Logistics Terminology Guide
Definitions for Supply Chain Professionals
Welcome to the PMB Logistics Glossary, a comprehensive guide to key terms and definitions used in the logistics and supply chain industry. Whether you’re new to the field or an experienced professional, this glossary will help you understand the technical language behind logistics operations and streamline your business processes.
A
Accessorial Charges
Additional fees charged by carriers for extra services beyond the standard transportation, such as liftgate usage, fuel surcharges, and handling.
Advanced Shipping Notice (ASN)
A message from the supplier to the buyer or receiving facility providing shipment details ahead of the delivery.
Automated Guided Vehicle (AGV)
A mobile robot used in warehouses or factories to transport materials and goods automatically, reducing manual labor and increasing efficiency.
B
Bill of Lading (BOL)
A formal document between the shipper and carrier outlining the type, quantity, and destination of the goods being transported. It acts as both a receipt and a contract for the transportation of goods.
Bulk Freight
Goods that are transported in large quantities without packaging, typically in the form of liquids, grains, or raw materials.
C
Carrier
A company or individual responsible for the transportation of goods, whether by land, sea, or air.
Cross-Docking
A logistics practice where products from a supplier or manufacturer are directly distributed to a customer or retail chain with minimal or no storage time in between.
Customs Clearance
The process of getting goods through customs in international trade, including the payment of duties and taxes, as well as compliance with local regulations.
D
Drop Shipping
A fulfillment method where a store doesn't hold inventory but forwards customer orders to the supplier, who ships the products directly to the customer.
Delivery Window
A specific time frame during which a shipment is expected to arrive at its destination.
E
EDI (Electronic Data Interchange)
The digital transfer of business documents, like purchase orders and invoices, between companies using standardized formats.
End-to-End Visibility
The ability to track and monitor all stages of the supply chain, from production to final delivery, ensuring efficiency and transparency.
F
Freight Forwarder
A company or individual that arranges the storage and shipping of goods on behalf of the shipper, coordinating with carriers, customs, and other necessary services.
Full Truckload (FTL)
A shipping method where the entire capacity of a truck is filled with goods from a single shipper, offering direct and faster delivery.
G
Global Positioning System (GPS)
A satellite-based navigation system that allows companies to track the location of vehicles or shipments in real-time.
Gross Weight
The total weight of a shipment, including both the goods and the packaging or containers.
H
Hazardous Materials (Hazmat)
Substances that pose a risk to health, safety, or the environment and require special handling, packaging, and documentation during transportation.
Hub-and-Spoke System
A logistics system where goods are moved from various origins (spokes) to a central hub for sorting and distribution to final destinations.
I
Inventory Management
The process of managing the ordering, storage, and utilization of goods and materials to ensure availability when needed.
Intermodal Shipping
The use of more than one mode of transportation (e.g., truck, rail, ship) to move goods across long distances.
J
Just-in-Time (JIT)
A production strategy aimed at minimizing inventory costs by receiving goods and materials only when needed in the production process.
K
Kitting
The process of assembling individual items into ready-to-ship sets, typically used for creating packages or promotional kits.
L
Lead Time
The time taken from when an order is placed to its delivery to the customer.
LTL (Less-than-Truckload)
A shipping option for smaller shipments that don’t require a full truckload, where the space on the truck is shared with other shipments.
M
MOQ (Minimum Order Quantity)
The smallest quantity of a product that can be ordered from a supplier or manufacturer, often used in wholesale or bulk purchasing.
Managed Transportation
A service where logistics operations, such as shipment management and route planning, are outsourced to a third-party provider to optimize transportation efficiency.
N
Net Weight
The weight of the goods being shipped, excluding any packaging or containers.
Non-Vessel Operating Common Carrier (NVOCC)
A company that does not own ships but acts as a carrier by booking space on ships and consolidating cargo for transport.
O
Order Fulfillment
The entire process of receiving, processing, and delivering orders to customers, encompassing inventory management and shipping.
Overhead Costs
The expenses associated with running logistics operations that are not directly tied to specific shipments, such as warehousing and staff salaries.
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P
Proof of Delivery (POD)
A receipt signed by the recipient of goods to confirm that the items were delivered in good condition and on time.
Packing List
A detailed list of the contents within a shipment, often included with the goods during transit for customs and inventory purposes.
Q
Quality Control
The process of ensuring that goods meet specified quality standards before they are shipped to customers or retailers.
R
Reverse Logistics
The process of moving goods from the final consumer back to the supplier or manufacturer for returns, recycling, or disposal.
Route Optimization
The process of planning the most efficient route for shipments, taking into account factors like distance, time, and fuel costs.
S
Supply Chain
The full network of organizations involved in the production and delivery of a product, including suppliers, manufacturers, and distributors.
Ship from Store
A logistics method where products are shipped directly from a retail store to the customer, bypassing the central warehouse.
T
Third-Party Logistics (3PL)
A service provider that manages logistics operations on behalf of other companies, such as warehousing, transportation, and order fulfillment.
Transportation Management System (TMS)
Software used by businesses to plan, execute, and optimize the movement of goods across the supply chain.
U
Uptick
A term used to describe an increase in activity or business, such as a surge in shipping demand.
V
Vendor-Managed Inventory (VMI)
A supply chain management strategy where the supplier takes responsibility for managing inventory levels at the retailer’s location.
W
Warehouse Management System (WMS)
A software system designed to manage and optimize warehouse operations, including inventory management, order fulfillment, and shipping.
X
X-Dock
A type of cross-docking system where products are transferred from incoming shipments directly onto outgoing ones without storing them.
Y
Yield Management
The process of adjusting prices or services based on the demand and supply of logistics capacity, often used in air and sea freight.
Z
Zero Inventory
A supply chain strategy where inventory is minimized or eliminated, relying on just-in-time delivery systems to meet demand.
This glossary is designed to assist you in understanding the terminology used in logistics and help optimize your supply chain and transportation processes.
For any further assistance or inquiries, feel free to contact PMB Logistics!