Glossary

We organized the glossary into thematic categories that group terms by their function or context. This structure facilitates quick reference and encourages a more strategic view of how different elements within the supply chain interact. Additionally, many of the definitions are linked to in-depth blog articles that provide further explanation of the concept, its applications, and best practices in real-world scenarios.

Cargo Types and Load Units

• Break Bulk Cargo: Freight that is transported in individual units, such as boxes, crates, or drums, instead of containers.
• Bulk Cargo: The unpackaged goods that are transported in large quantities, such as grains, coal, or liquids.
• Cargo Readiness: The point at which goods are fully prepared and available for pickup or shipment.
• Container: A standardized, enclosed metal box used for transporting goods securely across different modes of transport.
• Container Freight Station (CFS): A facility where cargo is consolidated or deconsolidated before or after container transport.
• DIM Weight (Dimensional Weight): A pricing method based on the volume a package occupies rather than its actual weight.
• FCL (Full Container Load): A shipment that occupies the entire space of a container exclusively for one consignee.
• LCL (Less than Container Load): A shipment that shares container space with other cargo because it does not fill an entire container.
• Packing List: A document that details the contents, dimensions, and weight of each package in a shipment.
• Pallet: A flat platform used to stack, store, and move goods efficiently by forklift or pallet jack.
• Refrigerated Container (Reefer): A temperature-controlled unit designed to preserve sensitive or perishable cargo during transit.

Carriers, Parties, and Logistics Models

• 4PL (Fourth-Party Logistics): A logistics model where a single provider manages and integrates the entire supply chain on behalf of the customer.
• Authorized Economic Operator (AEO): A certified entity recognized for complying with customs and supply chain security standards.
• Carrier: The company or individual responsible for transporting goods from origin to destination.
• Courier: A service that provides fast and secure delivery of parcels or documents from origin to destination.
• Customs Broker: A licensed agent who facilitates the clearance of goods through customs on behalf of importers or exporters.
• Exporter of Record (EOR): The entity responsible for ensuring export compliance and filing necessary documentation.
• FCA (Free Carrier): A shipping term where the seller hands over the goods, cleared for export, to a carrier at an agreed location.
• Freight Forwarder: An intermediary that arranges and coordinates the transport of goods on behalf of shippers.
• Importer of Record (IOR): The entity legally responsible for ensuring imported goods comply with regulations and customs requirements.
• Inbound Logistics: The management of transporting, receiving, and storing goods coming into a business or facility.
• Logistics Hub: A central location used for the consolidation, storage, and distribution of goods.
• NVOCC (Non-Vessel Operating Common Carrier): A company that arranges ocean freight shipments without operating its own vessels.
• Reverse Logistics: The process of moving goods from the final destination back to the origin for return, reuse, or disposal.
• Shipper: The person or entity that arranges the transport of goods from origin to destination.
• Third-Party Logistics (3PL): The outsourcing of logistics operations, such as warehousing and transportation, to an external provider.

Customs and Regulatory Documentation

• Ad Valorem Duty: A customs tax calculated as a percentage of the declared value of imported goods.
• ATA Carnet: An international customs document that allows the temporary importation of goods without paying duties or taxes.
• Bonded Warehouse: A secured facility where imported goods can be stored under customs control without immediate duty payment.
• Customs Clearance: The process of submitting required documentation and payments to authorize the entry or exit of goods.
• Customs Declaration: An official statement listing the details of goods being imported or exported for clearance by customs authorities.
• Customs Duty: A tax imposed on imported or exported goods by a country’s customs authority.
• Customs Transit: A procedure that allows goods to move through one or more countries under customs control without paying duties until they reach the final destination.
• Customs Value: The declared monetary worth of goods used to calculate import duties and taxes.
• DDP (Delivered Duty Paid): A shipping term where the seller covers all costs and risks, including duties and taxes, to deliver the goods at the agreed destination.
• Export Declaration: An official document submitted to authorities that details the nature and value of goods being exported.
• Export License: An official authorization required to ship specific goods to foreign countries.
• HS Code (Harmonized System Code): A standardized numerical classification used globally to identify traded products for customs purposes.
• Import License: An official permit that allows the entry of certain goods into a country.
• Import Quota: A restriction that limits the amount of a specific product that can be imported into a country during a set period.
• Nationalization: The customs process that registers imported goods for domestic circulation after duties and taxes are paid.
• Proof of Delivery (POD): A document signed by the recipient confirming that the shipment was received in good condition.
• Warehouse Receipt: A document issued by a warehouse operator confirming the storage of goods and identifying ownership.

Incoterms and Trade Agreements

• Cargo Consolidation: The process of combining multiple smaller shipments into one larger load for more efficient transport.
• CFR (Cost and Freight): A shipping term where the seller pays for the transportation of goods to the destination port, while the buyer assumes risk once the goods are on board.
• CIF (Cost, Insurance and Freight): A shipping term where the seller covers the cost, insurance, and freight to the destination port, while the buyer assumes risk once goods are on board.
• CIP (Carriage and Insurance Paid To): A shipping term where the seller pays for transport and insurance to a named destination, with risk transferring to the buyer once goods are handed to the first carrier.
• CPT (Carriage Paid To): A shipping term where the seller pays for freight to the named destination, while the buyer assumes the risk once the goods are handed to the carrier.
• DAP (Delivered At Place): A shipping term where the seller is responsible for delivering goods to a specified destination, excluding unloading and import duties.
• DAT (Delivered at Terminal): A former Incoterm (replaced by DPU) where the seller delivered goods unloaded at a named terminal, with the buyer responsible for import duties.
• Deconsolidation: The process of separating consolidated cargo into individual shipments for last-mile delivery.
• DPU (Delivered at Place Unloaded): A delivery term where the seller is responsible for unloading goods at the named place of destination.
• EDI (Electronic Data Interchange): An automated system for exchanging standardized business documents between parties electronically.
• EXW (Ex Works): A shipping term where the buyer assumes responsibility once the goods are made available at the seller’s premises.
• FAS (Free Alongside Ship): A shipping term where the seller delivers goods alongside the vessel at the port of shipment.
• FOB (Free On Board): A shipping term where the seller delivers goods on board the vessel, and the buyer assumes risk and cost from that point onward.
• Free Trade Agreement (FTA): A pact between countries that reduces or eliminates tariffs and trade barriers on goods and services.
• Free Trade Zone: A designated area where goods can be stored, handled, or manufactured without immediate customs duties.
• Incoterms (International Commercial Terms): The standardized trade terms that define the responsibilities of buyers and sellers in international transactions.

Infrastructure, Facilities, and Technology

• Cold Chain: A temperature-controlled supply chain used to preserve and transport perishable or sensitive goods.
• Cross-docking: A logistics method where incoming goods are directly transferred to outbound transport with minimal or no storage.
• Distribution Center (DC): A facility used to receive, store, and distribute products to retail, wholesale, or end customers.
• Dry Port: An inland terminal connected to a seaport where cargo can be handled, stored, and cleared through customs.
• EDI Invoice: An electronic version of a billing document sent from the seller to the buyer using standardized digital formats.
• Free Storage Period: The allotted time during which goods can be stored at a terminal without incurring storage fees.
• Lane Optimization: The process of analyzing and selecting the most efficient transport routes to reduce cost and transit time.
• Letter of Credit (L/C): A financial document issued by a bank guaranteeing payment to a seller upon meeting agreed conditions.
• Shipment Tracking: The system that monitors and provides real-time updates on the location and status of a shipment.
• TMS (Transportation Management System): A digital platform used to plan, execute, and optimize the movement of goods across the supply chain.
• WMS (Warehouse Management System): A software system that controls and optimizes warehouse operations, inventory, and workflows.

Operations, Risk, and Strategy

• AFR (Advanced Filing Rules): A regulation requiring shipment data to be submitted electronically to customs before cargo arrival.
• Bill of Lading (B/L): A legal document that serves as a receipt of goods, a contract of carriage, and a document of title.
• Cargo Insurance: A coverage that protects goods against loss, damage, or theft during shipment.
• Cargo Manifest: A document listing all goods loaded on a transport vehicle, including descriptions and quantities.
• Dead Freight: A fee charged to the shipper for reserved but unused cargo space on a vessel.
• Demurrage: A charge applied when a container remains at the terminal beyond the allowed free time.
• Detention: A fee applied when a container is kept outside the terminal longer than the agreed free time after pickup.
• Drawback: A refund of duties or taxes paid on imported goods that are subsequently exported or used in exported products.
• ETA (Estimated Time of Arrival): The projected date and time when a shipment is expected to reach its destination.
• ETD (Estimated Time of Departure): The projected date and time when a shipment is scheduled to leave the point of origin.
• Export: The process of sending goods from one country to another for commercial purposes.
• Freight: The transportation of goods by air, sea, rail, or road, typically for commercial purposes.
• Freight Bill: An invoice issued by a carrier or freight forwarder for transportation services rendered.
• Freight Collect: A payment term where the consignee pays the freight charges upon delivery.
• Freight Prepaid: A payment term where the shipper pays the freight charges before shipment.
• Fulfillment: The process of receiving, processing, and delivering customer orders.
• Hazardous Materials (Hazmat): Substances that pose risks to health, safety, or the environment during transport or handling.
• Import: The process of bringing goods into a country from abroad for sale or use.
• Just in Time (JIT): An inventory strategy that minimizes storage by receiving goods only when they are needed.
• Just-in-Case (JIC): An inventory strategy that maintains high stock levels to prevent shortages caused by demand or supply fluctuations.
• Lead Time: The total time required from placing an order to receiving the goods.
• Load Factor: The percentage of available cargo space that is actually used during transportation.
• Marine Cargo Insurance: A policy that protects goods transported over water against loss or damage.
• Packaging: The method of enclosing goods to protect them during handling, transport, and storage.
• Partial Shipment: The fulfillment of a single order in multiple deliveries due to logistics or availability.
• Picking: The process of selecting items from inventory to fulfill specific customer orders.
• Pre-Alert: An advance notice sent to inform the receiving party of an incoming shipment and its key details.
• Proforma Invoice: A preliminary bill of sale issued before shipment, outlining the terms, goods, and estimated costs.
• Shipping Line: A company that operates vessels and provides scheduled ocean freight services.
• Supply Chain Management (SCM): The coordination of all activities involved in sourcing, producing, and delivering goods to end users.
• TEU (Twenty-foot Equivalent Unit): A standard unit of measure representing the cargo capacity of a twenty-foot-long shipping container.
• Transit Time: The total duration a shipment takes to travel from the point of origin to the final destination.
• Transport Insurance: Coverage that protects goods against loss or damage during transit.
• ULD (Unit Load Device): A standardized container or pallet used to load cargo securely onto aircraft.
• VGM (Verified Gross Mass): The total weight of a packed container, including cargo and tare, as required for compliance with SOLAS regulations.
• Waybill: A transport document issued by the carrier that provides shipment details and serves as a receipt of goods.
• Yield Management: A pricing strategy that adjusts rates based on supply, demand, and time to maximize revenue.

Transport Modes and Routing

• Air Freight: The shipment of goods via aircraft for fast, long-distance transport.
• Blank Sailing: A scheduled sailing that is canceled by the carrier, meaning the vessel skips a port or the entire voyage.
• Charter Party: A contract between a shipowner and a charterer outlining the terms for the use of a vessel.
• Door-to-Door: A delivery service that transports goods directly from the sender’s location to the recipient’s address.
• Interline Shipment: A cargo movement involving two or more carriers under a single transport agreement.
• Intermodal Transport: The movement of goods using multiple modes of transportation without handling the cargo itself during transfer.
• Land Freight: The movement of goods by road or rail over domestic or cross-border routes.
• Last Mile: The final leg of delivery from a transportation hub to the end customer’s location.
• LTL (Less Than Truckload): A shipment that does not fill a full truck and is combined with other freight to optimize transport.
• Multimodal Transport: The shipment of goods using two or more modes of transportation under a single contract.
• Ocean Freight: The transportation of goods by sea using cargo ships or containers.
• On-Carriage: The transportation of goods from the arrival port or terminal to the final inland destination.
• Pre-Carriage: The movement of goods from the shipper’s location to the main point of export departure.
• Slot Charter Agreement: A contract where a company reserves space on a vessel operated by another carrier.
• Transshipment: The transfer of cargo from one vessel or mode of transport to another during its journey to the final destination.