111 terms, A to Z
Logistics and Fulfillment Glossary
Short, plain-English definitions of the words that show up in 3PL quotes, freight paperwork and retailer routing guides. Where we have written a full guide on a term, the definition links to it.
0-9
- 1PL (first-party logistics)
- A business moving, storing and shipping its own goods with its own people, space and vehicles. A brand packing every order in its own space is operating as a 1PL.
- 1PL vs 2PL vs 3PL vs 4PL vs 5PL
- 2PL (second-party logistics)
- A provider that owns one logistics asset, most often transport, and sells its use. Parcel carriers, ocean lines and trucking companies are 2PLs: they move your goods but do not manage your fulfillment.
- 1PL vs 2PL vs 3PL vs 4PL vs 5PL
- 3PL (third-party logistics provider)
- A company that stores a brand's inventory and picks, packs and ships its orders, usually handling receiving and returns as well. The brand keeps ownership of the goods and outsources the physical work.
- What is a 3PL?
- 4PL (fourth-party logistics)
- A provider that manages a brand's supply chain on its behalf, often coordinating several 3PLs, carriers and vendors. Put simply, a 3PL does the work and a 4PL manages the work.
- 3PL vs 4PL
- 5PL (fifth-party logistics)
- A provider that designs and runs entire supply networks, usually with a heavy technology layer. The label mostly applies to very large, complex operations.
- 1PL vs 2PL vs 3PL vs 4PL vs 5PL
A
- ABC analysis
- A way of ranking SKUs by their share of sales or value. The small group of A items gets the tightest reorder points and the most frequent counts, while slow C items are checked less often.
- Ecommerce inventory management
- Advance ship notice (ASN)
- An electronic notice, sent as an EDI 856, that tells a retailer what is on a shipment before it arrives: which items are in which cartons, and which cartons are on which pallets. It lets the receiving dock scan the load in rather than count it by hand.
- Retail fulfillment
- Air freight
- Cargo carried on aircraft. It is far faster and far more expensive per kilogram than ocean freight, and it is billed on chargeable weight, so light bulky cargo costs more than its scale weight suggests.
- Air freight vs ocean freight
- Air waybill
- The transport document for air cargo, the air equivalent of a bill of lading. Unlike an ocean bill of lading it is not a title document, which is one reason air shipments release faster.
- What is freight forwarding?
- Amazon FBA prep
- The labeling and packaging work a product must pass before Amazon will accept it into a fulfillment center, such as FNSKU labels, polybagging, bundle marking and carton content information. The requirements vary by product type.
- Amazon FBA prep
- APO, FPO and DPO
- USPS address designations for Army Post Office, Fleet Post Office and Diplomatic Post Office. They route mail to US military personnel overseas and aboard ships, and to embassies and consulates.
- APO and FPO shipping
B
- B2B fulfillment
- Storing a brand's inventory and shipping its wholesale orders to other businesses such as retailers, distributors and resellers. Orders move by the case or pallet against a purchase order, often with labeling and delivery rules set by the buyer.
- B2B fulfillment
- Backorder
- An order accepted for an item that is temporarily out of stock, to be shipped once new inventory arrives. Unlike an out-of-stock item, a backordered item can still be purchased.
- What is a backorder?
- Batch picking
- A picking method where one pass through the warehouse pulls the same SKU for many orders at once, and the items are sorted to individual orders afterward. It suits high volume with repeat SKUs and one or two items per order.
- Pick and pack fulfillment
- Bill of lading (BOL)
- The transport document for a freight shipment. It records what is shipping and between whom, and serves as a receipt for the goods and the contract of carriage. An ocean bill of lading issued as an original negotiable set is also a title document.
- What is freight forwarding?
- Billable weight
- The weight a carrier actually charges for: the greater of a package's actual weight and its dimensional weight. A large, light box is billed on its size, not its scale weight.
- Cheapest way to ship a package
- Bona fide agent
- The FMCSA term at 49 CFR 371.2 for someone inside a carrier's normal organization, working under its direction, with no discretion to allocate traffic between that carrier and others. A dispatcher acting this way does not need broker authority.
- Truck dispatch services
- Bundling
- Selling items together as one offer. A bundle can be physical, packed together ahead of time, or virtual, where the listing groups products but each component SKU is picked separately when the order arrives.
- Kitting services
C
- Cargo
- The goods being transported, usually in bulk by ocean vessel, aircraft or freight truck. When tracking says a parcel shipped as cargo, it is moving on a freight network rather than a parcel one.
- Cargo vs shipment
- Chargeable weight
- The weight air freight is billed on: the greater of actual gross weight and volumetric weight. Volumetric weight comes from the shipment's dimensions divided by a divisor the carrier sets.
- Air freight vs ocean freight
- Chargeback
- A deduction a retailer takes off a supplier's payment when a shipment misses a routing guide rule, from a mislabeled carton to a missed delivery appointment.
- Retail fulfillment
- Cluster picking
- A picking method where the picker carries several order totes and drops items into each while walking one route. It suits small mixed-SKU orders such as subscription boxes or apparel.
- Pick and pack fulfillment
- Co-packing
- A manufacturing step where a contract packager fills, seals, labels or assembles a product as part of production, before it is a finished good. Combining finished products after production is kitting, not co-packing.
- Kitting services
- Commercial invoice
- The document stating what imported goods are, what they are worth and who is buying them. Customs values the shipment from it.
- What is freight forwarding?
- Consignee
- The party that receives a shipment. The consignee is named on the bill of lading, takes possession of the freight at delivery and signs for it. On imports, the consignee is usually the importer of record.
- Consignee meaning
- CPG fulfillment
- Storing, picking, packing and shipping consumer packaged goods such as food, beverages, supplements and personal care. Because the inventory is dated and lot controlled, it adds expiration tracking, lot tracking and first expired, first out picking.
- CPG fulfillment
- Cross docking
- Re-sorting inbound freight onto outbound trucks across the same dock, matched to orders that already exist. The goods do not enter inventory and ideally never leave the dock area.
- International freight and transloading
- Customs broker
- A company or individual licensed by US Customs and Border Protection to prepare and file customs entries on an importer's behalf. RitePrep is not a customs broker; we coordinate paperwork with the licensed broker who files.
- What is freight forwarding?
- Cycle counting
- Checking a rotating slice of SKUs on a schedule instead of shutting down for one full physical count a year. It catches inventory drift while it is small and the cause is still traceable.
- Ecommerce inventory management
D
- DAP (Delivered at Place)
- The Incoterm where the seller delivers the goods to the named destination, but the buyer clears them through customs and pays import duties and taxes. It replaced the older DDU term.
- DDP shipping
- Days on hand
- How many days of sales your average inventory would cover, calculated as average inventory value divided by cost of goods sold, multiplied by the days in the period.
- Ecommerce inventory management
- DDP (Delivered Duty Paid)
- The Incoterm where the seller pays every cost and carries every risk of getting goods to the buyer's door, including import customs clearance, duties and import taxes. The buyer owes nothing on delivery.
- DDP shipping
- DDU (Delivered Duty Unpaid)
- A retired Incoterm, replaced by DAP. Carriers and checkout tools still use the label for the same arrangement, in which the buyer pays duties and taxes before the parcel is released.
- DDP shipping
- Deadhead
- Miles a truck drives empty, with no paying load, usually between one delivery and the next pickup. Deadhead burns fuel and hours without earning revenue.
- Truck dispatch services
- Delivery exception
- A carrier status meaning an unexpected event has delayed a package in transit, such as severe weather, an address problem, a customs hold or a damaged label. It does not mean the package is lost.
- Delivery exception
- Devanning
- The physical work of emptying an ocean container, also called destuffing or stripping. Floor-loaded or loose cargo comes off as cartons or pallets.
- International freight and transloading
- Dimensional weight
- A pricing method where carriers bill by package volume when it exceeds actual weight. Length times width times height is divided by a dimensional divisor, and the carrier bills whichever is higher.
- Shipping box sizes
- Distribution center
- A facility built for fast throughput: goods arrive, get sorted and ship out to retailers, businesses or customers within days or hours. It is measured by how quickly inventory moves, not how much it holds.
- Distribution centers
- Drayage
- Short-distance trucking of shipping containers, typically between a port or rail terminal and a nearby warehouse. On an import it is the inland leg that brings the container from the port to its destination.
- What is freight forwarding?
- DTC fulfillment
- Picking, packing and shipping each customer order straight from the warehouse to the buyer, with no retailer or marketplace in between. The brand keeps the customer relationship, the packaging and the order data.
- DTC fulfillment
- Dunnage
- Protective material that secures and cushions goods in transit so they do not shift or absorb impact: air pillows, bubble wrap, paper and inserts inside a parcel, and blocking, bracing and airbags around freight.
- What is dunnage?
E
- Ecommerce fulfillment
- Everything between a customer clicking buy and the package arriving: storing inventory, receiving the order from the store, picking the items, packing them and shipping them out.
- Ecommerce fulfillment
- EDI (Electronic Data Interchange)
- The standardized file format retailers use to exchange purchase orders, shipping notices and invoices with suppliers instead of email or spreadsheets. In the US the documents are ASC X12 transaction sets, identified by number.
- Retail fulfillment
- EDI 810 (invoice)
- The supplier's electronic invoice to a retailer, referenced back to the 850 purchase order and to what actually shipped.
- Retail fulfillment
- EDI 850 (purchase order)
- The retailer's electronic purchase order, listing items, quantities, prices, the ship-to location and the delivery window.
- Retail fulfillment
- EDI 855 (PO acknowledgement)
- The supplier's reply to an 850, confirming, changing or rejecting each line on the purchase order.
- Retail fulfillment
- EDI 856 (advance ship notice)
- The transaction set for an advance ship notice: a map of the shipment showing what is on each pallet and carton, sent before the truck arrives.
- Retail fulfillment
- EDI 997 (functional acknowledgement)
- A technical receipt confirming an EDI file arrived and passed syntax checks. It shows the file was readable, not that the recipient agreed to its business terms.
- Retail fulfillment
- Expedited shipping
- Any shipping service faster than standard ground. Expedited packages are prioritized through the carrier network, and overnight delivery is its fastest tier.
- Expedited shipping
F
- FCL (full container load)
- An ocean shipment that books an entire container at a flat rate, no matter how full the container is. It is usually the lowest cost per unit once volume fills the box.
- Air freight vs ocean freight
- FEFO (first expired, first out)
- A picking rule that ships the unit closest to its expiration date first. It only works if expiration dates are recorded accurately when stock is received.
- CPG fulfillment
- FIFO (first in, first out)
- A picking rule that ships the unit that arrived at the warehouse first. It suits undated goods where stock age still matters.
- CPG fulfillment
- FNSKU
- Amazon's own product identifier, used inside its fulfillment centers to tie a unit to a specific seller. Units sent to FBA under an FNSKU need that label applied so it covers the original manufacturer barcode, leaving one scannable code.
- SKU vs UPC
- Freight broker
- A licensed intermediary that represents the shipper and arranges for a motor carrier to haul its freight. A broker holds its own FMCSA authority and bond, never takes possession of the goods, and is paid from the margin inside the freight bill.
- Freight broker vs dispatcher
- Freight class
- The standardized NMFC rating used to price LTL freight in the US, based on density, stowability, handling and liability. Errors in class or dimensions surface later as reweigh and reclass adjustments.
- LTL shipping
- Freight forwarder
- A company that arranges the international movement of goods for a shipper: booking carrier space, consolidating cargo, preparing documents and coordinating customs clearance. It usually does not own the ships, planes or trucks.
- What is freight forwarding?
- FTL (full truckload)
- A whole trailer dedicated to one shipper, moving direct from pickup to delivery. It makes sense when you have enough freight to fill it or need to avoid the handoffs of LTL.
- LTL shipping
- Fulfillment center
- A type of distribution center specialized in individual ecommerce orders: single units, piece picking, branded packaging and parcel carriers. A traditional distribution center ships cases and pallets to stores and businesses instead.
- Distribution centers
G
- General average
- A maritime rule under which, if property is deliberately sacrificed or extraordinary expense is incurred to save a voyage, every cargo owner on the vessel contributes in proportion to the value of their goods. Your container can arrive undamaged and still owe a share.
- Ocean freight insurance
- Gross weight
- The weight of the product plus everything shipped with it: container, label, carton, dunnage and pallet. Gross weight equals net weight plus tare weight.
- Net weight vs gross weight
- GS1-128
- The GS1 barcode standard used on carton and pallet shipping labels in retail supply chains. Each label ties a physical carton or pallet to its line on the advance ship notice so the load can be scanned in.
- Retail fulfillment
- GTIN (Global Trade Item Number)
- The GS1 family of product identification numbers. The number printed under a UPC barcode is a GTIN-12.
- SKU vs UPC
I
- Importer of record
- The party legally responsible for an import: declaring the goods correctly to customs and paying duties and fees. On most imports it is the business buying the goods.
- Shipping from China to the USA
- Incoterms
- Standardized trade delivery rules published by the International Chamber of Commerce. They set who pays for each leg of a shipment and where risk passes from seller to buyer. They do not set prices.
- DDP shipping
- Inventory turnover
- How many times inventory is sold and replaced during a period, calculated as cost of goods sold divided by average inventory value at cost. Low turnover means cash is tied up on the shelf.
- Ecommerce inventory management
- ISF (Importer Security Filing)
- A data filing US Customs and Border Protection requires for ocean cargo headed to the US, due at least 24 hours before the goods are loaded onto the vessel at the foreign port. It is often called 10+2, and late or inaccurate filings carry penalties.
- What is freight forwarding?
K
- Kitting
- Combining several separate, finished products into one sellable unit before an order ships. The finished kit is built to a documented spec and stored and picked as its own SKU.
- Kitting services
L
- Landed cost
- The full cost of getting a product to your warehouse: what you paid the supplier plus origin charges, main carriage, duty and destination charges. Comparing freight options on landed cost per sellable unit gives a truer answer than the freight invoice alone.
- Freight forwarder cost
- Last mile delivery
- The final leg of a shipment, from the carrier's local sorting facility to the customer's door. It is the shortest leg by distance but the most expensive per package, because each stop usually serves a single delivery.
- Last mile delivery
- LCL (less than container load)
- An ocean shipment where your pallets share a container with other shippers' cargo, consolidated at origin. It is priced by the space and weight you use rather than a flat container rate.
- Air freight vs ocean freight
- LIFO (last in, first out)
- A picking rule that ships the unit that arrived most recently. Older stock can sit at the back until it expires, so it is not used for dated products.
- CPG fulfillment
- Loading dock
- The area of a warehouse where trucks are loaded and unloaded. The dock floor is raised to roughly trailer bed height, so pallets move between trailer and building without a ramp or lift gate.
- Loading docks
- Lot tracking
- Recording the lot or batch number of inventory from receiving through shipping, so you know which orders received which lot. It is what turns a product recall into a targeted pull rather than guesswork.
- CPG fulfillment
- LTL (less-than-truckload)
- Palletized freight that does not fill a full trailer. Your pallets share truck space with other shippers' freight and you pay for the space and weight you use, which puts LTL between parcel and full truckload.
- LTL shipping
M
- Marine cargo insurance
- A policy, also called ocean freight insurance, that covers the value of goods against physical loss or damage in transit from covered causes. It responds up to the insured value regardless of fault, unlike capped carrier liability, and covers your general average contribution.
- Ocean freight insurance
- Multichannel selling
- Selling on several channels where each runs as its own island, with its own stock count, spreadsheet and packing routine. It becomes omnichannel when inventory, orders and shipping run through one system.
- Omnichannel fulfillment
N
- Net weight
- The weight of the product itself, with no packaging, carton or pallet.
- Net weight vs gross weight
O
- Ocean freight
- Cargo carried in shipping containers on vessels between seaports. It is slow, but the lowest cost per unit of any mode, and it is bought as FCL or LCL.
- Air freight vs ocean freight
- Omnichannel fulfillment
- Running every sales channel from one shared pool of inventory and one order flow, so a unit sold anywhere is deducted everywhere and every customer gets the same delivery experience.
- Omnichannel fulfillment
- Order management system (OMS)
- Software that captures orders from every sales channel, allocates inventory, decides where each order ships from, sends it for fulfillment and tracks it through delivery and returns.
- Order management system
- Overnight shipping
- A next-business-day delivery service, not 24 hours from checkout. The package has to be tendered before the carrier's daily cutoff, or the clock effectively starts a day later.
- Overnight shipping
P
- Pick and pack
- The warehouse process of pulling the items on an order from storage, checking them against the order, packing them, labeling the package and handing it to a carrier. It is the step between order placed and order shipped.
- Pick and pack fulfillment
- Polybagging
- Sealing a unit in a clear plastic bag to protect it in transit. Amazon requires it for certain product types as part of FBA prep, along with a printed suffocation warning where the bag size calls for one.
- Amazon FBA prep
- Prep center
- A warehouse that receives inventory, inspects it and applies Amazon's labeling and packaging requirements before sending it on to Amazon fulfillment centers, so problems are caught before Amazon receives the units.
- Shipping from China to Amazon FBA
- Putaway
- The step after receiving where goods are moved to a storage location and recorded against it, so the system knows where every unit sits.
- Warehousing and storage
R
- Rate confirmation
- The document fixing the rate and terms for one truckload. The carrier is the party bound by it, because the carrier holds the authority and the insurance.
- Truck dispatch services
- Reorder point
- The stock level at which the next purchase order should go out, calculated as average daily units sold times supplier lead time in days, plus safety stock.
- Ecommerce inventory management
- Retail fulfillment
- Receiving, preparing and shipping bulk purchase orders to retail partners rather than to individual shoppers. It covers case packing, pallet configuration, compliant labeling and delivery inside the retailer's required window.
- Retail fulfillment
- Returns management
- The process for handling products customers send back: authorization, transport to a warehouse, inspection and grading, and a disposition decision to resell, refurbish, liquidate, return to the vendor or dispose.
- Returns management
- Reverse logistics
- The movement of goods back up the supply chain, from the customer toward the seller, warehouse or supplier. Beyond customer returns it covers recalls, warranty repairs, packaging recovery and pulling unsold stock out of retail.
- Returns management
- RMA (return merchandise authorization)
- The reference issued when a return is approved. It ties the inbound parcel to the original order, so the warehouse knows what should be inside and which rules apply.
- Returns management
- Routing guide
- A retailer's published rulebook for suppliers: carton specs, label format and placement, pallet build, approved carriers and the delivery window. Missing any part of it is what triggers a chargeback.
- Retail fulfillment
S
- Safety stock
- Extra units held to absorb demand spikes and late deliveries. It protects against variability, at the cost of cash tied up in stock.
- Ecommerce inventory management
- Sell-through rate
- The share of stock received that actually sold in a period, usually units sold divided by units received. It shows which SKUs are moving and which are drifting toward dead stock.
- Ecommerce inventory management
- Shipment
- One specific consignment of goods sent from one party to another at one time. Cargo describes the goods; a shipment describes one movement of them.
- Cargo vs shipment
- Shipping insurance
- Coverage that reimburses the declared value of a package if it is lost, stolen or damaged in transit, paying what the item is worth rather than only the shipping cost.
- Shipping insurance
- Shipping zone
- A numbered distance band between the origin and destination ZIP Code areas. Carriers price zoned parcel services by zone rather than by mile, so the same parcel costs more as the zone number rises. Each carrier publishes its own zone charts, and they do not match.
- USPS shipping zones from Austin
- Single order picking
- A picking method where one picker walks the full route for one order, then takes it to a pack station. It is simple, but the walking per order climbs with volume.
- Pick and pack fulfillment
- SKU (stock keeping unit)
- An internal code a business creates to track its own inventory. SKUs differ from seller to seller, so the same product can carry a different SKU at every company that stocks it.
- SKU vs UPC
- Standard shipping
- A carrier's default ground service and the baseline delivery option at checkout. There is no fixed transit time: it depends on the distance, the carrier and the daily pickup cutoff.
- Standard shipping
- Subscription box fulfillment
- Storing, kitting and shipping recurring subscriber orders on a fixed schedule. Every box is assembled to a documented bill of materials and handed to a carrier on the ship date the brand sets.
- Subscription box fulfillment
T
- Tare weight
- The weight of the packaging and shipping materials alone: the difference between gross weight and net weight.
- Net weight vs gross weight
- Transloading
- Moving freight from one vehicle or mode to another so it can carry on to its destination, for example turning a container load into pallets, LTL freight or parcels. It is a transfer, not a receipt into stock.
- International freight and transloading
- Truck dispatcher
- An agent working for a motor carrier who finds and books loads, negotiates rates with brokers, plans routes and handles paperwork. The dispatcher is paid by the carrier and presents loads for the carrier to accept or pass.
- Truck dispatch services
U
- UPC (Universal Product Code)
- The 12-digit barcode, licensed through GS1, that identifies a product everywhere it is sold. Most retailers and marketplaces expect one to list a product.
- SKU vs UPC
W
- Warehouse management system (WMS)
- Software that tracks inventory and directs the work inside a warehouse: what is in stock, where it lives, what has been picked and what has shipped.
- Warehouse management system
- Warehousing and storage
- Holding goods in a dedicated building until they are needed. Storage is the passive part, keeping stock safe. Warehousing is the active part: receiving, counting, organizing and moving goods back out to orders.
- Warehousing and storage
- Wave picking
- A picking method where picks are released in scheduled groups, usually timed to carrier cutoffs. An order placed after a wave releases waits for the next one.
- Pick and pack fulfillment
- White glove delivery
- A premium delivery service that goes past the doorstep: a scheduled appointment, delivery inside to the room of choice, unpacking, assembly or installation, and debris removal.
- White glove delivery
Z
- Zone picking
- A picking method where the warehouse floor is split into zones and each picker works only their own. Orders are consolidated before packing, which adds a hand-off point.
- Pick and pack fulfillment
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