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Logistics Glossary

Use the logistics glossary to learn the meaning of common logistics, warehousing and transportation terminology.

Bailment

The term bailment is derived from the French term "bailler" which means "to place in the hands of." It refers to the situation where temporary possession - as distinguished from title - of personal property is transferred from one person (bailor) to another (bailee) for a specific purpose. The characteristics of bailment are:

a.

Transfer of possession is without intent to transfer title to the bailee.

b.

Possession is to be for some temporary purpose.

c.

Possession is to revert to the bailor (or his/her designated representative) either upon the fulfillment of the purpose of the bailment, at the expiration of a designated period of time, upon the happening of a specific event, or at the demand of the bailor unless otherwise agreed to.


The bailee (warehouseman) has care, custody and control of the product while the bailor (the depositor) retains title to the product.

 

Since the title to the bailed property resides with the bailor, he/she retains the risk of loss or damage. The bailee is only responsible to the bailor for such loss or damage to the bailed property as results from his negligence. In other words, the warehouseman's liability is limited to loss or damage to the depositor's goods attributable to thewarehouseman's negligence.

Bill of Lading

A bill of lading (BL - sometimes referred to as BOL or B/L) is a document issued by a carrier to a shipper, acknowledging that specified goods have been received on board as cargo for conveyance to a named place for delivery to the consignee who is usually identified. The term derives from the verb "to lade" which means to load a cargo onto a ship or other form of transportation. A Through bill of lading involves the use of at least two different modes of transport from road, rail, air, and sea.

Case Pick

Case picking is the gathering of full cartons or boxes of product, often onto a pallet, for delivery.

Consignee

In a contract of carriage, the consignee is the person to whom the shipment is to be delivered whether by land, sea or air.

Consignor

The consignor, in a contract of carriage, is the person sending a shipment to be delivered whether by land, sea or air. Some carriers, such as national postal entities, use the term "sender" or "shipper" but in the event of a legal dispute the proper and technical term "consignor" will generally be used.

Contract Warehouse

A contract warehouse is a warehouse that handles shipping, receiving, and storage of products on a contract basis. Contract warehouses will generally require a client to commit to a specific period of time (generally in years) for the services. Contracts may or may not require clients to purchase or subsidize storage and material handling equipment. Fees for contract warehouses may be transaction and storage-based, fixed, cost plus, or any combination. See also public warehouse and third-party logistics.

Cross-Docking

Cross-docking is a practice in logistics of unloading materials from an incoming semi-trailer truck or railroad car and loading these materials directly into outbound trucks, trailers, or rail cars, with little or no storage in between. This may be done to change type of conveyance, to sort material intended for different destinations, or to combine material from different origins into transport vehicles (or containers) with the same, or similar destination.

C-TPAT

The Customs-Trade Partnership Against Terrorism is a voluntary supply chain security program led by U.S. Customs and Border Protection (CBP). It focuses on improving the security of private companies' supply chains with respect to terrorism. Through this initiative, US Customs asks businesses to ensure the integrity of their security practices and communicate and verify the security guidelines of their business partners within the supply chain.

Cycle Count

A cycle count is an inventory management procedure where a small subset of inventory is counted on any given day. Cycle counts contrast with traditional physical inventory in that physical inventory stops operation at a facility while all items are counted at one time. Cycle counts are less disruptive to daily operations, provide an on-going measure of inventory accuracy and procedure execution, and can be tailored to focus on items with higher value, higher movement volume, or that are critical to business processes.

Direct Store Delivery

Direct store delivery (DSD) is a business process that manufacturers use to both sell and distribute goods directly to point of sales (PoS) or point of consumption (PoC) It is an alternative distribution model to centralized distribution, and tends to be used extensively in the food industry for fresh products such as milk and bread where minimizing the number of days in the supply chain is a key concern. Similarly, DSD is used effectively for full truckload orders where bypassing distribution centers makes economic sense.

EDI

Electronic data interchange (EDI) is the structured transmission of data between organizations by electronic means. It is used to transfer electronic documents or business data from one computer system to another computer system, i.e. from one trading partner to another trading partner without human intervention. It is more than mere e-mail; for instance, organizations might replace bills of lading and even checks with appropriate EDI messages. It also refers specifically to a family of standards.

FIFO

FIFO stands for first-in, first-out, meaning that the oldest inventory items are recorded as sold first but do not necessarily mean that the exact oldest physical object has been tracked and sold; this is just an inventory technique.

Freight Forwarder

A freight forwarder, forwarder, or forwarding agent, is a person or company that organizes shipments for individuals or other companies and may also act as a carrier. A forwarder is often not active as a carrier and acts only as an agent, in other words, as a third-party (non-asset-based) logistics provider that dispatches shipments via asset-based carriers and that books or otherwise arranges space for these shipments. Carrier types include ships, airplanes, trucks and railroads.

Handling

A process by which something is handled in a commercial transaction; especially: the packaging and shipping of an object or material.

Hazardous Goods

Hazardous goods are solids, liquids, or gases that can harm people, other living organisms, property, or the environment. They are often subject to chemical regulations. "HazMat teams" are personnel specifically trained to handle dangerous goods. Hazardous goods include materials that are radioactive, flammable, explosive, corrosive, oxidizing, asphyxiating, biohazardous, toxic, pathogenic, or allergenic. Also included are physical conditions such as compressed gases and liquids or hot materials, including all goods containing such materials or chemicals, or which may have other characteristics that render them hazardous in specific circumstances.

Intermodal Freight Transport

Intermodal freight transport involves the transportation of freight in an intermodal container or vehicle, using multiple modes of transportation (rail, ship, and truck), without any handling of the freight itself when changing modes. The method reduces cargo handling, and so improves security, reduces damages and losses, and allows freight to be transported faster.

Inventory

The term inventory has developed from a list of goods and materials to the goods and materials themselves, especially those held available in stock by a business, equivalent to the term "stock" in British English. In accounting, inventory or stock is considered an asset.

Inventory Turnover

In accounting, the inventory turnover is a measure of the number of times inventory is sold or used in a time period such as a year. The equation for inventory turnover equals the cost of goods sold divided by the average inventory. Inventory turnover is also known as inventory turns, stockturn, stock turns, turns, and stock turnover.

Just In Time

Just in time (JIT) is a production strategy that strives to improve a business return on investment by reducing in-process inventory and associated carrying costs. Implemented correctly, JIT focusses on continuous improvement and can improve a manufacturing organization's return on investment, quality, and efficiency. To achieve continuous improvement, key areas of focus could be flow, employee involvement and quality.

Less Than Truckload (LTL) Shipping

Less than truckload (LTL) shipping is the transportation of relatively small amounts of freight. Usually the deliveries are consolidated into a container to make delivery time and effort much more efficient. The alternatives to LTL carriers are parcel carriers or full truckload carriers. Full truckload carriers move freight that is loaded into a semi-trailer. Semi-trailers are typically between 26 and 53 feet and thereby require a substantial amount of freight to make such transportation economical.

Logistics

Logistics is the management of the flow of goods between the point of origin and the point of destination in order to meet the requirements of customers or corporations. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and often security. Logistics is a channel of the supply chain which adds the value of time and place utility.

Order FulfillmentLogistics

Order fulfillment is in the most general sense the complete process from point of sales inquiry to delivery of a product to the customer. Sometimes order fulfillment is used to describe the more narrow act of distribution or the logistics function; however, in the broader sense it refers to the way firms respond to customer orders.

Outsourcing

The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider. The concept of outsourcing helps companies to perform well in their core competencies and mitigates the rise of skill or expertise shortage in areas where they want to outsource.

Pick and Pack

Pick and pack is a part of complete supply chain management process that is commonly used in, but not limited to, the retail distribution of goods. It entails processing small to large quantities of product - disassembling truck or trainloads of product, picking the relevant product for each destination and re-packaging with shipping label affixed and invoice included.

Pool Distribution

Pool Distribution is the distribution of product to numerous consignees within a particular geographic region. This is a highly superior and cost effective alternative to the higher cost of LTL shipments. In some instances this could represent a 30%-70% savings vs. traditional LTL. Instead of LTL direct to a consignee, product is shipped to regional terminals or DC's in truckload quantities. There it is off-loaded, then segregated and sorted by consignee and then reloaded on local delivery trucks for delivery to pool destinations. Pool Distribution reduces transit times, reduces claims and damages and allows for significant savings over LTL rates.

Public Warehouse

A public warehouse is a business that provides short or long-term storage to companies on a month-to-month basis. Public warehouse fees can be a combination of storage fees and inbound and outbound transaction fees. A public warehouse can charge per pallet, per carton, per hundred weight (cwt) or charge for each square foot of storage that is used by a company.

Quality Assurance (QA)

Quality assurance (QA) refers to the systematic measurement, comparison with a standard, monitoring of processes and an associated feedback loop that confers error-prevention. This can be contrasted with Quality "Control", which is focused on process outputs. Two principles included in QA are: "Fit for purpose", the product should be suitable for the intended purpose; and "Right first time", mistakes should be eliminated. QA includes management of the quality of raw materials, assemblies, products and components, services related to production, and management, production and inspection processes.

Quality Control (QC)

Quality control (QC) is a process by which entities review the quality of all factors involved in production. It emphasizes testing of products to uncover defects and reporting to management, who make the decision to allow or deny product release. This is in contrast to Quality Assurance, which attempts to improve and stabilize production (and associated processes) to avoid, or at least minimize, issues which led to the defect(s) in the first place.

Reverse Logistics

Normally, logistics deal with events that bring the product towards the customer. In the case of reverse logistics, the resource goes at least one step back in the supply chain. For instance, goods move from the customer to the distributor or to the manufacturer.

Stock-Keeping Unit

A stock-keeping unit or SKU (pronounced as either an acronym, / "skew"/, or as a set of initials /S K U/ ) is a number or code used to identify each unique product or item for sale in a store or other business. SKUs are not always associated with actual physical items, but are more appropriately billable entities.

Storage

Normally, logistics deal with events that bring the product towards the customer. In the case of reverse logistics, the resource goes at least one step back in the supply chain. For instance, goods move from the customer to the distributor or to the manufacturer.

a.

space or place for storing;

b.

an amount stored;

c.

the act of storing: the state of being stored; especially the safekeeping of goods in a depository (as a warehouse);

d.

the price charged for keeping goods in a storehouse


Straight Bill of Lading

On this bill, the importer/consignee/agent is named in the bill of lading, and it is called "straight bill of lading." It is a document in which a seller agrees to use a certain transportation to ship a good to a certain location, where the bill is assigned to a certain party. It details the quality and quantity of goods being delivered.

Sustainability

Sustainability is the long-term maintenance of well-being, which has environmental, economic, and social dimensions, and encompasses the concept of stewardship, the responsible management of resource use.

Third-Party Logistics (3PL)

A third-party logistics provider (abbreviated 3PL, or sometimes TPL) is a firm that provides service to its customers of outsourced (or "third party") logistics services for part, or all, of their supply chain management functions.

Throughput

Throughput can be best described as the rate at which a system generates its products / services per unit of time. In the 3PL industry, average throughput is calculated by adding receipts plus shipments over a specific time period and then dividing by 2.

Transloading

Transloading is the process of transferring a shipment from one mode of transportation to another. It is most commonly employed when one mode cannot be used for the entire trip, as when goods must be shipped international from one inland point to another, i.e. truck to an airport, airplane overseas, truck at destination airport to consignee.

Truckload Shipping

Truckload shipping (TL) is the movement of large amounts of homogeneous cargo, generally the amount necessary to fill an entire semi-trailer or intermodal container. A truckload carrier is a trucking company that generally contracts an entire trailer-load to a single customer. This is as opposed to a less-than-truckload (LTL) company that generally mixes freight from several customers in each trailer.

Value-Added

The enhancement added to a product or service by a company before the product is offered to customers.

Warehouse Legal Liability

The enhancement added to a product or service by a company before the product is offered to customers.

a.

The warehouseman shall not be liable for any loss or injury to goods stored however caused unless such loss or injury resulted from the failure by the warehouseman to exercise such care in regard to them as a reasonably careful man would exercise under like circumstances and warehouseman is not liable for damages which could not have been avoided by the exercise of such care.

b.

Goods are not insured by the warehouseman against loss or injury however caused.

c.

The depositor declares that damages are limited to _____________________, provided, however, that such liability may at the time of acceptance of the contract as provided in Section 1 be increased upon depositor's written request on part or all of the goods hereunder in which event an additional monthly charge will be made based upon such increased valuation.

d.

Where loss or injury occurs to stored goods, for which the warehouseman is not liable, the depositor shall be responsible for the cost of removing and disposing of such goods and the cost of any environmental clean-up and site remediation resulting from the loss or injury to the goods.


Warehouse Receipt

A warehouse receipt is a document that provides proof of ownership of commodities (e.g., bars of copper) that are stored in a warehouse, vault, or depository for safekeeping. Warehouse receipts also guarantee existence and availability of a commodity of a particular quantity, type, and quality in a named storage facility.

Warehouse Management System (WMS)

A warehouse management system, or WMS, is a key part of the supply chain and primarily aims to control the movement and storage of materials within a warehouse and process the associated transactions, including shipping, receiving, putaway and picking. The systems also direct and optimize stock putaway based on real-time information about the status of bin utilization.


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