Understanding shipping and logistics terminology.
It is not uncommon to feel overwhelmed with the extensive terminology used from industry to industry. It is no different when it comes to the shipping and logistics industry. Fortunately for you, we have solved this problem with our extensive experience in the industry. Our guide covers many important and helpful terms that will help you better understand the industry and also minimize common shipping mistakes.
3PL (Third Party Logistics) – A provider of outsourced logistic services. The provider typically manages a significant part of an organization’s logistics requirements such as storing, shipping and tracking products.
Accessorials – Additional charges/fees accessed for performing services beyond normal pickup and deliveries, such as, but not limited to, lift gate deliveries, inside deliveries, shipping hazardous items (see hazmat below) and more. They are also refereed to special handling charges.
Air Waybill – An air waybill is a shipping document airlines use. Similar to a bill of lading(see BOL below), the air waybill is a contract between the shipper and airline that states the terms and conditions of transportation. The air waybill also contains shipping instructions, product descriptions, and transportation charges.
Backhaul – The “return trip” from point B to the originating point A. It is typically a return to the origin of the freight hauled in which the carrier is willing to offer a discount to avoid returning empty.
Bill of Lading (BOL) – The legal shipping document necessary for each LTL (Less Than Truckload) shipment that outlines the type, quantity and destination of the goods being shipping. It is important to note that we provide a BOL for each shipment which is encoded with our discounted pricing.
Blind Shipment – When one or more parties to a shipment do not know who is the shipper, receiver or both. This is common when a retailer ships straight from their vendor to the end customer and wish to keep the end customer “in the blind” of the actual origin.
Bonded Carrier – A transportation provider U.S. Customs allows to carry customs-controlled merchandise between customs points.
Broker – A person who makes shipping arrangements on behalf of another individual or company. Through their experience and product offering, they ensure efficiency and negotiated rates on your behalf.
CAB Card – Similar to registration papers we keep in our vehicles, this is a state issued document outlining permitted states the commercial driver is authorized to drive in.
Carrier – A company that transports parcels or freight for a fee.
Cartage Agent – A carrier that performs the pickup or delivery in specific areas that a trucking company does not service themselves.
Certificate of Origin – A document that certifies the country in which the products were made.
Commercial Invoice – A customs document prepared by the exporter (or Freightwire), and required to clear customs, containing terms of sale, quantity and value of the goods.
Chassis – A rail term that refers to a frame with wheels and locking devices to secure a container during transportation.
COD (Collect on Delivery) – Freight carrier collects money prior to the final delivery.
Concealed Damage – Damage not evident or visible at the time of delivery. It is very important to open and inspect each item prior to signing off for the receipt of the goods.
Commodity – Any article of commerce or goods shipped.
Conestoga – a special form of flatbed trailer with a flexible retractable roof and siding, used to carry large pieces of equipment that can only by side loaded or loaded overhead by crane which must be protected from the weather.
Consignee – The recipient or receiver.
Container – A container looks like a truck trailer with no wheels and is now among the most common freight shipping methods in the United States and abroad. Containers are used for intermodal shipping and come in standard sizes to ensure they fit on standard trucks, rail cars and container ships.
Cubic Capacity – The total freight load capacity of any truck is measured in cubic feet opposed to linear feet. Each carrier has maximum cubic footage for their LTL shipments. Shipments exceeding their set standard may result in a steep up charge.
Customer Routed – Shipments paid by and charged to the receivers account.
Customs – The government service that is responsible for the assessment of import and export duties and taxes and administration of other laws and regulations that apply to the shipment.
Dead Head Miles – The amount of miles a truck driver travels empty to arrive at the pickup location.
Dedicated Load – The arrangement of freight which does not share floor space with another company, regardless of shipment size. Also referred to as an “exclusive load”
Detention – A fee charged against shippers or consignees for delaying carrier’s equipment beyond allowed time, typically when two or more hours are exceeded per location.
DDU (Delivery Duties Unpaid) – An international trade where the seller is responsible for making a safe delivery or goods to the destination, paying for all transportation expenses and assuming all risks during transportation except for the duty once it arrives to port.
DDP (Delivery Duties Paid) – An international transaction where the seller pays for the total costs associated with transporting goods and is fully responsible for the goods until they are received and transferred to the buyer.
Density – The space an items occupies in relation to its own weight. Many commodities rely on the density to accurate price out the freight cost.
Dimensional Weight – A calculation of the shipment’s weight based on its volumetric standard instead of its actual weight.
Door to Door – International terminology clarifying a delivery beyond the destination port.
Drop Shipping – Transportation from the manufacturer directly to the end recipient without going through the usual distribution channels, minimizing shipping cost.
Dry Van – The most common semi-truck trailer that requires no special requirements such as refrigeration.
Dunnage – Pieces of wood, matting or similar material used to prevent the product from moving.
Dead Head Miles – The amount of miles a truck driver travels empty to arrive at the pickup location.
EEI Filing – A dutiable shipment with a single commodity valued over $2,500 requires filing Electronic Export Information (EEI) to receive an Internal Transaction Number (ITN) necessary for export. Always select “I want DHL to be the EEI filing agent” to make like easier on you.
Flatbed Trailer – A truck with an entirely flat trailer with no sides or roof. Ideal for over sized items.
FOB (Free on Board) – A term that specifies at which point the seller transfers ownership of the goods to the buyer.
Gross Weight – When referring to a cargo, in most cases, this is referring to the weight of the product and the packaging.
Hot Shot Trailer – Typically a 1 ton truck pulling a smaller trailer for lighter loads or partial loads.
Import taxes / Duty Fees – The tax imposed by Customers on imported goods, and does not change regardless of carrier or service. Does not apply on documents/papers.
Interline – The transfer of freight from one carrier to another.
Intermodal Transportation – When freight is shipped using two or more modes of transportation. This typically refers to truck-rail-truck shipments.
Known Shipper – A shipping security status that allows a shipper to move freight on any commercial airline. A known shipper has a valid account number with an IAC (Indirect Air Carrier) and has executed the proper documents required by the TSA to become a known shipper to the IAC. Unknown shippers are not permitted to ship anything via passenger airplane.
Line Haul – The distance from terminal to terminal in LTL Freight, or origin to destination in Truckload/partial shipping.
Loaded Miles – Refers to the distance between pickup and destination, not including the distance a truck must drive empty (dead head miles) to arrive at the pickup location.
Low Boy Trailer – Trailer that has two drops in height, generally designed to transport taller items.
Nested – A term in LTL shipping in which materials are stacked so that one item goes inside another. Nested reduces the amount of space taken up by the combined freight and makes LTL shipping more efficient as a result.
NMFC (National Motor Freight Class) – A 4-6 digit number that categorizes commodity type and is used by LTL carriers to determine the freight class. Comparable to a barcode that grocery stores use for their products.
NOI (Not Otherwise Indicated) – A general class rate that covers a large range of categories.
Pallet Rate – A fixed price for one pallet shipments regardless of commodity.
POD – Proof of delivery, a delivery receipt attainable once shipments are delivered.
Preferred Carrier – The main carrier used at a tradeshow. Try to use this carrier for all tradeshow shipments as they are allowed to drop trailers before and after shows.
Pre-Paid Shipments – All shipment we arrange are pre-paid. (Either by Credit Card or through a Line of Credit.
PRO # – The tracking number for LTL freight shipments.
Pup – a 28-foot trailer.
Reefer Trailer – A refrigerated trailer designed to carry perishable products at a specific temperature.
Scale weight – Trucks are required to pull over at weight stations during the line haul. Each trailer type has a legal limit they can scale, or carry.
Schedule B Number – An official commodity classification used by shippers in reporting export shipments from the United States. Very comparable to the NMFC number used in LTL freight.
Single Shipment Fee – Applies to single shipments of less than 500 lbs. This is built into the rate shows in the rater, not an additional charge to be added.
SLI (Shippers Letter of Instruction) – The paperwork used for Air Freight shipments.
Step-Deck Trailer – Similar to a flatbed but has two decks opposed to one long deck.
Tariff – The cost and contract of freight shipments for the shipper and carrier.
Terminal – A dock or hub where freight originates, terminates, or is handled in the transportation process (between line hauls); or a location where motor carriers maintain operating facilities.
Time Critical – A guaranteed LTL freight service that is generally ships via air to arrive at destinations much quicker than the estimated LTL transit times.
TONU – Acronym standing for, “Truck Ordered, Not Used.” This fee is a cancellation charge for ordering a truck and then cancelling the order after a rate con has been signed by the carrier.
Transit Time – The total time from pickup to delivery. Unless indicated, transit times are estimated.
Truckload (TL) – A truckload is defined as freight weighing 23,000 pounds or more or that occupies half or more of a trailer’s capacity.
Volume Rate – A less than truckload (LTL) term for rates that are made subject to a minimum weight of 4,000 pounds or more, or cubic volume exceeding 750 cubic feet.