When you’re getting into the E-commerce game, you might run across a lot of logistics terms and acronyms with which you’re unfamiliar. Even savvy entrepreneurs familiar with the shipping industry might need a refresher on some of the more obscure lingo. With that in mind, we’ve put together a handy glossary of common (and not so common) logistics terms that you should get familiar with.
Logistics Terms: A through C
AES (Automated Export System): A system used by U.S. exporters to electronically declare international shipments. The information goes to the Census Bureau to help put together export and trade statistics, and is shared with agencies involved in monitoring exports.
ASN (Advance Shipping Notice): A notification of pending deliveries, usually sent electronically. It lists the contents of a shipment, and often provides additional information such as product descriptions and packaging types. An ASN can help the recipient more efficiently receive and process the shipment.
AWB (Airway Bill): A receipt issued by international carriers or airlines that covers the transport of cargo from airport to airport. Some carriers, such as DHL Express, use the AWB number for tracking purposes. You can enter the AWB number on their website to track your shipments.
B2B (Business to Business): A term that refers to transactions between two businesses; in other words, when one business buys goods or services from another business.
B2C (Business to Consumer): A term referring to transactions between a business and the end-user of a product or service; for example, when you (the consumer) buy a car from an auto dealer (the business).
Barcode: An image consisting of lines and spaces printed on a product or package that contains encoded data. It can be read by electronic scanners and provides an easy way to transfer information about the package into the relevant computer systems.
BOL (Bill of Lading): A detailed list of goods included in a shipment. It acts as a receipt of freight services, a contract between a carrier and shipper, and a document of title. It’s required for all freight shipments.
Carrier: Any individual, company, or corporation engaged in transporting goods. Common carriers used by Simple Global include DHL, UPS, USPS, FedEx, and Globegistics.
CLP (Classification, Labeling, and Packaging): A European Union regulation that covers the classification, labeling, and packaging of dangerous chemical substances. It was established to align the Union’s regulations with the Globally Harmonised System of Classification and Labelling of Chemicals (GHS) established by the United Nations.
Logistics Terms: D through H
Dangerous Goods: Also called Hazardous Materials (HAZMAT), Dangerous Goods are products that could be harmful to people, animals, property, or the environment. Strict regulations govern the storage, handling, and shipping of dangerous goods. Special packaging and labeling is often required, and carriers generally charge an additional fee to ship such products.
DDP (Delivered Duty Paid): A transaction where the seller pays all the costs associated with transporting goods, including shipping, export and import duties, insurance, and any other expenses.
DDU (Delivered Duties Unpaid): A transaction where the seller pays all the costs associated with transporting goods, except import duties and taxes.
Dimensional (DIM) Weight: Also known as volumetric weight, DIM weight is a pricing technique for commercial freight transport. It uses an estimated weight calculated from the length, width, and height of a package. DIM weight reflects a package’s density, which is the amount of space it occupies in relation to its actual weight. When determining shipping fees, carriers use the DIM weight or the actual weight of a package, whichever is greater.
Dropshipping: An e-commerce fulfillment method in which products are shipped to customers directly from the manufacturer or wholesaler, not from the merchant. The merchant therefore has no need to keep inventory on hand.
EDI (Electronic Data Interchange): A standardized system for transferring information from one computer to another without human interaction. This allows businesses around the world to exchange documents—such as ASNs, invoices, and purchase orders—electronically.
ETA (Estimated Time of Arrival): A date and/or time when an order is expected to be delivered.
Harmonization Code: Numeric codes, developed by the World Customs Organization (WCO), used to classify and define internationally traded goods. These codes must be used when importing or exporting a good internationally.
Hub: A facility where transport-related services, such as collection & distribution, are performed. When a shipment leaves Simple Global, it is likely to be processed at one of the carrier’s hubs before it continues to its destination.
Logistics Terms: K through N
Kit: A grouping of two or more individual SKUs (products) to be sold together as a set. A new SKU, called a Kit SKU is created for the set. When an order for a Kit SKU comes in, all included products will be picked and packed together to be shipped to the customer.
Last-Mile Delivery: The movement of a package from a hub (see above) to its final destination (usually the purchaser’s residence). Often, last-mile delivery is handled by the local postal service. Example: Simple Global ships a package to you via DHL parcel. DHL picks the package up from our warehouse and takes it to a hub near your city. From there, USPS picks it up and delivers it to your home.
LOA (Letter of Authorization): A letter written by someone in authority to authorize a party to take a specific action. For example, Simple Global might write an LOA to a carrier to authorize an address change for a package that has already shipped.
Logistics: The detailed coordination of a complex operation involving many people, facilities, or supplies. For our purposes, logistics deals with managing inventory in motion or at rest.
LTL (Less than TruckLoad): Freight shipments, usually on pallets, that do not fill entire truck. Unlike Full Truckload carriers, LTL carriers usually transport freight from several different companies on the same truck. Freight may be transferred to various trucks (or, sometimes, trains or aircraft) before it reaches its destination.
Manifest: A detailed summary of the items included in a container or shipment.
Master Carton: A large outer carton that contains several smaller cartons. It protects the smaller cartons, and reduces the number of packages that need to be handled. It is sometimes called a “Parent.”
MSDS (Material Safety Data Sheet): A document that provides health and safety information about products, substances, or chemicals that are classified as hazardous materials or dangerous goods. Nowadays, it is standard to drop the “M” and refer to the document simply as an SDS.
MUID (Moving Unit Identity): A number assigned to each separate unit (box or pallet, for example) included in a single shipment coming into the warehouse. For example, if a client sends an ASN (see above) stating the shipment contains six pallets, the system generates six MUIDs and assigns one to each pallet, so that each pallet can be tracked separately in inventory. This assists in the receiving process and makes unloading more efficient.
NAFTA (North American Free Trade Agreement): A treaty involving the United States, Canada, and Mexico that removes trade barriers and tariffs between the three nations. NAFTA is ending in 2019 and is likely to be replaced by a new agreement called USMCA.
NDA (Next Day Air): A service provided by some carriers which guarantees air shipments to arrive on the day after they are shipped.
Logistics Terms: P through R
Pack: To put inventory into a box or envelope and seal it for shipping. This is the second stage in the order fulfillment process. A scan is performed that records this step in the system.
Pallet (or Skid): A small platform, usually 40×48 inches, on which goods are placed for handling within a warehouse or a transportation vehicle.
Pick: To pull inventory from the shelf for shipping. This is the first step in the order fulfillment process. The product is scanned when picked to record this step in the system.
POD (Proof of Delivery): Documentation from the carrier, usually delivered electronically, establishing the fact that the recipient has received the contents sent by the sender.
Pro-forma Invoice: A preliminary invoice sent in advance of a shipment. Typically, it describes the goods included in the shipment, along with the cost, weight, shipping charges, and other relevant details.
Quarantine: To separate an unsatisfactory item from inventory. Generally, an item is quarantined if the purchaser has returned it due to damage.
Receiving: The process of accepting a client’s inventory into the warehouse for storage and order fulfillment.
Returns: Products that have been returned by the consumer. These products are received and processed in the warehouse, possibly being returned to inventory or quarantined.
RMA (Return Merchandise Authorization): A process for returning a product in order to get a refund or replacement. Usually, the buyer contacts the distributor, who gives them an RMA number that must be included with the returned item.
RTI (Return to Inventory): Putting an item that has been previously picked or returned by the customer back into inventory.
RTO (Return to Origin): The process of returning an undeliverable package to the location from which it was sent, such as a Simple Global warehouse.
Logistics Terms: S Through W
SDS (Safety Data Sheet): See MSDS
Shipping Zones: Geographical regions, designated by carriers, on which shipping pricing is based. For example, USPS divides the 50 states into zones 1-8, where zone 1 is closest to the origin (where the package ships from), and zone 8 is furthest away. In general, the higher the zone, the more expensive the shipping fee.
SKU (Stock Keeping Unit): A unique identification number used to categorize products by certain criteria, such as brand, size, color, and model. Each SKU is assigned its own location in the warehouse. It’s pronounced “skew.”
SLA (Service Level Agreement): A contract between a service provider a client specifying the level of service to be provided. For example, Simple Global’s SLA states that we will reply to customer service inquiries within 24 hours.
SOP (Standard Operating Procedure): A detailed, step-by-step set of instructions created to help workers perform routine tasks.
Sort: To separate orders by carrier for shipping. Orders are scanned and placed in large containers (called Gaylords) assigned to different carriers (DHL, UPS, etc). Sorted orders are then picked up by the designated carrier. This is the final step in the order fulfillment process.
Third Party Logistics Provider (3PL): A company that provides logistics services (such as warehousing, shipping, and/or order fulfillment) to other businesses.
Tracking Number: A number assigned by a carrier that can be used to follow a package’s progress (via the carrier’s website) when it is in transit.
UPC (Universal Product Code): A scannable barcode consisting of a 12 digit number that is widely used for tracking trade items in stores.
WPX (Worldwide Parcel Express): The international express delivery service offered by DHL, commonly referred to as DHL Express. Packages are typically delivered within 3 business days. When using this service, the letters “WPX” will appear prominently on the shipping label.