If you’re searching for the right warehouse and logistics services for your needs, all the terms they use can be confusing. If you don’t know your cross-docking from your consolidation, or your public warehousing from your picking and packing, how can you find the perfect solution for your storage and distribution needs? Don’t worry, we’ve got you covered. We’ve looked into all of these terms to give you a helpful glossary and guide to the various services a warehousing business can offer you.
Receiving Orders — Logistics and Warehousing Terms
Cross-Docking
Cross-docking means loading, unloading and transferring materials between different modes of transport. For example,between a truck semi-trailer and railroad car. Cross-docking typically means that products and materials do not need to be stored, so there is minimal handling or storage time. Cross-docking can be used to:
- Change the method of transportation.
- Sort materials intended for various destinations.
- Combine materials from different origins for delivery to the same destination.
Cross-docking can be used for pallets, loose materials, packages, crates, entire container loads, and more.
Drayage including Container Drayage
Drayage is the transport of goods over a short distance, particularly from ports to a warehouse. Some logistics providers describe it as a truck pickup from or delivery to a seaport, border point, inland port, or intermodal terminal with both the trip origin and destination in the same urban area. Drayage is often part of a longer move.
Inbound and Receiving Orders
Inbound and receiving orders refers to a warehouse or logistics provider arranging for the transport, storage, and management of goods coming into their business.
Intermodal Transport
Intermodal transport means that carriers can move freight around inside an “intermodal container,” using multiple modes of transport (e,g, ocean, rail, or road). The internal cargo and products do not need to be handled. This means less cargo handling needs and time, improved security, and reduced damages and losses.
Picking and Packaging (Pick and Pack)
Picking and packing is a major part of goods receiving and distribution. It involves receiving goods into a warehouse, disassembling containers into relevant products, picking the products for each destination, repacking them, and labelling them for distribution.
Replenishment
Replenishment is the process of ordering goods and materials so that a logistics provide can keep inventory up to the stock levels that a client requests.
Segregation
Segregation is involved when multiple items are received in a single delivery and they need to be separated into segregated areas prior to storage, picking, packing, and distribution.
Transloading
Transloading means transferring cargo and containers from one type of transport to another. It’s commonly used when one type of transport isn’t suitable for the entire trip, for example moving goods from rail or ocean to truck.
Inventory Handling — Logistics and Warehousing Terms
Bar Coding
Bar coding involves scanning, labeling, and tracking products, packages, and other inventory throughout its life in the warehouse, and sometimes the complete supply chain. It is a key part of a good warehouse management system.
Case Pick
Case picking gathers together cartons, boxes, and other containers of products for onward delivery, typically on a pallet.
Cycle Count
Cycle counts are part of inventory management and means that certain parts of warehouse and client inventory are counted and checked at certain times. This helps to ensure accuracy throughout the inventory management process and reduces the risk of loss and wastage. They are also less disruptive to daily operations and can focussed on high-value items or other criteria.
eCommerce and Dropshipping Fulfillment
This is a specialist service that allows a client to store products at a warehouse. When they receive an order, they pass the information onto the warehouse, which will pick, pack, and ship the item direct to the end customer, often through mail and parcel carriers.
Inventory Handling
Handling is the process that logistics providers use to receive, process, store, and distribute products, particularly the packaging and shipping of products and materials.
Hazardous Materials (HAZMAT) Handling
Hazardous materials are raw materials and products that could harm individuals, animals, plants, property, or the environment. They can be solids, liquids, or gases. Hazardous materials are often governed by stringent chemical and other regulations. Individuals and teams can receive HAZMAT training and get the special skills, precautions, and equipment needed to handle, receive, store, distribute, and manage dangerous products. Hazardous goods include materials that are radioactive, flammable, explosive, corrosive, oxidizing, asphyxiating, biohazardous, toxic, pathogenic, or allergenic.
Inventory
Inventory is typically the stock of products, goods, and raw materials that a warehousing and logistics provider holds on a client’s behalf. Most logistics providers give regular updates on inventory held, either through reports, warehouse management systems, or EDI.
Inventory Management
Inventory management manages the receipt of goods from manufacturers to warehouses and then from those warehouses to final delivery. Inventory management is normally part of a warehouse and inventory management system.
Just in Time (JiT) Services
Just in time (JiT) services reduce the costs and effort needed to receive, process, manage, store, and distribute inventory for a client. JiT streamlines logistics and distribution processes to make it faster and easier to process and distribute inventory to clients, “just in time.” It allows clients and warehouses to process and receive goods only as they are needed, reducing inventory costs. JiT relies on accurate demand forecasting.
Order Management and Fulfillment
Order management and fulfillment is the process that turns a request for goods from a customer into a shipping request that delivers goods to the intended destination.
Palletizing
Palletizing is a way to manage, store, and transport goods that are stacked on a pallet, and shipped as a unit. It allows loads to be handled in a standardized way with common warehouse equipment.
Quality Assurance and Quality Control
Quality assurance (QA) and quality control(QC) means measuring, analyzing, and improving logistics processes and inventory items to ensure quality throughout the supply chain. This reduces waste and defects and increases efficiency. QA includes managing the quality of raw materials, assemblies, products, components, services, and more. QC focuses on testing products to uncover and remove defects.
Repacking and Repackaging
Repacking and repackaging happens whenever a product needs to be changed or reconfigured. This might involve moving a product into branded packaging but can also include meeting customer requests or making changes to kitting or assemblies.
Reverse Logistics
Reverse logistics is about allowing customers to return products that are broken, not fit for purpose, or otherwise not wanted. Reverse logistics handles the returns, refunds, distribution, and what happens with returned inventory, including disposal.
Specialist Materials Handling
Specialist materials handling is similar to hazardous materials handling, except that the materials are not likely to be hazardous. Instead, they normally require specialist equipment, techniques, and training to handle safely. Specialist materials could include large rolls, liquids, loose materials, pipes and rods, cables, and more.
Stock-Keeping Unit (SKU)
A stock-keeping unit (SKU), pronounced as “skew”, is a number or code used to identify each unique product or inventory item. SKUs are often used to track inventory throughout the supply chain and are recorded in inventory and warehouse management software.
Wrapping
Wrapping is the process of covering items and packages for storage or distribution. A common type of wrapping is shrink wrapping, which is typically used on pallets to keep products together and protected.
Storage — Logistics and Warehousing Terms
Bulk Storage
Bulk storage is specialist storage designed for large amounts of products or raw materials. Goods stored in bulk storage are often kept in their original packaging or containers. Bulk storage can apply to loose goods, liquids, and many types of drum, tank, or other storage.
Climate / Temperature-Controlled Storage
This type of storage means controlling factors like temperature, humidity, and other areas to preserve the integrity and freshness of products. This is commonly used for refrigerated or frozen products.
Contract Warehousing
Contract warehousing is defined warehouse space and storage that has been preassigned to a specific customer, for a defined length of time. This is defined in a contract with the customer. A contract warehouse typically handles receiving, storage, shipping, and management of products on a contract basis.
Food Grade Storage
Food grade storage is warehouse storage that meets the requirements of the USDA, defined as, “all places where foods are prepared, kept or stored shall be kept in a clean and sanitary condition and be protected from dust, dirt, insects and vermin in the manner prescribed by the regulations of the department.”
Public Warehousing
Public warehousing involves providing short- and long-term storage options to customers on a month-to-month basis. Public warehouses typically charge by storage volume and for any additional services.
Storage
Storage is about having the space and facilities to safely receive and hold inventory items until they are needed for distribution and delivery. Most warehouses offer short- and long-term storage.
Parties and Documentation — Logistics and Warehousing Terms
Bill of Lading
Bills of lading (BL or BOL) are documents issued by a carrier that state goods have been received for transportation to a specific delivery destination. A “through” bill of lading means that transportation involves two different modes , for example road and rail.
Consignee
The consignee is the recipient of the goods that are being transported. Consignees can be end customers, warehouses, or other third parties.
CTPAT
The Customs-Trade Partnership Against Terrorism (CTPAT) is security program from US Customs. It is designed to improve the security of the supply chain and reduce the risk of it being associated with terrorism. US Customs requests that businesses ensure the integrity of their security practices and communicate and verify the security guidelines of their business suppliers, customers, and partners throughout the supply chain.
Customs Bonded
A customs bonded warehouse is a building or other secured area where goods may be stored, and managed without payment of customs and import duty. While goods are in a bonded warehouse, they are normally supervised by customs officials. Products may be manipulated by cleaning, sorting, repacking, or otherwise changing their condition by processes that do not involve manufacturing. Bonded warehouses can also provide specialized services such as deep freeze or bulk liquid storage, commodity processing, and coordination with transportation.
Customs Clearance
Customs clearance is needed for products that are moved between zones where payment duties would be incurred. Typically, commercial invoices, packing lists and other documents are presented to customs who can then levy charges and tariffs.
Free Trade Zone (FTZ)
A free-trade zone (FTZ) is a special type of “economic zone.” It is an area where goods may be landed, stored, handled, manufactured, or reconfigured, and re-exported under specific customs regulation and are generally not subject to customs duty.
Freight Forwarding
Freight forwarders and forwarding agents are individuals, teams, or businesses that organize shipments for or other companies. Freight forwarders can be carriers themselves, or they may have agreements and partnerships with distribution fleets. They manage relationships with carriers and clients, create schedules, book truck space, and otherwise take care of distribution needs. They can work across various carrier types, including ships, airplanes, trucks, and railroads.
Logistics
Logistics is the whole practice and process of managing the flow of goods between the point of origin and the point of destination to meet the needs of suppliers, vendors, customers, and businesses. Logistics brings together data, transportation, inventory, warehousing, material handling, packaging, and security.
Third-Party Logistics (3PL)
Third-party logistics (3PL) is a service that providers offer to customers. 3PL allows a client to outsource all or part of their supply chain, including ordering goods, receiving them, consolidation and de-consolidation, storage, picking and packing orders, distribution, and delivery to the end customer.
Distribution and Trucking — Logistics and Warehousing Terms
Brokerage
Brokerage is the process of arranging transportation of inventory and products via distribution channels. Warehouses and logistics providers may have their own distribution fleets, or they may act as brokers with partner distributors, or distributors on the open market.
Climate / Temperature-Controlled Freight
This type of freight means controlling factors like temperature, humidity, and other areas to preserve the integrity and freshness of products as they are distributed and delivered. This is commonly used for distributing refrigerated or frozen products in trucks known as “reefers.”
Consolidation
Consolidation involves a logistics provider combining products from several shipments so they can be shipped together. This helps to lower shipment costs. It is also known as cargo consolidation or freight consolidation. Compare this with deconsolidation.
Deconsolidation
Deconsolidation involves separating a consolidated shipment into its original shipments for delivery. It can also be known as degroupage. Compare this to consolidation.
Drop Deck and Lowboy Transport
A lowboy transport is a special type of vehicle that has a “drop deck” that allows for the distribution of oversized items or equipment that exceeds normal height restrictions for transportation. They are often used to move heavy equipment, goods, and machinery.
Full Container Load (FCL)
A full container load is a standard, twenty- or forty-foot container. Typically, a full container load attracts lower freight rates than an equivalent weight of loose cargo. It can also be known as a full trailer load (FTL).
Hot Shot Trucking
Hot shot trucking is a type of freight hauled by particular trucks in combination with different trailer types. Hot shot trucking is used for urgent deliveries — it is rarely used for planned shipments, but normally comes from a sudden, urgent need for products at a specific location.
Less than Container Load (LCL)
Less than container load is a method of transporting small freight shipments that do not require all of the capacity of a ocean container. These shipments typically require less than 20 cubic meters. Logistics providers may consolidate LCLs together prior to distribution.
Less than Truckload (LTL)
Less than truckload (LTL) is a shipping practice that distributes smaller amounts of cargo that does not fill up a full truck load. Typically, deliveries to multiple destinations are consolidated into one truck or container to make delivery time and effort more efficient.
Oversized Cargo and Shipping
Oversize cargo is any shipment that does not fit inside a 40 foot shipping container. This typically involves machinery, equipment, and other materials that are too wide, tall, or long to fit the standard specifications for container shipments. Oversized cargo is normally shipped on specialist vehicles.
Pool Distribution
Pool distribution means transporting and delivering products to numerous destinations within a particular geographic area. It requires route and freight optimization. This is a cost-effective way of distribution to specific customers and reduces transit times and costs.
Truck Load / Full Truck Load
Truckload shipping (TL), also known as full truck load (FTL) means moving large amounts of similar cargo, typically enough to fill an entire trailer or container. Compare this to less-than-truckload (LTL) shipping that mixes cargo for several customers in one container.
Software and Technology — Logistics and Warehousing Terms
Electronic Data Interchange (EDI)
Electronic data interchange (EDI) is a framework and technology that allows for the structured transfer of data between organizations. It can be used to transfer documents, metrics, quantities, and other information. For example. A business can use EDI to track and check inventory levels being held at a partner warehouse.
Online Order Management
This is a technology and process that allows clients and logistics providers to make, fulfill, and manage orders online, often through a web portal that integrates with a warehouse or inventory management system.
Online Tracking
Online tracking allows clients and logistics providers to track products through the supply chain, up to delivery to an end customer.
Radio Frequency Tracking
Radio frequency (RF) tracking involves using technology to track products and shipments throughout the supply chain. RF tracking normally uses small radio transmitters that can be attached to cargo and will report where it is in the warehouse, distribution, or supply chain.
Software Integration for Warehouses
Software integration involves warehouse and customer or supplier systems exchanging information on orders and products throughout the supply chain. It can make it easier to track specific shipments at any point in their journey from origin to destination.
Extra Services — Logistics and Warehousing Terms
Assembly, Light Assembly and Subassembly
Assembly, light assembly, and subassembly are services that involve building components into constructions that can be used to manage, hold, or display products, including point of sale and other end items.
Kitting
Kitting involves filling orders by pre-assembling individual items into ready-to-ship kits. This can provide big savings in fulfillment costs. It typically involves grouping, packaging, and delivering separate but related items as one unit.
Labelling
Labels are used to track products, consignments, and pallets through the supply chain. Warehouses can affix labels as part of the logistics services they provide, including relabelling.
Point of Sale (POS) Building and Promotional Displays
Point of sale and promotional display building involves the construction of units that can be used to store and display products for sale, typically to the public.
Warehouse Management System
A warehouse management system (WMS) Is the software and process used to control goods from the moment they enter a warehouse until they are distributed and beyond. It mainly controls the movement and storage of products in a warehouse, including ordering, receiving, storage, processing, picking, packing, and distribution.
We hope you’ve found this guide to common logistics and warehousing terms useful.