Logistics dictionary

Introduction to key logistics terms and concepts

Understanding logistics terminology is crucial for navigating the complexities of international trade and transportation. From Cost, Insurance, and Freight (CIF) to Ex Works (EXW) and Peak Season Surcharge (PSS), each term defines specific conditions, obligations, and costs that influence global shipping operations. This dictionary covers important logistics terms like Free On Board (FOB) and Delivered Duty Unpaid (DDU) to help businesses and individuals streamline their logistics processes, ensure compliance, and optimize their supply chain strategies.

ABI (Automated Broker Interface)

System used by customs declarants i.e., U.S. brokers for electronic data exchange among themselves and with customs.

AC (Accessorial charges)

Costs incidental to the cost of transportation (e.g., loading, unloading, insurance, porterage, etc.).

ADR (Accord Dangereuse Routiers)

International Agreement for the Carriage of Dangerous Goods by Road (in full: Accord Europeen Relatif au Transport International des Marchandises Dangereuses par Route). By extension, we speak of "ADR product," "ADR transport," "ADR storage," etc., when products that fall under the regulations of the mentioned ADR agreement are handled. These operations should always be carried out according to the specific regulations. In air transport, DGR regulations, short for English Dangerous Goods Regulations, apply.

ATA Carnet

An international customs document used for the temporary import and export of goods.

AWB (Air Way Bill)

Bill of lading (bill of lading) of an air transport, which, however, does not constitute title to the goods.

B2B (Business to Business)

Electronic commerce between two companies (one buying and one selling). Contrasted with B2C (one company to one individual) and C2C (between two individuals), where buyer and seller have the same goals and have similar organizational configurations.

B2C (Business to Consumer)

Electronic commerce between a company (selling) and an individual (buying). Contrasted with B2B (between two companies) and C2C (between two individuals).

Backordering

The possibility for customers to place an order even if the desired product is not available at the time of the order.

Barcode

The symbology or alphabet used to encode information in such a format that it can be automatically acquired by special readers.

Bill

Generic term for a document relating to a batch of goods. Its meaning depends on the specification (e.g., production bill, deposit bill, picking bill, accompanying bill, etc.).

Bill of Lading (B/L)

A legal document between the shipper and the carrier that details the type, quantity, and destination of the goods being transported. It serves as a receipt of shipment and a contract for delivery.

Blind Shipment

A shipment where the consignee or the shipper is unaware of the identity of the other party.

C2C (Consumer to Consumer)

Electronic commerce between two individuals (one buying and one selling). Contrasted with B2C (one company to one private individual) and B2B (between two companies).

CEMT-Permit

A permit issued by the CEMT (Conférence Européenne des Ministres des Transports) authorizing national logistics companies to perform international transport services within the member countries of the CEMT. This authorization allows companies to expand their transport services across borders and operate in other countries without being restricted by national laws and regulations. The CEMT permit is an important part of the European single market and helps improve competitiveness and efficiency in logistics.

CMR (Convention Marchandise Routièere)

Geneva Convention for International Road Transport (19.1.1956 implemented in Italy by Law 1621/1960; amended by the Geneva Prot. of 5.7.1958 made enforceable in Italy by Law 242/1982). By extension: transport documentation for road transport between countries that have adopted the CMR Convention.

CTPAT (Customs-Trade Partnership Against Terrorism)

A U.S. Customs program that requires companies to meet security standards and procedures to minimize terrorist threats in the supply chain.

Containerization

The packaging of goods into standardized containers (e.g. sea containers) to simplify and optimize handling and transportation.

Corriere

A company or service provider that offers transportation services such as trucking, air freight, or ocean freight.

Cross-Docking

A logistics strategy in which goods are transferred directly from an arriving mode of transportation to a departing one to save on storage and transshipment costs.

Customs duty

Indirect charge levied on the value of all products imported and exported from the country imposing it. There is a very precise classification of transported goods that all fall under the online tables available on TARIC. The latter is the tool used to calculate customs duties on imported goods. The goods are classified by codes that identify their nature and characteristics, on which, in turn, the calculation of taxes at customs depends. Thus, precise obligations, provisions and customs fees correspond to each code.

DAP (Delivery At Place)

Clause whereby the seller makes the goods available.

DDP (Delivery Duty Paid)

Clause whereby the seller makes the goods, already cleared for import in the country of destination, available at a place agreed upon with the buyer (usually a warehouse of the buyer or his trust). The seller assumes all costs and risks of transportation to the agreed place, must obtain any licenses and permits in both export and import, and pay taxes, charges and customs duties in import. VAT (or similar taxes) are also the responsibility of the seller, unless otherwise explicitly agreed upon in the sales contract. Only the unloading of the means of transport is the responsibility of the buyer.

Demurrage

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

Disposition

The planning and control of production and inventory levels, and the coordination of shipments and deliveries.

E-commerce

A way to perform B2B and B2C transactions and exchange information via telecommunications networks such as the Internet.

EDI (Electronic Data Interchange)

A method of electronically transferring data and documents between companies, such as purchase orders or delivery bills.

Excise taxes

Indirect tax imposed by the state on certain products (alcohol, fuel, etc.). It takes the form of a manufacturing or consumption tax and is paid to the state by the producer or marketer, who recharges it on the selling price of the product. For example, when we make gasoline or diesel, we do not think that €0.6/€0.7 per liter of what we pay is actually an excise tax that oil companies pay to the state. What's more, the excise tax-as a component of the retail price-is also subject to VAT.

Express

In logistics terms, it refers to an express shipping service, that is, offering the possibility of handling transportation in a shorter time to compared to standard/economy shipping. The route chosen for express shipping, involves the shortest routes and, at times, some routes served by air freight. This service involves a signature by the recipient certifying precisely that the shipment has been received.

FIFO (First In, First Out)

A storage method in which goods are stored and processed in the order in which they arrive, those that were stored first are consumed first.

FTL (Full Truckload)

A transport service in which a truck is loaded and transported entirely by a single customer.

Fork Lift

Handling equipment intended for lifting, transporting, stacking, storing in racks loads of any kind.

Free Port

The term refers to shipments in which payment of the transportation cost has already been paid by the shipper or originator of the shipment. In such cases, the consignee does not pay the charges related to the transportation cost.

Free Trade Zone (FTZ)

A designated area within a country where goods can be imported, stored, and exported without being subject to customs duties or taxes.

Freight Forwarder

An intermediary that organizes the movement of goods on behalf of a shipper, often handling paperwork, transportation, and warehousing.

Hazmat

Hazardous materials that require specific handling, documentation, and transportation methods.

Hub

Also known as a logistics hub, the hub represents the epicenter where all activities related to the transportation, logistics, and distribution of goods from different operators take place. It usually refers to a port or airport but hubs can also be found in road or rail transportation.

Hydraulic platform

Equipment placed on the back of a motor vehicle that allows a portion of the load to be raised/lowered from the ground to floor level. Used for pickup/delivery of goods that cannot be handled by hand where there is no loading ramp or forklift.

Incoterms (International Commercial Terms)

Conventional codes governing transactions relating to international trade issued by the ICC International Chamber of Commerce in Paris in 1936. They are used for the correct and uniform interpretation of current clauses in international contracts of sale and purchase with particular attention to the conditions of surrender and insurance of goods.

Intermodal Transportation

The use of more than one mode of transport to move goods, often involving containers that are transferred between ships, trucks, and trains.

Item

Physical item managed by a warehouse, production, sales network, etc., which refers to a well-identified physical object (product, group, component, material, etc.) because it is surveyed in the company registry with its own code number.

JIT (Just-in-Time)

A concept for optimizing inventories and delivery times in which goods are produced or ordered only when they are actually needed.

KPI (Key Performance Indicator)

A metric or indicator that measures the performance of a business or process in relation to a specific metric such as delivery times, inventory levels, or utilization.

LTL (Less Than Truckload)

A transportation service in which multiple shipments from different customers are transported on one truck to reduce costs.

Leadtime

The time required to take, process, and deliver an order.

Logistic Operator

Anyone who provides logistics services to third parties.

Logistics

Process of planning and managing the physical and information flows of raw materials (supply logistics), components/semi-finished goods (industrial logistics) and finished goods (distribution logistics) in and out of the company for the purpose of meeting customer needs.

MTO (Multimodal Transport Operator)

Multi-sector logistics worker, able to propose solutions for managing the flow of goods, choosing the most suitable forms of storage and appropriately assembling means of transport. The same is responsible to the payer for the organization, coordination and execution of transportation.

POD (Proof of Delivery)

Proof of delivery certifying the arrival of the goods to the consignee.

Package

Single first-tier cargo unit corresponding to objects of various kinds. Goods shipped as one package at a time can also be defined as bulk.

Packaging

A set of products or materials of various nature used to contain and protect certain goods and enable their handling and collection from the producer with subsequent delivery to the consumer. The same is necessary and essential for transportation management.

Packing list

Bill or list indicating the contents of a transport.

Pallet

A platform of wood or other material of various sizes (some standardized as 80*80cm, 80*120cm, 120*120cm) on which one or more packages can be affixed for easy handling by forklift. They can be reusable or disposable. The loaded goods can be called palletized.

Pallet

A platform, usually made of wood, on which packages are stacked to facilitate the loading, unloading and storage of goods. It may have two or four ways and can be forked with the appropriate lifting machines.

Pallet truck

Internal handling vehicle with or without an electric motor, used for picking that can carry one or more gablets at the same time depending on the fork with which it is equipped (short or long).

Palletizing

The packing of goods onto pallets or Euro pallets for transport or storage.

Picking

The manual or mechanical selection of goods from an inventory for a particular order or shipment.

Place of loading

Place where goods are loaded onto the vehicle for transportation.

Place of unloading

Place where goods are unloaded from the vehicle on which they were transported.

Porterage

It represents the activity performed by the porter, i.e., person engaged in loading and unloading operations. This activity can therefore refer to the transport of packages, goods and generally weights. This service is not included in the cost of transportation.

Reverse Logistics

The process of returning goods that have not been sold or are defective back to the manufacturer or supplier.

SLA (Service Level Agreement)

An agreement between a company and a supplier or service provider that specifies service levels (e.g., delivery times, availability).

Slotting

The strategic placement of goods within a warehouse to maximize picking and storage efficiency.

Stationary storage

Represents a service required of the carrier in charge of transportation, to hold the package in storage for a specified period so that the consignee can go to pick up the goods within the stipulated time frame.

Storage

Process of storing goods at warehouses for a short period.

Supply Chain Management

A management approach that addresses the planning, control, and optimization of processes throughout the supply chain, from the procurement of raw materials to delivery to the end customer.

Supply Chain Visibility

The ability to track and monitor the movement of goods and materials along the supply chain.

TEU (Twenty-Foot Equivalent Unit)

A standardized unit of measurement used in container shipping, representing the dimensions of a standard 20-foot container.

Tautliner

An enclosed truck trailer covered with a tarp to protect the cargo from the elements.

Tax weight

The greater of the actual weight of the shipment including packaging and the conventional weight obtained by multiplying the volume of the shipment, including packaging, by the weight/volume ratio set by the carrier.

Volumetric weight

The weight of a package or container, calculated from the ratio of volume to weight. This is used to calculate the cost of transportation.

WMS (Warehouse Management System)

A software system for controlling and optimizing warehouse processes, such as inventory management, stock accounting and picking.

Warehouse

Warehouse/physical place of storage of goods and products.

Warehousing

Activities related to the receiving, storage and handling of goods in a warehouse.

Waybill (CMR)

Document regulating the road transport contract made pursuant to the CMR, or Convention relative au contrat de transport international de marchandises par route.

Waybill

Document evidencing the transportation of the goods from the place of loading to the final destination; differs depending on the type of carrier used.