with a minimum of handling, reducing the risk of damage to the goods and making it easier to transfer the cargo from one mode of transportation to another. Containers come in a variety of sizes, including 20-foot, 40-foot, and 45-foot units, and are often used in intermodal transportation, allowing for the transfer of cargo from ship to rail or truck without the need for re-handling.
A Container Freight Station (CFS) is a facility where containers are loaded, consolidated, and deconsolidated for shipment by ocean, air, or land transportation. A CFS is typically used by freight forwarders, NVOCCs, and other logistics providers as a central location for handling and storing containers before they are transported to their final destination. The CFS provides a range of services, including the receipt of cargo, inspection and verification of the cargo, packing and unpacking of containers, and the preparation of customs documentation.
Length: 5.90m Width: 2.35m Height: 2.39m Door width: 2.34 m Door height: 2.28 m Max payload: 28.20 t Capacity: 33 cbm Max EUR pallets: 11
Length: 5.97 m Length (inner): 5.70 m Width: 2.36 m Height: 2.24 m Max payload: 27.15 t
Length: 5.90 m Width: 2.34 m Height: 2.35 m Door width: 2.29 m Door height: 2.25 m Max payload: 28.20 t Roof opening: 5.68 x 2.25 m Capacity: 32 cbm
Length: 5.45 m Width: 2.29 m Height: 2.25 m Door width: 2.29 m Door height: 2.24 m Max payload: 27.49 t Capacity: 28 cbm Max EUR pallets: 10
Length: 12.03 m Width: 2.35 m Height: 2.39 m Door width: 2.34 m Door height: 2.28 m Max payload: 28.80 t Capacity: 67 cbm Max EUR pallets: 25
Length: 12.04 m Width: 2.35 m Height: 2.70 m Door width: 2.34 m Door height: 2.58 m Max payload: 28.62 t Capacity: 76 cbm Max EUR pallets: 25
40' Flat rack Length: 12.06 m Length (inner): 11.66 m Width: 2.37 m Height: 2.28 m Max payload: 39.30 t
Length: 12.03 m Width: 2.34 m Height: 2.35 m Door width: 2.29 m Door height: 2.25 m Max payload: 26.60 t Roof opening: 11.81 x 2.22 m Capacity: 64 cbm
Length: 11.58 m Width: 2.29 m Height: 2.50 m Door width: 2.29 m Door height: 2.50 m Max payload: 28.35 t Capacity: 67 cbm Max EUR pallets: 23
Length: 13.56 m Width: 2.35 m Height: 2.70 m Door width: 2.34 m Door height: 2.58 m Max payload: 27.60 t Capacity: 85 cbm Max EUR pallets: 27
A container yard (CY) is a secured area located near a seaport or airport where containers are stored and processed before being loaded onto ships or trucks. The container yard is an essential part of the supply chain and serves as a temporary storage and handling facility for containers. CYs can also provide services such as stacking, stripping, and stuffing of containers.
Corporate Social Responsibility (CSR) is the concept that companies have a responsibility to act in the best interests of society and the environment, in addition to maximising profits for their shareholders. CSR refers to a company's commitment to being socially and environmentally responsible in its operations and business practices. In the context of supply chain and logistics, CSR can refer to a company's efforts to minimise the environmental impact of its transportation and distribution operations, ensure fair labour practices in its supply chain, and promote sustainability and social responsibility throughout the entire supply chain.
The country of origin is where a product is manufactured, produced, or grown. The country of origin is an important factor in international trade, as it can affect the duties, taxes, and regulations that apply to the shipment. The country of origin can also impact the value of the goods, as well as their marketability and competitiveness in different markets.
When cargo is transported from one country to another without going via the local business base – whether that be by road, rail, sea or air – this is known as cross trade. Cross trade is also sometimes referred to as triangular trade (due to three countries being involved), third party shipments or foreign-to-foreign shipments. Cross trade services are a cost-effective and efficient way to move goods from manufacturers to customers.
Cross-docking is a process where incoming goods are unloaded and transferred directly to outbound vehicles, with little or no time in storage. Goods are sorted at a cross-dock facility by destination, then reloaded for onward delivery, usually within hours rather than days.
Why it matters for your supply chain: Cross-docking reduces storage costs and handling, and it speeds up the flow of goods to stores or distribution centres. It works best for fast-moving, predictable stock.
Related terms: Deconsolidation, Warehousing, Container Freight Station (CFS)
Find out more: Contract logistics
A cubic metre is a unit of volume measurement equal to 1000 litres. Cubic metres are commonly used to measure the volume of containers, particularly in the shipping and logistics industries. The volume of a shipment is a critical factor in determining the cost and the method of transportation, as well as the maximum weight that can be loaded in a container.
Currency Adjustment Factor (CAF) is a fee added to shipping charges to account for changes in currency exchange rates. The CAF is used to reflect the fluctuation in the value of a currency and its impact on the cost of shipping goods.
A customs broker is a specialist authorised to prepare and submit customs declarations on behalf of importers and exporters. In some countries, customs brokers must also hold a government licence. A broker classifies goods, calculates duties and taxes, and makes sure documentation meets local customs requirements.
Why it matters for your supply chain: Accurate declarations help avoid delays, penalties and overpaid duty at the border. This matters most when trade rules and tariffs are changing.
Related terms: Customs clearance, Harmonized System (HS) codes, Importer of record, Customs procedure code (CPC)
Find out more: Customs clearance
Customs clearance is the process of obtaining permission from a country's customs authorities to import or export goods across the country's border. This process involves the submission of various forms and documents, such as the commercial invoice, the bill of lading, and the certificate of origin.
The Customs Declaration Service (CDS) is the UK government’s new electronic system for handling customs declaration processes. CDS is replacing the Customs Handling of Import and Export Freight (CHIEF) system.
The Customs Declaration Service (CDS) is the UK government's system for making import and export customs declarations. It replaced the Customs Handling of Import and Export Freight (CHIEF) system.
Related terms: C88 form, Customs clearance, Economic Operator Registration and Identification (EORI)
A customs procedure code (CPC) is a unique code used by customs authorities to identify the type of customs procedures that a shipment is subject to. The CPC is used to track the movement of goods across international borders and to ensure that the proper duties, taxes, and other fees are paid. It is typically assigned to a shipment by the customs authority in the country of origin and is included on the customs declaration form.
Dangerous goods are hazardous materials, substances, or products that pose a significant risk to people, property, or the environment during transportation. Dangerous goods are typically regulated by national and international laws and are subject to special handling and packaging requirements, labeling and marking requirements, and documentation and reporting requirements to ensure their safe transportation by air, sea, or land.
A debit note is a document used in financial transactions between a buyer and a seller, used to inform the buyer that they have a debt or outstanding balance. The debit note serves as a record of the transaction, specifying the amount owed, the reason for the debt, and the payment terms. It also serves as a formal request for payment and provides evidence of the debt owed.
Deconsolidation is the process of unloading a consolidated shipment and separating it into individual consignments for onward delivery. It usually takes place at a container freight station or warehouse near the port or airport of arrival. Each consignment is then delivered to its own consignee or destination.
Why it matters for your supply chain: Deconsolidation lets you benefit from the lower cost of consolidated shipping while still delivering goods to multiple locations.
Related terms: Ocean freight consolidation, Less than container load (LCL), Container Freight Station (CFS), Cross-docking
Find out more: Ocean freight consolidation
A delivery order is a document issued by a carrier or freight forwarder that authorises the release of goods to the consignee or recipient named in the document. The delivery order serves as proof of delivery of the goods and can be used as a document of title. It usually includes details such as the shipment details, the names and addresses of the sender and recipient, the description of the goods, and the terms and conditions of the delivery.
Demurrage is a fee charged to a shipper or consignee for exceeding the time limit allowed for loading or unloading cargo at a terminal or port. Demurrage fees are typically imposed when a shipment has been kept at a terminal or port beyond the agreed-upon time limit for loading or unloading, and is designed to incentivise shippers and consignees to move their cargo in a timely manner. The fee is typically calculated per day, and is usually specified in the shipping contract or bill of lading.
Detention is a charge imposed by a carrier, terminal operator, or other third party, for the use of their equipment or facilities beyond a specified time limit. This fee is typically assessed for cargo that is not loaded or unloaded from a container within a certain period of time, or for containers that remain at a terminal beyond the allowed free time.
Drayage is the transportation of goods over a short distance, typically from a port or railway terminal to a nearby storage facility or distribution centre. Drayage is often performed by a specialised type of truck, called a dray truck, and is used to move goods that are too large or heavy to be transported by regular delivery trucks.
A dry run is a practice or trial run of a logistics or transportation operation, typically performed without actual cargo or goods. A dry run is performed to test the feasibility, efficiency, and accuracy of a supply chain or logistics plan and to identify any issues or problems that may arise during the actual transportation of goods.
The Economic Operators Registration and Identification (EORI) is a unique identification number assigned by customs authorities to economic operators (businesses and individuals) involved in cross-border trade within the European Union (EU). The EORI number is used to identify the operator in all customs-related procedures, such as declaration of goods, payment of duties, and communication with customs authorities.
The entry summary declaration is a declaration submitted to a country's customs authorities that provides details about the goods being imported, including information about the goods, the importer, the exporter, and the intended use of the goods. The entry summary declaration is used by customs officials to determine the duties and taxes that are owed on the goods, as well as to verify that the goods meet the country's regulations and standards.
Estimated time of arrival (ETA) is the estimated or expected time a shipment, vehicle, ship or aircraft is scheduled to arrive at its destination. The ETA is used for planning and tracking purposes and helps carriers, shippers, and receivers to coordinate their activities and make informed decisions. The ETA is calculated based on various factors such as mode of transportation, distance, weather conditions, and traffic.
Estimated time of departure (ETD) is the estimated or expected time a shipment, vehicle, ship or aircraft will depart from a specific location. It is a prediction of the scheduled time of departure and may vary due to various factors such as weather conditions, traffic, technical issues, etc. The actual time of departure (ATD) may be different from the ETD.
Ex Works (EXW) is an international trade term indicating that the seller is responsible for delivering the goods to a specified location, usually their own premises, and that the buyer is responsible for paying all costs from that point onwards. This term places the maximum obligation on the buyer and minimum obligation on the seller, and is often used for goods that are to be shipped by the buyer.
The Export Control Classification Number (ECCN) is a number assigned by the US government to goods and technologies that are subject to export controls. The ECCN is used to determine the level of export controls that apply to a specific product or technology and to identify the licensing requirements for exporting it from the US. It is based on a product's category, characteristics, and potential uses.
An export declaration is a document that is required by customs authorities for the export of goods from one country to another. It contains information about the shipment, including details about the goods being exported, the country of origin, the consignee and consignor, and the intended destination. The declaration is used to assess the customs duties, taxes, and fees that may be payable on the shipment, and to ensure compliance with any export controls and regulations that may apply.
An express bill of lading is a type of bill of lading that is issued for expedited shipments, where the goods are delivered to the consignee as soon as possible, without waiting for consolidation with other shipments. It is a document that acknowledges the receipt of goods for shipment and serves as a contract between the shipper and the carrier. The express bill of lading usually contains detailed information about the goods, the shipping route, and the delivery date.
Forty-foot equivalent unit (FEU) is a standard unit of measurement for container capacity in shipping. It refers to the maximum capacity of a 40-foot shipping container, which is typically considered the largest standard size for container vessels.
A Forwarder's Cargo Receipt (FCR) is a document used in international freight forwarding that confirms the receipt of cargo by the freight forwarder from the shipper. It is a legally binding document that states the terms and conditions of the agreement between the shipper and the forwarder. The FCR serves as evidence of the forwarder's possession of the cargo and their responsibility to arrange for its transportation to the final destination.
Fourth-party logistics (4PL) is when a business outsources the management of its whole supply chain to one provider, which coordinates carriers, 3PLs, suppliers and technology on its behalf. A 4PL provider acts as a single point of accountability. It plans, manages and optimises the end-to-end supply chain rather than running individual operations such as warehousing or transport.
3PL vs 4PL: A 3PL provider carries out specific services, such as storing goods or moving them from A to B. A 4PL provider manages the wider supply chain, including the 3PLs and carriers involved, and uses data and technology to improve cost, visibility and performance across it.
Why it matters for your supply chain: A 4PL model gives you one view of your whole supply chain and one partner to manage. This makes it easier to spot issues early, control costs and adapt when markets change.
Related terms: Third-party logistics (3PL), Supply chain management (SCM), Freight forwarder
Find out more: Supply chain management
Free on Board (FOB) is an international trade term used in shipping to indicate the transfer of ownership and responsibility of goods from the seller to the buyer at the point the goods cross the ship's rail at the port of shipment. The buyer is responsible for the cost and risks associated with transporting the goods from that point on. This term is commonly used in incoterms, a set of international trade terms developed by the International Chamber of Commerce (ICC).
A Free Trade Agreement (FTA) is a treaty between two or more countries that promotes trade by eliminating or reducing barriers such as tariffs, quotas, and subsidies on the goods and services traded between them. It is aimed at promoting economic cooperation and expanding trade flows between participating countries.
Freight All Kinds (FAK) is a pricing term used in the shipping industry to indicate that the price quoted for shipping a container or cargo includes all charges, regardless of the type or nature of the goods being shipped. This term is often used in situations where multiple types of goods are being shipped together in a single container, and the shipper wants to simplify the billing process by combining all of the charges into one price.
A freight forwarder is a company that arranges the movement of goods from origin to destination on behalf of a shipper, using carriers across air, ocean, road and rail. Most forwarders do not own the vessels, aircraft or trucks that carry the cargo. Instead, they buy capacity from carriers and manage the full journey.
Freight forwarding is the service itself. It covers:
A fuel surcharge fee is a fee that is added to the cost of a product or service to account for fluctuations in the price of fuel. It is typically used in the transportation industry, such as in ocean, air and road freight, to cover the additional cost of fuel. The amount of the fuel surcharge fee can vary based on changes in fuel prices and is usually adjusted on a regular basis.
Fulfilment, or order fulfilment, is the process of receiving, storing, picking, packing and shipping orders to customers. It starts when stock arrives at a warehouse and ends when the order reaches the end customer. In eCommerce, fulfilment often includes managing returns as well.
Why it matters for your supply chain: Fulfilment speed and accuracy directly shape the customer experience. They also shape the cost of every order you ship.
Related terms: Pick and pack, Warehousing, Last mile delivery, Reverse logistics, Stock keeping unit (SKU)
Find out more: eCommerce logistics
Full container load (FCL) refers to a shipment of goods that fill a standard shipping container, which is usually 20 or 40 feet long. In this mode of transportation, the shipper rents the entire container to transport their goods, and the container is loaded and unloaded only once, which can make it more cost-effective than other modes of shipment such as LCL (less than container load) or air freight.
Full truckload (FTL) is a shipping method in which a single truck is used to transport goods from one place to another. The entire capacity of the truck is used by a single customer for their shipment, and no other cargo is included in the same vehicle. FTL is a cost-effective solution for large shipments, as it eliminates the need for multiple shipments and reduces handling costs.
Garment on hanger (GOH) refers to clothing items that are hung on hangers, rather than folded and packaged, for shipping and transportation. This type of packaging is common in the fashion industry and is designed to reduce wrinkles and keep the clothes in a presentable condition. GOH shipments typically require specialised handling, as the items are more fragile and prone to damage than traditional packaged goods.
"Gating in" refers to the process of loading containers onto a ship at the terminal. It usually involves the use of cranes and other equipment to move containers from truck trailers or rail cars and place them onto the ship's deck. The term "gating in" is used to describe the first step of the vessel loading process, which is followed by the process of stacking containers on the ship's deck.
General Rate Increase (GRI) refers to an increase in the amount charged by shipping lines for the transport of goods by sea. This increase is a result of rising operational costs such as fuel prices, equipment, and personnel expenses. Shipping lines often implement GRIs as a way to maintain profitability and cover the cost of providing shipping services. The frequency and amount of GRIs can vary based on market conditions and the specific shipping line.
The Harbor Maintenance Fee (HMF) is a fee imposed by the US federal government on all cargo imported into or exported from the United States through its ports. The fee is used to fund the maintenance and improvement of the nation's harbors and channels. The amount of the fee is based on the value and weight of the cargo and can vary depending on the type of cargo, the port of entry, and other factors.
HS (Harmonized System) / HTS (Harmonized Tariff Schedule) codes are standardised codes used for the classification of goods in international trade. The HS codes are assigned by the World Customs Organization and are used to categorise products for customs purposes, while the HTS codes are used by the US to categorise goods and determine the applicable duties and taxes.
High cube (HC) containers are shipping containers with an increased height compared to standard containers. They have a height of 9 feet 6 inches (2.89 meters), while standard containers have a height of 8 feet 6 inches (2.59 meters). This increased height provides additional space and volume for goods, making them useful for shipping taller items or a larger quantity of smaller items.
A house airway bill (HAWB) is a document used in the international transportation of goods. It is issued by a freight forwarder and serves as a receipt for the shipment of goods. The HAWB is used in conjunction with the master airway bill (MAWB), which is issued by the airline and provides a record of all shipments being carried on a particular flight. The HAWB contains information about the shipment, such as the origin, destination, and type of goods being transported, as well as details about the consignor and consignee.
A house bill of lading (HBL) is a document that is issued by a freight forwarder, rather than a carrier, and serves as a receipt for the goods being shipped. It also functions as a contract between the shipper and the forwarder, specifying the details of the shipment including the type and quantity of goods, the shipping route, and any relevant terms and conditions.
Importer of record (IOR) refers to the person or company responsible for importing goods into a country and is responsible for complying with all the customs regulations and laws in the country. The IOR is responsible for filing the customs declaration and paying any duties or taxes owed on the imported goods. The IOR may or may not be the same person or company that owns or is purchasing the goods.
Importer Security Filing (ISF) is a mandatory security filing that must be submitted to the US Customs and Border Protection (CBP) by the importer of record or its authorised agent. The ISF provides detailed information about the cargo being imported into the US, including the ship, voyage, consignee, manufacturer, commodity description, and value. The purpose of the ISF is to enhance security and reduce the risk of smuggling, terrorism, and other threats to US national security. The ISF must be filed prior to the departure of the ship carrying the cargo, and any changes to the information must be reported promptly to the CBP.
Incoterms are standard trade terms used in international trade to specify the responsibilities of the buyer and seller in relation to the delivery of goods. Incoterms provide a set of internationally recognised rules and definitions that help to ensure that the parties involved in a trade transaction understand their responsibilities and obligations. The most commonly used Incoterms include Ex Works (EXW), Free on Board (FOB), Cost and Freight (CFR), Cost, Insurance, and Freight (CIF), and Delivered at Terminal (DAT).
Intermodal transport is the movement of goods in the same container or unit across two or more modes of transport, such as ship, rail and truck, without handling the goods themselves. Only the container is transferred between modes. Each leg of the journey may be arranged under a separate contract with a different carrier.
Intermodal vs multimodal: Both use more than one mode of transport. Intermodal transport focuses on keeping goods in one unit throughout, and each leg can have its own contract. Multimodal transport is arranged under a single contract, with one provider responsible for the whole journey.
Why it matters for your supply chain: Less handling means lower risk of damage and loss, and you can choose the most cost-effective mode for each leg.
Related terms: Multimodal transport, Container, Chassis, Drayage
Find out more: Rail freight and Road freight
The International Operating Procedure (IOP) is a standard set of procedures used by a shipping company or freight forwarder to ensure efficient and consistent operations for international shipments. The IOP typically outlines specific steps for handling tasks such as customs clearance, cargo packing and labeling, documentation, and transportation, among others, in accordance with the relevant international trade regulations. The purpose of the IOP is to ensure a seamless, cost-effective and compliant shipping process for all parties involved.
The International Organization for Standardization (ISO) is an independent, non-governmental, international organisation that develops and publishes standards to ensure quality, safety, and efficiency in various fields including but not limited to technology, manufacturing, and trade. These standards provide a common and consistent language and framework that companies can use globally to guide their business practices.
Key Performance Indicator (KPI) refers to specific and quantifiable metrics used to measure and evaluate the success and progress of an organisation, department, project or individual in meeting their goals and objectives. KPIs are chosen based on the strategy, goals and objectives of an organisation. The use of KPIs enables organisations to track their performance, measure the effectiveness of their processes and make data-driven decisions to improve performance and achieve their goals.
A known shipper is a term used in the air cargo industry to refer to a person, company, or organisation that has been pre-screened and approved by the relevant security authorities, and is deemed to pose a low risk to air transportation security. The concept of a known shipper is intended to help improve air cargo security by allowing security authorities to focus their resources on higher-risk shipments and persons, while enabling trusted and reliable shippers to benefit from streamlined and expedited security procedures.
Land-air is a multimodal service that moves goods by road or rail to an airport hub, then by air to their destination. Using land transport for the first leg can give access to more flight options and capacity than shipping from the origin airport alone.
Why it matters for your supply chain: Land-air can offer a balance of speed and cost. It is useful when direct air capacity is limited, expensive or disrupted.
Related terms: Sea-air, Multimodal transport, Chargeable weight
Find out more: Land-air
Landed cost represents the total cost of a product's journey from factory to store or buyer’s door. It includes the cost of the item, shipping costs, customs duties, insurance fees, and any other costs incurred along the way. Knowing how to calculate landed cost in an accurate way is necessary to running a business.
Last mile delivery is the final stage of a shipment's journey, from a distribution hub to the end customer's door. It is often the most complex and costly part of delivery, because orders are smaller and destinations are more spread out.
Why it matters for your supply chain: Last mile performance is what your end customers see. Reliable delivery and clear tracking build trust and repeat business.
Related terms: Fulfilment, Pick and pack, Reverse logistics
Find out more: eCommerce logistics
Less than container load (LCL) refers to a shipping arrangement in which multiple consignments, belonging to different consignors, are consolidated into a single container. This is done to reduce the shipping cost for each individual consignor as it is more economical to share the cost of a full container than to pay for the full cost of an individual small shipment.
Less than truckload (LTL) refers to a shipping term used to describe a shipment that is too small to fill a full truckload, but is too large to be shipped as a parcel. LTL shipments are typically consolidated with other small shipments to fill a full truck and are then shipped to their destination. This type of shipping is more cost-effective than parcel shipping and offers more flexibility in terms of scheduling and delivery options.
A Letter of Credit (LOC) is a financial instrument used in international trade transactions. It is a type of payment guarantee that is issued by a financial institution (such as a bank) on behalf of a buyer to a seller. The letter of credit serves as a promise to pay the seller a specified amount if the buyer fails to fulfill their obligations, such as paying for goods or services. The seller is required to provide documentation proving that they have met the terms of the transaction before receiving payment.
A Letter of Indemnity (LOI) is a written agreement between a shipper and a carrier in which the shipper agrees to indemnify, or reimburse, the carrier for any expenses, losses or damages incurred due to specific actions or omissions by the shipper.
Lift on / lift off (LO/LO) refers to a method of loading and unloading cargo containers, where a crane or other similar equipment is used to lift the containers on and off a ship or truck. This method of handling containers is typically used when the cargo is too large or too heavy to be loaded and unloaded by hand, or when the equipment used to handle containers is not available. LO/LO is a common method used in ports and terminal operations.
Liquefied Natural Gas (LNG) is a form of natural gas that has been cooled down to a liquid state at minus 162 degrees Celsius. This process reduces its volume by around 600 times, making it easier and more cost-effective to transport. LNG is mainly used as a fuel for vehicles, power generation, and heating. It is also a cleaner source of energy compared to traditional fossil fuels, producing lower levels of carbon dioxide and other pollutants when burned.
Machine learning is a subfield of artificial intelligence (AI) that focuses on the development of algorithms and statistical models that enable computers to perform tasks without explicit instructions. Machine learning algorithms learn from data and improve their performance over time. There are various types of machine learning algorithms, including supervised learning, unsupervised learning, semi-supervised learning, and reinforcement learning.
A master airway bill (MAWB) is a shipping document used in air freight that acts as a receipt for the consignor (sender) and serves as evidence of the contract of carriage. It includes details such as the sender, recipient, flight details, and the type and number of packages being shipped. The MAWB is used by freight forwarders and air carriers to manage and track shipments from origin to destination.
A material safety data sheet (MSDS) is a document that provides information on the properties and handling of hazardous materials, including physical data, fire and explosion hazard data, reactivity data, toxicological information, and spill/leak procedures. MSDS is intended to be used as a reference for workers handling hazardous substances and provides information on how to protect themselves and the environment from any potential harm.
The merchandise processing fee (MPF) is a fee charged by the US Customs and Border Protection (CBP) for processing import cargo into the United States. The fee is based on the value of the goods. It is a mandatory fee that must be paid by the importer or their agent before the goods are released from CBP custody. The purpose of the MPF is to cover the cost of processing and evaluating imports, as well as to maintain the infrastructure and technology needed for secure and efficient trade.
Multimodal transport is the movement of goods using two or more modes of transport under a single contract, with one provider responsible for the whole journey. A shipment might travel by ocean, rail and road, but the customer deals with one provider and receives one transport document.
Multimodal vs intermodal: Both use more than one mode. Multimodal transport has a single contract and a single provider for the whole journey. Intermodal transport keeps goods in one unit, and each leg may be contracted separately.
Why it matters for your supply chain: One point of accountability makes it easier to manage cost, visibility and risk across the full journey. It also gives you more options to reroute when a mode or route is disrupted.
Related terms: Intermodal transport, Sea-air, Land-air, Freight forwarder
Find out more: Freight solutions
Net-zero carbon refers to the balance between the amount of carbon dioxide emitted and the amount removed from the atmosphere, leading to zero net carbon dioxide emissions. This is considered an important goal in addressing the impacts of climate change, as reducing and eventually eliminating carbon emissions is seen as crucial in mitigating its effects.
A Non-Vessel Operating Common Carrier (NVOCC) is a company that provides ocean freight services, but does not own its own ships. Instead, the NVOCC contracts with shipping lines to transport cargo on their behalf and acts as an intermediary between the shipping line and the customer. NVOCCs offer a range of ocean freight services, including the preparation of shipping documents, cargo consolidation, and customs clearance, and often have a global network of offices and agents to provide customers with door-to-door service.
The Notice of Arrival (NOA) is a document provided by the shipping company to the recipient of a shipment to inform them of the expected arrival date of the shipment. The NOA typically includes information such as the shipment's origin, destination, vessel name, and estimated time of arrival. It is used as an operational tool to help with the coordination of the receiving and handling of the goods at the port of destination.
Ocean freight consolidation is the process of combining smaller shipments, often from several suppliers, into one container to reduce cost per unit. Goods are collected at a consolidation point near the port of loading, packed into a shared or full container, and shipped together. They are then deconsolidated at destination.
Why it matters for your supply chain: Consolidation lowers shipping costs and reduces the number of separate bookings and documents to manage. It can also cut carbon emissions per unit by improving container use.
Related terms: Buyers consolidation, Less than container load (LCL), Full container load (FCL), Deconsolidation
Find out more: Ocean freight consolidation
The origin terminal handling charge (OTHC) refers to a fee charged by a terminal operator at the port of origin for handling cargo before it is loaded onto a shipping vessel. The fee covers the costs associated with handling, storage, and other related services for the cargo at the terminal. This fee may vary depending on the type of cargo, the size of the shipment, and the services required. The OTHC is typically paid by the shipper or their agent, and is a separate cost from the ocean freight charge.
Out of gauge (OOG) cargo is cargo whose dimensions exceed the internal measurements of a standard shipping container. It is usually shipped on flat rack or open top containers, or as break bulk. Examples include machinery, vehicles and large aircraft parts. OOG cargo often needs specialist equipment, route surveys and permits.
Why it matters for your supply chain: OOG shipments need early planning. Lashing, handling and permit requirements affect cost and transit time.
Related terms: Break bulk, 40′ flat rack container, 40′ open top container, Roll-on / roll-off (RORO)
Find out more: Project logistics
The overweight surcharge (OWS) is a fee added to the cost of shipping goods that exceed a certain weight limit. This fee is usually imposed by shipping companies to compensate for the additional cost and effort involved in handling and transporting overweight packages. The amount of the surcharge will depend on the specific weight limits set by the shipping company, as well as the size, weight, and nature of the goods being shipped.
A packing list (PL) is a document that lists the contents of a shipment. It provides a detailed description of the items included in a package, such as the quantity, weight, and dimensions of each item. The packing list is used by the recipient to verify the contents of the shipment and can also be used for customs purposes to help determine the value and classification of the goods being shipped. It is a critical document in the supply chain process and can be used for tracking and documentation purposes.
The per diem (per day) charge is a daily fee that is assessed for certain expenses such as the cost of storage or the use of equipment. It is typically used in the shipping and transportation industry for the purpose of compensating for the additional costs incurred in keeping a shipment or cargo in transit. The amount of the per diem charge is usually set by industry standards or agreements between the parties involved in the shipment. The purpose of this fee is to ensure that all necessary expenses are covered and to incentivise prompt delivery or release of the shipment.
Pick and pack is a warehouse process where items are selected from stock for each order, then packed and labelled ready for dispatch. Picking can be done by individual order, in batches or by zone, depending on order volumes and the warehouse layout.
Why it matters for your supply chain: Picking accuracy reduces returns and complaints. Efficient packing lowers material and shipping costs.
Related terms: Fulfilment, Warehousing, Stock keeping unit (SKU), Value added services (VAS)
Find out more: Contract logistics
Port of discharge (POD) refers to the port where the goods on board a ship are offloaded and the responsibility of the shipment is transferred from the carrier to the recipient. It's the final destination of the goods in a shipment, and the location where the goods are cleared from customs.
Port of loading (POL) refers to the port where the cargo is loaded onto the shipping vessel or container. It is the starting point of the shipping journey and is an important factor in determining shipping costs and transit time. The port of loading is usually specified in the shipping contract or bill of lading.
A pre-pull refers to the process of retrieving goods or containers from a terminal or depot in advance of their scheduled delivery date. This is often done to allow for further inspection, preparation, or storage of the goods before they are delivered to the final recipient. Pre-pulling can help to ensure the smooth and efficient flow of goods through the supply chain and minimise the risk of delays or other issues that may arise.
A purchase order (PO) is a document issued by a buyer to a supplier that confirms the type, quantity and agreed price of goods or services to be supplied.
.Quality Control (QC) in shipping is the process of verifying that goods meet the agreed specifications and relevant regulations before they are released for transportation. The objective of QC is to ensure product quality and order accuracy, this includes checking and confirming quantity, weight, packaging, labelling and documentation so that shipments match customer requirements and relevant and local regulations.
Reverse logistics is the process of moving goods back from the customer to the seller or manufacturer for return, repair, resale, recycling or disposal. It covers:
Why it matters for your supply chain: A well-run returns process recovers value from returned stock, improves the customer experience and supports sustainability goals.
Related terms: Fulfilment, Last mile delivery, Sustainability, Quality control (QC)
Find out more: eCommerce logistics
Robotic process automation (RPA) is a technology that allows organisations to automate repetitive, time-consuming tasks by using software robots. In the context of shipping, RPA can be used to automate various processes such as data entry, tracking and monitoring of shipments, invoicing, and more. The use of RPA helps to improve efficiency, accuracy, and speed in shipping operations, freeing up employees to focus on more value-adding activities.
Roll-on/Roll-off (RORO) is a shipping method for transporting wheeled cargo, such as vehicles, trailers, and containers, onto a special vessel equipped with ramps. The cargo is driven or rolled on and off the vessel, without the need for cranes or other lifting equipment. This method is commonly used for automobiles, heavy equipment, and other wheeled cargo, as it is cost-effective and efficient for shipping large items.
Rolled cargo refers to cargo that is not loaded onto a vessel due to various reasons, such as operational issues, lack of space, or missing documentation. When cargo is rolled, it means that it has been left behind at the port and will be carried on a subsequent voyage.
A sea waybill (SWB) is a shipping document that serves as evidence of a contract of carriage between a shipper and a carrier. It provides details of the goods being shipped, the origin and destination ports, and other relevant information. Unlike a bill of lading, a sea waybill is not a negotiable document and does not transfer ownership of the goods. However, it is still widely used in the shipping industry as it is faster and simpler to produce than a bill of lading.
Sea-air is a multimodal service that moves goods by ocean to a transit hub, then by air to their destination. It is typically faster than ocean freight alone and lower in cost than air freight for the full journey.
Why it matters for your supply chain: Sea-air gives you a middle option between ocean and air. It is useful for time-sensitive goods, or when ocean routes face delays.
Related terms: Land-air, Multimodal transport, Chargeable weight
Find out more: Freight solutions
A shipper's letter of instruction (SLI) is a document that provides detailed instructions from a shipper to a freight forwarder or shipping company regarding the shipment of goods. It contains important information such as the type of goods being shipped, the quantity, packaging requirements, delivery instructions, and the names and addresses of the shipper, consignee, and any intermediaries involved in the transaction. The SLI is used to ensure that the shipment is properly documented and that all parties involved are aware of the details of the transaction.
Shipping line refers to a company that operates vessels for the transportation of cargo by sea.
A shipping order (SO) is a document that confirms the booking of a shipment on a vessel, issued by the carrier. It specifies the location of the empty container to be picked up and may include additional details such as the vessel number and sailing time.
A standard operating procedure (SOP) is a detailed, written instruction that outlines the steps necessary to complete a task or process. In the context of shipping, SOPs may cover various procedures such as cargo handling, customs clearance, or security procedures to ensure consistent and efficient operations.
Stock Keeping Unit (SKU) is a unique identifier assigned to each individual product or item in inventory. It helps in tracking and managing the stock levels and sales performance of the product. In shipping, SKUs are used to identify and track the items being shipped, to ensure accurate and efficient order fulfillment and inventory management.
Supply chain management (SCM) is the coordination and management of activities involved in the production and delivery of goods and services from suppliers to customers. SCM involves the optimisation of all processes in the supply chain to minimise cost, improve quality and delivery time, and increase customer satisfaction.
Sustainability refers to the development and maintenance of processes and systems that meet the needs of the present generation without compromising the ability of future generations to meet their own needs. In the context of shipping, it involves taking steps to minimise the negative impacts of shipping activities on the environment, such as reducing greenhouse gas emissions and reducing waste. It also involves considering the social and economic impacts of shipping operations, such as ensuring fair labor practices and supporting local communities.
Telex release (TR) is a document issued by a shipping line or their agent, indicating that a shipment has been released from the carrier and is available for pickup at the destination port. The telex release serves as a substitute for an original bill of lading and is typically required by the consignee or the bank to clear customs and receive the goods.
The Integrated Tariff of the European Union (TARIC) is a database of trade-related measures in the European Union. It provides information on tariffs, trade agreements, and trade-related measures, such as quotas and anti-dumping duties, for goods imported into the EU. This information is used by EU customs authorities and is also available to businesses and the public for reference.
Third-party logistics (3PL) is when a business outsources services such as warehousing, transport and fulfilment to a specialist provider. A 3PL provider manages these operations on the customer's behalf, often across multiple locations and carriers.
Why it matters for your supply chain: Outsourcing to a 3PL lets businesses scale without investing in their own warehouses, vehicles or systems.
Related terms: Warehousing, Fulfilment, Supply chain management (SCM)
Find out more: Contract logistics
Twenty-foot equivalent unit (TEU) is a standard unit of measurement for cargo capacity in shipping. It represents the capacity of a standard 20-foot intermodal shipping container and is widely used in the shipping industry to determine the capacity of container ships, ports, and terminals. One TEU is equal to one 20-foot shipping container or its equivalent.
The ultimate consignee refers to the end recipient of goods being shipped, as specified in the shipping documentation. The ultimate consignee may be different from the named consignee, who is responsible for receiving the goods and ensuring that they are transported to the final destination.
Value added services (VAS) are services beyond transport and storage that prepare goods for sale or onward delivery. They can take place at origin, in transit or at destination. Examples include:
Why it matters for your supply chain: Completing these tasks earlier in the supply chain can save time and cost later. It also means goods arrive ready for sale.
Related terms: Quality control (QC), Garment on Hanger (GOH), Pick and pack
Find out more: Value added services
A value added tax (VAT) number is a unique identification number assigned by a government to a business for the purpose of collecting and reporting VAT, a tax on the value added to goods and services during production and distribution. The VAT number is used to track the payment and collection of VAT and to verify that a business is registered and compliant with VAT regulations.
Warehousing is the storage of goods in a dedicated facility until they are needed for sale, production or onward distribution. Modern warehousing goes beyond storage and often includes:
Why it matters for your supply chain: The right warehouse location and set-up reduces delivery times and transport costs. It also gives you clearer visibility of stock levels.
Related terms: Bonded warehouse, Cross-docking, Pick and pack, Fulfilment
Find out more: Contract logistics
