Most industries have their own specialized terms, acronyms, and industry-related jargon, and the supply chain sector is no different. When you consider the sheer size and scope of the supply chain sector, including the logistics and freight transportation industries, the number of industry-related terms can easily reach the thousands.
Fortunately, we’re not going to talk about all those thousands of terms. Instead, let’s outline the most common freight terms that you’re likely to come across when procuring packaging for your products. Here are the most common freight terms that you should probably know.Do you know the most common freight terms used in supply chain management? #logistics #manufacturing #supplychain Click To Tweet
Generally, this refers to the quantity of freight that’s required to fill a trailer to its maximum capacity. That can mean the total weight allowed for the trailer (10,000 pounds), or the total amount of cargo that will physically fit on a trailer.
This is a shipment of freight that requires less than an entire trailer. Generally, this method of shipping can be used when freight weighs between 150 and 15,000 pounds. When shipping LTL, the shipper usually pays for the portion of the trailer that their freight occupies, and other shipments will fill the unoccupied space.
Over the road refers to the transportation mode for shipping materials over log distances. Over the road means that transportation will use highway systems, rather than local routes.
Intermodal means that the transportation of your goods will use two or more different modes of transportation, such as truck and rail.
Estimated time of arrival is exactly what it sounds like – the approximate time a freight shipment is expected to arrive at its destination.
A bill of lading is a legal document that’s issued by a carrier to a shipper. It details the type, quantity, and destination of the goods being carried. The BOL also serves as a shipment receipt when the carrier delivers the goods at to their destination. Generally, the BOL must accompany the shipped goods, regardless of the mode of transportation. It must also be signed by an authorized representative from the carrier, shipper and receiver.
As it sounds, this is a document to establish that the full shipment was received at its destination.
According to the Uniform Commercial Code, FOB officially stands for Free on Board, but you may also hear that it means Freight on Board. FOB is commonly used to indicate who pays for the loading and transportation costs of the shipment. It also indicates at what point the responsibility transfers from the shipper to the buyer.
- FOB Shipping Point or FOB Origin: This indicates that the buyer pays shipping costs and takes responsibility for the goods as soon as they leave the seller’s premises.
- FOB Destination: This indicates that the seller will pay shipping costs and be responsible for goods until the buyer takes possession of the shipment.
A consignee is the business or individual that receives the shipment.
This term is used when the cost of freight will be paid by the person receiving the shipment at the time the goods are received.
A Few Other Logistics/Freight Terms Worth Knowing
This is the federal department within the United States that’s responsible for safety on our national highways, airlines, and railways.
FMCSA is the federal department inside of the DOT that regulates the trucking industry.
This is the general term given to a wide array of outsourced logistics services. These types of services can encompass the management of one of more facets of procurement, transportation, warehousing, assembly, kitting, repackaging, and more.
Wrapping It Up
Although there are a lot of terms used in the logistics industry, knowledge of the acronyms and industry-related terms above will help you look like a pro when you’re working with vendors in your supply chain. Hopefully this list will help you make sense of the common terms you probably see on partner paperwork and supplier deliveries.