common LOGISTIC TERMS
Shipper / Consignor
An individual or firm that sends freight. A freight originator.
An individual or firm to whom freight is shipped. A freight receiver.
A firm that provides transportation services, typically owning and operating transportation equipment.
Examples include: trucking company, railroad, airline, steamship line, parcel/express company.
Freight Bill-of-Lading (Freight Bill, BL or BoL)
A document providing a binding contract between a shipper and a carrier for the transportation of freight, specifying the obligations of both parties. Serves as a receipt of freight by the carrier for the shipper. Usually designates the consignee, and the FOB point.
FOB (Free-on-Board) Point
Point at which ownership of freight changes hands from shipper to consignee. FOB origin indicates that consignee owns the goods in transit; FOB-destination indicates that shipper owns goods in transit. Owner of goods in transit is liable for loss and damage to freight, and thus should provide insurance.
Freight FOB Terms-of-Sale
Indicates (1) Who arranges for transport and carrier, (2) Who pays for transport, (3) Where/when does title (ownership) of goods transfer from seller to buyer (FOB point). Freight charges: collect, prepaid, prepaid and charged back. Collect: Buyer pays the freight charges. Prepaid: seller pays. Prepaid and charged back: seller prepays (bears), bills buyer for the charges.
An agency that receives freight from a shipper and then arranges for transportation with one or more carriers for transport to the consignee. Often used for international shipping. Will usually consolidate freight from many shippers to obtain low, large volume transportation rates from carriers (through a contract ). Often owns some pickup and delivery equipment; uses to transport freight to/from consolidation facilities. Also provide other shipping services: packaging, temporary freight storage, customs clearing.
An agency that obtains negotiated large-volume transportation rates from carriers, and resells this capacity to shippers. Unlike freight forwarders, will not handle freight and owns no pickup/delivery equipment or storage facilities.
Non Vessel-Operating Common Carrier. Owns no vessels (ships), but provides ocean shipping freight-forwarding services. Provides consolidated, negotiated-rate services for ocean and inland water carriers. Often will affiliate with freight forwarders to provide pickup/delivery, other services.
Not-for-profit association of shippers using collective bargaining and freight consolidation to obtain lower, high-volume transportation rates; similar to freight forwarding w/o profit motive. Avoids premium charges paid to forwarders. Only non-competitive shippers may associate, due to monopoly restrictions.
Companies that provide door-to-door domestic and international air freight service. Own and operate aircraft, as well as ground delivery fleets of trucks. In contrast, freight-hauling airlines (e.g., Delta, Lufthansa) typically do not provide door-to-door service. Example: UPS, FedEx, BAX Global, Emery Worldwide.
A third-party, or contract, logistics company. A firm to which logistics services are outsourced. Typically handles many of the following tasks: purchasing, inventory management/warehousing, transportation management, order management.
Shipment moving from origin to destination via two or more carriers. Occurs frequently in rail transportation: for example, each rail container moving from Atlanta to Los Angeles is moved interline, using for example CSX and Union Pacific with an interline junction in New Orleans.
Transportation service arrangement in which freight is moved from origin (shipper) through to ultimate destination (consignee) for a given rate. Trucking companies typically offer door-to-door service. Railroads do not, unless the shipper and consignee both have rail sidings. Brokers, forwarders, NVOCCs etc. often package together door-to-door service through contracts with multiple carriers.
Bringing together many small shipments, often from different shippers, into large shipment quantities, in order to take advantage of economies of scale in transportation costs. In-vehicle consolidation is when a vehicle makes pickups from many customers and consolidates freight inside the vehicle. Out-of-vehicle consolidation occurs at a terminal facility; shipments to a single customer/region are consolidated before shipment.
Loss and Damage
Loss or damage of freight shipments while in transit or in a carrier-operated warehouse. Terms for the handling of claims are usually stipulated in the freight bill. Shippers/consignees usually take out insurance against L&D with premiums a function of the value of goods shipped, and the likelihood of L&D.
Freight is most often measured by its weight, and transportation vehicles of varying sizes typically have weight capacities that cannot be exceeded due to engineering or regulatory reasons. Freight may also be measured by cube, which generally refers to the volume of the freight. A vehicle is said to cube-out if it does not exceed its weight capacity, but its volume is completely full.
FCL (Full Container-Load)
An ocean-shipping and intermodal industry term; a full container-load shipment is when a shipper contracts for the transportation of an entire container. The vast majority of intermodal and ocean freight is contracted in this manner. Historically, FCL also stands for full carload which is the primary business of all modern railroads, and is the railroad equivalent of TL trucking.
An ocean-shipping and intermodal industry term; LTL equivalent in container shipping. Container freight stations at ports serve as consolidation and deconsolidation terminals. Historically, LCL also stands for less-than-carload. Before the prominence of interstate trucking, railroads offered less-than-carload (LCL) service but this business has largely disappeared.
A portion of a transportation trip in which no freight is conveyed; an empty move. Transportation equipment is often dead-headed because of imbalances in supply and demand. For example, many more containers are shipped from Asia to North America than in reverse; empty containers are therefore dead-headed back to Asia.
A freight movement in a direction (or lane) of secondary importance or light demand. Backhauls are preferable to deadheads by transportation companies, since revenue is generated. In order to entice shippers to move goods in backhaul markets, carriers may offer lower rates.
Owned and operated by a shipper. Usually refers to private trucking fleets. Components include: vehicle fleet, drivers, maintenance equipment. Often more expensive than contracting out, but not always. Can serve special needs: fast, high-ontime-reliability delivery; special equipment; special handling; availability.
A transportation system design in which large hub terminals are used for freight consolidation. Medium-volume services serve the spoke-to-hub collection and hub-to-spoke distribution tasks. Large-volume services are operated in the hub-top-hub markets. In most systems, all outbound/inbound freight for a spoke uses the same hub, and thus larger shipment sizes are realized. Many transportation systems oriented in this way.
Transportation terminal in which received items transferred directly from inbound to the outbound shipping dock, with storage only occurring temporarily during unloading and loading. No long-term storage is provided. Usually used only for vehicle transfers. Often owned and operated by large shippers.
TL / FTL (Truckload, Full Truckload)
A trucking industry term; a truckload shipment is when the shipper contracts an entire truck for direct point-to-point service. Truckload shipments are priced per mile within designated lanes, regardless of the size of the shipment provided it fits (weight, cube) within the vehicle. Less expensive per unit weight shipped than LTL. A truckload carrier is a trucking company specializing in point-to-point truckload shipments.
A trucking industry term; a less-than-truckload (LTL) shipment is when a shipper contracts for the transportation of freight that will not require an entire truck. LTL shipments are priced according to the weight of the freight, its commodity class (which generally determines its cube/weight ratio), and mileage within designated lanes. An LTL carrier specializes in LTL shipments, and therefore typically operates a complex hub-and-spoke network with consolidation/deconsolidation points; LTL carriers carry multiple shipments for different customers in single trucks.
A for-hire carrier providing transportation services to the general public. Obligations: to serve, to deliver, to charge reasonable rates, to avoid discrimination. Previously regulated in the United States; most are now deregulated.