Logistics Glossary

Use our helpful logistics glossary below to learn more about common terms used in freight forwarding.

Air Freight

Air freight involves transporting goods by aircraft, making it ideal for moving high-value or perishable items over long distances quickly. Airlines provide cargo space on either passenger flights or dedicated cargo planes designed exclusively for freight.

Airway Bill

An airway bill is a document in air freight forwarding that serves as a contract between the shipper and the air carrier.

Backhaul

Backhaul is the term used for the return trip of a truck, ship, or plane after it has delivered its main load.

Ballast Voyage

A ballast voyage is a journey a ship makes without carrying cargo. During these trips, the ship carries ballast—usually seawater—to maintain stability, balance, and proper draft.

Baltic and International Maritime Council (BIMCO)

The Baltic and International Maritime Council (BIMCO) is the world's largest international shipping association, representing shipowners, operators, managers, brokers, and agents.

Bareboat Charter

A bareboat charter is a type of vessel rental where the charterer takes full control and responsibility for the vessel without a crew or provisions. The charterer manages all aspects of the boat, including navigation, crew hiring, maintenance, and compliance with maritime laws.

Bill of Lading (BOL)

A Bill of Lading (BoL) is a document that serves as a contract between the shipper of goods and the carrier, detailing the type, quantity, and destination of the cargo being shipped.

Blind Shipment

A blind shipment is a shipping method where the identity of the shipper, receiver, or both is hidden from the other party involved.

Blocking and Bracing

Blocking and Bracing are techniques used in freight shipping to secure cargo and prevent movement during transit. These methods are essential for ensuring the safe transport of goods, protecting them from damage caused by shifting or vibrations.

Bonded Warehouse

A bonded warehouse is a special storage facility where imported goods can be kept without paying import duties or taxes right away.

Bulk Shipping

Bulk shipping is the transportation of large quantities of goods that are generally similar and transported unpackaged in large quantities.

Cargo

Cargo refers to goods or products transported from one place to another via various modes of transportation, including air, sea, rail, and road.

Cargo Insurance

Cargo insurance is a type of insurance policy that provides financial protection against the loss, damage, or theft of goods during transportation.

Certificate of Origin

A Certificate of Origin (CO) is an international trade document certifying the country where a commodity or good was manufactured, produced, processed, or obtained.

Charter Party

A charter party is a formal contract between the shipowner and the charterer outlining the terms and conditions for hiring a vessel.

Charterer

A charterer is an individual or company that rents a vessel from a shipowner for a specific period or voyage.

Concealed Loss

Concealed loss is the damage or loss of goods that is not immediately obvious upon delivery and is usually discovered after the packaging is opened and the contents are inspected.

Consignee

The consignee is the party that receives the goods being transported in a freight forwarding operation. They are the intended recipient of the shipment at the final destination.

Consignor

A consignor is the party that sends or "consigns" goods for transportation. The consignor is responsible for preparing the goods for shipment and ensuring that all necessary documentation and information is provided to the freight forwarder or carrier.

Container

A container is a standardised, reusable steel box used for the safe, secure and efficient transportation of goods by sea, road, rail or air.

Countervailing Duty (CVD)

A countervailing duty (CVD) is a tariff levied on imported goods to offset subsidies given to producers in the exporting country.

Cross Docking

Cross docking is a logistics strategy where incoming shipments are directly transferred from the receiving dock to the shipping dock with minimal or no storage in between.

Customs Broker

A customs broker is a licensed professional or firm that assists businesses in navigating the complex process of importing and exporting goods across international borders.

Customs Clearance

Customs clearance is a process in international trade that involves preparing and submitting documents required to legally export or import goods across international borders and ensuring that all necessary taxes, duties, and regulations have been adhered to.

Daily Operating Costs

Daily operating costs in logistics and freight refer to the everyday expenses needed to efficiently run transportation and delivery services. These costs include driver salaries, fuel, vehicle maintenance, warehouse rent, utilities, and administrative supplies.

Demurrage

Demurrage is a charge that the owner of a chartered ship imposes on the charterer (the person or company hiring the boat) for failing to load or unload the ship within the time agreed.

Detention

Detention refers to the holding of cargo or a vessel beyond the allowed free time, typically at a port, terminal, or warehouse.

Door-to-Door Service

Door-to-door Service in logistics is a comprehensive shipping service that covers the entire process of moving goods from the initial sender's location directly to the final recipient's premises.

Drayage

Drayage is the short-distance transport of goods, typically as part of a longer journey in the shipping and logistics world.

Economies of Scale

Economies of scale means that as companies grow bigger and handle more shipments, they can often reduce their costs per shipment.

Education Cess

Education cess is a tax added to other taxes in some countries, particularly India.

Expedited Shipping

Expedited Shipping is a shipping option that ensures goods are delivered faster than standard shipping methods.

Export License

An export license is a document secured from a government that authorises a shipper to export a specific quantity of a particular commodity to a certain country.

Freight

Freight refers to goods or cargo transported by land, air, or sea. It plays an important role in global trade, enabling the movement of products across different countries.

Freight Audit & Payment

Freight audit and payment is the process of verifying and settling freight invoices.

Freight Audit Services

Freight audit services involve reviewing and verifying freight bills and invoices to ensure accuracy and compliance with agreed-upon rates and terms.

Freight Audit Software

Freight Audit Software is a digital tool designed to review, verify, and correct freight invoices. It makes sure that carrier charges are accurate and match agreed-upon rates and terms, automating a process that can otherwise be time-consuming and error-prone.

Freight Collect

Freight Collect is a term used in the shipping industry to describe a payment arrangement where the receiver of the goods is responsible for paying the shipping costs at the time of delivery.

Freight Forwarder

A freight forwarder is a company or individual that organises shipments for businesses or individuals to transport goods from one destination to another.

Freight Prepaid

Freight Prepaid is a shipping term used to indicate that the freight charges for transporting goods from the sender to the recipient have been paid by the sender in advance.

Fuel Surcharge (FSC)

A fuel surcharge (FSC) is an additional fee that carriers add to cover the varying fuel costs. This charge helps manage the impact of fuel price fluctuations on shipping operations.

Full Container Load (FCL)

Full Container Load, or FCL, refers to a shipping mode where a single container is booked by a shipper to transport goods. This container is exclusively used for one shipper's cargo, meaning the goods inside are not shared with items from other shippers.

GATT/DGFT Declaration

A GATT/DGFT Declaration is an important document in international trade. It's a statement that exporters use to claim duty benefits under foreign trade policies.

Green Shipping

Green shipping is about making sea transport more environmentally friendly. It uses new technologies, better working methods, and updated rules to reduce shipping's environmental impact.

Gross Vehicle Weight (GVW)

Gross Vehicle Weight (GVW) is the total weight of a vehicle, including its own weight, plus any cargo, passengers, fuel, and other items it carries.

Hazardous Goods (Hazmat)

Hazardous goods refer to products or substances that pose a risk during transport due to their chemical, physical, or biological properties.

Hazardous Materials (Hazmat)

Hazardous materials, often abbreviated as Hazmat, refer to substances or materials that pose a risk to health, safety, property, or the environment due to their chemical, physical, or biological nature. These materials' handling, storage, transportation, and disposal are strictly regulated to prevent accidents and ensure public safety.

Import License

An import licence is a document issued by a government authority that permits a company or individual to bring goods into a country.

Inbound Freight

Inbound freight is the goods and materials brought into a business from suppliers or manufacturers. This process includes the transportation, handling, and receiving of these items.

Incoterms

Incoterms, short for International Commercial Terms, are a set of global rules established by the International Chamber of Commerce (ICC) that define the responsibilities of sellers and buyers for the delivery of goods under sales contracts.

Intermodal Transportation

Intermodal transportation refers to the process of transporting goods using two or more different modes of transportation in a single journey, without handling the freight itself when changing modes. It is distinguished by its use of standardized containers, which are designed to be moved easily from trucks to trains to ships and back.

Know Your Customer (KYC) Papers

Know Your Customer (KYC) Papers are documents and information collected by businesses to verify the identity of their clients.

Last Mile Delivery

Last-mile delivery is the final step of the logistics process, where goods are transported from a transportation hub to their final delivery destination.

Less than Container Load (LCL)

Less than Container Load (LCL) is a shipping term used when the volume of goods is not enough to fill a standard container.

Letter of Credit

A letter of credit is a financial instrument issued by a bank that guarantees payment to a seller on behalf of a buyer, provided that the terms and conditions specified in the document are met.

Manifest

In international freight shipping, a manifest is a document that provides a detailed list of all the cargo being transported. It is an important record for the shipper, the carrier, and customs authorities, facilitating the smooth movement of goods across international borders.

Maritime Law

Maritime law is the rules governing activities at sea and ocean shipping. For those of us in freight forwarding and logistics, it's essential to understand these rules as they affect how we move goods across oceans.

Multimodal Transport

Multimodal transport is a method of moving goods that uses two or more different types of transportation during a single journey.

Non-Vessel Operating Common Carrier (NVOCC)

A Non-Vessel Operating Common Carrier (NVOCC) is a company that provides ocean freight transportation services to customers without operating its own vessels.

Ocean Freight

Ocean freight, also known as sea freight, is transporting goods across the sea in large containers aboard ships. Businesses worldwide rely on ocean freight to import and export products, making it an essential part of global trade.

On-Board Courier (OBC)

An on-board courier (OBC) is a specialist who provides a personal delivery service for time-sensitive or high-value items across the globe. This person typically travels with the package on commercial flights, ensuring it remains secure and reaches its destination as quickly as possible.

Pallet

A pallet is a flat, horizontal structure, typically made of wood, plastic, or metal, used to support and lift a load of goods.

Port of Discharge (POD)

The Port of Discharge (POD) is the port where cargo is unloaded from a vessel upon reaching its destination. During the shipping process, it marks the transition of cargo from transit to land distribution.

Port of Loading (POL)

The Port of Loading (POL) is the port at which cargo is officially loaded onto a ship or vessel for transport. It serves as the departure point in the shipping itinerary for international trade and logistics.

Purchase Order

A purchase order (PO) is a necessary document in freight forwarding and logistics. It's an official, legally binding offer issued by a buyer to a seller detailing the types, quantities, and agreed prices for products or services.

Quarantine

Quarantine is a preventive measure in international shipping and trade that involves temporarily isolating cargo, vessels, or personnel to prevent the spread of diseases, pests, or other potential hazards.

Reefer Container

A reefer container, short for refrigerated container, is a type of shipping container equipped with refrigeration units to transport temperature-sensitive goods.

Roll-on/Roll-off (RoRo)

Roll-on/roll-off (RORO) refers to a method used in the shipping industry to load and unload cargo which is on wheels, such as cars, trucks, semi-trailer trucks, trailers, and railroad cars. The vehicles are driven on and off the ship on their own wheels or using a platform vehicle, such as a self-propelled modular transporter.

Shipbroker

A shipbroker is a specialised professional in the shipping industry who acts as an intermediary between shipowners and charterers, facilitating vessels' chartering, buying, and selling.

Shipment

A shipment refers to transporting goods from one location to another, typically involving a sender (consignor) and a recipient (consignee).