Discover the Power of Precision with KGR Logistics’ Ultimate Glossary
Welcome to KGR Logistics’ Ultimate Glossary of Logistics and Supply Chain Management, a meticulously crafted tool designed to elevate your understanding and enhance your operational capabilities in the logistics industry. At KGR Logistics, we recognize the vital role that a deep grasp of terminology plays in navigating the complex landscape of global trade and logistics. This glossary is part of our commitment to empowering professionals, from budding logistics coordinators to seasoned supply chain managers, with the knowledge they need to excel.
Through this resource, KGR Logistics offers more than just definitions; we provide a bridge to greater efficiency and clearer communication within your operations and business interactions. Each term has been selected and explained with the precision and expertise that KGR is known for, ensuring that you can confidently discuss, plan, and execute logistics strategies with clarity and insight. By integrating this glossary into your professional toolkit, you will enhance not only your personal knowledge but also the operational prowess of your teams, leading to improved decision-making and a stronger competitive edge in the marketplace.
KGR Logistics Glossary
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3PL (Third-Party Logistics): Outsourced logistics services encompassing transportation, warehousing, and fulfillment services.
A
Accessorial Charges: Fees for additional services beyond standard transport.
Advanced Forecasting Tools: Sophisticated analytics tools that use historical data and predictive modeling to estimate future logistics needs, helping to optimize inventory levels and manage supply chain resources efficiently.
AI (Artificial Intelligence) & Machine Learning: Sophisticated analytics tools that use historical data and predictive modeling to estimate future logistics needs, helping to optimize inventory levels and manage supply chain resources efficiently.
Alternative Storage Solutions: Various temporary or permanent warehousing solutions used to manage excess inventory, especially during peak demand periods, to prevent overflow and maintain service levels.
Analytics, Data: The practice of examining data sets to draw conclusions about the information they contain, aiding in logistics planning and performance improvement.
ATA Carnet: An international customs document that permits the duty-free and tax-free temporary import of goods for up to one year.
Automated Export System (AES): A system run by the U.S. Census Bureau for collecting data on U.S. exports. Required documentation for goods valued over $2,500 or ones requiring an export license.
B
Backhaul: The process of a transportation vehicle returning from the original destination to the point of origin with a load, to maximize trip efficiency.
Bill of Entry: A legal document filled out by an importer or an agent detailing the goods being imported. Critical for customs clearance in many countries.
Bill of Lading (BOL): A legally binding document between the shipper and carrier that details the type, quantity, and destination of the goods being carried. Essential for tracking and accountability.
Blockchain in Logistics: Revolutionary technology that ensures transparency, security, and efficiency through a decentralized record of transactions.
Bottleneck: A point of congestion in a production system (such as supply chain) that occurs when workloads arrive too quickly for the production process to handle. Solution: Implementing lean logistics practices and optimizing routing and scheduling to alleviate.
Bulk Shipping Discounts: Cost reductions achieved when transporting large volumes of goods, leveraging economies of scale to benefit both the logistics provider and the customer.
C
Cabotage: The transport of goods or passengers between two points in the same country by a transport operator from another country.
Capacity Crunch: A situation where the demand for transportation services exceeds the available supply, often during peak seasons or in specific geographic regions.
Carrier Management: The process of selecting and managing the carriers used for transporting goods, crucial for optimizing costs and ensuring service quality.
CFS (Container Freight Station): The assurance that all logistics activities adhere to relevant laws and regulations, emphasizing expertise in international trade.
Compliance Management: A point of congestion in a production system (such as supply chain) that occurs when workloads arrive too quickly for the production process to handle. Solution: Implementing lean logistics practices and optimizing routing and scheduling to alleviate.
Compliance Training: Training programs designed to educate logistics staff on the latest regulations and industry standards to ensure compliance across international and domestic markets.
Contingency Planning: Strategic preparation for unexpected events or disruptions in the supply chain, ensuring there are processes in place to maintain operations under various scenarios.
Cost Efficiency: Leveraging economies of scale and network optimizations to reduce overall shipping and warehousing costs for customers.
Cost-Effective Solutions: Services designed to provide the best possible service at the lowest possible cost.
Cross-Docking: The process of unloading materials from an incoming semi-trailer truck or railroad car and loading these materials directly into outbound trucks, trailers, or rail cars, with minimal or no storage in between.
C-TPAT (Customs-Trade Partnership Against Terrorism): A voluntary supply chain security program led by U.S. Customs and Border Protection, focused on improving the security of private companies' supply chains with respect to terrorism.
Customization: The ability to tailor logistics services to meet specific client needs, from warehousing specifications to specialized transportation routes and schedules.
Customs Clearance: Navigating the complexities of international shipping regulations to ensure goods pass through customs smoothly.
Customs Delays: Delays incurred during the process of clearing goods through customs barriers, often due to documentation issues or compliance problems.
D
Damaged Goods: Items that have been harmed or impaired in transit, impacting customer satisfaction and increasing costs due to returns and replacements.
Demurrage: A penalty charge against shippers or consignees for delaying the carrier's equipment beyond the allowed free time.
Detention: A fee charged by carriers when a shipper or receiver delays the carrier's equipment beyond the allotted free time for loading or unloading.
Distribution Strategy: The creation of a digital replica of physical supply chain assets, processes, or systems, allowing for simulation and analysis to improve efficiency.
Diverse Carrier Base: Utilizing a wide network of carriers to ensure flexibility and the ability to secure competitive shipping options under various conditions.
Drop Trailer Program: A flexibility service where carriers drop off a trailer at a shipper’s facility for loading at the shipper’s convenience.
Dry Van: A type of trucking trailer that is fully enclosed and designed to carry pallets or boxes of cargo. Dry vans are the most commonly used form of transportation for freight, ideal for shipments that need protection from the elements but do not require temperature control.
Duty Drawback: A refund of customs duties paid on imported goods later exported as finished products.
Dynamic Routing: A fee charged by carriers when a shipper or receiver delays the carrier's equipment beyond the allotted free time for loading or unloading.
E
E-commerce Logistics: Specialized logistics services tailored for the e-commerce sector, highlighting expertise in fulfilling online orders efficiently.
Efficient Return Systems: Streamlined processes and technologies designed to manage product returns efficiently, ensuring products are reintegrated into the inventory or disposed of properly, reducing waste and costs.
End-to-End Logistics Solutions: Comprehensive service offerings that manage all aspects of the supply chain from origin to the final consumer, enhancing convenience and control.
Excessive Costs: Higher than necessary expenses incurred at various points in the supply chain.
Expedited Shipping: A service provided by carriers to transport freight faster than normal, often by optimizing routes and reducing transfer times.
Expertise and Experience: Utilizing a wide network of carriers to ensure flexibility and the ability to secure competitive shipping options under various conditions.
EXW (Ex Works): An international trade term where the seller delivers goods at their premises.
F
FCL (Full Container Load): A type of shipping where a container is exclusively used for a single shipment and the cost is borne by one party.
Flatbed: A type of trucking trailer that has an open body in the form of a flat platform with no sides or roof. Flatbed trailers are used for transporting heavy loads, oversized cargo, construction equipment, or goods that are not vulnerable to weather conditions.
Free Alongside Ship (FAS): Comprehensive service offerings that manage all aspects of the supply chain from origin to the final consumer, enhancing convenience and control.
Freight All Kinds (FAK): A pricing method that groups various goods together regardless of size and weight, simplifying complexity and often reducing costs.
Freight Brokerage: The mediation between shippers and carriers to facilitate the transportation of goods, highlighting expertise in logistics networking.
Freight Classification: Categories assigned to various types of freight that determine the carrier’s shipping charges, based on factors like weight, density, value, and ease of transport.
Freight Forwarding: The coordination and shipment of goods from one place to another via a single or multiple carriers via air, marine, rail, or highway.
FTL (Full Truckload): Transportation service for shipments that require the entire space of a truck, indicating capability in handling large-scale shipments.
Fuel Management Strategies: Approaches to manage and reduce fuel consumption, such as optimizing routes, maintaining vehicles, and employing fuel-efficient driving techniques.
Fuel Price Fluctuation: Variability in fuel costs that can affect shipping rates and overall transportation costs. Solution: Employing fuel management strategies and adjusting logistics plans to keep costs predictable.
G
Gate Appointment: In logistics, a scheduled time arranged for trucks to arrive at the terminal gates for loading or unloading goods. This system helps manage traffic at cargo terminals and warehouses, reducing wait times and increasing efficiency.
Gross Weight: The total weight of a shipment, including the goods and the packaging. It is important for determining transport costs, compliance with vehicle weight regulations, and planning the loading of cargo.
Groupage: A method of shipping where a logistics provider combines, or groups, smaller shipments from multiple customers into a single consignment to optimize transport resources and costs. It is a cost-effective solution for customers with smaller loads that do not require a full container or truck.
General Cargo: Refers to goods that are shipped in packaging, such as boxes, barrels, or pallets, as opposed to bulk cargo like oil or grain. General cargo is handled piece by piece, making it suitable for a wide variety of goods that require special handling and care.
H
HAZMAT: An abbreviation for hazardous materials, which are substances that pose a risk to health, safety, property, or the environment. HAZMAT logistics involve special handling, storage, and transportation requirements to comply with regulatory laws and ensure safety.
Handling Charges: Fees associated with the processing of goods in various facilities such as airports, seaports, or warehouses. These charges cover services like loading, unloading, and moving goods within the facility.
High Cube Container: A taller shipping container with extra capacity for lightweight cargo.
Hub & Spoke System: A system of transportation where all traffic moves along spokes connected to a hub at the center. This model is commonly used in airline and freight logistics to facilitate the handling of cargo and passengers from various origins to various destinations with fewer routes.
I
Incoterms: International commercial terms published by the International Chamber of Commerce, widely used in international and domestic contracts for the sale of goods. They help to define exactly the shipping responsibilities of both seller and buyer.
Intermodal Transportation: The use of multiple forms of transportation (e.g., ship, train, and truck) without any handling of the freight itself when changing modes.
Intrastate: The motor carrier transports goods ONLY in one state.
Inventory Buffering: Keeping additional stock to act as a buffer against forecast errors or sudden spikes in demand, ensuring continuous product availability.
Inventory Management Systems: Software tools that manage stock levels accurately, ensuring efficient order processing and space utilization.
Inventory Management: Advanced management of stock levels, ensuring products are available when and where needed without excess inventory.
Inventory Mismanagement: Poor handling or forecasting of inventory levels leading to excess stock or stockouts, resulting in lost sales and increased costs.
IoT (Internet of Things) in SCM: The network of physical objects—“things”—embedded with sensors, software, and other technologies for the purpose of connecting and exchanging data with other devices and systems over the internet.
IoT Technologies: Implementation of the Internet of Things devices for enhanced tracking and management of shipments throughout the supply chain.
ISPM 15: International Standards for Phytosanitary Measures No. 15, guidelines for regulating wood packaging material in international trade.
J
JIT Delivery: Just-in-time delivery scheduled exactly when needed.
JIT II: A variant of the Just-in-Time inventory strategy that involves a supplier representative working directly within the customer's facility to forecast and replenish inventory directly on the production line.
Job Lot: A small quantity of merchandise shipped together.
Jockey: A driver who operates trucks within a terminal or warehouse yard for the purpose of moving, organizing, or loading/unloading goods.
Joint Rate: Shipping rate agreed upon by two or more carriers for the same route.
Jumbo Trailer: A trucking trailer with larger capacity for lightweight cargo.
Just-in-Time (JIT): A logistics and inventory strategy that involves receiving goods only as they are needed in the production process, reducing inventory costs. This method requires precise timing and reliable suppliers to avoid disruptions.
K
Kanban: A lean manufacturing scheduling system.
Keelhaul: A term originally from nautical practice, but in logistics, it humorously refers to the complete overhaul or rigorous inspection of transportation practices or operations within the logistics chain.
Kilometer Post: Markers placed along roads or railways that measure the distance in kilometers from a specified point. These markers assist in route planning and monitoring transportation routes.
Kitting: Goods that are disassembled to reduce the volume for easier and more cost-effective transport. Once these goods reach their destination, they are reassembled. This is commonly used for furniture and other large items.
Knock Down (KD): Goods disassembled to reduce shipping volume and cost.
KPI (Key Performance Indicator): Metrics to evaluate the success of logistics operations.
L
Lane: In logistics, a lane refers to a regular route or corridor between two points that is frequently used for transporting goods. Lanes are significant in planning and optimizing transportation as they help define the most efficient and cost-effective paths for shipping.
Last Mile Delivery: Final step of delivery from a hub to the final destination.
Lean Logistics: Applying lean principles to eliminate waste in supply chain.
Lean Logistics Practices: Methods that minimize waste within the supply chain, optimizing resource use and operational efficiency.
Letter of Credit (L/C): A letter from a bank guaranteeing a buyer's payment to a seller will be received on time and for the correct amount.
Load Matching: Goods that are disassembled to reduce the volume for easier and more cost-effective transport. Once these goods reach their destination, they are reassembled. This is commonly used for furniture and other large items.
Lost Shipments: Shipments that fail to reach their intended destination.
Lowboy: A type of flatbed trailer with two drops in deck height: one right after the gooseneck and one right before the wheels. This allows the lowboy to carry tall items (such as heavy machinery) that would not legally clear bridges on a standard flatbed.
LTL (Less Than Truckload): Shipping for smaller freight loads that don't require a full truck.
M
Market Analysis: Evaluating market conditions to forecast trends and strategies.
Micro-Fulfillment Centers: Small logistic facilities fulfilling online shopping orders quickly.
Mileage Rate: Pricing based on the number of miles a carrier transports goods, typically used in truckload shipping.
Multimodal Transportation: Using multiple modes of transport under one contract.
N
Network Optimization: Improving the supply chain's network efficiency.
NVOCC (Non-Vessel Operating Common Carrier): A freight forwarder issuing its own bills of lading but not owning any vessel.
O
On-Time Performance (OTP): How often carriers deliver at the scheduled time.
Over the Road (OTR): Long-haul trucking carrying loads over long distances.
Optimization: Making supply chain operations efficient and effective.
Overflow: More goods than can be accommodated in storage.
P
Packaging Improvements: Enhancing packaging to reduce damage in transit.
Palletization: Packing goods on a pallet for efficient shipping.
Peak Season Demand: Increased demand during holidays or special events.
Predictive Analytics: Using statistical algorithms to identify future outcomes.
Predictive Stocking: The practice of using data analytics to predict customer demand and stock products accordingly, minimizing stockouts and overstock situations.
Pro Forma Invoice: An initial bill of sale sent to buyers in advance of a shipment or delivery of goods. Typically used to declare the value of the trade.
Procedural Key Terms: Terms used to describe specific logistics processes or methods, enabling better communication and understanding of operations within the supply chain.
Procurement Logistics: The strategic approach to sourcing and purchasing the goods and services needed within the supply chain.
Proof of Delivery (POD): A document that confirms the receipt of goods and is often signed by the recipient, used to verify successful delivery.
Q
Quality Assurance (QA): Ensuring logistics services meet required standards.
Quality Control: Ensuring products meet safety and quality standards.
R
Rate Confirmation: Document issued by carriers confirming the price and service terms.
Real-time Inventory Management: Technology-driven approaches that provide immediate updates on the quantity and location of inventory, helping businesses react quickly to changes in demand or supply conditions.
Real-time Tracking Systems: Technologies providing live updates on the status of shipments.
Reefer: A refrigerated trailer used for perishable goods requiring temperature control.
Regulatory Compliance: The challenge of keeping up with diverse regulations across different markets.
Returns Management: The process of handling returned merchandise effectively, which can be challenging due to the need for efficient sorting, inspection, and rerouting of returned items.
Risk Management: The process of identifying, assessing, and prioritizing risks followed by coordinated efforts to minimize, monitor, and control the probability or impact of unfortunate events.
ROI (Return on Investment): A measure used to evaluate the profitability of an investment, emphasizing the financial savvy in logistics planning.
Roll-on/Roll-off (RoRo): A method of shipping where vehicles, trailers, or other wheeled machinery are driven on and off the ship. RoRo ships are specially designed to carry wheeled cargo and are often used for cars, trucks, semi-trailer trucks, trailers, and railroad cars.
Route Optimization: Determining the most efficient delivery routes.
S
SCAC (Standard Carrier Alpha Code): A unique two-to-four-letter code used to identify transportation companies, widely used in the freight industry to track shipments.
Scalability: The ability of a 3PL provider to adapt logistics capacities and services to the changing needs of their customers, supporting business growth and seasonal fluctuations.
SCM (Supply Chain Management): Comprehensive management of the supply chain from production to delivery.
Secure Facilities: Warehouses equipped with advanced security measures.
Security Concerns: Risks of theft or tampering with goods during transit.
SLI (Shipper’s Letter of Instruction): A form used to specify instructions from the exporter to the agent, typically the freight forwarder, containing all necessary information for proper handling and accurate shipping of materials.
Smart Lockers: Automated lockers where customers can pick up parcels securely.
Spot Rate: One-time carrier charge to move a load based on market conditions.
Step Deck (Drop Deck): A type of trailer that is similar to a flatbed but includes a 'step' in the platform that drops down after the tractor unit. It is used to transport goods that are too tall to be carried on a standard flatbed, providing versatility in the types of cargo that can be transported without requiring special permits for height.
Stockouts: Occurrences when items are out of stock and unavailable for order fulfillment, leading to potential sales losses and customer dissatisfaction.
Supply Chain Disruption: Interruptions to normal operations from external factors.
Supply Chain Visibility: The ability to track raw materials and products from the manufacturer to their final destination. This capability helps improve efficiency and allows companies to better manage inventory.
Sustainability in Logistics: Implementing environmentally friendly practices within logistics operations, demonstrating a commitment to ecological responsibility.
T
Tariff: Published rates and conditions for carrier services.
Tariff Negotiation: The process of negotiating the terms and rates for transporting goods, showcasing negotiationskills and market understanding.
Technology Integration: Deploying advanced technologies to streamline operations.
Technology-Enhanced Delivery Solutions: The use of advanced technologies, such as drones or autonomous vehicles, to improve the efficiency and reliability of delivery services, particularly in the last mile segment.
Telex Release: An electronic release system used by shippers to authorize the release of cargo internationally,often faster than releasing original bills of lading.
Time Savings: Offering logistics services that save time for customers, allowing them to focus on their corebusiness operations without the hassle of managing supply chain details.
TMS (Transportation Management System): A platform for managing transportation operations efficiently.
Tracking Capabilities: The deployment of systems that allow continuous monitoring of goods throughout the supplychain, ensuring accountability and security.
Transit Delays: Delays occurring during the transportation of goods, affecting delivery timelines and customersatisfaction.
Transit Time: Total time for goods to move from origin to destination.
Transportation Solutions: Customized transportation services that address specific logistic needs, showcasing a customer-centric approach.
U
Unit Load: Packaging system that uses a container or pallet base to transport multiple goods.
ULD (Unit Load Device): Containers or pallets used in air freight to bundle cargo.
Upstream: Supply chain activities involving movement of goods from suppliers to manufacturers.
Utilization: The degree to which equipment is used compared to its capacity.
V
Value Stream Mapping: Analyzing and improving supply chain processes to identify waste.
VGM (Verified Gross Mass): The total weight of cargo required for packed containers.
Visibility Gaps: Lack of real-time information on goods in transit.
W
Warehouse Receipt: A receipt listing goods received for storage.
Warehousing: Offering storage solutions for goods before their distribution, reflecting capabilities in handlingand storing products.
Waybill: Similar to a bill of lading, a document issued by a carrier giving details and instructions relating tothe shipment of a consignment of goods.
WMS (Warehouse Management System): Software that offers visibility into inventory and fulfillment.
X
X-Dock: Short for cross-docking, bypassing traditional warehouse storage.
XaaS (Everything as a Service): Offering logistics services on a subscription or pay-as-you-go basis.
X-ray Inspection: Cargo inspection technology ensuring security and regulatory compliance.
XML (eXtensible Markup Language): Similar to a bill of lading, a document issued by a carrier giving details and instructions relating to the shipment of a consignment of goods.
Y
Yield Management: Techniques used by carriers to optimize revenue through pricing.
Z
Zone Picking: Order-picking method dividing the warehouse into separate zones.
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