Logistics Glossary (+ eCommerce): 2020 Edition

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ABC Analysis

An inventory categorisation technique used on items within an inventory based on their value, importance, purchase volume and sales volume. It recognises that not all inventory are of equal value and classify them into 3 categories:

A (the smallest category of items but being of the highest value)

B (items with larger volumes and lesser value)

C (the largest category of items with the least value) 


Ad Valorem Tax

An import tax calculated as a percentage of the total shipment value



An enterprise authorized to transact business for another enterprise itself or on their behalf. 


Air Freight

The service for transportation of goods by air carriers


Aircraft Pallet / Airline Pallet

Sometimes also referred to as Unit Load Device (ULD), is a pallet of standard dimensions for the assembly or securing of goods for better space optimisation and handling onboard the aircraft (e.g. on-and off-loading). 

Some examples of airline pallet dimensions can be found here


Airway Bill

A receipt issued by international air couriers to prove the receipt of goods and contract of carriage. It usually comes in multiple copies, and the parties involved can present the bill as document of title to the goods being transported. 


All-Cargo Aircraft

An airplane strictly used for transporting goods or mails and not passengers. 


Assemble-To-Order (ATO)

A business production strategy where sub-assemblies and components are assembled into a final product only when a customer order has been made. 


Assembly Line

A series of workers and machines lined up to assemble and build identical product in a pre-defined sequence. 


Automated Storage / Retrieval System (AS/RS)

A group of computer-controlled system that automates the storing and picking of items from designated storage bins in the warehouse.  



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Business-to-Business (B2B) 

Commercial transactions from one business to another. 


Business-to-Consumers (B2C)

Commercial transactions from one business to customer. Sometimes also referred to as direct selling. 



The act of exchanging commodities for other commodities without using money. 


Batch Picking

An order picking protocol whereby multiple orders are compiled into small batches.This results in pickers picking multiple items from multiple orders in a single trip. The main goal is to reduce the frequency of pickers revisiting the same bins to fulfill their orders. 


Bill of Lading (BOL)

A document of title issued and signed by a carrier to acknowledge the receipt of cargo for shipment, conditions on which the transportation is made, parties involved, quantity of goods and destination. 


Blind Shipment

A freight shipment where the shipper and consignee are unaware of each other's identities. 


Bonded Warehouse

A customs-controlled warehouse where imported goods are stored until the duty owed is paid. Bonded warehouses can either be government-owned or privately owned. 


Bracing / Blocking

The securing of shipment in transportation vehicles to reduce maneuverability during transit. 


Buffer Stock

A quantity of goods kept on hold with the purpose to meet sudden fluctuations in product demands. 


Bullwhip Effect

A supply chain phenomenon where a small change in demand downstream can progressively create larger changes i inventory levels upstream. For example, the rise of demand for a certain product by end-consumers (downstream) may influence the manufacturer to order more inventories.



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Goods that are being conveyed by a carrier 



An individual or company engaged to provide professional conveyance of goods or people 


Centralized Inventory Control

An organised system where all inventorised items can be controlled from a single location. 


Certificate of Compliance

A document certified by an authorised body to attest the quality and specified requirements of the goods or services supplied. 


Channel Partners

Members of a supply chain such as suppliers, manufacturers, distributors, retailers and more where they sell product and services on behalf of the vendor.


Channels of Distribution

Individual or companies that are involved in the flow of goods and/or services from the manufacturers to the end consumer.



When a traditional brick-and-mortar developed its presence online and have a combination of online and real life experience.



The person or the company that the carrier have to deliver the goods to. They are financially responsible for the receipt of the shipment and is not necessary the end receiver of the product and/or services.



The person or the company that sends the shipment of goods, usually the owner of the goods until goods are fully paid by consignee.


Cross Shipment 

Where the flow of goods happens in a different shipping point than the original.



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Dangerous goods (DG) 

Dangerous goods are substances that can be in the form of solid, liquid or gas. Some dangerous goods are known for their hazardous effects. Their effects can be minimal to fatal.


Distribution Center (DC)

A temporary warehouse to hold inventory to efficiently meet the requirements of customers. The goods that flow in and out of the distribution center are higher than in a warehouse. 


Distribution Channel 

The flow in which the goods and services move from the manufacturers to the end consumer. They can include indirect channels with wholesalers, retailers, distributors and others.  


Double-Pallet Jack 

It is used for moving 2 pallets at once from one place to another with relative ease.



The activities that are involved in providing the end consumer with the finished product. 



A service that usually involves transporting goods from ships to warehouses over a short distance.


Drop Ship 

Retailers do not keep any inventory of goods but instead transfer the sales order to supplier to ship to customer directly. 



A protection packaging material used among cargo to separate them in order to prevent damage and provide space for fork lift trucks to insert. 


Duty Free Zone (DFZ)

An area where foreign goods can be stored without paying for import duties until further transports or released into the local market.



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A platform to buy and sell online or electronically. This term can be referred to businesses conducted online. 


Electronic Transaction Act (ETA)

A framework used to govern digital services like eCommerce to remove any legal uncertainties over electronic transactions. 



A ban on commerce that prevents exports and/or imports from specific countries or with specific products. 


End User

Consumer that buys the product for immediate use. 



A term used to refer to the goods are in the course of the journey or in transit. 



To move prioritised shipment at an accelerated rate upon request. 



Priority delivery to customers whereby they are able to receive their parcel overnight or faster than normal.



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First In First Out (FIFO)

The practice of using stocks on the basis of what was placed in the inventory/storage first. 


Fixed Order Quantity

It is an inventory control system whereby stocks are continuously monitored and replenished when stocks fall below established re-order point. 


Floor-Ready Merchandise (FRM)

Merchandise is pre-tagged with all the details needed in a retail store to allow cross docking rapidly.


Flow Rack 

Rack that helps with the flow of materials whereby goods are introduced from one side of the rack and flows through to the other side. This promotes FIFO. 


Fourth Party Logistics (4PL)

Lead Logistics Partner (LLP) or supply chain integrator, acts on behalf of the company and oversees all supply chain related activities. At this point, the 4PL is devising a supply chain network to fulfill the company's organisational goals.....(Read more)



Transporting goods in bulk by land, sea, and air. 


Freight Forwarder

An agent that handles the movement of goods from one place to another on behalf of the shipper. 



The act of fulfilling an order that includes managing, packing and shipping the product to the end consumer. 



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Goods Receipt Note (GRN)

A document that acts as a proof of record that ordered products have been received. Often used as a basis of comparison, to match list of goods ordered versus goods received.


Gross Weight

The total weight of a shipment of goods, including packaging (crates, pallets, containers, etc.).


Goods and Services Tax (GST)

A broad-based consumption tax levied on the import and supplying of goods/services. Otherwise known as Value-added Tax (VAT)


Good Distribution Practice (GDP)

A quality management system for warehouses and distribution centres handling pharmaceuticals and medicines - assures the consistency across supply chain; from raw materials delivery, manufacturing plant to end-users.


Good Distribution Practice for Medical Devices (GDPMDS)

A compulsory audit for organisations involved in the importing, wholesale and distribution of medical devices - a certification that qualifies that products are stored, handled and transported under suitable conditions. Otherwise known as ISO13485 Medical Devices.



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Handling Costs

Costs that include moving, transferring, preparing and others that involve handling inventory.


Harmonised System (HS) Codes

An international standard that classifies traded products - enables government officials and port authorities to identify type of goods being imported/exported such that the applicable taxes can be levied.


Hazardous Goods

These goods are classified into 9 classes according to the nature of the hazard. Also known as Dangerous Goods (DG).


Heat Treated

A technology used to treat and disinfect wood package and dunnage.


Heavy Weight Surcharge (HWS)

A surcharge imposed on 20ft. containers weighing more than 14,000KG, inclusive of its load.



The operator of the forklift truck must stand and not sit. 



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Inbound logistics

The activities that bring your goods into the business. The inflow of goods that comes from the supplier into the warehouse. 


Indirect/Distributor Channel

Where the product passes through different channels like wholesalers, retailers, distributors and others in order for the good to reach the consumer. 


Integrated Logistics

 The functions in the supply chain are managed by a company rather than many small companies with each function. 


Inventory Cost

The cost of storing and maintaining the goods until it is sold. 


Inventory Management

To track and oversee the inventory when it’s stored, sold and used.



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Just-in-Time Logistics

A technique whereby goods are only received when needed to decrease inventory cost, and time to handle, transport and store goods. This way is more efficient to meet consumer order fulfilment.



An act of throwing cargo, equipment or goods overboard to lighten the shipping vessel and improve its stability during dire emergencies threatening safety of vesesl and/or crew.




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Kanban Methodology

A lean method that focuses on the design, management and improvement of work flow systems - focuses on balancing demand with operational capacity, identifying and improving bottle-necks in the work flow.


Key Opinion Leaders (KOL)

A person or organisation with the product or subject matter knowledge and influence in their particular field. Often known as 'influencers' with ability to drive marketing efforts and affect consumer behaviour.



When individual parts of the product are sent to the assembly line as a kit to assemble instead of needing to find the correct parts to assemble the product in the assembly line. Reduce the need for an inventory for loose parts.



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Laid-Down Cost

The sum total cost of the product and transportation. This helps consumers compare the total cost of the product when the product is shipped from different resources.


Landed Cost

The total cost of the product that includes shipping, handling, applicable duties and taxes, insurance, storage and more.


Last In First Out (LIFO)

The practice of using stocks on the basis of what was received last to the inventory/storage. 


Lead Time

The amount of time taken from when the order is placed to when it is received. 


Less-Than-Containerload (LCL)

This refers to a shipment that does not require the whole capacity of an ocean container. When there are many small shipments in one container, they are considered LCL. 


Loading Port

A port where the shipment of goods are loaded into a ship and secured to be ready for transportation. 



The process of planning and carrying out efficient transportation and storage of goods from one place to another. Other aspects of logistics include handling, inventory management, packaging, shipment and others.


Logistics Channel 

The network within the supply chain that is engaged in functions like storage, transportation, handling, communications, warehousing, receiving, inventory management and others.


Lot Control

It is a process of assigning lot ID and tracking parameters such as expiration date and place of origin as it enters the warehouse in order to track each item as well as the status of each lot.



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Machine Downtimes

A period of time where the machine is not in production. This can occur when the machine is not in operation, faulty, under maintenance and etc. 


Make to Order (Manufacture to Order)

This process allows consumers to customise the order to their specifications. The making of the product will only happen after the order is received by the manufacturer.


Make to Stock (Manufacture to Stock)

The stocks produced are made according to the forecasted consumer demand.


Market-Positioned Warehouse

This warehouse is located near the region where the demand for the product is the highest. This allows consumers to be served quickly. 


Marquis Partners 

Key big players in the supply chain industry that can create barriers to entry. 


Merge In Transit

It is a method where shipments from different suppliers of different locations are consolidated into a consumer delivery for consumers to receive a complete package of their orders.



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Net Weight

The weight of the product without additional packaging used for transportation.


Non-Containerised Cargo

Goods that are shipped in pieces without the use of containers, often shipped in bags, crates, barrels and drums. 



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Obsolete Inventory

There is no more demand for that certain product. Usually caused by the development of a new or better product. 


One-Piece Flow

Parts are moved through a process in small batches or piece by piece. 



A request for something to be made, supplied or delivered. 


Order Entry and Scheduling

A process of procedures once order is received from the consumer where the order is entered into the company’s ordering processing system. A series of activities will then be activated: reserving inventory for delivery and more. A delivery date will then be scheduled. 


Order Fill 

A measure of the number of orders processed without stockouts, or the need to back order, expressed as a percentage of all orders processed in the distribution center or warehouse.


Order Picking 

Acquiring the item from the storage for customer’s order


Order Processing

Activities that include fulfilling the customer’s order such as picking, packing, delivering and more.


Ordering Cost

The cost related to acquiring the inventory from the supplier. 


Outbound Logistics

It refers to the activities that are required to bring the goods to the customers. The outflow of goods that starts from the customer’s order to when the customer receives the goods.



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A structure used to support goods. It stacks, protects and transport goods when it is being handled by equipment like forklift. They are usually made out of wood. 



A term used in shipping when multiple shipments are combined to reduce shipping cost. 



An act of purchasing in order to meet the needs of the consumer as an external party. 


Purchase Order (PO)

An order form that is issued by the buyer indicating the specifics of the purchase 


Push Ordering System

This system is to replenish goods after it is sold. The stocks are dispatched from the central distribution centres to the various points of sales.



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Quality Control

To ensure the goods are according to product specification.


Quantitative Metrics

A part of digital/online marketing that measures the performance that may be represented in numbers - some key metrics include web traffic, click-through rates, bounce rates, etc.


Qualitative Metrics

A part of digital/online marketing that measures the performance and quality of customer interaction in a subjective approach - i.e. comments left by customers during a campaign.


Quick Response

A method that enables manufacturers and retailers to communicate inventory needs for their shelves (retail) or manufacturing line (production) in near-real time. Reduces the need to hold excess or buffer stocks.



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Radio Frequency Identification (RFID)

Used to identify and track tags attached to objects through electromagnetic field 


Real Time 

Actions and processes that are presently taking place in order to respond to immediate events. Usually used in tracking and tracing. 



An individual or a company that sells goods to consumers directly or indirectly through other channels. Usually purchase in small quantities from wholesalers or manufacturers. 


Reverse Logistics

Operations that are related to goods that are after sale or after delivery to the customer. This includes product returns for damaged goods, dissatisfaction and/or others.



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Safety Stock

When a company holds inventory that is more than normal to meet with change in demand or delay in order receipts. 



Refers to the period of the year where there is an increase in consumption. Festive seasons like Black Friday, Christmas and more. More resources are required during those periods. 


Self Billing

Invoice is not required to submit to the shipper. The shipper pay you automatically based on the freight order.


Serial Number

A unique identifier to an item that contains a set of numbers or characters or both. Used to identification and inventory purposes.


Shelf Life

The period of time where a good can be stored before it comes unusable, unsaleable or unfit for consumption. 



The individual or company who is usually the supplier or owner of the goods that tenders goods for transportation.  


Shipping Manifest

A key document that lists all the cargo and key relevant information like freight charge, weight, destination name, piece count. The manifest includes all pieces of shipment even if they are shipped to different locations. 



It is the process of allocating goods to increase picking and replenishment efficiency. It also prevents product damage. 



In the supply chain, they are also known as vendors or manufacturers that provide goods and services to individuals or companies for them to sell the goods to end consumers.



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Tare Weight

The weight of the container or vehicle after subtracting the weight of the goods that are in the container. This can be determined by the weight of an empty container or vehicle. 



The tax or duties incurred when importing and exporting goods from one country to another.



It is a formal offer from the supplier to bid for a supply for goods or services. 


Third Party Logistics Provider (3PL)

Providers that help the company to get their products out to end-consumers, with the addition of value-added services along the supply chain........ (Read more)


Transit Time 

The amount of time from when it is picked up to when it is delivered. 


Transportation Mode

Different methods of transportation including air, sea and land. 



The upwards and downwards movement of the demand for goods over a certain period of time. This can be used to predict the change in consumption over time.  


Turnover Rate

The number of times when the stock is being replaced by the same product.



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Combining smaller packages into a big unit for easier handling. 


Universal Product Code (UPC)

A unique code, often 12 digits, designated to a product and printed on its packaging; to aid in identifying and tracking products in inventory and its sales performance.



The logistics activities that happen before the production processes like organising of raw material procurement, managing suppliers and optimizing purchase and more.


User Interface (UI)

The point or means in which users interact with a computer system, input devices and software - e.g. websites and mobile applications.


User Experience (UX)

A user's experience in its entirety when using a particular product, system or service - including the human-computer interaction.



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Valuation Charges

Additional insurance charge for shippers that has declared goods that exceed the value of the carriers' limits of liability


Value Chain

A set of interrelated activities that allow a company to gain a competitive advantage. Value chain includes activities from receiving raw materials to manufacturing and ultimately selling the finished product to the customer. 



The rate of the products going in and coming out of the warehouse. 


Vertical Integration 

A company that controls the manufacturing to the point of sales to the end consumer. A company can decide how many activities they want to integrate into their value chain. 



A ship or large boat that is used for transportation.



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Waiting Costs

The cost for the amount of time used to load and unload good. Container transport usually takes 2 hours.



A facility used to store goods. 


Warehouse Management System (WMS)

A software solution, integrated with a warehouse/fulfilment centre, offering visibility into a business' entire inventory and supply chain distribution - from warehouse to retail.


Warranty Costs

A cost that business expects for any repairing or replacement of previously sold goods.



A document that states the shipment destination, consignee, consignor and freight charge. Issued by the carrier with the details and instructions relating to the shipment of goods.



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Yield Management

A variable pricing strategy that monitors, observes and influences consumer behaviour/purchase patterns - with intention to improve revenue yields. I.e. higher prices at high/full operational capacity and conversely, lower prices at less-than-full capacity.



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Zone Picking

An efficient way to do order picking based on the different zones in the warehouse. The order that is zone picked will be grouped according to the location. 



About UrbanFox

Together with GEODIS Logistics, UrbanFox delivers 3PL and 4PL services to empower 500 esteemed homegrown and global brands to strengthen their presence in the region through our:

• Integrated B2B2C fulfilment
• Cross-border & last-mile distribution
• Real-time inventory and
• Online-to-offline retail management

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