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Logistics & Transportation Terminology Demystified - A-Z of Freight Shipping

Freight shipping and the terminology that goes with it can be a little overwhelming. Use Opus9's handy reference guide of commonly used terms and abbreviations so that you can get on top of the freight shipping process.

Accessorial Charge: Charges made for providing freight services in addition to normal pickup and delivery. Examples--detention, fuel surcharges, storage charges, dunnage, tarps, layovers.

Automatic On-Board Recording Device (AORBD): An Automatic On-Board Recording Device is hardware connected to a vehicle’s engine to record a truck driver’s hours of service. Trucks outfitted with AORBDs (meeting the requirements outlined in 49 CFR 395.15) before the enforcement of the ELD Mandate in December 2017 have until December 16, 2019 to implement an ELD.

Backhaul: The return trip of a commercial truck that transports freight along the same route it ran to its current location.

Bill of Lading: A receipt from a shipper provided to a carrier that outlines the nature of cargo by weight, size, and/or number of pieces, as well as, the origin and destination. It protects the shipper, carrier, and receiver during the transportation process.

Capacity: Capacity refers to the logistics industry’s ability to meet shippers’ demand for transportation of goods.

Carrier: A company that provides transportation services for customers in need of transporting goods from point A to point B: trucking companies, parcel express companies, railroads, airlines.

Compliance, Safety, and Accountability (CSA): CSA is the safety compliance and enforcement program of the Federal Motor Carrier Safety Administration (FMCSA) that holds motor carriers and drivers accountable for their role in safety.

Cold Chain: A cold chain is a temperature-controlled supply chain during which many means are employed to ensure the shelf life of perishable products.

Commodity: An article of commerce including raw materials, manufactured goods, or agricultural products.

Consignee: The person, company, or location taking delivery and financial responsibility for the receipt of a shipment.

Distribution Center: Referred to as a DC, distribution centers are locations where goods are stored until they are ready to move to their final destination.

Deadheading: Operating a semi-truck with an empty trailer or no cargo.

Dedicated Truck, Team, or Fleet: Truck, driving teams, or entire fleets that are dedicated to the service of one customer.

Detention: The charge a carrier assesses in the event that a truck is held up due to untimely loading or unloading.

DOT: Established in 1966, The Department of Transportation is a Federal Cabinet department of the US government with the purpose of keeping the nation’s transportation systems--federal highway, air, railroad, maritime--safe while contributing to its growth.

Driver Shortage: The American Trucking Association estimated the shortage of truck drivers in the United States to be at 50,000 by the end of 2017, and projects that the shortage of drivers could rise to 175,000 by 2026.

Dunnage: Extra material or filler used to load and secure cargo during transportation.

EDI Integration: Electronic Data Interchange Integration refers the computer-to-computer exchange of business documents such as purchase orders and invoices.

Electronic Logging Devices: Referred to as ELDs, these electronic logging devices monitor a vehicle’s engine to capture data on whether the engine is running, whether the vehicle is moving, miles driven, and duration of engine operation (engine hours). ELD manufacturers must certify that their products meet the technical standards in the ELD rule.

ELD Mandate: The ELD (Electronic Logging Device) rule is a congressionally mandated rule requiring ELD use by commercial drivers who must keep HOS (hours of service) records of duty status (RODS). The rule also sets performance and design status and requires ELDs to be certified and registered with the FMSCA.

Expedited: Any shipment that requires a faster than normal shipping process.

Flatbed: A open bed truck with no sides or roof typically used for heavy loads not vulnerable to weather.

Federal Motor Carrier Safety Association (FMCSA): The FMCSA was established within the Department of Transportation on January 1, 2000. While the FMSCA conducts many activities, its primary mission is to “prevent commercial motor vehicle-related fatalities and injuries.

Freight Broker: An intermediary between a shipper with goods to transport and a carrier with the equipment to transport those goods.

Freight Forwarder: A freight broker who actually takes possession of items being shipped.

Fuel Surcharge: This is the extra fee charged by trucking companies or 3PLs to cover the fluctuating costs of fuel. It’s calculated as a percentage of the base rate of transportation and typically added to the freight bill.

Geofencing: GPS or RFID technology is used to create virtual and geographic boundaries and enables software to notify customers when a mobile device (or shipment) enters or leaves a particular area.

Hazmat: Materials classified by the US Environmental Protection Agency (EPA) as hazardous. The transport of hazardous materials is regulated by the U. S. Department of Transportation (DOT).

Hot Shot: Hot shot loads are typically hauled on smaller trailers pulled by heavy-duty pickup trucks. Often used for moving small or expedited loads.

Hours of Service (HOS): Hours of Service refers to the regulations that limit how many hours a commercial motor vehicle operator may drive in a given time frame.

Intermodal: The transportation of freight in a container or vehicle using more than one mode of transport; for example, truck to rail.

Just in Time: A system of manufacturing in which needed materials or components are delivered as needed in order to minimize inventory costs.

Lane: A freight move from point A to point B. Often companies will use a particular lane on a regular basis.

Layover: A layover occurs when a driver is detained overnight waiting to pick up or deliver a shipment.

Load optimization: The implementation of relevant processes and technologies that save time and money in the supply chain. Often includes mode analysis and creative solutions.

Less than Truckload (LTL): Less than Truckload shipping is used for the transportation of smaller loads or when freight doesn’t require the use of an entire trailer. Often used when freight weight is below 15,000 pounds and less than 6 pallets.

Milk Run Routes: A delivery method that often transports freight for multiple suppliers and multiple customers, utilizing shorter and more frequent routes.

Owner-Operator: Individuals who both own and operate their own trucking business and equipment.

Pallet: A flat transportation structure predominantly made of wood and utilized in the transportation of goods. Offers stability and protection in the handling, moving, and storing of products.

Proof of Delivery: A POD is a signed document, often a bill of lading, that supplies proof that a delivery was received at a location.

Rate Confirmation: An agreement between shipper and carrier enumerating the cost of service.

Reefer: A refrigerated trailer used in the transport of refrigerated, frozen, or temperature-controlled goods.

Same Day Pickup and Delivery: Same Day PIckup refers to freight that must be picked up the day the order is taken while Same Day delivery refers to freight that must be delivered the day it is picked up.

Shipper: Also called the consignor, the shipper is the supplier or owner of the product being shipped.

Shipping Container: A strong container with the strength to survive shipment, handling, and storage. They range from reusable steel boxes to corrugated boxes.

Supply Chain: The supply chain encompasses the system of organizations, activities, information, resources, and logistics involved in the movement of a product from the supplier to the customer.

Tanker: A cylinder, attached to a truck, used to transport and deliver liquid freight.

Team: A team comprised of two drivers dedicated to delivering one shipment. A team is often used when a shipment is expedited and must deliver more quickly.

Third Party Logistics (3PL): A company that does not function as a shipper or carrier, but instead works as an intermediary between the two offering a suite of services that include transportation and warehousing of goods, as well as, specialty services and complete supply chain management.

Tracking and Visibility: Terminology used in the logistics industry that includes a range of information from the tracking of freight as it makes its way through the supply chain to increased visibility of supply chain dynamics and costs in order to improve and streamline processes.

Transportation Management System (TMS): A logistics platform that utilizes technology and enables users to optimize and manage daily operations with greater efficiency.

Truck Ordered Not Used (TONU): A cancellation fee charged a shipper for ordering a truck and cancelling said truck.

USDOT Number: Companies that operate commercial vehicles transporting passengers or hauling cargo in interstate commerce must be registered with the FMSCA and have a USDOT Number. The USDOT number enables the Department of Transportation (DOT) to collect information and monitor a company’s safety information during audits, reviews, investigations, and inspections.

Van: A rectangular box container connected to trucks used to haul dry freight. Designed to haul pallets or boxes, they are the most common type of freight transportation.

Nov 2 | Posted by Trupti Desai

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