Freight Broker Terms

F.O.B. Destination

"F.O.B. Destination" changes the location where title and risk pass. Under this arrangement, title and risk remain with the seller until they have delivered the freight to the delivery location specified in the contract.

F.O.B Origin

"F.O.B. Origin" means that title and risk pass to the buyer at the moment of the seller"s delivery to the carrier. The parties may agree to have title and risk pass at a different time or to allocate freight charges by a written agreement.

Claim or Cargo Claim

A "Cargo Claim" is a demand made upon a transportation company for payment, due to freight loss or damage alleged to have occurred while shipment was in the possession of carrier. Pursuant to the National Motor Freight Classification (NMFC) Uniform Bill of Lading, all cargo claims must be filed within 9 months.

Freight Broker

A "Freight Broker" is any person who sells transportation without actually providing it. The term usually refers to an agent for TL shipments, matching small shippers with carriers. Freight brokers often do not accept any responsibility for their shipments. (Also see Freight Forwarder and Shipper"s Agent). Any person who sells transportation without actually providing it. Usually refers to agent for TL shipments, matching small shippers with carriers. Freight brokers often do not accept any responsibility for their shipments.

Shipping Agent or Freight Agent

A "Shipper"s Agent" is not a carrier, freight forwarder, or broker. Shipper"s agents generally arrange for the transportation of truckload or container load shipments. They work under a freight broker using his DOT authority. Shipper"s agents coordinates all aspects of an intermodal move, hiring drayage at both ends, and providing shippers with a single invoice.

Tariff

A "Tariff" is a document setting forth applicable rules, rates, and charges for the movement of goods. A tariff sets forth a contract of carriage for the shipper, the consignee, and the carrier. Since January 1, 1996, motor carriers are not required to "publish" tariffs. However, in accordance with federal law, tariffs must be provided to a shipper upon request.

Free Along Side (F.A.S.)

A basis of pricing meaning the price of goods alongside a transport vessel at a specified location. The buyer is responsible for loading the goods onto the transport vessel and paying all the cost of shipping beyond that location.

Bill of Lading (B/L)

A bill of lading is a binding contract that serves three main purposes: (1) a receipt for the goods delivered to the carrier for shipment; (2) a definition or description of the goods; and (3) evidence of title to the relative goods, if "negotiable". Complete the BOL online.

Broker or Freight Broker or Freight Forwarder

A broker is an independent contractor paid to arrange motor carrier transportation. A broker may work on behalf of a carrier or shipper.

Bonded Carrier

A carrier licensed by U.S. customs to carry customs-controlled merchandise between Customs points. It's very important to only work with bonded carriers.

Connecting Carrier

A carrier which interchanges trailers with another for completion of shipments.

Doubles

A combination of two trailers pulled by a power unit. Usually refers to a power unit pulling two 28" trailers. See also Rocky Mountain Double and Turnpike Double. This is also a vehicle configuration in which a tractor pulls two trailers connected by a dolly or jifflox.

Turnpike Double

A combination vehicle consisting of a tractor and two trailers of 45 to 48 feet.

Rocky Mountain Double

A combination vehicle consisting of a tractor, a 45 to 48 foot semitrailer and a shorter 28 foot semitrailer

Fifth Wheel

A device used to connect a semi-trailer and tractor together.

Operating Ratio

A measure of profitability based on operating expenses as a percentage of gross revenues.

Vehicle-Mile

A measurement of the total miles traveled by all vehicles in an area. Generally applies to intercity movements only

Dock

A platform, generally the same height as the trailer floor, where trucks are loaded and unloaded.

Less-Than-Truckload or Less-Than-Load (LTL)

A quantity of freight less than that required for the application of a truckload rate. The historical definition for LTL freight is shipments under 10,000 pounds. LTL carriers are carriers which specialize in shipments under 10,000 pounds. However, competition from other freight carriers restricts shipments for most LTL carriers to the range between 300 and 3000 pounds.

Tracer

A request that a carrier locate a shipment to speed its movement or to establish proof of delivery, or a request for an answer to a previously filed claim.

COD

A shipment for which the carrier is responsible for collecting the sale price of the goods shipped prior to delivery.

Order Notify (also called Negotiable Bill of lading)

A shipment requiring the consignee to surrender the original endorsed bill of lading at the time of delivery. This is a method for the shipper to use to guarantee payment for goods shipped. More commonly used with truckload shipments.

Twin Trailer (AKA short semi-trailer)

A short semi-trailer (under 29") designed to be operated as part of a combination vehicle with a tandem trailer of similar length

Cartage Agent

A subcontracted carrier who performs pickup or delivery in areas where the contracted motor carrier does not service.

Weight-distance Tax

A tax basing the fee per mile on the registered gross weight of the vehicle. Total tax liability is calculated by multiplying this rate times miles traveled

Ton-Mile Tax

A tax calculated by measuring the weight of each truck for each trip. The gross weight is assigned a tax rate which is multiplied by the miles of travel.

Specialized Carrier

A trucking company franchised to transport articles which, because of size, shape, weight, or other inherent characteristics, require special equipment for lading, unloading or transporting.

Enroute

A trucking term meaning they are on the way.

Non-vessel operating common carriers (NVOCC)

A type of ocean freight forwarder. NVOCCs books space in large quantities for a reduced rate, then sell space to shippers in lesser amounts. NVOCCs consolidate smaller shipments into a container load that ships under one bill of lading.

Straight Truck

A vehicle with the cargo body and tractor mounted on the same chassis

Consignee

Also called the "shipper". This is the person or place where a shipment will be transferred for the last time (destination); the individual or organization to who the freight is addressed.

Consignor

Also called the destination. This is the person or place where a shipment will be transferred for the last time (destination); the individual or organization to who the freight is addressed.

Drayage

Also known as connecting road haulage. 1. The hauling of a load by a cart with detachable sides (dray). 2. Road transportation between the nearest railway terminal and the stuffing place.

Free On Board (F.O.B.)

An acronym for "free on board" when used in a sales contract. The seller agrees to deliver merchandise, free of all transportation expense, to the place specified by the contract. Once delivery is complete, the title to all the goods and the risk of damage become the buyer"s.

Air Freight Forwarder/ Air Forwarder

An air freight forwarder provides pickup and delivery service under its own tariff, consolidates shipments into larger units, prepares shipping documentation, and tenders shipments to the airlines. Typically, air freight forwarders do not operate their own aircraft and are often referred to as indirect air carriers. Airlines consider the forwarder to be the shipper, since the air freight forwarder tenders the shipment.

Air Waybill

An air waybill is a shipping document used by the airlines. Similar to a bill of lading, the air waybill is a contract between the shipper and airline that states the terms and conditions of transportation. The air waybill also contains shipping instructions, a description of the commodity, and transportation charges.

Bogie

An auxiliary axle assembly having a fifth wheel used for purpose of converting a semitrailer to a full trailer. Dollies can be used to haul multiple trailers behind a single power unit. (Also referred to as dolly)

Dolly

An auxiliary axle assembly having a fifth wheel used for purpose of converting a semitrailer to a full trailer. Dollies can be used to haul multiple trailers behind a singlepower unit.(also referred to as Bogie) . Converter that provides an extra axle and fifth wheel and is used to connect multiple trailers.

Combination Vehicle

An equipment configuration which includes separate power unit (tractor) and at least one trailer

Exceptions

An exception is any delivery in which the receiver or driver notes a problem on the delivery receipt before signing it. Typically, exceptions concern shortages and damages.

Freight Forwarder

An individual or company that accepts less-than-truckload (LTL) or less-than-carload (LCL) shipments from shippers and combines then into carload or truckload lots. Designated as a common carrier under the Interstate Commerce Act. Freight forwarders issue a bill of lading for shipments and accept responsibility for cargo. A freight forwarder combines less-than-truckload (LTL) or less-than-carload (LCL) shipments into carload or truckload lots. Freight forwarders are designated as common carriers. They also issue bills of lading and accept responsibility for cargo. The term may also refer to the company that fills railroad trains with trailers. (Also see Freight Broker and Shipper"s Agent.)

Carmack

An industry term regarding loss or damage of cargo. Carmack is governed by 49 U.S.C 14706, which states that a motor carrier must (1) issue the Bill of Lading and (2) pay the actual loss or injury to the property. However, carriers do limit their liability for release value commodities, and can limit their damages to $25.00 per pound or $100,000 per shipment.

UN Number

An internationally accepted 4-digit number used to identify hazardous material.

Freight

Any commodity or goods being transported.

Third Structure Tax

Any tax on road users other than registration fees or fuel taxes. See, for example, ton-mile tax and weight-distance tax.

Articles of Extraordinary Value

Carriers are not liable for "documents, coin money, or articles of extraordinary value" unless the items are specifically rated in published classifications or tariffs. Exceptions may be made by special agreement. If an agreement is made, the stipulated value of the articles must be endorsed on the bill of lading. Articles may include precious stones, jewels, and currency. Many tariffs include restrictions on commodities with values in excess of a specified amount.

Truck Classifications

Class I Truck = A truck with gross vehicle weight (GVW) of 6,000 lbs or less. Class II Truck = A truck with gross vehicle weight (GVW) of 6,001-10,000 lbs Class III Truck = A truck with gross vehicle weight (GVW) of 10,001-14,000 lbs Class IV Truck = A truck with gross vehicle weight (GVW) of 14,001-16,000 lbs Class V Truck = A truck with gross vehicle weight (GVW) of 16,001-19,500 lbs Class VI Truck = A truck with gross vehicle weight (GVW) of 19,501-26,000 lbs Class VII Truck = A truck with gross vehicle weight (GVW) of 26,001-33,000 lbs Class VIII Truck = A truck with gross vehicle weight (GVW) of over 33,000 lbs

Exempt Commodity

Commodities that are exempt from federal regulation, such as agricultural and forestry products.

State of Domicile

Companies - The state in which the carrier maintains its headquarters. Drivers - the state in which a driver resides.

Common Carrier

Company that provides transportation services to the public in return for compensation.

Break-Bulk Terminal

Consolidation and distribution center. This is typically a facility where loads are unloaded and then re-consolidated into shipments. These shipments usually come from both its smaller terminals and from other break-bulks. Often each city or region could have it's own break-bulk terminal.

COFC

Container on (rail) flat car. A form of intermodal movement of freight using a box suitable for use on rail cars, trailer frames, and container ships. Containers come in many sizes. International containers which are used on ships usually have height and width of eight feet. Length can vary, but 20 and 40 foot lengths are the most common. US domestic containers are generally taller than international containers.

Waybill

Description of goods with a common carrier freight shipment. A waybill is a non-negotiable document prepared by or on behalf of the carrier at the point of shipment origin. The document shows point of origin, destination, route, consignor, consignee, description of shipment, and amount charged for the transport service. See air waybill.

Rating

Determination of the correct legal rate for a shipment

Delivery Receipt

Document dated and signed by consignee or its agent at the time of delivery stating the condition of the goods at delivery. The signed delivery receipt is returned to the driver for retention at the terminal. The customer retains the remaining copy.

Revenue

Freight charges received by carrier for transportation of freight.

Multimodal Transportation (also called Intermodal)

Freight movement involving more than one mode of transportation (ground, air, rail, ocean).

Payment Terms

Generally, the shipper is responsible for payment of prepaid shipments and the consignee is responsible on collect shipments unless a third party is indicated as payor on the shipping papers.

Hazardous Material

Hazardous materials are defined by the U.S. Department of Transportation in accordance with the Federal Hazardous Material Law. A substance or material may be designated as hazardous if the transportation of the material in a particular amount and form poses an unreasonable risk to health and safety or property. Learn more about hazmat cargo at http://hazmat.dot.gov.

CWT

Hundred weight, or one hundred pounds

National Motor Freight Classification (NMFC)

Industry standard tariff published by motor carriers containing rules, descriptions, and rating on all commodities moving in commerce; used to classify freight for the purpose of rating the freight bill. More information about freight classes and the NMFC can be found at www.nmfta.org. To determine the classification of your freight, contact your local service center.

ISTA

Intermodal Surface Transportation Efficiency Act of 1991.

ICC

Interstate Commerce Commission The federal body charged with enforcing Acts of Congress affecting interstate commerce. Because of recent changes in regulation, this body may be obsolete

LTL Carrier (Less-than-load motor carrier)

LTL carriers are carriers which specialize in shipments under 10,000 pounds. However, competition from other freight carriers restricts shipments for most LTL carriers to the range between 300 and 3000 pounds

Truckload (TL)

Large-volume shipment from a single customer that weighs over 10,000 pounds or takes up the trailer space so no other shipment can be loaded. Also a quantity of freight required to fill a truck. Or when used in connection with freight rates, the quantity of freight necessary to qualify a shipment for a truckload rate. Historical definition is a shipment of 10,000 pounds or more.

Pickup & Delivery (P&D)

Local movement of freight between the shipper (or pickup point) and the origin terminal or between the destination terminal and the consignee (or delivery point). Info See the trailer dimensions.

Find an LTL Motor Carrier

Looking for a carrier that requires an LTL shipment to their desired destination or surrounding cities.

Find Freight

Looking for a commodity being shipped from one destination to another.

Linehaul

Movement of freight between cities or between break-bulk terminal facilities. Usually this is between the origin terminal and destination terminal. But it is does not refer the initial pick-up or final delivery of the freight.

Overage

Number of units received is in excess of the quantity shown on shipping documents. Overages should not be delivered to a customer. They"re returned to the terminal unless more info is received while the driver is out.

Overcharge/Undercharge Claim

Overcharge or undercharge claims are demands upon a transportation company for the refund of an overcharge from the erroneous application of rates, weights, and assessment of freight charges.

Commodity

Referees the to goods being shipped. These could be any article of commerce.

In Bond

Shipments move under bond from point of entry to an interior U.S. destination for clearance or to another border location for clearance.

Exclusive Use

Shipper pays a premium rate for the sole use of the trailer. The trailer will be sealed at loading and the seal number is recorded on the manifest. The seal number is verified before the trailer is unloaded at destination. When a shipper requests an exclusive use trailer, no other freight may be added to the unit even if space permits.

Concealed Loss

Shortage or damage not evident at delivery. Help with concealed loss.

Dispatch/Dispatcher

The act of sending a driver on his/her assigned route with instructions and required shipping papers. Contact is maintained with the driver throughout day via phone, pager, radio, satellite communication, or cellular phone.

Gross Vehicle Weight (GVW)

The combined weight of the vehicle (tractor and trailers) and its cargo.

Power Units

The control and pulling vehicle for trailers or semitrailers.

Operating Expenses

The costs of handling traffic including both direct costs, e.g. driver wages and fuel; and indirect cots, e.g. computer expenses and advertising; but excludes interest expense.

Electronic Data Interchange (EDI)

The electronic transmission of routine business documents, such as purchase orders, invoices, and bills of lading, between computers in a standard format. The data formats, or transaction sets, are usually sent between mainframe computers. Learn more in the EDI Resource Center.

Interstate Commerce Commission (ICC)

The federal body charged with enforcing Acts of Congress affecting interstate commerce.

U.S. DOT (United States Department of Transprotation)

The government organization that oversees and regulates the transportation in the US. www.DOT.gov

Minimum Charge

The lowest charge for which a shipment will be handled after discount and/or adjustment.

GCW (Gross Combination Weight)

The maximum allowable fully laden weight of a truck and its payload. the most common classification scheme used by manufacturers and by states.

Backhaul

The most coveted and desirable of all loads. When a motor carrier has delivered a load from his home city to another city. Then instead of trying to drive home with an empty trailer, the will try to find a load going back to their home city.

Ton-Mile or Ton-Per-Mile

The movement of one ton of freight a distance of one mile. Ton-miles are computed by multiplying the weight in tons of each shipment transported by the distance hauled for each movement. Total ton-miles for a carrier are calculated by adding the figure for all movements.

Shortage

The number of units received is less than quantity shown on shipping documents. The outstanding shipment may be delivered later.

Overcharge Claims

The payor of the freight charges files an overcharge claim to dispute a discrepancy in charges that can stem from overpayment, weight or description corrections, etc...

Modal Share

The percentage of total freight moved by a particular type of transportation

Bill of Lading Exceptions

The terms and conditions of most bills of lading release carriers from liability for loss or damage arising from: (1) an Act of God, (2) the public enemy, (3) the authority of law, or (4) the act or default of the shipper. In addition, except in the case of negligence, a carrier will not be liable for loss, damage, or delay caused by: (1) the property being stopped and held in transit upon the request of the shipper, owner, or party entitled to make such request, (2) lack of capacity of a highway, bridge or ferry, (3) a defect or vice in the property, or (4) riots or strikes.

Piggyback

The transportation of highway trailers or removable trailer bodies on rail cars specifically equipped for the service. It is essentially a joint carrier movement in which the motor carrier forms a pickup and delivery operations to a rail terminal, as well as a delivery operation at the terminating rail head

Truck Tonnage

The weight of freight in tons transported by truck

Freight Bill

These are shipping document used to confirm delivery of the freight and indicate the terms of payment. They are given to the motor carrier. The freight bill gives description of the freight, its weight, amount of charges, taxes, and whether collect or prepaid. Charges paid in advance are called prepaid freight bills. They gives a description of the freight, its weight, amount of charges, taxes, and whether the bill is collect or prepaid. If bill is prepaid, freight charges are paid by shipper. If bill is collect, freight charges are paid by the receiver of the goods.

SIC Code

These are standard Industrial Classification Codes. It"s a classification of establishments by type of activity in which they are engaged; for the purpose of facilitating the collection, tabulation, presentation and analysis of data relating to establishments, e.g. SIC 42 Motor Freight Transportation and Warehousing SIC 421 Trucking,, Local and Long distance

Third-Party

Third-party other than the shipper or consignee that is ultimately responsible for paying the shipment charges.

Shipping Documents

This is a collection of documents that are needed for each load. They include a bills of lading (PDF), a packing slips (PDF), manifests, shipment bills and any necessary customs paperwork.

Freight Broker Software

This is a computer software program or web based program that helps you manage your freight brokerage. It will help find loads, find shippers, track loads, issue invoices, issue rate confirmations and much much more. Having the right frieght broker software is a tremendous time saver. Large, successful brokerages have long been using various forms of freight broker software. This software was developed to be installed on the main frame and/or on individual computers in offices to keep track of loads, accounting and other important items. The broker and each of his agents had to be individually trained to use the software. The software is complicated enough that the software company usually sends out special trainers to install the software on each machine, teach every broker and agent how to use it and constantly troubleshoot software problems unique to each machine. Just the training alone can sometimes take several days to complete. Of course costs put into the development of this software was large, the support staff required to keep it all running on the freight brokers' computers is also large and the training and sales team is also expensive. These costs are then passed on to the buyer / freight broker which makes it an extremely expensive software (tens of thousands of dollars) and affordable only to those with deep enough pockets. The rest of us had to fall back on pencils, paper and generic business management software. Lear more about freight broker software.

Progressive Rotating Order (PRO)

This is a tracking or invoice number used by many freight borkers and motor carriers to help identify unique loads in their system.

Jifflox/ Dolly

This is a type of truck converter that provides an extra axle and fifth wheel and is used to connect multiple trailers.

Accessorial Charges

This is also sometimes called the assessorial charges. These are charges made for performing services beyond normal pickup and delivery such as inside delivery or storage charges.

Origin

This is the location where the freight or load is originally picked up.

Break-Bulk

This is when loads are seperated into individual shipments for routing to different destinations. One example of this would be how UPS directs large shipments into it's regional centers where they are re-divided for delivery.

Break Bulk

To separate a composite load into individual shipments and route to different destinations;

Deck Trailers

Trailers with rows of tracking on each sidewall and deck load bars. The load bars fit into the tracks to form temporary "decks" on which freight can be loaded. Decks allow more freight to be loaded in the trailer, reduce damage, and speed loading and unloading.

Intermodal Transportation (AKA. Multimodal)

Transportation movement involving more than one mode, e.g. rail-motor, motor-air, or rail-water

Semitrailer

Truck trailer equipped with one or more axles and constructed so that the front end rests upon a truck tractor

Heavy Duty Truck

Truck with a gross vehicle weight generally in excess of 19,500 pounds (class 6-8). Other minimum weights are used by various laws or government agencies

Intercity Trucking

Trucking operations which carry freight beyond the local areas and commercial zones