3PL Glossary

An Advanced Shipping Notice (ASN) is a notification sent from a supplier to a retailer or distributor before the shipment of goods. It provides details about the shipment, including the contents, quantities, packaging, and expected arrival date, allowing the recipient to prepare for the incoming delivery.

Air freight refers to the transportation of goods by aircraft, allowing for rapid delivery over long distances. This method is commonly used for high-value, time-sensitive, or perishable goods that require quick transit times.

Ambient storage involves keeping products in environments where the temperature is stable and falls within the range of typical room temperatures, usually between 15°C and 25°C (59°F and 77°F). It is commonly used for goods that are not sensitive to temperature changes and do not need specific climate control, such as dry foods, household products, and certain pharmaceuticals.

A backorder occurs when a customer places an order for a product that is currently out of stock but is expected to be restocked soon. The order is accepted with the understanding that the item will be shipped to the customer once it becomes available.

A barcode is a visual representation of data in a series of parallel lines and spaces, typically printed on a label. It can be scanned using a barcode reader to quickly retrieve information about a product, such as its price, manufacturer, and inventory status.

Blind shipping is a shipping method where the identity of the sender or receiver is intentionally concealed. This practice is often used in drop shipping and third-party logistics to prevent the buyer or recipient from knowing the origin of the shipment.

A bonded warehouse is a secure storage facility where imported goods can be stored without the payment of customs duties or taxes until they are cleared for entry into the country.

Cargo insurance is a type of insurance that protects goods in transit against loss, damage, or theft.

Cold storage is the practice of storing goods in a temperature-controlled environment to preserve their quality, extend shelf life, and prevent spoilage.

Commercial shipping refers to the transportation of goods and cargo for business purposes. It involves moving products from manufacturers or suppliers to retailers, distribution centers, or directly to customers.

Cross docking is a logistics practice where incoming goods are directly transferred from incoming vehicles to outbound vehicles with minimal or no storage time.

Customs clearance is the process of documenting, inspecting, and approving goods for import or export across international borders. This process involves preparing necessary documents, paying applicable duties or taxes, and ensuring compliance with customs regulations to allow smooth entry or exit of goods.

Delivered Duty Paid (DDP) is an international shipping agreement where the seller is responsible for all costs and risks involved in transporting goods to the buyer's location, including shipping charges, duties, taxes, and customs clearance.

Dwell time in logistics refers to the amount of time a vehicle, container, or shipment remains stationary at a specific location, such as a port, warehouse, or loading dock, before it resumes transit.

EOQ is a supply chain formula that calculates the optimal order quantity a company should purchase to minimize costs associated with inventory, including holding, ordering, and stock-out costs.

Expedited shipping is a faster-than-normal shipping service designed to deliver goods more quickly than standard delivery methods. It often involves prioritizing shipments to ensure they reach their destination in a shorter time frame, typically at an additional cost.

An export tariff is a tax imposed by a government on goods and services exported out of a country. This tax is typically applied to specific products and is intended to generate revenue for the government, regulate trade, or protect domestic industries.

Fill rate is a key performance metric in logistics and supply chain management that measures the percentage of customer orders that are fully fulfilled from stock at the time of order. It reflects how effectively inventory meets customer demand without backorders or delays.

First In, First Out (FIFO) is a method of inventory management and asset handling where the oldest inventory items are sold, used, or processed first.

Flat rate shipping is a shipping method where a fixed fee is charged for shipping regardless of the package's weight, size, or destination.

A 4PL (Fourth-Party Logistics) provider is a supply chain management firm that takes on the responsibility of managing, integrating, and overseeing the entire logistics and supply chain process for a business.

Freight class is a system used to categorize freight based on its characteristics such as weight, dimensions, density, and ease of handling. It helps determine the cost of shipping and the appropriate transportation method.

Freight consolidation is the process of combining multiple smaller shipments into a single, larger shipment to optimize space, reduce transportation costs, and improve efficiency.

Freight forwarding is the process of coordinating the shipment of goods from one location to another on behalf of the shipper. A freight forwarder acts as an intermediary between the shipper and various transportation services, organizing the logistics of moving goods by air, sea, rail, or road.

A Full Container Load (FCL) refers to a shipping method where a single shipment occupies the entire container, offering exclusive use of the container's space. It’s ideal for businesses with large or high-volume shipments.

Ground shipping refers to the transportation of goods over land using trucks, vans, or trains. It is a cost-effective method for delivering packages and freight within a region, country, or continent.

The Harmonized Tariff Schedule (HTS) is a standardized system used to classify imported and exported goods created by the World Customs Organization (WCO) and adopted by various countries.

An import license is an official document or authorization issued by a country's government or relevant authority, allowing the holder to legally import specific goods into the country. It regulates the importation process to ensure compliance with national laws, safety standards, and trade policies.

Inventory management is the process of overseeing, controlling, and optimizing a company's stock of goods, materials, or products. It ensures the right amount of inventory is available at the right time to meet customer demand while minimizing costs and preventing excess or shortages.

Just-In-Time (JIT) is an inventory management and production strategy aimed at reducing waste by receiving goods and producing items only when they are needed.

Landed cost refers to the total expense of acquiring a product, including the purchase price, shipping costs, customs duties, taxes, insurance, and other fees involved in getting the item to its final destination.

Last-mile delivery refers to the final stage of the shipping process, where goods are transported from a distribution center or local hub to the customer's doorstep.

Less Than Container Load (LCL) refers to a shipping method where multiple shipments from different customers share a container.

Line haul is the core segment of the logistics process where goods are moved from one major point to another, such as from a manufacturer to a distribution center. This phase occurs after the initial pickup (first mile) and before the final delivery (last mile).

A merchant in the context of shipping refers to any individual or business that engages in the buying, selling, or trading of goods. Merchants can operate on a local, national, or global scale, and they may be involved in various stages of the supply chain, from procurement to distribution.

Multi-Warehouse Management refers to the process of overseeing and optimizing the operations of several warehouses or distribution centers.

Ocean freight refers to the transportation of goods by sea using cargo ships

Order fulfillment is the process of receiving, processing, and delivering customer orders. It includes all activities from the moment a customer places an order to the point when the product is delivered to their doorstep.

​​Order management is the process of receiving, processing, and tracking customer orders from initiation to delivery. It involves overseeing the entire lifecycle of an order, ensuring that inventory is available, the order is accurately filled, and the customer is kept informed throughout the process.

Parcel shipping refers to the transportation of individual packages or parcels, typically weighing under 150 pounds, through a carrier for delivery to a specific destination. This method is integral to the e-commerce and retail industries.

A pro forma invoice is a preliminary document provided by a seller to a buyer before the actual shipment of goods or services. It outlines the estimated costs, quantities, and specifications of the transaction but is not a legally binding invoice.

Bundling in shipping refers to the process of combining multiple items or products into a single package for easier handling, reduced shipping costs, or promotional sales.

Proof of Delivery (POD) is the confirmation that a shipment has been successfully delivered to the recipient. It can take various forms, such as a signed document, an electronic acknowledgment, or a photograph, to verify that the goods were received in good condition at the correct location.

The reorder point is the inventory level at which a business should place a new order to replenish stock before running out. It ensures there is enough inventory to meet demand during the lead time, preventing stockouts and disruptions in operations.

Retail logistics refers to the process of managing the flow of goods from suppliers to retailers and eventually to consumers. It involves steps including warehousing, inventory management, order fulfillment, transportation, and distribution, ensuring that products are delivered to the right place, at the right time, and in the right condition.

A shipping manifest is a detailed document or list that provides information about the goods being transported. It includes essential data such as descriptions of the cargo, its quantity, weight, and the shipper’s and consignee’s details.

A Stock Keeping Unit (SKU) is a unique alphanumeric code assigned to a product to identify and track it in inventory and sales systems. SKUs are used by retailers, warehouses, and e-commerce businesses to manage stock and differentiate products.

SCM, or Supply Chain Management, is the coordination and oversight of the flow of goods, information, and finances from raw material suppliers to the end consumer. It involves managing processes, including procurement, production, inventory management, transportation, and delivery, ensuring efficiency and cost-effectiveness.

3PL (Third-Party Logistics), refers to outsourcing logistics and supply chain functions to a specialized provider. These services include warehousing, transportation, inventory management, order fulfillment, and more, allowing businesses to focus on their core operations.

Transit time is the duration for a shipment to travel from the point of origin to its final destination. It includes the entire journey, from pickup by the carrier to delivery, excluding potential delays like customs clearance or unforeseen disruptions.

A Transportation Management System (TMS) is a software solution that helps businesses plan, execute, and optimize the movement of goods. It streamlines shipping operations by managing carrier selection, route optimization, freight auditing, and real-time tracking.

Unit cost refers to the cost incurred by a business to produce, store, or ship a single unit of a product. It includes all direct and indirect expenses related to production or delivery.