Transportation

Order Fill Rate

1) An indicator that provides insights into achieving the perfect order and into the fulfillment process. 2) The percentage of incoming customer orders that are filled on time. This can be calculated by taking the total number of completely filled orders and dividing by the total number of orders.

Customer

1) In distribution, the trading partner or reseller. 2) In direct-to-consumer, the end customer or user.

Supply Chain

1) Starts with unprocessed raw materials and ends with final customers using the finished goods by linking many companies together. 2) The material and informational interchanges in the logistical process stretches from acquisition of raw materials to delivering finished products to the end user. Vendors, service providers, and customers are links in the supply chain.

Shipping

1) The act of conveying materials from one point to another. 2) The functional area that prepares the outgoing shipment for transport.

Balance Sheet Measures

A balance sheet keeps track of profits and losses (i.e., return on working capital), and this measure is used in determining the economic bottom line

Air Waybill

A bill of lading for air transport serving as a receipt for shippers and indicates carriers have accepted the goods listed. Acceptance obligates carriers to carry the consignment to the airport of destination according to specified conditions.

Constraint

A bottleneck, obstacle, or planned control limiting the utilization of capacity. Managers have little or no control over constraints.

Container

A box, typically 10 to 40 feet long, primarily used for ocean freight shipments.

For-Hire Carrier

A carrier providing transportation services to the public for a fee.

Private Carriers

A carrier that provides transportation services to firms and owns or leases their vehicles without a fee. Private motor carriers may haul at a fee for wholly owned subsidiaries.

Accessorial Charge*

A carrier's charge for accessorial services, such as loading, unloading, pickup, and delivery, fuel surcharges, single shipments, and detention/demurrages.

Certificate of Insurance

A certificate issued by an insurance agency when buyers and sellers use the CIF and CIP INCOTERMS or if buyers and sellers want to buy insurance independent of the INCOTERMS, which is issued for a small premium.

Certificate of Inspection

A certificate verifying the quality or authenticity of goods; this certificate is issued by an independent inspection agency.

Transportation Management System

A computer system designed to provide optimized transportation management in various modes along with associated activities, including managing shipping units, labor planning and building, shipment scheduling through inbound, outbound, intra- company shipments, documentation management (especially when international shipping is involved), and third-party logistics management.

Risk

A cost consideration in transportation that sometimes increases the cost of shipping for products that are at higher risk of being damaged in transit than other products.

Cost Per Ton-Mile

A cost metric of the total expenses the shipper incurs on transportation divided by the total ton-miles.

Variable Cost

A cost that fluctuates with the volume or activity level of business.

Negotiation:

A counteroffer to an individuals or groups original offer.

Logbook

A daily record of the hours interstate drivers spend driving, off duty, sleeping in the berth, or on duty but not driving.

Invoice

A detailed statement showing goods sold and amounts for orders. The invoice is prepared by sellers and is the document that buyers use to make payments.

Differential

A discount offered by a carrier who faces a service time disadvantage over a route.

Commercial Invoice

A document created by sellers. An official document used to indicate, among other things, the names and addresses of buyers and sellers, the product(s) being shipped, and their value for customs, insurance, or other purposes.

Offer

A document that describes a business transaction to be performed. An example would be a request to a carrier to pick up goods for shipment.

Consular Invoice

A document, required by some foreign countries, describing a shipment of goods and showing information, such as the consignor, consignee, and value of the shipment. This invoice is certified by a consular official of the foreign country, used by the country's custom.

Cabotage

A federal law requiring coastal and inter-coastal traffic to carry goods in U.S.-built and registered ships.

Carrier

A firm which transports goods or people via land, sea or air.

Absolute Minimum Charge (AMC)

A fixed cost presented in contracts listed as the minimum amount accepted.

Lighter

A flat-bottomed boat designed for cross-harbor or inland waterway freight transfer.

Consideration

A form of mutual obligation in which parties are bound by contracts to perform at a certain level and agree to carry out their responsibilities. Considerations can hold value and give contracts legal validity.

Freight Broker

A freight broker's main purpose is to serve as a conduit for connecting freight carriers with shippers, similar to buying plane tickets using third-party websites

Fleet

A group of transportation modes working together to accomplish a similar goal (usually to provide deliveries for customers).

Contract

A legally binding agreement between two or more parties to provide specific products or services.

Asset Utilization

A measure of how well a company is using its resources. The quality of the company's management can also be inferred from this measurement.

Ton-Mile

A measure of output for freight transportation; it reflects the weight of the shipment and the distance it is hauled. This metric is calculated by multiplying the amount of good shipped (in tons) and distance traveled (in miles).

Bulk Carrier

A merchant ship specifically designed to transport unpackaged bulk cargo in its cargo hold, such as grains, coal, ore, and cement.

Client

A personal computer or smartphone is a client. At the other end of the connection are large computers known as servers, which store information a client would request.

Zone-to-Zone Pricing

A pricing system where shipping origins and destinations are grouped into specific zones. The shipper will pay the inter-zone rate between these zones.

Mileage Rate

A rate based on the number of miles the commodity is shipped

Federal Maritime Commission

A regulatory agency controlling services, practices, and agreements of international water common carriers and noncontiguous domestic water carriers.

Indirect Cost

A resource or activity cost, such as operation costs and overhead. This cost cannot be directly traced to a final cost object because no direct or repeatable cause-and-effect relationship exists. An indirect cost uses an assignment or allocation to transfer cost.

Hedging

A risk strategy firms use to reduce the amount of exposure to risks. Companies do this by choosing to spread their business across multiple carriers instead of relying on a smaller amount of suppliers or vendors for product inputs.

Commercial Motor Vehicle

A self-propelled or towed motor vehicle used on a highway interstate or intrastate commerce to transport passengers or property when the vehicle falls into one of the categories identified by the FMCSA.

Hours of Service

A series of guidelines about how many hours, drivers are allowed to operate their commercial vehicle.

Process

A series of time-based activities that are linked to complete a specific output.

Pooled Distribution

A shipping term for the practice of combining shipment from multiple shippers into a truckload in order to reduce shipping charges.

Pallet-Rack

A single or multi-level structural storage system that is utilized to support high stacking of single items or palletized loads.

Reverse Logistics

A specialized segment of logistics focusing on the movement and management of products and resources after the sale and delivery to customers and includes product returns for repair and/or credit.

Best Practice

A specific process or group of processes that have been recognized as the best method for conducting an action. Best practices may vary by industry or geography, depending on the context.

Hazardous Material

A substance or material the USDOT has determined to be capable of posing a risk to health, safety, and property when stored or transported in commerce.

Barcode

A symbol consisting of a series of printed bars representing values. A system of optical character reading, scanning, and tracking of units by reading a series of printed bars for translation into a numeric or alphanumeric identification code. A popular example is the UPC code used on retail packaging.

Global Positioning System

A system which uses satellites to precisely locate an object on earth. Used by trucking companies to locate over-the-road equipment.

National Motor Freight Classification

A tariff that contains descriptions and classifications of commodities and rules for domestic movement by motor carriers in the U.S.

Derived Demand

A term in economics in which demand for one good or service occurs as a result of demand for another. For example, demand for coal leads to derived demand for mining, as coal must be mined for coal to be consumed.

Prospect

A term that refers to being a prospective or potential customer.

Reefer

A term used for refrigerated vehicles.

Full Container Load

A term used when goods occupy a whole container.

On-Time Delivery

A time metric defined as the percentage of orders received on time by the company from its suppliers (inbound), or delivered on time to the company's customers (outbound).

Cost, Insurance, Freight

A trade term requiring the seller to arrange for the carriage of goods by sea to a port of destination, and provide the buyer with the documents necessary to obtain the goods from the carrier. See also INCOTERMS.

Bill of Lading

A transportation document containing the terms and conditions between shippers and carriers: also referred to as a contract of carriage.

Owner-Operator

A trucking operation in which the owner of the truck is also the driver of the truck.

Asset-Based Carrier

A type of 3PL who moves a company's freight on their own trucks and stores them in their own warehouses.

Regulated Shipper

A type of cold chain technology that can hold products at an exact temperature for either 36 or 72 hours.

Roll-On, Roll-Off

A type of ship designed to permit cargo to be driven on the ship at origin and off the ship at destination; used extensively for the movement of automobiles.

Standard Carrier Alpha Code

A unique 2 to 4-letter code assigned to transportation companies for identification purposes

Customer Service

Activities between buyers and sellers to enhance or facilitate the sale or use of sellers' products or services.

Merchant Ships

Also known as bulk carriers and are specially designed to transport unpackaged bulk cargo in their cargo holds (e.g., grains, coal, ore, and cement).

Motor Carrier

Also referred to as common carriers, an enterprise that offers service via land motor carriage.

Currency Adjustment Factor

An added charge assessed by water carriers for currency value changes. It is sometimes applied when currencies need to be converted.

Bunker Adjustment Factor

An additional surcharge levied on the shippers to compensate for fluctuations in the price of ships' fuel; this is also called a bunker surcharge.

Single Shipment

An additional surcharge that is added when there is no (or limited) potential of repeat business.

Liquefied Natural Gas

An alternative fuel source created by chilling natural gas and squeezing it down to 1/600 of its original volume. Natural gas is considered one of the most environmentally friendly fossil fuels available.

Freight-All-Kinds

An approach to rate-making in which the ante is based only upon the shipment weight and distance; widely used in trailer on a flat car services.

Modal Optimization

An emerging field of transportation management that attempts to use the most efficient transportation modes available.

Boxcar

An enclosed rail car typically 40 to 50 feet long used for packaged freight and bulk commodities.

Balance of Freight

An ideal situation where freight going to a destination matches the amount going back to the starting point.

Regulation

An important guideline that must be followed in transportation industries in order to remain lawful, conduct business smoothly, and keep everyone in the transportation industry safe.

Supplier

An individual or an organization who supplies goods or services to companies.

Distribution Center

An inventory holding warehouse facility for manufacturing.

Freight Forwarder

An organization providing logistics services as an intermediary between shippers and carriers, typically on international shipments.

National Motor Freight Traffic Association

An organization that publishes the National Motor Freight Classification and issues SCACs.

Decline

As demand continues to drop, companies try to adopt product innovations to keep customers interested, but eventually, products do not appeal or meet customers' expectations. At this stage, cost is a critical factor.

Fuel Surcharge

Assessed to cover unexpected rises in price of fuel (typically diesel fuel).

Inventory

Components, raw materials, work in process, finished goods, and supplies required for the creation of goods and services.

Meeting of the Minds

Contract negotiations in the acceptance phase in which offers and counteroffers are exchanged until both sides reach an agreement.

Free on Board

Contractual terms between buyers and sellers, which define where title transfers take place.

Raw Materials

Crude or processed material that can be converted by manufacturing, processing, or both, into new and useful products.

Free Carrier

Document requiring sellers to fulfill certain responsibilities when products are delivered to carriers.

Electronic Logging Device

EDL is an electronic solution that enables professional truck drivers and commercial motor carriers to easily track Hours of Service (HOS) compliance. It is intended to help create a safer work environment for drivers, and make it easier, faster to accurately track, manage, and share records of duty status. ELD connects to the truck's engine to record if the truck is in motion.

Federal Motor Carrier Safety Administration

Enforces safety regulations for commercial motor vehicle drivers and vehicle safety.

Cash Flow and Growth Management Measures

Figures and ratios used by companies to measure how much cash flow exist (i.e., the amount of cash available) and the overall financial health of the company from an accounting perspective. This measure is used in determining the economic bottom line.

Capitalization Measures

Figures and ratios used to measure the amount of capital a company has on its balance sheets. This measure is used in determining the economic bottom line.

Liquid Residue Measures

Figures and ratios used to measure the amount of liquid remaining after processing or conversion. This measure is used in determining the environmental bottom line.

Solid Residue Measures

Figures and ratios used to measure the amount of particulate matter emitted during processing.

Material Use Measures

Figures and ratios used to measure the amount or efficiency of materials used during a process. This measure is used in determining the environmental bottom line.

Gaseous Residue Measures

Figures and ratios used to measure the creation of various gases and their subsequent residual remains.

Energy Use Measures

Figures or ratios used to measure energy use or the efficiency of energy use. This measure is used in determining the environmental bottom line.

Demand Management Measures

Figures used to measure the effects or efficiency of elements in a demand plan. This measure is used in determining the economic bottom line.

Transportation Operations

Focuses on the timely movement of materials and products within an organization and between organizations.

Customs and Border Protection

Formed during the creation of the Department of Homeland Security in 2003, customs and border protection consists primarily of the customs inspection function formerly performed by the U.S.

Freight

Goods being transported from one place to another.

Risk Management

Identifying, evaluating, and ranking the priority of risks followed by synchronized and cost-effective application of resources to lessen, monitor, and control the probability and/or impact of unfortunate events.

Growth

In this stage the sales of products are expanding.

Terminal

Includes places, either covered or not (e.g., quays, warehouses, container yards, and road, rail or air cargo terminals), in which goods are made available to buyers after being unloaded.

Electronic Data Interchange

Intercompany, computer-to-computer transmission of business information in a standard format.

Ocean Transportation Intermediaries

Intermediary companies between the shipper and the carrier that are either freight forwarders or carriers available to the public that do not own their own vessels.

INCOTERMS

International terms of sale developed by the International Chamber of Commerce to define sellers' and buyers' responsibilities.

Server

Large computers located at the other end of Internet connections.

Packing List

List showing merchandise packed and merchandise particulars. Normally prepared by shippers but not required by carriers.

Return

Material that has been rejected by customers or buyers' inspection department and is awaiting shipment back to the supplier for a repair or replacement.

Cost Metrics

Measures of a company's financial performance

Triple Bottom Line (TBL) Metrics

Metrics that measure ecological and social performance in addition to financial performance.

Pipeline

Mode of transportation used for handling inter-city ton-mileage of freight, including crude oil, refined oil, gasoline, and natural gas.

Fixed Cost

Non-fluctuating costs with business volume in the short run. Fixed costs include items such as depreciation on buildings and fixtures.

Reporting

Occurs when TMS helps a shipping manager by tracking carrier performance, customer service, cost, and other measures of carrier quality.

Rating

Occurs when TMS helps shipping managers choose the best cost carriers by factoring in issues such as FAK groupings, discounts, and accessories.

Shipment Jettisoning

Occurs when cargo is discharged because the master of an ocean-going vessel may feel that the integrity or safety of the vessel or crew is at risk.

Risk Reduction

Occurs when companies participate in hedging or postponement strategies in order to reduce the amount of risk presented in transportation industries.

Product Pilferage

Occurs when packages or items are stolen by the people who were trusted with them (e.g., freight handlers, equipment operators, and managers).

Product Loss

Occurs when products are lost for any number of reasons, including piracy on ships, pilferage, and others.

Import License

Official authorization issued by a government agency which allows for the transport of goods across their national boundaries. Licenses may be required for all, or only specific classes, of commodities.

U.S. Coast Guard

One of the five armed forces of the U.S. and the only military organization within the Department of Homeland Security. It safeguards U.S. maritime interests around the world and evaluates, boards, and inspects commercial ships as they approach U.S. waters. The Captain of the Port is the Coast Guard officer responsible for the security and safety of vessels and waterways in each U.S. port area.

Third-Party Logistics Provider

Outsourcing of a company's logistics operations to a specialized company. Services they provide are transportation, warehousing, cross-docking, inventory management, packaging, and freight forwarding.

Eutectic Plate

Plates similar to gel packs and used in cold chain technology.

Routing

Process of determining how shipment will move between origin and destination.

Marine Terminal Operator

Provides facilities such as wharfage, docks, or warehouses to ocean carriers.

Uniform Commercial Code

Provides the legal basis for the terminology used in domestic U.S. transactions between parties in a transaction.

Automatic Identification and Data Capture (AIDC) System

Provides tools for automatically identifying objects, collecting data about them, and entering data directly into computer systems. Technologies usually considered a part of AIDC include barcodes and RFID.

Sustainability

Refers to efforts a company makes related to conducting business in a socially and environmentally responsible manner.

Air Cargo

Refers to freight moved via air transportation.

Software

Refers to the brain of the machine—the programs that make the machine run, such as the operating system.

Lighter Aboard Ship

Refers to the practice of loading barges (also called lighters) onto larger vessels for transport.

Free Alongside Ship

Requires sellers to deliver products alongside a given vessel at a port.

Less-Than-Container Load

Shipment that is less than a complete container load.

Door-to-Door Service

Shipping service in which freight is collected at a point of origin and delivered directly to the destination without any intermediate stops.

Placard

Sign attached to the outside of a vehicle that indicates items, such as vehicle registration information or whether hazardous materials are being transported.

Lane Departure Systems

Similar to collision avoidance systems, these systems are designed to detect the likelihood of departure from drivers' lanes. Once they detect a possible lane drift, cars with these systems may warn the driver or take preventive action, depending on how they are programmed.

Consumer

Someone who purchases goods and/or services for personal use.

20-Foot Equivalent Unit (TEU)

Standard unit for counting containers of various capacities and for describing the capacities of container ships or terminals.

Centweight

Tariffs are generally quoted on a 100-pound basis.

Collision Avoidance Systems

Technological development systems designed to detect the likelihood of upcoming crashes or departures from drivers' lanes. Once these systems detect possible crashes or lane drifts, they warn the drivers to take preventive action. Collision detection systems use radar to keep track of the distance between vehicles and the vehicles in front of them.

Delivered at Terminal

The INCOTERM indicating it is the seller's responsibility to clear the goods for export and pay loading, freight, and unloading charges at the designated terminal.

Delivered at Place

The INCOTERM indicating sellers are discharged of responsibilities when goods are available to buyers on the mode of transportation where the goods have arrived

Risk Avoidance

The act of reducing the amount of risk so much that a task is completely avoided or not completed.

Risk Transfer

The act of transferring risk over to other parties that are created to receive and handle those risks (e.g., insurance companies).

Procurement

The activities associated with acquiring products or services.

Average Vehicle Turnaround Time

The average time elapsed between when a vehicle arrives at a company's facility and when it leaves the facility. This time metric can be calculated by adding up vehicle turnaround times and dividing by the total number of vehicles arriving at or leaving from the facility.

Ex Works

The buyer assumes total responsibility for the shipment. Delivery is accomplished when the product is handed over to the buyer's representative at the shipper's plant or distribution center. The buyer is responsible for the freight costs, insurance, export and import clearance, and customs charges.

Detention/Demurrage

The carrier charges and fees applied when rail freight cars, ships, and carriers are retained beyond a specified loading or unloading time.

Cost and Freight

The cost of merchandise and freight costs. Sellers are responsible for the product and the transportation costs to the destination point. See also INCOTERMS.

Freight Cost

The cost of transporting goods, which is reflective of a number of factors excluding normal transportation costs.

Postponement

The delay of final activities (e.g., assembly, production, and packaging) until the latest possible time.

Supply Chain Management

The design and management of all activities involved in sourcing and procurement, conversion, and all logistics management activities.

Freight Tariffs

The fees and rules applied by a carrier for its services transporting freight.

End Customer

The final consumer who purchases the product.

Dimensional Factor

The freight carriers' opinions of what items should weigh based on their volume.

Transportation Manager

The generic term used to refer to the person responsible for the various roles involved in transportation management.

Objective

The goal that the manager is ultimately interested in achieving for the company.

Rate Basis Point

The major shipping point in a local area; points in the local area are considered to be the rate basis point.

Delivered Duty Paid

The maximum obligation assumed by sellers. Sellers are responsible for risk and charges up to the consignors' door.

Tanker

The most common type of bulk carrier that moves bulk liquid cargo, such as petroleum.

Inbound Logistics

The movement of materials from suppliers and vendors into production processes or storage facilities.

Passive Shipper/Package System

The packing technology used for cold chain transportation that typically consists of a box with gel packs, freezer packs, and/or dry ice within an insulated box; these can be single use or regulated.

Trailer

The part of the truck that carries the goods.

Manufacturing

The phase of the product life cycle in which a prototype is built and tested, and then the mass production of the product is completed.

Transportation

The physical movement of people and goods between origin and destination points, thereby creating time and place utilities.

Operations

The planning and manufacturing (conversion) of goods.

Pallet

The platform that cartons are stacked on and then used for shipment or movement as a group. Pallets may be made of wood or composite materials. Pallets have electronic tracking tags, and most are recycled.

Headhaul

The portion of a transport trip typically associated with trucking, which is incurred when a vehicle leaves toward its destination from its point of origin.

Backhaul

The portion of a transport trip typically associated with trucking, which is incurred when returning a vehicle to its point of origin. Ideally, carriers will have freight to carry back, but if the trip is empty, it is called deadhead.

Merge in Transit

The process of combining or merging shipments from multiple suppliers that are going directly to the buyer or to the store, bypassing the seller.

Logistics

The process of planning, implementing, and controlling procedures for the efficient and effective transportation and storage of goods, services, and related information from the point of origin to the point of consumption for the purpose of conforming to customer requirements.

Sourcing

The process of purchasing or procuring products and services.

Conversion

The process of taking one or more materials and processing them to create a new materials or products.

Outbound Logistics

The process related to the movement and storage of products from the end of the production line to the end user.

Purchase Order

The purchaser's authorization used to formalize a purchase transaction with a supplier

Cost Per Unit Shipped

The ratio of shipping costs divided by the total number of units of goods shipped in a given time period.

Modal Split

The relative use made of the modes of transportation; these statistics used include ton- miles, passenger miles, and revenue.

Deadhead

The return of an empty transportation container back to a transportation facility. This is a commonly used description of an empty backhaul.

Acceptance

The second important phase of creating a contract after the offer phase. The recipient of the offer must accept the offer in order to move forward with creating a contract in the consideration phase.

Break-Bulk

The separation of a single consolidated bulk load into smaller, individual shipments for delivery to the ultimate consignees.

Weight Break

The shipment volume at which the LTL charges the minimum TL weight.

Base Rate

The starting price for a negotiation.

Quoted Rate

The starting price for negotiation.

Tractor

The tractor is the driver compartment and engine of the truck. It has two or three axles, depending on the type of tractor used.

Link

The transportation method used to connect the nodes (plants, warehouses) in a logistics system.

Cold Chain

The transportation of items requiring a constant temperature, either cold or hot, to keep products fresh, safe, and healthy. Cold chain technology also handles the diagnostics, research, and investigational materials mandatory for controlled temperatures.

Intrastate Commerce

The transportation of persons or property between points within a state.

Interstate Commerce

The transportation of persons or property between states.

Radio Frequency Identification

The use of radio frequency technology, including RFID tags and tag readers to identify objects.

Federal Motor Carrier Safety Regulations

These regulations are set by the FMSCA for commercial freight, the FMSCA has issued several regulations designed to minimize incidents caused by commercial motor carriers operating on public roads: including cell phone bans and emergency equipment regulations.

Terminal Handling Charge

This covers the charges for the movement of the freight when it is on the pier .

Average Transit Time

This time metric can be calculated by taking the total time, from pickup to delivery, of a shipment for every single shipment and dividing it by the total number of shipments.

On-Time Pickup

This time metric is calculated by dividing the number of pick-ups that the freight carrier makes on time in a given time period by the total number of shipments in that time period.

Trailer on a Flatcar

Transport of tractor trailers with their loads on specially designed rail cars.

Transportation Security Administration

Transportation Security Administration was created to strengthen the security of the nation's transportation systems and ensure the freedom of movement for people and commerce. Together with the customs and border protection, Transportation Security Administration is responsible for Operation Safe Commerce, which attempts to verify the contents of containers at their point of origin, ensures the physical integrity of the containers in transit, and tracks the movement of cargo and passenger transportation from origin to destination.

Transportation Supervisors

Transportation personnel who are usually with transportation service providers and responsible for dispatch duties of the drivers, driving supervision, monitoring of safety, and HOS and other USDOT regulation compliance.

Dispatchers

Transportation personnel who route trucks and manpower efficiently in order to meet customer needs promptly and responsively. Dispatchers often have specialized knowledge regarding transportation requirements for various specialized commodities.

Intermodal Transportation

Transporting freight by using two or more transportation modes, such as a truck and rail or a truck and oceangoing vessel.

Less-Than-Truckload

Trucking companies that consolidate and transport smaller shipments of freight by utilizing a network of terminals and relay points.

Truckload

Trucking companies that move full truckloads of freight directly from the point of origin to destination.

Team Drivers

Two drivers who are assigned to one truck and alternate driving duties

Law of Large Numbers

Used by insurance companies to gather risk from many different customers into a more predictable risk profile.

Next Flight Out Price

Usually much more expensive than other prices offered because of the expedient shipping.

Active Shipper/Package System

Utilizes an electronic, temperature-controlled container with a fan and dry ice; this system usually has two refrigeration units.

Decision Variables

Variables the end user or transportation manager can control.

Demand

What customers or users actually want.