ABC Analysis is a method used in supply chain management to categorize inventory into three groups—A, B, and C—based on their importance. This classification helps businesses prioritize their resources and focus on the most critical items.
An Advanced Shipping Notice (ASN), sometimes referred to as Advance Ship Notice, is a notification sent by a supplier or manufacturer to a customer or retailer to provide detailed information about a pending shipment. The ASN serves as an electronic document that outlines the contents of the shipment before it physically arrives at the destination.
An agile supply chain is a flexible and responsive approach to supply chain management that enables organizations to quickly adapt to changing market conditions, customer demands, and disruptions. It focuses on enhancing speed, efficiency, and adaptability throughout the entire supply chain process, from sourcing raw materials to delivering finished products to customers.
An air waybill (AWB) is a vital logistics document used in air freight transportation. It serves as a contract of carriage between the shipper (consignor) and the airline (carrier), detailing the terms and conditions of air transportation for the shipment. The air waybill contains essential information such as the origin and destination of the cargo, the description of goods, the weight, and the freight charges.
An arrival notice is a notification sent by a carrier or freight forwarder to inform consignees or recipients that a shipment has arrived at its destination port or facility. This notice serves as an important communication tool in the supply chain, providing recipients with essential information about the arrival of their goods and detailing the next steps for delivery or pickup.
An Automatic Identification System (AIS) is a tracking system used in the maritime industry to monitor the location and movement of ships. AIS provides real-time information about vessel identification, position, course, and speed.
Backhauling is a transportation logistics practice where trucks carry a return load on their way back from delivering goods to their destination. Instead of returning empty, trucks utilize their empty space to transport goods from the destination back to the point of origin or another destination along the route.
In supply chain management, "backorder" refers to a situation where a customer places an order for a product that is temporarily unavailable in the seller's inventory. When an item is on backorder, it means the customer's order cannot be fulfilled immediately due to insufficient stock levels.
A bay plan is a diagram that details the stowage of containers on a vessel, specifying their exact position by bay, row, and tier to ensure efficient and safe loading and unloading operations.
A Beneficial Cargo Owner (BCO) is the entity with ownership or a beneficial interest in transported goods. While not always the shipper, the BCO reaps the benefits of the cargo's arrival.
A bill of lading (B/L) is a legal document issued by a carrier or its agent to acknowledge receipt of goods for shipment. It serves as a contract between the shipper (seller) and the carrier (transport provider), detailing the terms and conditions of transportation, including the type, quantity, and destination of the goods.
Blank sailing is a term used to describe the situation when a shipping line cancels a scheduled port call or an entire voyage. This can happen for various reasons, such as low demand for shipping services, operational issues, or unforeseen circumstances like bad weather or port congestion.
A blind shipment refers to a logistics practice where certain details about the shipment, such as the sender, receiver, or contents, are intentionally obscured or withheld from one or both parties involved in the transaction. This is typically done to maintain confidentiality or to prevent competitors from obtaining sensitive information about suppliers, customers, or pricing.
A bonded warehouse is a secured facility authorized by customs authorities where imported goods can be stored, manipulated, or undergo manufacturing operations without payment of duty.
A booking confirmation is a document that verifies the reservation of space for cargo on a carrier’s vessel, flight, or truck, ensuring all shipping arrangements are approved and scheduled.
A request for reservation of space and equipment for a particular vessel/voyage and possibly inland transport.
Break bulk cargo refers to goods that are individually packaged or bundled, rather than being transported in containers or in bulk. These items are often large or irregular in size and include products like machinery, vehicles, construction materials, or heavy equipment.
Buffer stock, also known as inventory buffer or stock buffer, refers to the extra inventory held by a company to mitigate the risk of stockouts caused by uncertainties in supply and demand. It acts as a cushion against fluctuations in customer demand, supply chain disruptions, and variations in lead times.
Bulk cargo refers to commodities that are transported unpackaged in large quantities, typically stored and handled in bulk form, rather than in individual units or containers. This category of cargo is crucial in global trade, especially for goods that are homogeneous and not easily damaged during transportation.
The bullwhip effect, also known as demand amplification or whiplash effect, is a phenomenon that occurs in supply chains where small fluctuations in demand at the consumer level lead to exaggerated fluctuations in demand further upstream in the supply chain. This amplification of demand variability causes inefficiencies, such as excess inventory, stockouts, and increased costs, as supply chain partners overreact to perceived demand changes.
CIF, or Cost, Insurance, and Freight, is an international shipping agreement used in the transportation of goods. In freight shipping, CIF means that the seller takes responsibility for the cost of transporting goods to the buyer's destination port. This includes paying for shipping, handling, and insurance. The seller's obligations end when the goods reach the destination port, at which point the buyer assumes responsibility for customs clearance, import duties, and any further transport to their final destination.
A Capesize ship is a large bulk carrier vessel designed to transport heavy raw materials across long distances, too large to transit through canals like the Panama or Suez.
The action of allowing cargo to leave the container yard typically authorized by the carrier. This is often confused with gate-out, but cargo release is the authorization necessary before shipments can be allowed to gate-out.
A cargo survey is an inspection process that assesses the condition and quantity of goods during transportation to ensure compliance with shipping terms and prevent disputes.
A shipping carrier is an organization that provides transportation services for goods. They manage the logistics of moving cargo, which includes loading, transporting, and delivering goods to the specified location. Shipping carriers handle various types of shipments, from small packages to large freight consignments, using different modes of transportation such as maritime, air, rail, and road.
Carrier haulage refers to a transportation arrangement where the carrier, typically the ocean shipping line or its designated transport provider, is responsible for arranging and paying for the inland transportation of containers. In this scenario, the carrier takes charge of moving the container from the port of discharge to the final destination or vice versa, using their own transportation assets or subcontracted carriers.
A carrier scorecard is a performance measurement tool used by supply chain and logistics professionals to evaluate the effectiveness and reliability of their freight carriers. It provides a standardized way to assess carriers based on various performance metrics, helping organizations make informed decisions about their logistics partners
A certificate of origin is a document issued by an authorized body or organization that certifies the country in which the goods being shipped were manufactured, produced, or processed. It serves as a declaration by the exporter to the customs authorities of the importing country, providing information about the origin of the goods and facilitating trade by ensuring compliance with trade agreements, tariffs, and regulations.
A commercial invoice is a crucial document used in international trade transactions to provide details of the goods being shipped and their corresponding value. It serves as a formal request for payment from the buyer to the seller and is essential for customs clearance and regulatory compliance.
In shipping, a commodity refers to bulk goods or raw materials that are transported in large volumes as part of global trade.
In the realm of supply chain and logistics, the term "Consignee" refers to the individual, company, or entity to whom a shipment of goods is delivered. The consignee is the designated recipient or receiver of the goods, typically identified by name and address on shipping documents such as the bill of lading or delivery order.
Consignment inventory is a supply chain arrangement where a supplier (consignor) retains ownership of goods while they are held at a customer's (consignee's) location. The consignee only pays for the goods when they are sold or consumed, and the supplier retains responsibility for managing and replenishing the inventory as needed.
In shipping and logistics, a consignor refers to the entity or person who is the sender or shipper of goods. The consignor is responsible for initiating the shipment of goods from one location to another, typically to a consignee or recipient.
A container depot is a facility used for the storage, maintenance, and repair of empty shipping containers when they are not actively in use for transportation.
Container discharge is the process of unloading shipping containers from a vessel at a port, using cranes and other equipment, for onward transportation.
A container freight station (CFS) is a designated facility where goods are received, sorted, and prepared for onward transportation, enhancing efficiency in logistics operations.
Shipping container grades classify containers based on their condition and suitability for transporting goods, ranging from cargo-worthy to as-is quality.
A container packing certificate is a document that verifies the proper packing and loading of goods into a shipping container. It attests that the contents have been securely packed, arranged, and secured according to industry standards and regulatory requirements. Obtaining a container packing certificate is crucial for compliance with international shipping regulations and contractual obligations. It provides assurance that the goods have been properly prepared for transport, minimizing the risk of delays, damages, or disputes during the shipment process.
A container rollover occurs when a shipping container is not loaded onto its scheduled vessel and is instead 'rolled over' to a subsequent vessel. This delay means the container misses its intended departure and must wait for the next available sailing, which can significantly impact lead times and delivery schedules.
Container stripping (devanning) is the process of unloading cargo from a shipping container at its destination for inspection, storage, or further distribution.
Container stuffing is the process of loading cargo into a shipping container in a safe and space-efficient manner for transportation.
Cross docking is a logistics strategy where incoming goods from suppliers are unloaded from incoming trucks or containers and directly loaded onto outbound trucks or trailers, with minimal or no storage time in between. Essentially, it involves transferring goods directly from the inbound dock to the outbound dock, bypassing the need for traditional warehousing storage.
A customs broker is a licensed professional who specializes in facilitating the clearance of goods through customs barriers for importers and exporters. Acting as intermediaries between businesses and customs authorities, customs brokers ensure compliance with regulations and smooth passage of goods across international borders.
Customs clearance refers to the process of fulfilling the legal requirements necessary to facilitate the import or export of goods across international borders. This procedure ensures that shipments comply with local laws and regulations, allowing them to enter or leave a country legally. It involves various documentation, inspections, and payments of duties and taxes.
A customs manifest lists in detail all the bills of lading issued by a carrier, its agent or master for a specific voyage and port call. It is a detailed summary of the total cargo of a vessel and is used principally for customs purposes. It acts as a declaration to customs authorities, ensuring compliance with regulations and facilitating smooth movement of goods through ports and checkpoints.
The latest point in time where a container has to be delivered to a terminal to be loaded on a vessel, or where certain documentation has to be provided by the Shipper.Example: CY cut-off, FCL cut-off, VGM cut-off, DG cut-off.
Cycle counting is a methodical approach to inventory management where a subset of inventory is counted on a continuous basis, typically throughout the year. Unlike traditional annual or periodic inventory counts that halt operations, cycle counting allows businesses to maintain regular operations while ensuring accurate stock levels.
DAP, or Delivered At Place, is a term used in international trade that specifies the seller's obligation to deliver goods to a designated location in the buyer's country. In DAP terms, the seller is responsible for all costs and risks associated with delivering the goods to the agreed-upon destination. This includes arranging transportation, handling charges, and insurance up to the point of delivery. The buyer, however, is responsible for unloading the goods, handling customs clearance, and paying any import duties and taxes once the goods arrive at the destination.
DDP (Delivered Duty Paid) shipping terms dictate that the seller assumes all responsibilities and costs associated with delivering the goods to the buyer's specified destination. This includes transportation, insurance, handling charges, and import duties and taxes. Essentially, the seller handles everything from the point of origin to the final delivery location, ensuring the goods arrive ready for use by the buyer without any additional costs or logistical burdens.
DDU, or Delivered Duty Unpaid, is an international shipping term that defines the responsibilities of the seller and buyer. Under DDU terms, the seller delivers the goods to a specified destination in the buyer's country, covering all costs and risks associated with transportation, except for duties, taxes, and other import charges which are the responsibility of the buyer. The seller's obligations include arranging and paying for freight, insurance, and handling charges until the goods reach the agreed-upon place.
DPU, or Delivered at Place Unloaded, is a term used in international trade that specifies the seller's responsibility to deliver and unload goods at a designated location in the buyer's country. Under DPU terms, the seller bears all costs and risks associated with transporting and unloading the goods at the agreed destination. This includes all transportation costs, including freight, insurance, and handling charges, up to and including the unloading of the goods at the destination. The buyer then takes over responsibility for import duties, taxes, customs clearance, and any further transport to the final destination.
A dangerous goods declaration (DGD) is a legal document required for the transportation of hazardous materials or dangerous goods by air, sea, road, or rail. It provides detailed information about the nature, classification, packaging, and handling requirements of the dangerous goods being transported. The DGD helps ensure compliance with international regulations and facilitates the safe handling and transport of hazardous materials throughout the supply chain.
Deadheading is the practice of operating a commercial vehicle, such as a truck or a trailer, without any cargo or paying passengers. Essentially, it refers to the movement of a vehicle while it is empty, either on its way to pick up a load or after delivering a load to its destination.
Deadweight tonnage (DWT) is a measure of a ship's carrying capacity, representing the total weight of cargo, fuel, crew, provisions, and other materials that the vessel can safely carry.
Demurrage refers to the additional charges imposed on the owner or operator of a vessel, freight car, or truck for delaying the use of equipment or facilities beyond the agreed-upon time. In the context of maritime shipping, demurrage applies to the time that cargo remains at the port or terminal beyond the allotted free time for loading or unloading.
Detention charges are fees incurred when a carrier's equipment, such as containers or trailers, is held beyond the agreed-upon free time at a facility, such as a port, terminal, or warehouse. These charges compensate the carrier for the additional time their equipment is detained and unavailable for other use.
A supply chain digital twin replicates the entire supply chain network, including assets, facilities, products, and processes, in a digital environment. It enables real-time monitoring, analysis, and simulation of supply chain operations to improve efficiency, optimize decision-making, and mitigate risks.
Dimensional weight, also known as volumetric weight, is a pricing technique used by shipping carriers to calculate the cost of shipping packages based on their volume rather than just their actual weight. This method helps carriers account for the space that a package occupies in relation to its weight, ensuring fair pricing for shipping services.
A dock receipt is a logistics document issued by a carrier or its agent to acknowledge the receipt of goods at a shipping dock or terminal for transportation. It serves as a temporary receipt until the goods are loaded onto a vessel or other mode of transportation for shipment to their destination. The dock receipt contains essential information about the cargo, such as the quantity, description, condition, and destination, along with details about the carrier, shipper, and consignee.
A ship’s draft (draught) measures the depth of the vessel below the waterline, which determines the minimum water depth required for safe navigation.
Drayage refers to the transportation of goods over a short distance, typically within the same metropolitan area or between nearby facilities. It plays a crucial role in the logistics and supply chain industry, linking various points in the transportation network, such as ports, rail terminals, and distribution centers. Drayage often involves moving goods from a transportation hub like a port to a nearby warehouse or vice versa.
Drop shipping is a retail fulfillment method where a store doesn’t keep the products it sells in stock. Instead, when a store sells a product using the drop shipping model, it purchases the item from a third party and has it shipped directly to the customer.
Dry bulk cargo refers to unpackaged, loose commodities that are shipped in large quantities and typically consist of raw materials. These goods are usually loaded directly into the holds of a vessel without any packaging, making them different from containerized or break bulk cargo.
A booking received via Electronic Data Interchange, a standard electronic format for exchanging business documents within the supply chain, such as purchase orders, invoices, shipping notices, and other transactional information.
An Economic Operators Registration and Identification (EORI) number is a unique identifier assigned to businesses engaged in international trade within the European Union (EU) and certain other countries. It serves as a means of tracking and identifying entities involved in import, export, and other customs-related activities.
In shipping, ETA refers to the anticipated arrival time of a vessel, truck, or aircraft at a specified port or delivery location. It is calculated based on various factors such as the departure time, transit duration, and any potential delays due to weather, customs, or other unforeseen circumstances. This prediction helps logistics professionals plan and coordinate the movement of goods, ensuring timely deliveries and efficient supply chain management.
EXW, or Ex Works, is one of the Incoterms (International Commercial Terms) published by the International Chamber of Commerce (ICC). It defines the responsibilities of buyers and sellers in international transactions. Under EXW terms, the seller fulfills their obligation by making the goods available for pickup at their premises (factory, warehouse, etc.). The buyer assumes all risks and costs associated with transporting the goods from the seller’s location to the final destination.
Economic Order Quantity (EOQ) is a fundamental concept in inventory management that determines the optimal quantity of goods a company should order to minimize total inventory costs. It balances the costs of holding inventory (holding costs) and the costs of ordering inventory (ordering costs) to find the most cost-effective quantity to order at any given time.
An Electronic Product Code (EPC) is a unique identifier used to distinguish individual items, cases, or pallets in the supply chain. It serves as a digital identifier that provides a standardized way to track and manage products throughout their lifecycle, from manufacturing to distribution to retail.
Used for storing cargo in/on during transport. The equipment "size/type" is defined by the ISO 6346 code. The most common equipment size/type is 20'/40'/45' Dry Freight Container, but a number of different versions exist.
Confirmation & receipt of the equipment loaded/discharged on a vessel during a port call. This information is recorded by the terminal operator and sent to the carrier. This is often done using the EDI message - COARRI. The COARRI message reports that the equipment specified have been discharged from a seagoing vessel (discharged as ordered, over landed or short landed), or have been loaded into a seagoing vessel.
A shipping exception is an unexpected event or disruption that causes a shipment to deviate from its planned delivery schedule.
Expedited freight refers to a specialized service in logistics and supply chain management aimed at transporting goods quickly and efficiently to meet tight delivery deadlines. It is used when standard shipping methods cannot meet the required delivery timeframe, typically due to urgent customer needs, production delays, or unforeseen circumstances.
FAS, or Free Alongside Ship, is a shipping term used in international trade that specifies the seller's responsibilities and costs up to the point where goods are placed alongside the buyer's vessel at the designated port of shipment. The buyer then assumes all risks and costs from that point forward.
FCA, or Free Carrier, is an Incoterm (International Commercial Term) used in international trade to define the point at which the seller's obligations are fulfilled and the buyer assumes responsibility for the goods. Under FCA, the seller delivers the goods, cleared for export, to the carrier or another party nominated by the buyer at a specified place.
FCL (Full Container Load) freight involves shipping an entire container for a single shipper, offering faster and more secure transport, especially for large-volume cargo.
FOB, or Free on Board, is a term used in international trade to indicate when ownership and liability for goods transfer from the seller to the buyer. It specifies the point at which the seller is no longer responsible for the goods. This term is crucial for determining who pays for shipping, insurance, and other logistics costs, as well as who bears the risk during transit.
An entity operating a feeder service - ref. Feeder vessel.
A container feeder vessel, also known as a feeder ship, is a relatively small cargo vessel that is specifically designed for transporting containers between smaller ports or terminals to larger hub ports where mainline vessels operate. These vessels serve as a crucial link in the global shipping network by facilitating the distribution of cargo to and from regional ports that may not be accessible to larger ships due to navigational constraints or limited infrastructure.
A Feedermax container ship is a medium-sized vessel used to transport containers between regional ports and major ports, connecting smaller markets to global shipping routes.
Fill rate in supply chain management refers to the measurement of how fully customer demand for a product or service is met through the availability of inventory. It indicates the percentage of customer orders or demand that can be fulfilled immediately from stock, without backorders or delays.
A "Flag of Convenience" (FOC) refers to the practice of a ship's owner registering a merchant vessel in a country other than the owner’s country of origin to benefit from more favorable regulations, often related to taxes, labor laws, and safety standards. This practice allows shipowners to operate under less stringent regulations, often reducing operational costs and increasing profitability. However, FOC can also lead to concerns about safety, environmental standards, and working conditions for crew members, as the regulatory oversight in these flag states might not be as rigorous.
4PL, or Fourth Party Logistics, refers to a logistics model where a single organization, known as the fourth-party logistics provider, takes on the responsibility of managing and coordinating the entire supply chain on behalf of the client. Unlike traditional third-party logistics (3PL) providers, who primarily handle specific logistics functions, 4PL providers offer comprehensive end-to-end supply chain management services. 4PL providers act as strategic partners, overseeing multiple 3PLs and other service providers to optimize supply chain operations, enhance efficiency, and achieve cost savings for their clients.
A free trade zone (FTZ) is a designated area within a country where goods can be imported, stored, manufactured, or exported without being subject to the usual customs duties and tariffs.
A freight forwarder is a vital link in the supply chain, specializing in the coordination and management of international shipments. Acting as an intermediary between shippers and carriers, freight forwarders handle various logistics tasks such as booking cargo space, arranging transportation, preparing documentation, and managing customs clearance.
Freight visibility (also called shipment visibility) refers to the ability of supply chain professionals to track and monitor the movement of freight shipments throughout the supply chain. It involves gaining real-time insights into the location and status of goods as they move through various transportation modes and stages of the logistics process.
Full truckload (FTL) freight refers to shipments that occupy the entire capacity of a truck trailer. Unlike less than truckload (LTL) shipments, FTL shipments do not share space with other cargo, allowing for direct transportation from the point of origin to the destination without intermediate stops.
The GLEC (Global Logistics Emissions Council) framework is a globally recognized standard developed to measure and report greenhouse gas (GHG) emissions from logistics activities. It provides guidelines and best practices for calculating emissions across various modes of transport, including road, rail, sea, and air.
The action of moving a container from a container yard, a terminal or another restricted/controlled area.
The German Supply Chain Act, also known as Lieferkettengesetz, is a landmark legislation enacted to promote corporate social responsibility and ensure ethical practices throughout global supply chains. Introduced in 2021, the law applies to German companies with over 3,000 employees, requiring them to monitor and address human rights abuses, environmental violations, and labor standards in their supply chains.
A Global Trade Item Number (GTIN) is a unique identifier assigned to products in the supply chain to facilitate efficient tracking and management from production to point of sale. It provides a standardized method for identifying items globally, ensuring accurate inventory control, and enabling seamless transactions between trading partners.
A Goods Receipt Note (GRN) is a document used in the process of confirming the receipt of goods from a supplier or vendor. It serves as an acknowledgment by the receiving party, typically a warehouse or a buyer, that the goods specified in the accompanying purchase order have been received in satisfactory condition.
Green logistics refers to the process of minimizing the environmental impact of logistics and supply chain activities, including transportation, warehousing, packaging, and distribution.
A Handysize ship is a small to medium-sized bulk carrier designed for transporting various cargo types, capable of navigating smaller ports and shallow waters.
Gear used to do inland transportation of a container. This can include tools and apparatus used to load/discharge the container onto the intermodal type.
Specifications for a haulier set by a carrier in regards to a specific work order, e.g. timeline, capabilities.
The joint term for merchant and carrier haulage. It should be noted that a shipment can have several types of haulage throughout the transport from origin to destination.
A haulier, also known as a trucking company or a carrier, is a business or individual that transports goods by road using trucks or lorries. Hauliers play a vital role in the transportation industry, moving goods between locations such as warehouses, distribution centers, manufacturing facilities, ports, and retail stores.
A House Bill of Lading (HBL) is a transportation document issued by a freight forwarder or Non-Vessel Operating Common Carrier (NVOCC) to acknowledge receipt of goods for shipment. It serves as a contract of carriage between the shipper and the carrier and includes details such as the type, quantity, and destination of the goods being transported.
In supply chain logistics, a hub and spoke model refers to a system where goods or services are transported through a central hub to various spoke locations. The hub acts as a central point for collection, sorting, and distribution, while the spokes represent the routes connecting the hub to different destinations.
INCOTERMS, short for International Commercial Terms, are a set of standardized trade terms published by the International Chamber of Commerce (ICC) that define the responsibilities and obligations of buyers and sellers in international trade transactions. They specify who is responsible for the costs, risks, and logistics involved in transporting goods from the seller to the buyer.
ISO 14083:2023 is an internationally recognized standard focusing on greenhouse gas (GHG) emissions measurement and reporting in freight transport. This standard guides organizations in assessing and managing the environmental impact of their transportation activities.
Import duties, also known as tariffs, are taxes imposed by a country's government on goods brought into the country from abroad. These duties serve several purposes: they generate revenue for the government, protect domestic industries from foreign competition by making imported goods more expensive, and sometimes regulate the volume of imports and exports.
In-gauge cargo is freight that fits within standard dimensions and weight limits, allowing for easier and more cost-effective transportation using conventional shipping methods.
Inbound logistics refers to the process of receiving, handling, and storing raw materials, components, and goods from suppliers to a business or manufacturing facility. This involves the management of various activities, such as transportation, warehousing, inventory control, and material handling.
Inbound supply chain visibility refers to the ability to track and monitor the movement of goods, materials, and shipments as they move from suppliers to a company's receiving or manufacturing facilities.
An inland transport request is a formal request to arrange the movement of goods between a port and an inland destination using land-based transportation methods like trucks or trains.
Intermodal transportation is a logistics strategy that involves using multiple modes of transport, such as trucks, trains, ships, and planes, to move goods from origin to destination. Unlike traditional transportation methods that rely on a single mode of transport, intermodal transportation combines different modes in a coordinated and seamless manner, allowing for greater flexibility, efficiency, and reliability in the supply chain.
The International Convention for Safe Containers (CSC) is a global treaty that sets safety standards for the design, inspection, and maintenance of shipping containers used in international trade.
The International Maritime Organization (IMO) is a specialized agency of the United Nations that regulates shipping and maritime safety, promoting secure and environmentally sustainable practices in the global shipping industry.
Inventory turnover refers to the efficiency with which a company manages its inventory by measuring how often inventory is sold and replaced over a specific period. It is an indicator of efficiency and liquidity in inventory management.
LCL (Less than Container Load) freight allows multiple shippers to share space in a single container, making it a cost-effective solution for smaller shipments.
Last mile delivery refers to the final leg of the logistics journey, where goods are transported from a distribution center or fulfillment center to the end destination, typically a residential address or retail store. It is considered the most critical and challenging part of the supply chain due to its complexity and impact on customer satisfaction.
When a shipper submits documentation after a defined deadline set by the carrier.
Laytime is the period of time granted to a vessel for loading and unloading cargo at a port. It represents the duration, typically in a number of days, for which the ship is allowed to remain at the port facility to complete these operations. Laytime is typically agreed upon in charter party contracts between the shipowner or operator and the charterer, who may be the cargo owner or a freight forwarder.
A Lead Logistics Provider (LLP), also known as a Lead Logistics Integrator (LLI), is a supply chain management term referring to a specialized third-party logistics (3PL) provider that takes on a central role in overseeing and coordinating an organization's entire supply chain activities.
Less than truckload (LTL) freight refers to shipments that do not fill an entire truck trailer but instead occupy only a portion of the available space. LTL shipments are typically smaller in size and weight, making them more cost-effective for businesses that do not require full truckload capacity.
In shipping, a letter of indemnity is issued by a shipper or consignee to the carrier, indemnifying them against any potential losses or liabilities arising from the release of cargo without the presentation of required documents, such as bills of lading. This document acts as a legal instrument to facilitate the smooth movement of goods in situations where original documents are unavailable or impractical to obtain.
This is the confirmation sent to the customer, shipper or consignee, that the equipment has been loaded/discharged. This message is based on the "equipment discharge/load report".
The action of lifting any cargo or container on board of the vessel for transportation.
A load board serves as an online platform or marketplace where shippers and carriers can connect to facilitate the transportation of freight. Also known as freight boards or truck load boards, these platforms provide a centralized space for posting and searching available loads and trucks, enabling efficient matching of transportation needs.
List of containers sent by the carrier or its agent to the terminal to instruct which containers must be loaded on a specific vessel/voyage. Each vessel can have several load lists in case of vessel sharing agreements.
Load optimization in logistics refers to the process of efficiently arranging and maximizing the use of available space within transportation vehicles, containers, or storage areas.
In the realm of supply chain and logistics, a load tender refers to the formal request made by a shipper or a consignee to a carrier or transportation provider to transport goods or freight from one location to another. This request initiates the process of arranging transportation services for a specific shipment.
Logistics 4.0, also known as the fourth industrial revolution in logistics, refers to the integration of advanced digital technologies and data-driven solutions to revolutionize traditional supply chain and logistics operations. It builds upon the concepts of Industry 4.0, applying automation, artificial intelligence (AI), Internet of Things (IoT), and big data analytics to optimize efficiency, visibility, and agility across the supply chain.
Logistics document management refers to the process of handling, organizing, and storing various documents involved in supply chain and logistics operations. It encompasses the management of paperwork, electronic records, and other documentation essential for the efficient flow of goods from point of origin to final destination.
Logistics route optimization involves the strategic process of determining the most efficient and cost-effective routes for transporting goods and materials from origin to destination. It aims to minimize transportation costs, reduce fuel consumption, and enhance overall delivery efficiency within supply chain and logistics operations.
A Logistics Service Provider (LSP) is a company or organization that offers specialized logistics and supply chain management services to support the transportation, storage, and distribution of goods. LSPs play a crucial role in facilitating efficient movement of products from point of origin to point of consumption, serving as intermediaries between manufacturers, suppliers, and end-users.
Logistics visibility refers to the ability of supply chain professionals to track and monitor the movement of goods and assets throughout the supply chain in real-time. It involves gaining insights into the location, status, and condition of shipments, inventory, and transportation assets as they move through various stages of the supply chain.
The manifest corrector is used to make changes to a manifest after the manifest in question has been submitted to the relevant authorities.
Marine insurance offers protection for shipments and vessels involved in maritime trade. It covers various risks, including damage to cargo caused by accidents, theft, natural disasters, and even piracy. Additionally, marine insurance can provide coverage for liabilities arising from collisions, salvage operations, and pollution incidents during transportation by sea.
A Maritime Mobile Service Identity (MMSI) number is a unique nine-digit identifier assigned to ships, coastal stations, and other maritime communication equipment. This number is used in digital selective calling (DSC), automatic identification systems (AIS), and other marine radio communication systems to ensure accurate and efficient identification and communication.
A Master Bill of Lading (MBL) is a transportation document issued by the ocean carrier or its agent to acknowledge receipt of goods for shipment. It serves as a contract of carriage between the shipper and the ocean carrier, detailing the terms and conditions of transportation, including the type, quantity, and destination of the goods being shipped. The MBL also acts as a receipt for the cargo and serves as a title document, allowing the consignee to claim ownership of the goods upon arrival at the destination port.
Material Requirements Planning (MRP) is a systematic approach to managing the manufacturing and procurement of materials necessary for production. It involves calculating the quantities of raw materials, components, and assemblies needed to fulfill production orders or meet demand forecasts within a specified timeframe.
Merchant haulage refers to a scenario in transportation logistics where the party responsible for arranging and paying for the inland transportation of goods (e.g. port to warehouse) is the cargo owner or another party distinct from the ocean carrier.
MOQ, or Minimum Order Quantity, refers to the smallest quantity of goods or products that a supplier is willing to sell or a buyer is willing to purchase in a single order. It is a contractual agreement between the supplier and the buyer, setting a threshold below which the transaction may not be economically feasible for one or both parties.
Multimodal transport refers to the transportation of goods using two or more modes of transport under a single contract. It integrates different types of transportation modes, such as road, rail, sea, and air, to optimize the efficiency of cargo movement from origin to destination.
Neopanamax ships are large cargo vessels designed to navigate the expanded Panama Canal, offering increased cargo capacity and efficiency compared to earlier Panamax vessels.
The operational capacity of a vessel on a specific voyage. This capacity takes into account all limiting factors such as the physical capacity on-board, but it also allows for constraints in the terminals to load / discharge the vessel for the specific voyage.
NVOCC stands for Non-Vessel Operating Common Carrier and refers to a type of freight consolidator or intermediary that doesn't own any vessels but functions as a carrier by issuing bills of lading, booking space on vessels, and managing shipments. Essentially, NVOCCs act as intermediaries between shippers and ocean carriers, providing shipping services without operating their own vessels.
Off dock storage refers to the practice of storing cargo containers or goods at a location separate from the port terminal or container yard where they were initially unloaded from a vessel. This storage facility, often located nearby but off-terminal, provides additional space for holding containers temporarily before they are moved to their final destination.
OTIF stands for On-Time In-Full, a key performance indicator (KPI) used in supply chain management to measure the percentage of orders delivered to customers both on time and in full. It assesses the effectiveness and efficiency of logistics operations in meeting customer expectations regarding delivery timeliness and order completeness.
Order accuracy in logistics and warehousing refers to the precision with which customer orders are fulfilled.
Order lead time, often referred to simply as lead time, is a crucial concept in supply chain management that defines the duration between the initiation of an order and its fulfillment. It encompasses the entire process from when an order is placed until the goods or services are delivered to the customer or stocked in inventory.
Out of gauge cargo, often abbreviated as OOG cargo, refers to shipments that exceed the standard dimensions or weight limitations for transportation containers or transport vehicles. This type of cargo typically includes oversized, bulky, or irregularly shaped goods that cannot fit within the standard confines of a shipping container or vehicle.
A Pre-Arrival Processing System (PAPS) number is a tracking number used in the United States for road shipments that require pre-arrival customs processing. PAPS is a border-crossing process designed to expedite the clearance of goods entering the U.S. by allowing customs to review shipment information before it reaches the border.
A Pre-Arrival Review System (PARS) number is a unique identifier used in the Canadian border clearance process for road shipments entering Canada. The PARS number allows the Canada Border Services Agency (CBSA) to review shipment information before the goods arrive at the border, facilitating faster and more efficient customs clearance.
POD (Port of Discharge) refers to the specific port where goods are unloaded from a vessel at the end of their sea voyage. This term is integral in the logistics and supply chain industry as it marks the point where cargo is transferred from the shipping carrier to the next mode of transportation, such as trucks or trains, or directly to the consignee.
POL (Port of Loading) refers to the specific port where goods are loaded onto a vessel for transportation. In international shipping, the POL is a critical point in the logistics process, marking the beginning of the goods' journey from the exporter to the importer.
A packing list is a document that itemizes the contents of a shipment. It provides detailed information about the goods being transported, including descriptions, quantities, and any special instructions for handling. This document serves as a crucial tool in supply chain and logistics operations, aiding in the verification of goods received, inventory management, and customs clearance processes.
A Panamax ship is a vessel designed to meet the size restrictions of the original Panama Canal locks.
A facility with piers or docks. Ports are accessed by vessels and represent the destinations of a voyage. Ports can contain one or more terminals.
A port call is a scheduled stop made by a vessel at a port for loading, unloading, and other operational activities related to shipping. A vessel may have several terminal calls during a single port call.
Port congestion occurs when there is a significant backlog of vessels waiting to enter or leave a port, or when there are delays in cargo loading and unloading processes within the port. It results in extended wait times for ships, increased dwell times for cargo, and overall disruptions to supply chain operations.
A port of entry refers to a designated location where goods and merchandise can legally enter a country for customs inspection and clearance. It serves as the gateway through which imported goods are received and undergo official procedures before being allowed into the domestic market.
Port pair is a term used in the shipping and logistics industry to describe a set of two ports that serve as the origin and destination in a shipping route. A port pair consists of a Port of Loading (POL) and a Port of Discharge (POD).
A Post Panamax vessel is a large ship too big for the original Panama Canal locks but smaller than newer Neopanamax vessels.
Re-export refers to the process of exporting goods that were previously imported into a country without undergoing significant alteration or manufacturing processes within that country. Essentially, re-exports involve sending imported goods back out of the country to a different destination.
Real time transportation visibility refers to the ability of supply chain professionals to monitor and track the movement of goods and shipments in real time throughout the transportation process. It involves gaining insights into the location and status of shipments as they move through various modes of transportation, such as road, rail, air, or sea.
A reefer container, also known as a refrigerated shipping container, is a specialized shipping container used to transport temperature-sensitive cargo such as fruits, vegetables, pharmaceuticals, and other perishable goods. These containers are equipped with refrigeration units to maintain specific temperature conditions throughout the journey, ensuring the freshness and quality of the cargo.
Reference number contained in the Cargo Release. It is provided by the carrier to the terminal and to the cargo receiver, and it must be presented upon pick up at the terminal.
Reverse logistics refers to the process of managing the flow of products, materials, and information from the point of consumption back to the point of origin or other designated locations. It involves activities such as product returns, repairs, refurbishment, recycling, and disposal, aimed at optimizing the value recovery and sustainability of goods throughout their lifecycle.
Roll-on/roll-off (RORO) shipping is a method of transporting vehicles and other wheeled cargo by allowing them to be driven onto and off of specialized vessels, eliminating the need for cranes or other loading equipment. RORO vessels are equipped with ramps or platforms that facilitate the easy movement of cargo.
Plan for the end-to-end shipment of a shipment. This includes specification of all transport legs, timings, schedules and interdependencies between transport legs.
SCAC stands for Standard Carrier Alpha Code. It's a unique two-to-four letter code assigned to transportation companies for easy identification in the supply chain. These codes are primarily used in the United States, Canada, and Mexico.
Safety stock, also known as buffer stock or reserve inventory, refers to the extra inventory held by a company above its average demand level. The purpose of safety stock is to provide a buffer against unexpected fluctuations in demand, supply disruptions, or lead time variability.
Sanctions screening is the process of verifying that individuals, companies, and entities involved in a business transaction are not subject to any trade or economic sanctions imposed by governments or international organizations. This process is essential to ensure compliance with legal and regulatory requirements and to avoid engaging in prohibited activities.
Scope 3 emissions refer to indirect greenhouse gas emissions generated by activities associated with an organization's value chain, including its upstream and downstream activities such as procurement, transportation, product use, and disposal. These emissions occur outside of an organization's direct control but are a result of its business activities.
A sea waybill, also known as a non-negotiable sea waybill or direct ocean carrier bill of lading, is a document issued by the carrier to acknowledge receipt of goods and confirm the contract of carriage. Unlike a traditional bill of lading, a sea waybill is not a negotiable instrument and does not require endorsement for the transfer of ownership. It serves as a receipt of shipment and a contract of carriage between the shipper and the carrier.
A single-use instrument used for securing container or freight car or truck doors.Seals have unique numbers for record purposes.
A Shipment is the realisation of a customer booking for which all containers have a common routing and details of scheduling.
Shipment visibility refers to the ability of supply chain and logistics professionals to track and monitor the movement of goods throughout the entire logistics process, from the point of origin to the final destination. It involves real-time access to information about the status and location of goods as they travel through various stages of transportation and distribution.
The shipper is the entity or party who is responsible for the shipment. This can be dependent on the INCOTERMS under which the cargo moves. If there are any queries around this, please contact your Beacon Account Manager.
A shipping alliance is a collaboration between multiple shipping companies to share resources and optimize operations, enhancing service offerings and reducing costs in the global shipping market.
An enrichment to the original booking shared by the shipper to the carrier. The shipping instruction includes volume/weight, shipping dates, origin, destination and other special instructions. The information given by the shipper through the shipping instructions is the information, which is required to create the Bill of Lading.
Shipping lanes are predetermined routes used by ships and vessels for transporting goods and commodities across oceans and seas. These routes are established to ensure safe and efficient maritime navigation, taking into account factors such as water depth, currents, weather conditions, and proximity to ports.
A shipping manifest is an essential document in the logistics process, detailing all items being transported on a ship, airplane, or vehicle. It includes information such as the names and addresses of the shipper and consignee, descriptions of the cargo, the quantity and weight of each item, and any special handling instructions. The manifest helps ensure that all parties involved in the shipping process, including customs authorities and logistics providers, have a clear understanding of the cargo being transported.
A short shipment refers to a situation in logistics where the quantity of goods received by the consignee is less than what was originally shipped or expected. It can occur due to various reasons such as inventory discrepancies, packaging errors, transportation issues, or supplier mistakes. Short shipments can disrupt supply chain operations, delay production schedules, and impact customer satisfaction.
Slotting refers to the strategic placement of products within a warehouse to optimize the efficiency of picking, packing, and shipping processes. This involves organizing products based on factors such as their size, weight, demand frequency, and compatibility with other items.
Joint term for cargo, which is not transported in a regular dry container or is considered dangerous goods. This also includes, but is not limited to out of gauge cargo.
All container types other than regular Dry or Reefer containers. Examples of these can be flat racks (open containers for oversized, irregular and/or heavy cargo), Open tops (fitted with a solid removable roof), etc.
A stockout occurs when a business runs out of a particular item or product, leading to its temporary unavailability for sale or distribution. It denotes a situation where customer demand exceeds available inventory, resulting in potential lost sales and customer dissatisfaction.
Stowage refers to the systematic loading and arrangement of cargo on a vessel to ensure safety, efficiency, and optimal use of space during transportation.
Supplier risk management is the process of identifying, assessing, and mitigating risks associated with a company's suppliers to ensure continuity and reliability in the supply chain.
Supply Chain 3.0 represents the evolution of traditional supply chain management practices into a more advanced and interconnected model, driven by digital technology and data analytics. This next-generation supply chain approach focuses on enhancing visibility, agility, and collaboration across the entire supply chain ecosystem.
Supply Chain 4.0, an integral part of the broader concept of Industry 4.0 and Logistics 4.0, represents a paradigm shift in supply chain management driven by digital technologies and advanced analytics. It encompasses the integration of artificial intelligence (AI), machine learning, robotics, and the Internet of Things (IoT) to create smarter, more connected, and automated supply chain networks.
Supply chain automation involves the use of technology and software systems to streamline and optimize various processes within the supply chain, including inventory management, order fulfillment, transportation, and warehouse operations. It aims to reduce manual intervention, improve efficiency, and enhance overall supply chain performance.
Supply chain collaboration refers to the strategic partnership and cooperation among different entities within the supply chain, including suppliers, manufacturers, distributors, warehouses and retailers. It involves sharing information, resources, and responsibilities to optimize processes, improve efficiency, and achieve common goals.
A supply chain control tower is a centralized hub or platform that provides end-to-end visibility and orchestration of supply chain operations in real-time. It acts as a command center where supply chain professionals can monitor, analyze, and manage the flow of goods, information, and finances across the entire supply chain network.
Supply chain data refers to the information generated and collected throughout the entire supply chain process, from procurement of raw materials to delivery of finished products to customers. It encompasses various types of data, including inventory levels, transportation routes, freight tracking milestones, supplier performance, demand forecasts, and customer preferences. Supply chain professionals can analyze this data to gain insights, optimize processes, and make informed decisions to improve efficiency and planning.
Supply chain finance (SCF) refers to a set of financial solutions and practices aimed at optimizing cash flow and working capital management throughout the supply chain. It involves leveraging financial instruments and services to facilitate transactions between buyers, suppliers, and financial institutions, thereby improving liquidity, reducing risk, and enhancing collaboration within the supply chain.
Network design in supply chain management involves creating a strategic framework that outlines the structure and operations of the supply chain.
Supply chain resilience refers to the ability of a supply chain to withstand and recover from disruptions while maintaining continuous operations and delivering products or services to customers without significant impact. It involves the capacity to anticipate, adapt, and respond effectively to various challenges, including natural disasters, geopolitical events, market fluctuations, and supplier disruptions.
Supply chain risk management refers to the process of identifying, assessing, and mitigating risks within a supply chain to ensure continuity and minimize disruptions. It involves analyzing all elements of the supply chain—from sourcing raw materials to delivering finished products—to anticipate and address potential vulnerabilities that could impact operations, finances, or reputation.
Supply chain traceability refers to the ability to track and verify the journey of products through every stage of the supply chain, from raw materials to the final consumer.
Also referred to as end-to-end visibility, supply chain visibility refers to the ability of organizations to track, analyze, communicate and monitor the flow of goods as they move across the entire supply chain, from raw material suppliers to end customers. It encompasses real-time data and insights into inventory levels, order statuses, transportation movements, and other key metrics, enabling stakeholders to make informed decisions and respond swiftly to changes and disruptions.
Supply planning is the process of aligning supply with demand to ensure that sufficient quantities of goods or materials are available to meet customer needs while minimizing costs and optimizing inventory levels. It involves forecasting demand, determining production or procurement requirements, scheduling production activities, and managing inventory levels to maintain a balance between supply and demand.
A facility for loading, moving or discharging containers. Terminals can be both inland terminals for trucks and rail or port terminals are accessed by vessels and these can contain multiple berths.
Upon completion of operations on a particular vessel, a terminal departure report (TDR) is to be sent to the respective shipping lines. This report, prepared from timesheets, includes container vessel operation data and tabulation of productivity. This can be in the form of the EDI-message TPFREP.
Each terminal has a set number of moves, which can be performed on a vessel during a port call. One move is usually defined as the movement (loading or unloading) of one container.
A trade lane (or trade route) refers to a specific pathway along which goods are transported between two or more locations, typically across international borders. Trade lanes are established based on the flow of goods and the economic relationships between countries or regions. They encompass both maritime and air routes and play a crucial role in global supply chains by facilitating the movement of goods and fostering international trade.
Transit time refers to the duration it takes for goods or shipments to travel from their origin to their destination. It is a crucial metric in supply chain and logistics management, as it directly impacts delivery schedules, inventory levels, and customer satisfaction. Transit time encompasses the entire journey of a shipment, including transportation, handling, and processing at various checkpoints along the route.
Transloading refers to the process of transferring goods or cargo from one mode of transportation to another, typically from one type of truck or railcar to another, or from rail to truck and vice versa. This logistical practice is often employed to optimize transportation routes, reduce costs, and improve overall efficiency in supply chain operations.
A Transportation Management System (TMS) is a specialized software solution designed to streamline and optimize transportation and logistics operations within supply chains. It provides functionalities to effectively manage and control the movement of goods from origin to destination.
Transportation lead time refers to the duration it takes for goods to be transported from the point of origin to the final destination. It encompasses the time required for transportation activities, including loading, transit, and unloading, across various modes of transport such as road, rail, air, or sea.
A transshipment is the process of transferring goods from one transportation vehicle or vessel to another during their journey from origin to destination. It typically occurs at intermediary points along the supply chain route, where cargo is transferred between different modes of transportation, carriers or vessels.
Twenty-foot Equivalent Unit (TEU) is a standard unit of measurement used in the shipping industry to quantify the cargo-carrying capacity of container vessels. It represents the volume of a standard twenty-foot-long shipping container.
An Ultra Large Container Vessel (ULCV) is a massive container ship used on major trade routes, capable of carrying over 14,000 TEUs.
Vendor Managed Inventory (VMI) is a supply chain management strategy where the supplier or vendor takes responsibility for managing the inventory levels of their products at the customer's or retailer's location. In this arrangement, the vendor monitors the inventory levels based on agreed-upon criteria such as sales data or inventory levels, and initiates replenishment as needed.
Verified Gross Mass (VGM) is a term used in the shipping industry to refer to the total weight of a packed container, including its contents and packaging materials. It is a crucial requirement mandated by the International Maritime Organization (IMO) under the Safety of Life at Sea (SOLAS) convention to enhance safety in maritime transportation.
A floating structure with its own mode of propulsion designed for the transport of cargo and/or passengers. In the Industry Blueprint 1.0 "Vessel" is used synonymously with "Container vessel", hence a vessel with the primary function of transporting containers.
A vessel sharing agreement (VSA) is a cooperative arrangement between shipping companies that allows them to share space and resources on vessels for specific routes.
Vessel bunching refers to the situation where multiple vessels arrive at a port simultaneously or within a short period, leading to congestion and delays. This clustering of vessels can overwhelm port facilities, causing extended wait times for berthing, loading, and unloading operations.
A vessel call sign is a unique identifier assigned to a ship for radio communication purposes. It is used to distinguish the vessel from others in maritime communication systems, including VHF radios and satellite communications.
A vessel omission (sometimes called a port omission) occurs when a scheduled vessel does not call at a planned port during its voyage. This disruption means that the vessel skips the port entirely, which can impact the transportation and delivery schedules of goods.
In cargo shipping, vessel rotation is the planned sequence of port calls that a shipping vessel follows on its route to optimize cargo loading and unloading operations.
The timetable of departure and arrival times for each port call on the rotation of the vessel in question.
A journey by sea from one port or country to another one or, in case of a round trip, to the same port.
Warehouse utilization is a logistics metric that refers to the effective use of available warehouse space for storing goods and inventory.
Order for specific transportation work carried out by a third party provider on behalf of the issuing party.
Logistics yard management refers to the process of overseeing and controlling the movement of trucks, trailers, containers, and other vehicles within a yard or distribution center. This includes tasks such as scheduling, tracking, and coordinating the arrival, departure, and storage of these vehicles.
Automatic Identification Systems (AIS)
What is an automatic identification system (AIS) in shipping?
An Automatic Identification System (AIS) is a tracking system used in the maritime industry to monitor the location and movement of ships. AIS provides real-time information about vessel identification, position, course, and speed. It is essential for enhancing maritime safety and efficiency, aiding in navigation, and preventing collisions. AIS data is transmitted continuously, allowing ships and coastal authorities to track vessel movements.
How does AIS work?
AIS works by using very high frequency (VHF) radio signals to transmit and receive information between ships and shore stations. Each vessel equipped with an AIS transponder sends out data that includes its unique identification number, position (latitude and longitude), speed, course, and other relevant information. This data is picked up by other AIS-equipped ships and coastal base stations within range, which can then display the information on electronic charts or radar screens. The system operates continuously, providing up-to-date information on vessel movements.
How does AIS improve supply chain visibility?
AIS significantly enhances supply chain visibility by providing real-time tracking of vessels. This allows supply chain professionals to monitor the location and status of shipments, predict arrival times more accurately, and manage logistics operations more efficiently. Improved visibility helps in optimizing routing, reducing delays, and planning for port operations, thereby enhancing overall supply chain efficiency.
The data from AIS can also be integrated with other supply chain management systems to provide a comprehensive view of the entire logistics network
What are the limitations of AIS systems?
Despite its advantages, AIS has certain limitations. The system relies on VHF radio signals, which have a limited range, typically up to 40 nautical miles. Beyond this range, the data may not be received unless relayed by satellite AIS. Additionally, AIS data can be spoofed or tampered with, leading to potential inaccuracies. Lastly, AIS does not provide information on cargo specifics, only vessel details, limiting its utility in certain supply chain applications.