May 20, 2023

Key Transportation Terms and Definitions in Logistics



Whether you’re a shipper booking freight or a new logistician starting out in the industry, you’ll find that there are many terms you need to understand in order to speak the same language as your transportation provider. The following is a list of logistics terms and definitions that are common within the transportation industry.

For a more comprehensive list of supply chain definitions, check out Weber Logistics’ online glossary of logistics terms.

Logistics terms and definitions within the transportation industry

logistics terms and definitions-281810692Accessorial Fee: An accessorial fee is a charge that a carrier may add to a shipment’s transportation cost in addition to the base rate. Accessorial fees are typically charged for services that are not included in the standard shipping process (e.g., inside delivery, liftgate service, detention, and residential delivery). Accessorial fees may also be added for special requirements such as hazardous materials, overweight shipments, or specialized equipment needs. Accessorial fees can vary depending on the carrier, shipping location, and the specific service requested. It is important for shippers to be aware of potential accessorial fees that may apply to their shipments to avoid unexpected costs.

Airway Bill: A document used to define the terms and conditions of a shipment between a shipper and a carrier for air freight. The document includes information such as the shipper and consignee names and addresses, the origin and destination of the shipment, the type and quantity of goods being transported, and any special instructions or requirements.

Backhaul: A return trip that a truck driver makes after delivering a load to a destination. The backhaul helps to reduce the cost of transportation by allowing the driver to carry another load or cargo on their return trip.

Base Rate: The basic rate that a carrier charges for shipping goods from one location to another. The base rate does not include any additional fees or charges that may apply.

Bill of Lading (BOL): A legal document that serves as a receipt of goods and a contract between the shipper and carrier. The BOL includes information about the goods being shipped, the names and addresses of the shipper and carrier, and the terms and conditions of the shipment.

Bonded Cargo: In-bond cargo is cargo that is being transported under bond or security from one point to another within a country or across international borders. This means that the cargo is not cleared by customs at the point of entry but is transported under bond to an approved location where it will be cleared by customs.

This can be useful for companies that need to transport goods from one location to another, but do not yet have all the necessary documentation to clear customs at the point of entry.

In the United States, for example, in-bond cargo is regulated by the U.S. Customs and Border Protection (CBP) agency. There are two types of in-bond cargo:

  • Immediate transportation (IT) in bond: used for goods that are being transported from one point of the U.S. to another point of the U.S. without entering into the commerce of the U.S.
  • Transportation and exportation (T&E) in bond: used for goods that are being transported from a port of entry to another port of exit outside the U.S.

Breakbulk: A method of transporting cargo that involves separating it into smaller units for loading and unloading. Breakbulk cargo is typically shipped in crates, barrels, or other containers that can be easily moved by hand.

Carrier: A company that transports goods. Carriers can include trucking companies, shipping lines, air cargo carriers, and railroads.

Chassis: The frame or structure that supports a container or trailer. Chassis are typically used to transport containers and are designed to be compatible with a specific type of container.

Clean Truck Fee: A fee charged by some ports or shipping terminals to help reduce air pollution and improve air quality. The fee is usually assessed on trucks that do not meet certain emissions standards.

Consignee: The person or company that receives a shipment of goods. The consignee is responsible for inspecting the goods upon delivery and for signing the bill of lading to acknowledge receipt of the shipment.

Consignor: The person or company that sends a shipment of goods. The consignor is responsible for preparing the goods for shipment and for arranging for their transport.

Container Freight Station (CFS): A facility used for the consolidation and deconsolidation of cargo, typically located near a seaport or airport. CFS facilities provide a range of services, including container loading and unloading, cargo inspection, and customs clearance.

Container Per Diem: Container per diem refers to a fee charged by a shipping line or leasing company for the use of a container beyond the agreed-upon free time. The fee is charged on a per-day basis and is intended to compensate the owner of the container for the cost of the container’s use and the loss of revenue from the container being unavailable for use by other customers. The per diem fee encourages shippers to return containers promptly and helps ensure that containers are available where and when they are needed.

Container Reduction Station: A facility where shipping containers can be disassembled, sorted, and stacked for transport. The facility is generally used for the reduction of weight from a shipment.

Container Grounding: This occurs when a container is placed on the ground as opposed to placing the container on a wheeled chassis. The container is generally stacked with other containers thereby creating an efficient use of space.

CzarLite Tariff: A rating system used in the freight transportation industry to determine the cost of shipping goods by truck. It was created by the National Motor Freight Traffic Association (NMFTA) as a simplified method for calculating shipping rates. The system is based on a set of pricing formulas that take into account factors such as the weight and classification of the shipment, the distance traveled, and any additional services required. The CzarLite tariff is used by many carriers and shippers in the United States to determine the cost of shipping goods by truck and is widely recognized as an industry standard.

Demurrage: Charges assessed by a carrier when a shipment is delayed beyond a certain period of time. Demurrage charges occur in ocean shipping when containers exceed the negotiated free time allowed.

Dimensional Weight: A pricing method used by carriers to calculate the cost of shipping based on the size and weight of the package. Dimensional weight is calculated by multiplying the length, width, and height of the package and dividing by a predetermined factor.

Dock: A platform for loading and unloading cargo from trucks. Docks are typically found at warehouses, distribution centers, and other facilities where goods are loaded or unloaded from trucks. They can come in different types, such as a loading dock that is built at the same level as the truck bed or a dock that requires a ramp or lift to raise the cargo to the level of the warehouse.

Drayage: The process of transporting goods over a short distance, typically from a port to a nearby warehouse or distribution center. Drayage services can also refer to the use of specialized equipment, such as a dray, to move cargo.

Drop and hook: A method of delivery that involves dropping off one trailer and picking up another at the same location. This allows the driver to quickly exchange trailers without having to wait for the cargo to be loaded or unloaded. It is a common practice in the trucking industry and is often used for time-sensitive shipments.

Dry Run: An attempt to pick up or deliver goods to a consignee or designated pick up or return location where the goods cannot be delivered or picked up. This is usually followed by an accessorial fee for the attempt.

Dry Van: A type of trailer that is enclosed and used to transport dry goods. These trailers are typically used for shipping non-perishable items, such as furniture, electronics, and clothing.

FMCSA: Stands for the Federal Motor Carrier Safety Administration. The FMCSA is a United States government agency that is responsible for regulating and overseeing commercial motor vehicles and their operators.

Some of the key responsibilities of the FMCSA include:

  • Developing and enforcing safety regulations for commercial motor vehicles and their operators
  • Conducting safety inspections and audits of commercial motor carriers and drivers
  • Maintaining a database of safety information on motor carriers, drivers, and vehicles
  • Investigating crashes and other safety violations
  • Providing safety education and outreach programs to the motor carrier industry and the public

Four Axle Tractor: A type of tractor-trailer truck that has four axles, typically used for transporting heavier loads over long distances. Four-axle tractors are often used in the construction and mining industries, as well as for long-haul shipments.

Free Time: The period during which cargo can be stored at a facility without incurring additional charges. This is typically negotiated between the shipper and carrier and varies depending on the type of cargo and the facility.

Free time is also used when referring to Demurrage, Per Diem, and the time allotted for loading or unloading shipments.

Freight Classification: A system for categorizing different types of freight based on their size, weight, and other characteristics. Freight classification is used to determine the rates that carriers charge for shipping different types of cargo.

Fuel Surcharge: An additional fee added to the cost of shipping to cover the cost of fuel. Fuel surcharges are calculated based on the price of fuel at the time of shipment and are subject to change based on market conditions.

Full Container Load (FCL): A shipment that occupies an entire shipping container. FCL shipments are typically used for larger volumes of cargo and are more cost-effective than shipping multiple smaller loads.

Hot Hatch: A term used to describe a shipment that requires urgent and expedited delivery. Hot hatch shipments are typically time-sensitive and require special handling and transportation.

Liftgate: A liftgate, also known as a tailgate lift or hydraulic lift, is a device used on trucks and other vehicles to raise and lower heavy or bulky items. A liftgate consists of a platform that is mounted on a hydraulic system, which raises and lowers the platform using a series of hydraulic cylinders.

NMFTA: Is responsible for creating and updating the National Motor Freight Classification (NMFC) system, which is a standardized system for classifying freight based on its density, stowability, handling, and liability. The NMFC system is used by carriers and shippers to determine shipping rates and is widely recognized as an industry standard.

In addition to the NMFC, the NMFTA is also responsible for developing and maintaining other pricing and classification systems for the motor carrier industry, including the CzarLite tariff and the Uniform Straight Bill of Lading. The organization also provides education and training programs for industry professionals and advocates on behalf of the trucking industry in matters of policy and regulation.

Ocean Bill of Lading: A legal document issued by an ocean carrier to acknowledge receipt of goods and the contract of carriage of goods by sea. The bill of lading serves as evidence of ownership of the cargo and contains information such as the shipper and consignee’s name and address, the description of the goods, the date and place of loading, and the port of discharge.

Operating Authority (for Carriers): Operating authority is the legal permission or authority granted by a government agency to a motor carrier, allowing them to operate commercial vehicles on public roads. In the United States, the FMCSA is responsible for issuing operating authority to motor carriers.

Overweight Corridor: A designated route or highway that allows trucks with overweight loads to travel through. Overweight corridors have different weight limits and may require special permits or fees.

Overweight Trailer or Container: A trailer or container that exceeds the maximum allowable weight limit for a particular road or state. Overweight trailers or containers require special permits and may be subject to additional fees and regulations.

Owner-operator: A truck driver who owns and operates their own truck. Owner-operators may contract with carriers to transport goods, or they may operate as independent contractors.

Partner Carrier: A partner carrier is a transportation provider that works in partnership with a shipper or logistics provider to transport goods. Partner carriers may provide regular, scheduled service on a designated route or may be engaged on an as-needed basis. Partner carriers are typically selected based on their capacity, reliability, and cost-effectiveness.

Pier Pass: A fee charged by the terminal operator for the use of their facilities, such as the loading and unloading of cargo. The fee is typically charged to the shipping line, which then passes it on to the cargo owner or shipper.

Pre-Pull: A process in which cargo is pulled from the terminal or port prior to the vessel’s arrival. Pre-pulling helps to reduce congestion and wait times at the terminal or port.

Rate confirmation: A document that confirms the rate and terms of a shipment. The rate confirmation includes information such as the carrier’s name, the shipper’s name, the origin and destination of the shipment, the freight charges, and any other relevant terms and conditions.

Reefer: Short for “refrigerated.” Refers to a trailer or truck used for transporting temperature-sensitive goods. Refrigerated trailers are equipped with cooling systems that maintain a constant temperature and prevent spoilage of the cargo.

Relay: A method of delivery that involves multiple drivers taking turns to transport a shipment. Relays are commonly used for long-haul trucking and can help reduce delivery times and increase efficiency.

Shipper: The person or company that sends a shipment of goods. The shipper is responsible for preparing the shipment, including packaging, and labeling, and arranging for its transportation.

SKU: Short for “stock keeping unit,” an SKU is a unique identifier assigned to each product in inventory. SKUs are used to track inventory levels, manage orders, and provide real-time visibility into stock levels.

Spot market: A market where carriers can bid on loads that need to be transported. Spot markets are typically used for ad-hoc shipments or one-time delivery needs. Carriers can search for available loads on spot market platforms and submit bids to transport them. Spot markets can provide carriers with opportunities for additional business and can also provide shippers with competitive pricing and flexibility.

Tarping: The process of covering a load with a tarp to protect it from the elements. Tarping is commonly used when transporting open-top loads, such as flatbed trailers or containers. It is done to protect the load from rain, snow, and other weather conditions, as well as from debris on the road. Tarping is often a requirement for transporting certain types of cargo, such as construction materials, machinery, or vehicles.

Terminal: A facility used for loading, unloading, and storing cargo. Terminals are typically located near ports, rail yards, or airports, and they serve as a central hub for the movement of goods. Terminals can include warehouses, distribution centers, and cross-docking facilities. They provide a range of services, including cargo handling, storage, and transportation.

Transportation Management System (TMS): A software system that helps shippers and logistics providers manage and optimize their transportation operations, including carrier selection, routing, scheduling, and tracking of shipments. A TMS can provide visibility into transportation costs and delivery times, as well as help to manage exceptions and resolve issues that may arise during transit.

Tri-axle Chassis: A type of trailer chassis that has three axles, allowing it to carry heavier loads. Tri-axle chassis are commonly used for transporting containers, as they provide more stability and weight capacity than single or tandem axle chassis.

Truck Order Not Used: This occurs when a carrier is booked to pick up a shipment from a shipper where the goods are not ready, and the carrier is turned away. This is usually followed by an accessorial fee compensating the carrier for the lost revenue.

UCC128 Label: A label that is used to identify and track individual items or pallets in a supply chain. The label contains a barcode or RFID tag that provides a unique identifier for each item, as well as information about its origin, destination, and other characteristics.

UIIA: The Uniform Intermodal Interchange and Facilities Access Agreement (UIIA) is an agreement that governs the interchange of intermodal equipment (such as shipping containers and chassis) between motor carriers and equipment providers in the United States. The UIIA helps to standardize the interchange process and reduce the administrative burden of managing intermodal equipment.

VICS Bill of Lading: Short for “Voluntary Interindustry Commerce Solutions,” the VICS bill of lading is a standard document used to define the terms and conditions of a shipment between a shipper and a carrier. The document includes information such as the shipper and consignee names and addresses, the origin and destination of the shipment, the type and quantity of goods being transported, and any special instructions or requirements.

Waiting Time: The time that a driver spends waiting to load or unload a shipment. Waiting time can be a significant issue for carriers, as it can result in lost time and revenue. Carriers typically negotiate waiting time provisions with shippers as part of their transportation contracts.

Wheeled Container: A container which is placed on a chassis for transport. This is generally done at a marine terminal or storage facility after the container has been previously grounded.

Yard Management System (YMS): A software system that manages the movement and tracking of trailers and other equipment within a yard or distribution center. A YMS can provide real-time visibility into the location of trailers, as well as track the arrival and departure of shipments. It can also help to optimize the use of yard space and reduce waiting times for drivers.

Want to learn more? If you have questions about transportation services for your business, contact Weber Logistics today to learn how we can support your operations.





Source link

In this article:
Share on social media: