Glossary

EXW: Exworks

FCA: Free carrier

FAC: Free alongside ship

FOB: Free onboard vessel 

CFR: Cost & Freight

CIF: Cost insurance freight

CPT: Carriage paid to 

CIP: Carriage Insurance paid to

DAF: Delivery at frontier 

DES: Delivered ex ship

DEQ: Delivered ex quai duty paid

DDU: Delivery duty unpaid 

DDP: Delivery duty paid

3PL or third-party logistics provider; a supplier of logistics services that primarily uses its own assets and resources.

4PL or fourth-party logistics provider; a supplier of supply chain co-ordination and management services that generally does not own or operate the underlying assets and resources. When acting as a lead logistics provider (LLP), it may also co-ordinate and integrate the services of others with complementary or supporting capabilities.

Added-value processes/services Complementary processes or services applied to a product or service to increase its value to internal or external customers.

Aftermarket Activities completed after the sales process, such as the replacement and servicing of parts; particularly prevalent in the automotive industry.

Airfreight The transport of goods by air

Backstage areas Behind-the-scenes areas of stores and shops where stock is held, and logistics support and services are managed.

Bonded warehouse A facility or consolidation centre that is authorized by Customs to store goods. The payment of duties and taxes are only payable once the  goods  are  removed. Box car A closed freight car.

Bulk container A large container designed to carry bulk cargo.

Campus A site where multiple distribution centre share resources such as employees and transport to maximize time and cost efficiencies. See also Distribution Ce nt re; Multi-user .

Consignment One or more items that a carrier has accepted for shipment at a given time.

Consolidation The combination of two or more consignments to create a more economical freight solution.

Consolidation Centre A warehouse in which goods are packaged into larger units for onward distribution.

Container A sealed, reusable metal box for the shipping of goods by sea and rail.

Contract logistics the process of outsourcing product flow management, storage and related information transfer services, usually under long-term contract, with the objective of increasing efficiency and control.

Control Tower Bespoke packages of information services used to manage and control supply chain activities on behalf of customers and suppliers. Also known as Logistics Control Tewer (LCT).

Cross-dock/docking The direct flow of goods from receipt to shipping, bypassing storage. Used to reduce costs and lead­ times for fast-moving and perishable goods.

Customs broking The handling of customs formalities around the import and export of goods on behalf of importers.

Demand chain The reverse of the supply chain, when the processes employed switch from push to pull.  The demand chain is driven by consumers rather than manufacturers of goods. See also pull replenishment.

Dispatch The release of a container to a carrier or amounts paid to a carrier to charter the transport of goods.

Distribution The process of storing and transporting finished goods between the end of the production line and the final customer.

Distribution Centre (DC) A facility that accepts inbound consignments of raw materials, components or finished goods, divides and then recombines them into outbound shipments. Many DCs also contain specialized handling /storage equipment and IT systems and serve as warehouses.

Drop shipment The direct shipment of goods from a manufacturer to a dealer or consumer, bypassing the wholesaler.

End-to-end The complete cycle of logistics activity. End-to­ end supply chain management comprises the sourcing and transport of goods from point of origin to final customer destination.

End-of-life Goods that have reached the end of their shelf life; can include obsolete items that cannot be repaired.

Free Trade Zone (FTZ) A commercial or industrial area near a port of entry where merchandise and raw material imports are not subject to customs charges or duties.

Freight forwarder A person or company involved in the collection, consolidation, shipping and distribution of goods from overseas countries. Typically, freight forwarders clear freight through customs, prepare documents and arrange shipping, warehousing and delivery.

Freight management The management of third-party carriers to ensure the swift, safe and cost efficient delivery of shipments, often involving the integration of a range services.

Freight Transport Association UK trade association serving the transport interests of companies moving goods by air, rail, road and sea.

Full-truckload (FTL) Where goods being shipped occupy a complete truck.

Garments on hangers Standard containers fitted with bars and ropes to keep the clothes neat so they can be put straight on to shop shelves.

Globalization The internationalization of trade, by which domestic economies become interdependent.

Home delivery The transportation of goods to customers’ locations of choice (including workplaces); can also refer to order fulfillment. Most e-commerce sales involve home delivery.

International Air Transport Association (IATA) Trade association serving airlines, governments, passengers, shippers and travel agents.

Inbound logistics The movement of raw materials and components from suppliers/vendors to production processes and storage facilities. International inbound logistics is the management of the international inbound supply chain  on behalf of retailers.

Inbound-to-manufacturing The sourcing and transport of goods from their point of origin/manufacture through to the manufacturing facility.

In-store logistics The provision of pre-retailing services within shops, often in backstage areas. Services can include stock replenishment, storage and packaging.

Integrated logistics/supply chain The management of multiple supply chain components as a single entity on a global or regional scale. This practice can result in a more efficient supply chain and lower costs.

Inter-modal The coordinated movement of freight using different methods of transport, which is often a combination of truck and rail.

International inbound logistics/supply chain See inbound logistics.

Inventory Stocks of raw materials, components, work in progress, finished goods and other supplies.

Just-in-time Activities, including deliveries, completed at the right time in order to meet production  and client  schedules. These techniques help companies improve their return on investment by reducing in-process inventor­­­y and its associated cost.

Kerbside Delivery to and/or collection from the roadside.

Kitting The assembly of components to make a single item.

Last 50 yards/mile The transfer of goods from the rear of the delivery vehicle to the store shelf.

Lead logistics provider/partner (LLP) See 4PL

Less-than-truckload (LTL) A shipment that does not fill a standard truck.

Logistics The process of planning, implementing and controlling the efficient and cost-effective flow and storage of raw materials, in-process stocks, finished goods and related information from the point of origin to the point of consumption for customers. Put more simply, it is the science and art of ensuring that the right products reach the right place in the right quantity at the right time in order to satisfy consumer demand. Logistics encompasses warehousing, transport, added-value/pre-retailing services and IT solutions and covers inbound, outbound, internal, international and reverse product flows.

Logistics re-engineering The study and re-design of logistics processes to achieve a significant improvement in performance.

Logistics service provider (LSP) An organization that offers 3PL or 4PL services.

Logistics Control Tower (LCT) See Control Tower.

Logistics outsourcing See outsourcing.

Multi-modal Shipping that includes at least two modes of transport.

Multi-user Typically, a storage site used by more than one manufacturer or organization.

National Distribution Centre (NOC) See Distribution Centre (DC).

Origin services Support/added-value functions offered at the point of origin of merchandise or materials. Can include buying, purchase order management, vendor compliance, quality inspection, document management, container optimization, pick­ and-pack, pallet loading, customs processing and consolidation.

Pull replenishment The customer-driven flow of materials and merchandise through the supply chain. See also demand chain.

Railfreight The transport of goods by rail.

Roadfreight The transport of goods by road.

Real-time In the present. A real-time system that enables an immediate response to external events. Often used in relation to tracking; see also track-and-trace.

Roadside See kerbside.

Reverse logistics The process of collecting, handling and transporting used, damaged, unwanted or end-of-life goods and/or packaging for disposal, recycling or recovery. Can also refer to the return of re-usable transit equipment (pallets, containers etc.) to a point further up the supply chain (i.e. upstream).

RFID/smart labels RFID is radio frequency identification, a system that uses radio signals to locate and identify merchandise, batched products or transportation assets fitted with special electronic tags. The tags, also known as smart labels or intelligent tags, enable the automatic track-and-trace of merchandise/assets throughout the supply chain. RFID can help to reduce administration, improve productivity, optimize the use of warehousing space and increase accuracy and control.

Routing The process for arranging the course of direction of goods for transport.

Seafreight The transport of goods by sea.

Service logistics Logistics activities relating to the management of parts to and from customers.

Shared-user See multi-user.

Solution sets Packages of core services that cover multiple supply chain activities. Solution sets are based on standardized processes and pre-configured IT products.

Sourcing The practice of locating and procuring goods and products.

Sub-assembly The processes for putting together individual units to fit with other components to make a finished product.

Supply chain A linked set of resources and processes that begins with the sourcing of raw materials and ends with the delivery of merchandise to the final customer. It covers vendors, manufacturing facilities, logistics service providers, internal distribution centres, distributors, wholesalers and other intermediaries. See also demand chain.

Supply chain management The coordinated control of the supply chain, from the acquisition of raw materials from vendors through their transformation into finished goods to the delivery of merchandise to the final customer. It involves end-to-end information sharing, planning, resource synchronization and performance measurement.

TEU or 20-foot equivalent unit; the standard size of a seafreight container.

Temperature-controlled Th storage of goods within a certain temperature range as required by the product type, e.g. chilled and frozen.

Time-definite A freight delivery service that specifies or guarantees a day or time.

Track-and-trace The process for recording the progress of a consignment through the supply chain, usually in or near real­ time, in order to track its status or trace its movements. Sophisticated Control Tower systems function as a single point of control, delivering centralized command of the supply chain with full visibility.

Transload The transfer of 40ft container loads into truck­ driven 53ft containers to reduce costs per unit and achieve faster and more accurate deliveries.

Truckload FTL and LTL above.

Upstream See reverse logistics.

Unit cost The total cost of producing a single unit.

Value-added services See added-value services.

Vendor consolidation The process for managing various vendors in order to consolidate multiple LTL shipments within a consignment to reduce costs and improve delivery efficiency.

Vendors The sellers of products and services.

Visibility The ability to view detailed information about supply chain management processes, typically in real or near real­ time.

Warehouse/warehousing See distribution centre.