Glossary

A
Advanced Shipping Notice (ASN)

A notification of pending deliveries, typically sent electronically.

Air Waybill (AWB)

A document issued by an air carrier to acknowledge receipt of cargo for shipment.

Anticipatory Shipping

A strategy where products are shipped to distribution centers before customers place orders.

Arrival Notice

Notification sent by the carrier to the consignee advising the arrival of the shipment.

B
Backorder

An order for a product that is temporarily out of stock.

Benchmarking

Comparing performance metrics to industry bests or best practices from other industries.

Bill of Lading (B/L)

A legal document between the shipper and carrier detailing the type, quantity, and destination of the goods being carried.

Bonded Warehouse

A storage facility where imported goods can be stored without payment of duties until they are removed for sale or use.

C
Cargo Manifest

A detailed list of the cargo carried on a ship, plane, or vehicle.

Certificate of Origin (COO)

A document used in international trade to certify that the goods in a particular shipment have been wholly obtained, produced, manufactured, or processed in a particular country.

Consignee

The person or company receiving the goods.

Control Tower

A centralized hub for real-time visibility and control over supply chain operations, enabling monitoring, management, and optimization.

Cross-Docking

A practice in logistics where products from a supplier or manufacturer are distributed directly to a customer or retail chain with minimal handling and storage time.

Customer Relationship Management (CRM)

Practices, strategies, and technologies used to manage and analyze customer interactions and data throughout the customer lifecycle.

D
Demand Planning

The process of forecasting customer demand to ensure that products can be delivered to meet customer satisfaction.

Demurrage

A charge payable to the owner of a chartered ship in respect of failure to load or discharge the ship within the time agreed.

Detention

Charges incurred when containers are used beyond the agreed free time for either loading or unloading.

Distribution Center (DC)

A warehouse or other specialized building which is stocked with products to be redistributed to retailers, wholesalers, or directly to consumers.

E
EDI (Electronic Data Interchange)

The computer-to-computer exchange of business documents in a standard electronic format between business partners.

ERP (Enterprise Resource Planning)

Integrated management of main business processes, often in real-time and mediated by software and technology.

ETA (Estimated Time of Arrival)

The time when a ship, aircraft, or vehicle is expected to arrive at a particular place.

Export License

A government document that authorizes the export of specific goods in specific quantities to a particular destination.

F
Forecasting

The process of making predictions of the future based on past and present data.

Fourth-Party Logistics (4PL)

An integrator that assembles and manages the resources, capabilities, and technology of its own organization and other logistics service providers to design, build, and run comprehensive supply chain solutions.

Free Trade Zone (FTZ)

A specific class of special economic zone where goods may be landed, handled, manufactured, or reconfigured without the intervention of customs authorities.

Freight Bill

The carrier's invoice for freight charges applicable to a shipment.

Fulfillment

The process of receiving, processing, and delivering orders to end customers.

G
Geofencing

A virtual boundary for a geographic area, using GPS, RFID, Wi-Fi, or cellular data, that triggers a response when a device crosses it.

Geolocation

Determining the real-world location of an object using methods like GPS, Wi-Fi, or IP addresses.

Goods Received Note (GRN)

A document used to record the inward entry of any goods received at the premises of the organization.

GPS (Global Positioning System)

A satellite-based navigation system that offers location and time information anywhere on Earth with a clear view of four or more GPS satellites.

Gross Margin

The difference between revenue and cost of goods sold divided by revenue, expressed as a percentage.

Gross Weight

The total weight of the goods including packaging and container.

H
Harmonized System (HS) Code

An internationally standardized system of names and numbers to classify traded products.

Hub-and-Spoke Distribution

A system in which a central "hub" exists, and multiple "spokes" distribute the goods from the hub to various locations.

I
In-Transit Inventory

Inventory that is in the process of being transported from one location to another.

Incoterms

International Commercial Terms published by the International Chamber of Commerce (ICC) that define responsibilities of sellers and buyers in international transactions.

Insurance Certificate

A document that provides evidence of insurance coverage for cargo.

Inventory Management

The supervision of non-capitalized assets (inventory) and stock items.

J
Just-In-Time (JIT)

An inventory strategy companies employ to increase efficiency and decrease waste by receiving goods only as they are needed in the production process.

K
Key Performance Indicator (KPI)

A measurable value that demonstrates how effectively a company is achieving key business objectives.

L
Lead Time

The amount of time that passes from the start of a process until its completion.

Letter of Credit (LC)

A financial document issued by a bank on behalf of an importer guaranteeing payment to the exporter upon presentation of specified documents.

Logistics

The management of the flow of things between the point of origin and the point of consumption to meet the requirements of customers or corporations.

M
Manifest

A detailed statement listing the cargo, passengers, and crew, along with their condition and destination.

Marine Insurance

Insurance that covers the loss or damage of ships, cargo, terminals, and any transport or cargo by which property is transferred, acquired, or held between points of origin and final destination.

Material Requirements Planning (MRP)

A production planning, scheduling, and inventory control system used to manage manufacturing processes.

Mode of Transport

The method or means of transport used for the movement of goods, e.g., air, sea, road, or rail.

N
Negotiable Instruments

Financial documents that can be transferred from one party to another, such as bills of lading, checks, promissory notes, etc.

Network Optimization

The process of designing, planning, and implementing the optimal supply chain network configuration.

NVOCC (Non-Vessel Operating Common Carrier)

A company that organizes shipments for individuals or corporations to get goods from the manufacturer or producer to a market, customer, or final point of distribution, but does not own the vessels.

O
Ocean Freight

The cost to move goods by sea.

Order Bill of Lading

A negotiable document that provides evidence of the receipt of goods for shipment and can be used as a title document.

Order Fulfillment

The complete process from point of sales inquiry to delivery of a product to the customer.

Outsourcing

The practice of using outside firms to handle work normally performed within a company.

P
Packing List

A document that details the contents, dimensions, and weight of each package in a shipment.

PO (Purchase Order) Management

The process of overseeing and managing purchase orders from creation through to fulfillment, ensuring that the orders are processed accurately and efficiently.

Pro Forma Invoice

An invoice provided by a supplier prior to the shipment of merchandise, detailing the goods and terms of sale.

Procurement

The process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process.

Pull System

A method of controlling the flow of resources by replacing only what has been consumed.

Q
Quality Control (QC)

A process through which a business seeks to ensure that product quality is maintained or improved and manufacturing errors are reduced or eliminated.

Quarantine

A state, period, or place of isolation in which people or animals that have arrived from elsewhere or been exposed to infectious or contagious disease are placed.

R
Reverse Logistics

The process of moving goods from their final destination for the purpose of capturing value, or proper disposal.

RFID (Radio-Frequency Identification)

The use of radio waves to read and capture information stored on a tag attached to an object.

Ro-Ro (Roll-on/Roll-off)

Ships designed to carry wheeled cargo such as cars, trucks, trailers, and railroad cars that are driven on and off the ship on their own wheels.

S
Shipper

The person or company sending the goods.

SITC (Standard International Trade Classification

A statistical classification of the commodities entering external trade.

SKU (Stock Keeping Unit)

A unique identifier for each distinct product and service that can be purchased.

Supply Chain

The entire network of entities, directly or indirectly interlinked and interdependent in serving the same consumer or customer.

T
Tariff

A tax or duty to be paid on a particular class of imports or exports.

TEU (Twenty-foot Equivalent Unit)

A unit of cargo capacity often used to describe the capacity of container ships and container terminals.

Third-Party Logistics (3PL)

A provider that offers outsourced logistics services, which can include warehousing, transportation, and other supply chain functions.

Track & Trace

A system used in logistics to monitor the location and status of shipments and maintain a record of their journey from origin to destination.

Transportation Management System (TMS)

A subset of supply chain management concerning transportation operations.

U
ULD (Unit Load Device)

A pallet or container used to load luggage, freight, and mail on wide-body aircraft and specific narrow-body aircraft.

UPC (Universal Product Code)

A barcode symbology that is widely used for tracking trade items in stores.

V
Value Stream Mapping (VSM)

A lean-management method for analyzing the current state and designing a future state for the series of events that take a product or service from its beginning through to the customer.

VAT (Value-Added Tax)

A tax on the amount by which the value of an article has been increased at each stage of its production or distribution.

Vendor-Managed Inventory (VMI)

A family of business models in which the buyer of a product provides certain information to a supplier of that product and the supplier takes full responsibility for maintaining an agreed inventory of the material.

W
Warehouse Management System (WMS)

A software application designed to support and optimize warehouse or distribution center management.

Waybill

A document issued by a carrier giving details and instructions relating to the shipment of a consignment of goods.

Work-in-Progress (WIP)

Materials and components that have begun their transformation to finished goods.

Y
Yard

A facility where containers are stored and handled.

Z
Zone

A specific area within a port where special rules apply, often in relation to customs and tariffs.

Zone Picking

A method of order picking where the warehouse is divided into several zones with each picker assigned a specific zone.