Fed up with “industry speak?”- Common Logistics & Shipping Terms Explained (A-Z)
When you want to ship your goods and you get bamboozled by ‘industry speak’, this page offers you a place to come to get simple explanations. It’s also full of facts that you will find of interest. Over the coming months we’ll be adding to it so that soon it will provide all you need to know:
If you’re selling items online, this term refers to Goods in active pick locations and ready for order filling.
Airport to Airport
A shipping method that only covers the transportation of goods from one airport to another. It does not include a collection or delivery service.
A warehouse that has been approved and under bond/guarantee for compliance to revenue laws. Used for storing goods until duty is paid or goods are released in some other proper manner.
Broker / Customs broker
A licensed professional who works with customs authorities to clear imported goods on behalf of the importer.
Certificate of Origin
A Commercial invoice requires details of a consignments geographical origin. A Certificate of Origin form (CoO) accompanies the invoice and certifies the origin statement is true and is signed by the exporter.
A document used for consignments where the goods are being shipped in the context of a commercial transaction. It includes the details of the: buyer, seller, goods, number, price of each product and reason for shipping. It provides a declaration of the goods to customs from which the amount of Duties and Taxes to be paid will be calculated.
The individual or organisation receiving the consignment.
Goods that are “consigned” to a carrier by the consignor for delivery to the consignee.
The individual or organisation sending the consignment.
DAP & DDP
A country may impose tax or duty on goods at the time of entry, depending on its value. These duties and other charges need to be paid by either the sender or the receiver of the shipment. Delivery At Place (DAP) (commonly known as DDU), means the receiver/customer is responsible for paying the duties and extra charges. Delivery Duty Paid (DDP), means that the sender is responsible for the costs. DDP is soon going to be split into two separate terms which will be DTP (Delivered at Terminal Paid) and DPP (Delivered at Place Paid) and there’s going to be a new term – CNI (Cost and Insurance).
A term used to highlight the “insured value” of the consignment
Door to Door Delivery
A collection from the actual “door” of the sender, and delivery to the “door” of the recipient. Not all shipping solutions offer this.
Economic Operator Registration and Identification (EORI) – An EORI number is an EU registration and identification number that identifies individuals or organisations throughout the EU, for customs declarations when importing or exporting goods. In the UK this is assigned through HM Revenue & Customs. Individuals and organisations that are based in the EU and trading goods with countries outside the EU on a commercial basis. In January 2017 it became mandatory to be EORI registered in order to import goods into the EU from non-EU countries. It was already mandatory for exporting to non-EU countries. Conversely, if you’re shipping goods for non-commercial purposes, you shouldn’t need an EORI number.
Estimated time of arrival. This term is usually used to describe the time/date that the shipment will arrive at a destination.
The process of a shipment leaving a country and therefore crossing its border.
The Food and Drug Administration is a federal agency based in US whose objective it is to protect the health of American citizens by regulating products such as food, tobacco, medicines etc. Individuals and organisations shipping goods to US need to be aware of these regulations.
Goods that have been produced in the European Union (EU), or that have been imported into an EU country with duty paid, can be transported throughout the EU without being subject to customs formalities or duties.
A transport method for large shipments by either land, sea or air.
An added charge to a consignment to cover the fluctuating cost of fuel. Generally shown as a percentage of the base charge, the rate of the FSC is determined according to
published fuel prices, and will rise, fall in line with existing costs.
Items that make up the consignment being shipped.
The total weight of the shipment including packing.
When cargo is made up of multiple consignments from different shippers.
Every commodity that enters or crosses most international borders must be clearly identified by customs officials. Harmonised codes (or HS codes) provide accurate and official proof of identity. You can find HS codes here
An abbreviation for ‘hazardous materials’. These shipments require handling by companies that are regulated to do so.
The process of a shipment entering a country and therefore crossing its border.
Applied by customs of a country that the consignment is destined for. Duties (and VAT) are calculated as a percentage of the “Customs value” of the items (item + insurance + shipping).
Invoices (Commercial and Pro-forma)
A Commercial invoice must be used for consignments where the goods are being shipped in the context of a commercial transaction. A Pro-Forma invoice accompanies consignments where the goods are being supplied free of charge to the Consignee.
Jargon is terminology commonly understood within certain professions or sectors, that can leave outsiders lost and confused. Hence the need for this article.
Kerbside delivery means that shipped goods will be left at a safe point as close to the recipients address as possible where they will be required to collect from. Generally used when the delivery driver is not insured to enter a particular property or unpack the order.
Letter of Indemnity
A document designed to assure the buyer that the seller will take all financial responsibilities if the goods do not arrive and in good condition.
Lift gate / Tail lift
Hydraulic platform on the back of a vehicle, used to aid loading or offloading multiple, large or heavy goods.
Marine Insurance Policy
An insurance policy protecting the insured against loss or damage to his goods occurred during transport.
Merchandise Processing Fee (MPF)
A fee paid to U.S. Customs and Border Protection (CBP) in order to process goods entering the U.S.
Logistics companies have a network of depots in order to deliver locally at different locations. A miss-route is when a consignment has been sent to the wrong depot accidently.
The weight of just the goods, excluding all packing.
The process of receiving an order (generally as part of an online purchase), picking and packing the item/s, and getting ready for shipment.
Overnight is a courier service where the parcel will arrive on the next business (Mon-Fri) day.
A consignment that goes beyond the size or weight limits set for the type of delivery solution chosen. Carriers will charge extra in these cases.
A way to protect your goods in transit. Types of packing include: Tube, Tri-Wall case, Foam Lined Tri-Wall Case, Foam Lined Plywood Crate, Foam Lined Plywood Crate, Multipiece Plywood Crate, A-Frame Crate.
A document that accompanies a shipment and provides a detailed itemised breakdown of the items contained within the consignment.
This is a base, and in most cases is made of wood. It’s main job is to protect the goods that are stacked on them by keeping them off the floor and stacked together. It also makes it easier for forklift trucks to move heavy or large items around. There are different sizes depending on the requirement.
A document that accompanies consignments where the goods are being supplied free of charge to the Consignee.
Quarantine (Australian customs)
Australia’s quarantine regulations require certain incoming goods to be declared and within regulations. This includes plant material so if you send anything to Australia in wooden packaging, it must comply with the import conditions and carry a mark on the wood similar to the one shown below. The mark shows that the wood has been treated & therefore is to ISPM15 standards. If there are any irregularities, then it will enter quarantine.
Otherwise known as the Consignee, the “Recipient” is the individual or organisation receiving the consignment.
When a shipment is rejected by the recipient (or non delivery has taken place for other reasons) and is returned to where it was sent from.
Otherwise known as the Consignor, the “Shipper” is the individual or organisation sending the consignment.
Please see “Invoices”
Battens fitted underneath frames, boxes or packages to raise them off the floor and allow easy access for fork lift trucks, slings or other handling equipment.
Please see “Harmonised Code” it’s the same thing.
When an individual or organisation temporarily exports goods on non-commercial terms (typically an exhibition/a loan) without being subject to customs duty. Using an ATA Carnet will reduce the amount of customs red tape.
A system that allows all parties involved to see key where the consignment is on its journey between the Consignor (sender) and the Consignee (recipient).
If a shipment is under bond it means that goods shipped can be imported into a country and stored without having to pay duties, taxes or customs costs related to the import process. The goods must be stored in a bonded warehouse (a customs-controlled warehouse for the retention of imported goods until the duty owed is paid or shipped on) to comply with regulations.
Volumetric weight is a calculation formula used by courier and freight companies to determine whether the actual space taken up by a shipment (i.e. the volume weight) is greater or less than the actual dead weight. Shipping charges are then calculated on the greater weight of the two. Use this Online Volumetric Weight Calculator to quickly find out what the volumetric weight will be.
Warehouse Management System (WMS)
Computer software providing a management solution for controlling the operation of a warehouse
Waybill (or Air Waybill)
A document prepared by the carrier. It shows the place of origin, destination, route, consignor, consignee, description of shipment and amount charged for the transportation service. It is usually forwarded with the shipment.
The charge for carriage of goods based on their weight (air cargo).
X-ray scanners are used at borders as it is the most effective way to control imported goods in boxes/containers without unloading it.
A word Flight Logistics likes to use when asked if we can help ship your goods.
A geographical region or area defined for transport and/or charge purposes.
As we build this lexicon we invite participation from you, so please send in your questions/phrases using the form below: