BLOG
How to Make Sense of Logistics Terms and Acronyms
In this blog I identify the most important logistics terms and acronyms which you need to know…
Language of Logistics
Just like most industries, logistics has its own unique language. Its language is composed of specific words, in addition to numerous acronyms.
After running a recent logistics industry induction training course, one of the participants asked if I could recommend a glossary on the internet for logistics acronyms.
The acronyms are however daunting me
In my research and course preparation, I did not come across one good reference which I could recommend. There are lots of them available when you search. However, most of the ones you find via a search engine tend to be too detailed and therefore include a lot of acronyms which are not very relevant unless you actually work in operations. Others tend to be just a list with no explanations provided. I’ve even found lists with erroneous descriptions.
With this in mind, I promised to prepare what I consider to be the most useful terms and acronyms and that is what you now find here in this blog post.
In my opinion, these are the most relevant terms and acronyms for anyone working in the logistics industry but in a functional role, e.g. Finance, HR or IT.
At the end of the article you can request a pdf download of Logistics Terms and Acronyms
Contract Terms
INCOTERMS
A list of standard contract terms which clarify whether the seller or buyer holds the risk, responsibility and cost for each stage of the shipment. The list was last updated 2020 and is owned by International Chamber of Commerce (ICC). Incoterms are the source of many logistics acronyms and there are many useful guides on line.
PREPAID
Prepaid means that the shipper or consignor is responsible for the international freight charges.
COLLECT
Collect means that the consignee or shipment receiver is responsible for the international freight charges.
MEASUREMENTS
TEU
(Twenty-Foot Equivalent Unit): A unit of measurement in maritime transport that is equivalent to the capacity of a 20-foot container.
20'
Standard Twenty Foot Long Shipping Container
40'
Standard Forty Foot Long Shipping Container
HIGH CUBE
Shipping container which is about 30cm higher than a standard container
REEFER
A refrigerated shipping container used for cargo requiring temperature control.
CBM
Cubic Meter – calculated as length x width x height.
TAX WEIGHT
Also known as Chargeable Weight or Billed Weight: It is the designated weight shown on an invoice and/or waybill used to calculate freight charges. The tax weight may be the dimensional weight or the gross weight of the shipment. For example, a shipment of feathers will be based on the dimensions of the cargo, whereas a shipment of heavy metal will be based on the gross weight.
ULD
Unit Load Device – used to transport cargo by aeroplane. ULDs are divided into two main categories: aircraft containers and aircraft pallet/net combinations.
DOCUMENTS
BOL (B/L)
Bill of Lading – a document required to move a shipment. It serves as a contract of carriage containing the terms and condition between shipper and carrier.
AWB
Airway Bill – is a bill of lading which covers both domestic and international flights. The document contains the terms and conditions of the shipment, carrier’s limit of liability, description of goods and the procedure to make claims.
CHARGES
CAF
Currency adjustment factor – the shipping company sometimes levies a currency surcharge so as to compensate for currency exchange rate risks.
BAF
Bunker Adjustment Factor. When fuel prices are subject to major price fluctuations, the shipping company sometimes levies a bunker surcharge (fuel for ships) so as to compensate for the risks of price fluctuations.
THC
Terminal Handling Charge – A charge for handling containers at ocean freight terminals. It can also refer to charges for handling LCL cargo at deconsolidation depots.
DEMURRAGE
Demurrage is a fee attached to cargo that has overstayed its time at a terminal. Often ports and terminals allow importers to store goods or containers for a number of ‘free’ days (typically 4-7 days), after which charges are applied.
DETENTION
Detention is a charge that can be levied by a shipping transport provider for not returning an empty container to a container yard or port after an agreed time.
SERVICE TYPES
FCL
Full Container Load – FCL is a container shipping term. It refers to a container with only one shipment for a single destination. The container can be full or only part-full. FCL just indicates that it has not been consolidated with other shipments.
LCL
Less than Container Load – LCL is a container shipping term indicating that the volume of the shipment is less than a full container. Also known as groupage or a shared container, LCL shipments are shipped alongside other cargo in one single shipping container.
FTL
Full Truckload – FTL is a roadfreight term. It refers to a truck with only one shipment for a single destination. The truck can be full or only part-full. FTL just indicates that it has not been consolidated with other shipments.
LTL
Less than Truckload – LTL is a road freight shipment that only requires a part of the vehicle’s full capacity, but is greater than a parcel i.e. a pallet. Also known as groupage, LTL shipments are consolidated with other cargo in one truck.
Business Models
CEP
Courier / Express / Parcel companies – refers to postal and logistics companies that primarily transport consignments with comparatively low weight and volume – such as letters, small packages, documents or small items.
LSP
LSP is a term less commonly used for 3rd Party Logistics Providers (see 3PL).
3PL
3rd Party Logistics – A logistics outsourcing firm that can handle a variety of logistics-related requirements, such as inventory management, storage and warehousing, pick/packing, shipping and distribution.
4PL
4th Party Logistics – A 4PL orchestrates the alignment of resources and technology of 3PLs in order to provide a logistics service to an end client.
LLP
Lead Logistics Provider (also referred to as a 4PL) manages and directs all aspects of an entire supply chain.
Logistics Induction Training Contact Form
Do you want your team to learn the language of logistics?
Complete the contact form and I will get in touch with you to discuss your requirements. Let’s help your team make sense of logistics terms and acronyms!
Logistics Terms and Acronyms PDF Request
Complete the request form and I will send you a pdf summary to help you make sense of logistics terms and acronyms!
