Absorption: Acceptance by the carrier of a portion of a joint rate of charge which is less than the amount which it would receive for the service in the absence of such joint rate or charge.

Acceptance of goods: The process of receiving consignment from a consignor, usually against the issue of a receipt. As from this moment and on this place the carrier’s responsibility for the consignment begins. 

Active Inventory: Covers raw material, work in progress, finished products that will be used or sold within a given period without extra cost or loss. This term does not cover the so-called reserve inventory.

Activity Based Costing (ABC): ABC seeks to relate all relevant revenue and costs to the value adding activities performed in the supply chain. Revenue and costs are applied to a relevant activity, independent or when and where they occur; they are not allocated to an organizational budget unit.

Actual demand: Customer’s orders and often also the allocation of items, ingredients and/or raw materials to production or distribution.

After-sale-service: Services provided to the customer after products have been delivered. This can include repairs, maintenance and\or telephone support.

Air Cargo Containers: Containers designed to conform to the inside of an aircraft. There are many shapes and sizes of containers. Air cargo containers fall into three categories: 1) air cargo pallets 2) lower deck containers 3) box type containers.

Air Waybill (AWB): A bill of lading for air transport that serves as a receipt for the shipper, indicates that the carrier has accepted the goods listed, obligates the carrier to carry the consignment to the airport of destination according to specified conditions.

Allcargo Carrier: An air carrier that transports cargo only.

Available Inventory: The on-hand inventory balance minus allocations, reservations, backorders, and (usually) quantities held for quality problems. Often called "beginning available balance".

Average Cost per Unit: The estimated total cost, including allocated overhead, to produce a batch of goods divided by the total number of units produced.

Back Order: Product ordered but out of stock and promised to ship when the product becomes available.

Backflush: A method of inventory bookkeeping where the book (computer) inventory of components is automatically reduced by the computer after completion of activity on the component's upper-level parent item based on what should have been used as specified on the bill of material and allocation records. This approach has the disadvantage of a built-in differential between the book record and what is physically in stock. Synonym: explode-to-deduct.

Backhaul: The process of a transportation vehicle returning from the original destination point to the point of origin.

Benchmarking: The process of comparing performance against the practices of other leading companies for the purpose of improving performance.Companies also benchmark internally by tracking and comparing current performance with past performance. Benchmarking seeks to improve any given business process by exploiting "best practices" rather than merely measuring the best performance. Best practices are the cause of best performance. Studying best practices provides the greatest opportunity for gaining a strategic, operational, and financial advantage.

Blanket Purchase Order: A long-term commitment to a supplier for material against which short-term releases will be generated to satisfy requirements. Often blanket orders cover only one item with predetermined delivery dates. Synonym: Blanket Order, Standing Order

Bonded Warehouse: Warehouse approved by the Treasury Department and under bond/guarantee for observance of revenue laws. Used for storing goods until duty is paid or goods are released in some other proper manner.

Broker: An intermediary between the shipper and the carrier. The broker arranges transportation for shippers and represents carriers.

Bulk storage: The process of housing or storing materials and packages in larger quantities, generally using the original packaging or shipping containers or boxes.

Bundle: A group of products that are shipped together as an unassembled unit.

Business Logistics: The systematic and coordinated set of activities required to provide the physical movement and storage of goods (raw materials, parts, finished goods) from vendor/supply services through company facilities to the customer (market) and the associated activities—packaging, order processing, etc.—in an efficient manner necessary to enable the organization to contribute to the explicit goals of the company.

Cage: (1) A secure enclosed area for storing highly valuable items, (2) a pallet-sized platform with sides that can be secured to the tines of a forklift and in which a person may ride to inventory items stored will above the warehouse floor.

Cantilever rack: Racking system that allows for storage of very long items.

Capacity: The physical facilities, personnel and process available to meet the product or service needs of customers. Capacity generally refers to the maximum output or producing ability of a machine, a person, a process, a factory, a product, or a service.

Supply Charge: A railroad charge for a shipper's exclusive use of special equipment

Carload Lot: A shipment that qualifies for a reduced freight rate because it is greater than a specified minimum weight. Since carload rates usually include minimum rates per unit of volume, the higher LCL (less than carload) rate may be less expensive for a heavy but relatively small shipment.

Carrier: A firm which transports goods or people via land, sea or air.

Certificate of Compliance: A supplier's certification that the supplies or services in question meet specified-requirements.

Channel Partners: Members of a supply chain (i.e. suppliers, manufacturers, distributors, retailers, etc.) who work in conjunction with one another to manufacture, distribute, and sell a specific product.

Channels of Distribution: Any series of firms or individuals that participates in the flow of goods and services from the raw material supplier and producer to the final user or consumer.

Collect Freight: Freight payable to the carrier at the port of discharge or ultimate destination. The consignee does not pay the freight charge if the cargo does not arrive at the destination.

Common Carrier: Transportation available to the public that does not provide special treatment to any one party and is regulated as to the rates charged, the liability assumed, and the service provided. A common carrier must obtain a certificate of public convenience and necessity from the Federal Trade Commission for interstate traffic.

Common Carrier Duties: Common carriers are required to serve, deliver, charge reasonable rates, and not discriminate

Complete & On-Time Delivery (COTD): A measure of customer service. All items on any given order must be delivered on time for the order to be considered as complete and on time.

Complete Manufacture to Ship Time: Average time from when a unit is declared shippable by manufacturing until the unit actually ships to a customer.

Consignee: The party to whom goods are shipped and delivered. The receiver of a freight shipment.

Consignment: 1) A shipment that is handled by a common carrier. 2) The process of a supplier placing goods at a customer location without receiving payment until after the goods are used or sold.

Consignor: The party who originates a shipment of goods (shipper). The sender of a freight shipment, usually the seller.

Consortium: A group of companies that work together to jointly produce a product, service, or project.

Contract Carrier: A carrier that does not serve the general public, but provides transportation for hire for one or a limited number of shippers under a specific contract.

Cross Docking: A distribution system in which merchandise received at the warehouse or distribution center is not put away, but instead is readied for shipment to retail stores. Cross docking requires close synchronization of all inbound and outbound shipment movements. By eliminating the put-away, storage and selection operations, it can significantly reduce distribution costs.

Cross-Shipment: Material flow activity where materials are shipped to customers from a secondary shipping point rather than from a preferred shipping point.

Dangerous Goods: Articles or substances capable of posing significant health, safety, or environmental risk, and that ordinarily require special attention including packaging and labeling when stored or transported. Also referred to as Hazardous Goods or Hazardous Materials (HazMat).

Delivery Appointment: The time agreed upon between two enterprises for goods or transportation equipment to arrive at a selected location. Typically used to help plan warehouse and receiving / inspection operations and to manage backup of carriers at loading docks.

Demand Chain: Another name for the supply chain, with emphasis on customer or end-user demand pulling materials and product through the chain.

Demand Chain Management: Same as supply chain management, but with emphasis on consumer pull versus supplier push.

Dispatching: The carrier activities involved with controlling equipment; involves arranging for fuel, drivers, crews, equipment, and terminal space.

Distribution: Outbound logistics, from the end of the production line to the end user. 1) The activities associated with the movement of material, usually finished goods or service parts, from the manufacturer to the customer. These activities encompass the functions of transportation, warehousing, inventory control, material handling, order administration, site and location analysis, industrial packaging, data processing, and the communications network necessary for effective management. It includes all activities related to physical distribution, as well as the return of goods to the manufacturer. In many cases, this movement is made through one or more levels of field warehouses. Synonym: Physical Distribution. 2) The systematic division of a whole into discrete parts having distinctive characteristics.

Distribution Center (DC): The warehouse facility which holds inventory from manufacturing pending distribution to the appropriate stores.

Distribution Channel: One or more companies or individuals who participate in the flow of goods and services from the manufacturer to the final user or consumer.

Distribution Planning: The planning activities associated with transportation, warehousing, inventory levels, materials handling, order administration, site and location planning, industrial packaging, data processing, and communications networks to support distribution.

Distribution Warehouse: A warehouse that stores finished goods and from which customer orders are assembled.

Distributor: A business that does not manufacture its own products, but purchases and resells these products.  Such a business usually maintains a finished goods inventory. Synonym: Wholesaler

Exclusive Use: Carrier vehicles that are assigned to a specific shipper for its exclusive use.

Exempt Carrier: A for-hire carrier that is free from economic regulation. Trucks hauling certain commodities are exempt from Interstate Commerce Commission economic regulation. By far the largest portion of exempt carriers transports agricultural commodities or seafood.

Export Broker: An enterprise that brings together buyer and seller for a fee, then eventually withdraws from the transaction.

Field warehouse: A warehouse on the property of the owner of the goods that stores goods that are under the custody of a bona fide public warehouse manager. The public warehouse receipt is used as collateral fora loan.

Flow Rack: Storage rack that utilizes shelves (metal) that are equipped with rollers or wheels. Such an arrangement allows product and materials to "flow" from the back of the rack to the front and therein making the product more accessible for small-quantity order-picking.

Flow-Through Distribution: A process in a distribution center in which products from multiple locations are brought in to the D.C. and are re-sorted by delivery destination and shipped in the same day. Also known as a "cross-dock" process in the transportation business.

Free Alongside Ship (FAS): A term of sale indicating the seller is liable for all changes and risks until the goods sold are delivered to the port on a dock that will be used by the vessel. Title passes to the buyer when the seller has secured a clean dock or ship's receipt of goods. The seller agrees to deliver the goods to the dock alongside the overseas vessel that is to carry the shipment. The seller pays the cost of getting the shipment to the dock; the buyer contracts the carrier, obtains documentation, and assumes all responsibility from that point forward.

Freight: Goods being transported from one place to another.

Freight Carriers: Companies that haul freight, also called "for-hire" carriers. Methods of transportation include trucking, railroads, airlines, and sea borne shipping.

Freight Forwarder: An organization which provides logistics services as an intermediary between the shipper and the carrier, typically on international shipments. Freight forwarders provide the ability to respond quickly and efficiently to changing customer and consumer demands and international shipping (import/export) requirements.

Fulfillment: The act of fulfilling a customer order. Fulfillment includes order management, picking, packaging, and shipping.

Full Container load (FCL): A term used when goods occupy a whole container.

Full Truckload (FTL): A term which defines a shipment which occupies at least one complete truck trailer, or allows for no other shippers goods to be carried at the same time.

Gain Sharing: A method of incentive compensation where supply chain partners share collectively in savings from productivity improvements. The concept provides an incentive to both the buying and supplier organizations to focus on continually re-evaluating, re-energizing, and enhancing their business relationship. All aspects of value delivery are scrutinized, including specification design, order processing, inbound transportation, inventory management, obsolescence programs, material yield, forecasting and inventory planning, product performance and reverse logistics. The focus is on driving out limited value cost while protecting profit margins.

General Commodities Carrier: A common motor carrier that has operating authority to transport general commodities, or all commodities not listed as special commodities.

General-Merchandise Warehouse: A warehouse that is used to store goods that are readily handled, are packaged, and do not req1ire a controlled environment.

Gondola: A rail car with a flat platform and sides three to five feet high; used for top loading of items that are long and heavy.

Goods: A term associated with more than one definition: 1) Common term indicating movable property, merchandise, or wares. 2) All materials which are used to satisfy demands. 3) Whole or part of the cargo received from the shipper, including any equipment supplied by the shipper.

Gross Weight: The total weight of the vehicle and the payload of freight or passengers.

Handling Costs: The cost involved in moving, transferring, preparing, and otherwise handling inventory.

Haulage: The inland transport service which is offered by the carrier under the terms and conditions of the tariff and of the relative transport document.

Hazardous Material: A substance or material, which the Department of Transportation has determined to be capable of posing a risk to health, safety, and property when stored or transported in commerce.

Hi-low: Usually refers to a forklift truck on which the operator must stand rather than sit.

Hopper Cars: Rail cars that permit top loading and bottom unloading of bulk commodities; some hopper cars have permanent tops with hatches to provide protection against the elements.

Hostler: An individual employed to move trucks and trailers within a terminal or warehouse yard area.

Household Goods Warehouse: A warehouse that is used to store household goods.

Inbound Logistics: The movement of materials from suppliers and vendors into production processes or storage facilities.

Inland Carrier: An enterprise that offers overland service to or from a point of import or export.

Integrated Carrier: A company that offers a blend of transportation services such as land, sea and air carriage, freight forwarding, and ground handling.

Integrated Logistics: A comprehensive, system-wide view of the entire supply chain as a single process, from raw materials supply through finished goods distribution. All functions that make up the supply chain are managed as a single entity, rather than managing individual functions separately.

Interline: Two or more motor carriers working together to haul the shipment to a destination. Carrier equipment may be interchanged from one carrier to the next, but usually the shipment is rehandled without the equipment.

Intermediately Positioned Warehouse: A warehouse located between customers and manufacturing plants to provide increased customer service and reduced distribution cost.

In-transit Inventory: Material moving between two or more locations, usually separated geographically; for example, finished goods being shipped from a plant to a distribution center. In-transit inventory is an easily overlooked component of total supply chain availability.

Invoice: A detailed statement showing goods sold and amounts for each. The invoice is prepared by the seller and acts as the document that the buyer will use to make payment.

Just-in-Time (JIT): An inventory control system that controls material flow into assembly and manufacturing plants by coordinating demand and supply to the point where desired materials arrive just in time for use. An inventory reduction strategy that feeds production lines with products delivered "just in time". Developed by the auto industry, it refers to shipping goods in smaller, more frequent lots.

Lading: The cargo carried in a transportation vehicle.

Less-Than-Carload (LCL): Shipment that is less than a complete rail car load (lot shipment).

Less-Than-Truckload (LTL) Carriers: Trucking companies that consolidate and transport smaller (less than truckload) shipments of freight by utilizing a network of terminals and relay points.

Lift truck: Vehicles used to lift, move, stack, rack, or otherwise manipulate loads.

Linked Distributed Systems: Independent computer systems, owned by independent organizations, linked in a manner to allow direct updates to be made to one system by another. For example, a customer's computer system is linked to a supplier's system, and the customer can create orders or releases directly in the supplier's system.

Local Service Carriers: An air carrier classification of carriers that operate between areas of lesser and major population centers. These carriers feed passengers into the major cities to major hubs.

Logistics: The process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods including services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements. This definition includes inbound, outbound, internal, and external movements.

Logistics Channel: The network of supply chain participants engaged in storage, handling, transfer, transportation, and communications functions that contribute to the efficient flow of goods.

Major Carrier: A for-hire certificated air carrier that has annual operating revenues of $1 billion or more: the carrier usually operates between major population centers.

Materials Handling: The physical handling of products and materials between procurement and shipping.

Materials Management: Inbound logistics from suppliers through the production process. The movement and management of materials and products from procurement through production.

Mixed loads: The movement of both regulated and exempt commodities in the same vehicle at the same time.

Motor Carrier: An enterprise that offers service via land motor carriage.

Net Weight: The weight of the merchandise, unpacked, exclusive of any containers.

Non-Durable goods: Goods whose serviceability is generally limited to a period of less than three years (such as perishable goods and semidurable goods).

Order: A type of request for goods or services such as a purchase order, sales order, work order, etc.

Order Management: The planning, directing, monitoring, and controlling of the processes related to customer orders, manufacturing orders, and purchase orders. Regarding customer orders, order management includes order promising, order entry, order pick, pack and ship, billing, and reconciliation of the customer account. Regarding manufacturing orders, order management includes order release, routing, manufacture, monitoring, and receipt into stores or finished goods inventories. Regarding purchasing orders, order management includes order placement, monitoring, receiving, acceptance, and payment of supplier.

Order Processing: Activities associated with filling customer orders.

Outbound Consolidation: Consolidation of a number of small shipments for various customers into a larger load. The large load is then shipped to a location near the customers where it is broken down and then the small shipments are distributed to the customers. This can reduce overall shipping charges where many small packet or parcel shipments are handled each day.

Outbound Logistics: The process related to the movement and storage of products from the end of the production line to the end user.

Outsource: To utilize a third-party provider to perform services previously performed in-house. Examples include manufacturing of products and call center/customer support.

Over-the-road: A motor carrier operation that reflects long-distance, intercity moves; the opposite of local operations.

Owner-Operator: A trucking operation in which the opener of the truck is also the driver.

Physical Distribution: The movement and storage functions associated with finished goods from manufacturing plants to warehouses and to customers; also, used synonymously with business logistics.

Physical Supply: The movement and storage functions associated with raw materials from supply sources to the manufacturing facility.

Pick-Up Order: A document indicating the authority to pick up cargo or equipment from a specific location.

Plan Source: The development and establishment of courses of action over specified time periods that represent a projected appropriation of material resources to meet supply chain requirements.

Plant Finished Goods: Finished goods inventory held at the end manufacturing location.

Port: A harbor where ships will anchor.

Port Authority: A state or local government that owns, operates, or otherwise provides wharf, dock, and other terminal investments at ports.

Port of Discharge: Port where vessel is off loaded.

Port of Entry: A port at which foreign goods are admitted into the receiving country.

Port of Loading: Port where cargo is loaded aboard the vessel.

Private carrier: A carrier that provides transportation service to the firm and that owns or leases the vehicles and does not charge a fee. Private motor carriers may haul at a fee for wholly-owned subsidiaries.

Private Warehouse: A warehouse that is owned by the company using it.

Process Benchmarking: Benchmarking a process (such as the pick, pack, and ship process) against organizations known to be the best in class in this process. Process benchmarking is usually conducted on firms outside of the organization's industry.

Public Warehouse: A business that provides short or long-term storage to a variety of businesses usually on a month-to-month basis. A public warehouse will generally use their own equipment and staff however agreements may be made where the client either buys or subsidizes equipment. Public warehouse fees are usually a combination of storage fees (per pallet or actual square footage) and transaction fees (inbound and outbound). Public warehouses are most often used to supplement space requirements of a private warehouse.

Public Warehouse Receipt: The basic document issued by a public warehouse manager that is the receipt for the goods given to the warehouse manager. The receipt can be either negotiable or nonnegotiable.

Purchasing: The functions associated with buying the goods and services required by the firm.

Push Distribution: The process of building product and pushing it into the distribution channel without receiving any information regarding requirements.

Random-Location Storage: A storage technique in which parts are placed in any space that is empty when they arrive at the storeroom. Although this random method requires the use of a locator file to identify part locations, it often requires less storage space than a fixed-location storage method.

Refrigerated Carriers: Truckload carriers designed to keep perishables good refrigerated. The food industry typically uses this type of carrier.

Regular-Route Carrier: A motor carrier that is authorized to provide service over designated routes.

Resource Driver: In cost accounting, the best single quantitative measure of the frequency and intensity of demands placed on a resource by other resources, activities, or cost objects. It is used to assign resource costs to activities, and cost objects, or to other resources.

Return Goods Handling: Processes involved with returning goods from the customer to the manufacturer. Products may be returned because of performance problems or simply because the customer doesn't like the product.

Reverse Logistics: A specialized segment of logistics focusing on the movement and management of products and resources after the sale and after delivery to the customer. Includes product returns for repair and/or credit.

Safety Stock: The inventory a company holds above normal needs as a buffer against delays in receipt of supply or changes in customer demand.

Self Billing: A transportation industry strategy which prescribes that a carrier will accept payment based on the tender document provided by the shipper.

Ship Broker: A firm that serves as a go-between for the tramp ship owner and the chartering consignor or consignees.

Shipper: The party that tenders goods for transportation.

Shipping: The function that performs tasks for the outgoing shipment of parts, components, and products.  It includes packaging, marking, weighing, and loading for shipment.

Single Sourcing: When an organization deliberately chooses to use one supplier to provide a product or service, even though there are other suppliers available.

Single Source Leasing: Leasing both the truck and driver from one source.

Sole Sourcing: When there is only one supplier for a product or service, and no alternate suppliers are available.

Special-Commodities Carrier: A common carrier trucking company that has authority to haul a special commodity; there are 16 special commodities, such as household goods, petroleum products, and hazardous materials.

Special-Commodity Warehouses: A warehouse that is used to store products that require unique types of facilities, such as grain (elevator), liquid (tank), and tobacco (barn).

Strategic Sourcing: The process of determining long-term supply requirements, finding sources to fulfill those needs, selecting suppliers to provide the services, negotiating the purchase agreements and managing the suppliers' performance. Focuses on developing the most effective relationships with the right suppliers, to ensure that the right price is paid and that lifetime product costs are minimized. It also assesses whether services or processes would provide better value if they were outsourced to specialist organizations.

Subcontracting: Sending production work outside to another manufacturer. This can involve specialized operations such as plating metals, or complete functional operations.

Supplier: 1) A provider of goods or services. 2) A seller with whom the buyer does business, as opposed to vendor, which is a generic term referring to all sellers in the marketplace.

Supplemental Carrier: A for-hire air carrier subject to economic regulations; the carrier has no time schedule or designated route; service is provided under a charter or contract per plane per trip.

Supply Chain: 1) starting with unprocessed raw materials and ending with the final customer using the finished goods, the supply chain links many companies together. 2) the material and informational interchanges in the logistical process stretching from acquisition of raw materials to delivery of finished products to the end user. All vendors, service providers and customers are links in the supply chain.

Supply Chain Resiliency: A term describing the level of hardening of the supply chain against disasters.

Supply Chain Strategy Planning: The process of process of analyzing, evaluating, defining supply chain strategies, including network design, manufacturing and transportation strategy and inventory policy.

Supply Chain Vulnerability: Of equal importance to Variability, Velocity and Volume in the elements of the Supply Chain. The term evaluates the supply chain based on the level of acceptance of the five steps of disaster logistics being planning, detection, mitigation, response and recovery.

Supply Planning: The process of identifying, prioritizing, and aggregating, as a whole with constituent parts, all sources of supply that are required and add value in the supply chain of a product or service at the appropriate level, horizon and interval.

Supply Warehouse: A warehouse that stores raw materials. Goods from different suppliers are picked, sorted, staged, or sequenced at the warehouse to assemble plant orders.

SWOT Analysis: An analysis of the strengths, weaknesses, opportunities, and threats of and to an organization.  SWOT analysis is useful in developing strategy.

Tare Weight: The weight of a substance, obtained by deducting the weight of the empty container from the gross weight of the full container.

Third-Party Logistics (3PL): Outsourcing all or much of a company's logistics operations to a specialized company. The term "3PL" was first used in the early 1970s to identify intermodal marketing companies (IMCs) in transportation contracts. Up to that point, contracts for transportation had featured only two parties, the shipper and the carrier. When IMCs entered the picture—as intermediaries that accepted shipments from the shippers and tendered them to the rail carriers—they became the third party to the contract, the 3PL. But over the years, that definition has broadened to the point where these days, every company that offers some kind of logistics service for hire calls itself a 3PL.

Third-Party Warehousing: The outsourcing of the warehousing function by the seller of the goods.

Total Cost Analysis: A decision-making approach that considers minimization of total costs and recognizes the interrelationship among system variables such as transportation, warehousing, inventory, and customer service.

Tracing: Determining where a shipment is during the course of a move.

Tracking and Tracing: Monitoring and recording shipment movements from origin to destination.

Tractor: The tractor is the driver compartment and engine of the truck. It has two or three axles.

Traffic: A department or function charged with the responsibility for arranging the most economic classification and method of shipment for both incoming and outgoing materials and products.

Trailer: The part of the truck that carries the goods.

Trailer Drops: When a driver drops off a full truck at a warehouse and picks up an empty one.

Tramp: An international water carrier that has no fixed route or published schedule; a tramp ship is chartered for a particular voyage or a given time period.

Transit Time: The total time that elapses between a shipment's pickup and delivery.

Truckload Carriers (TL): Trucking companies, which move full truckloads of freight directly from the point of origin to destination.

Unit Train: An entire, uninterrupted locomotive, care, and caboose movement between an origin and destination.

Value Added: Increased or improved value, worth, functionality or usefulness.

Value Chain: A series of activities, which combined, define a business process; the series of activities from manufacturers to the retail stores that define the industry supply chain.

Velocity: Rate of product movement through a warehouse.

Warehouse: Storage place for products. Principal warehouse activities include receipt of product, storage, shipment, and order picking.

Warehousing: The storing (holding) of goods.

Yield: The ratio of usable output from a process to its input.