The logistics and supply chain industry is full of specific jargon and acronyms that can be confusing for newcomers. Understanding this language is essential for anyone navigating supply chain management and logistics.
Here, we’ve compiled the most commonly used terms and acronyms in the industry, providing clear definitions and explanations to help you communicate effectively and understand the nuances of transport logistics.
LTL (Less Than Truckload):
Definition: LTL shipping refers to the transportation of small freight, typically less than 150 pounds (68 kg), that does not require a full truckload. Parcel carriers handle small packages that can be broken down into units. Usage: LTL shipping is ideal for businesses that need to transport smaller shipments efficiently and cost-effectively. Related Terms: FTL, freight consolidation, partial truckload
FTL (Full Truckload):
Definition: FTL shipping means that a shipment will occupy an entire truck, usually required when there are ten or more pallets. Usage: Full truckload shipping is often chosen for large shipments that require dedicated space for improved security and speed. Related Terms: LTL, direct shipping, truckload logistics
LCL (Less than Container Load):
Definition: LCL describes the transportation of smaller ocean-freight shipments that don’t require the full capacity of a container. Usage: LCL shipping is often used for smaller shipments in international trade, helping businesses save on transportation costs by sharing container space. Related Terms: FCL, shared container, ocean freight
FCL (Full Container Load):
Definition: FCL refers to shipments where an entire container is dedicated to goods from a single party. Usage: FCL is ideal for larger international shipments that require more space and security. Related Terms: LCL, container shipping, exclusive container use
Euro Pallet (EP):
Definition: A standardized European pallet, measuring 120x80 cm, used widely in the European Pallet Pool (EPP) for easy exchangeability. Usage: Euro pallets are preferred in European logistics for their consistency and exchange system. Related Terms: Industrial pallet, pallet pool, standard pallet size
3PL (Third-Party Logistics):
Definition: A 3PL provider organizes logistics services without executing them directly, often partnering with 2PL carriers to manage and optimize supply chain activities. Usage: Companies use 3PL services to streamline logistics without investing in their own transportation assets. Related Terms: 2PL, logistics outsourcing, supply chain management
4PL (Fourth-Party Logistics):
Definition: A 4PL service provider oversees and manages the entire supply chain, often outsourcing specific logistics functions to other providers. Usage: 4PL providers act as logistics consultants, optimizing the entire supply chain for improved efficiency. Related Terms: 3PL, logistics strategy, supply chain optimization
ADR (Accord Dangereuses Routier):
Definition: ADR refers to European regulations for the safe transport of dangerous goods by road. Usage: ADR compliance is essential for logistics companies handling hazardous materials within the EU. Related Terms: hazardous materials, road safety, EU transport regulations
Cross Docking:
Definition: A logistics practice where goods move directly from the unloading dock to the loading dock, avoiding storage. Usage: Cross docking reduces storage costs and accelerates the distribution process. Related Terms: just-in-time, co-loading, streamlined logistics
Bill of Lading (BOL):
Definition: A legal document between a shipper and carrier, confirming the receipt of goods for transport. It details the nature, quantity, and destination of the goods. Usage: The BOL serves as a receipt, a shipping document, and a contract. Related Terms: shipping document, cargo receipt, logistics paperwork
Air Waybill (AWB):
Definition: An AWB is an international air cargo receipt, confirming the contract of carriage but not serving as a title to goods. Usage: An AWB is essential for air shipments, detailing cargo information and shipping instructions. Related Terms: BOL, freight documentation, international shipping
Volumetric Weight:
Definition: Also known as dimensional weight, it’s a pricing metric for freight transport based on package dimensions rather than actual weight. Usage: Volumetric weight is used to calculate shipping costs for large but lightweight packages. Related Terms: dimensional weight, shipping costs, logistics pricing
Maverick Buying:
Definition: The practice of purchasing materials or services outside established procurement procedures, often leading to inefficiencies. Usage: Maverick buying can disrupt cost control in supply chains and increase expenses. Related Terms: procurement compliance, purchasing processes, rogue buying
Procurement Software:
Definition: Procurement software is a digital tool that enables businesses to efficiently manage their purchasing processes and maintain optimal inventory levels. This software streamlines the creation of purchase orders (POs), facilitates order execution, matches invoices to received materials, and simplifies supplier payments. Usage: By automating procurement tasks, this software reduces manual work, enhances accuracy, and supports cost control in the supply chain. Related Terms: Purchase order management, inventory optimization, supplier management, procurement automation.
This glossary covered some of the essential terminology used in the logistics and supply chain industry. Understanding these terms can enhance your knowledge, improve communication, and streamline processes. For more resources on optimizing your supply chain, explore Easy4Pro's blog.