Trucking and Logistics Glossary

ABC Analysis The classification of items in an inventory according to importance defined in terms of criteria such as sales volume and purchase volume.

Absorption Costing Applying variable and fixed costs to the value of inventory.

Acquisition Logistics Acquisition Logistics is everything involved in acquiring logistics support equipment and personnel for a new weapons system. The formal definition is “the process of systematically identifying, defining, designing, developing, producing, acquiring, delivering, installing, and upgrading logistics support capability requirements through the acquisition process for Air Force systems, subsystems, and equipment.

Advance Cost Models The development of costing analysis that span a total supply chain network. Network constituents pinpoint the values at each point of connection – from initial supplies to final consumption and post-sale service.

Advanced Supply Chain Management Creating and maintaining a network of organizations dedicated to building and constantly improving a value chain constellation focused on a particular industry, market segments and consumer groups. This concept is the culmination of supply chain management, in which a trusting network of suppliers, manufacturers, distributors, and sales and support specialists works interdependently to achieve market dominance.

Air Freight Forwarder An intermediary that solicits shipments and tenders consolidated loads to airlines.

Air Ride Suspension Suspension which supports the load on air-filled rubber bags rather than steel springs. Compressed air is supplied by the same engine-driven air compressor and reservoir tanks which provide air to the air brake system.

American Standard Code for Information Interchange The American Standard Code for Information Interchange is used extensively in data transmission. The ASCII character set includes 128 upper and lower case letters, numerals and special purpose symbols, each encoded by a unique 7-bit binary number.

Available-to-Promise (API) Inventory An online display of the goods in inventory, throughout a full supply chain network, offering the viewer the opportunity to determine what is available for immediate delivery, where any particular order has progresses, and what back-up supplies can be accessed to complete an intended order.

Backhaul The portion of a transportation trip that returns carrier’s equipment to the origin point or back to their home terminal.

Bar Coding Graphical representation (generally narrow and wide bars) that represent one of a number of numeric or alphanumeric standards.

Benchmarking A management tool for comparing performance against an organization that is widely regarded as outstanding in one or more areas, to improve performance in those areas.

Bill of Lading (BOL) A shipping document that acts as a contract, a receipt, and evidence of title (ownership).

Bonding Generally used by service companies as a guarantee to their clients that they have the necessary ability and financial backing to meet their obligations.

Breakbulk Trucking Terminal A facility that receives loads from local, other breakbulk, and relay terminals and sorts the cargo for shipment to further points.

Break-Even-Analysis An analysis method used to determine the number of jobs, products, and/or services that needs to be sold to reach a break even point in a business.

Broker (trucking) An intermediary who tries to match trucking companies desiring traffic with shippers needing trucking services.

Capital The resources, usually cash or credit, available for investing in assets that produce output.

Cash-to-Cash Cycles The time accumulated between the expenditure for necessary raw materials and supplies until the receipt of payment from the customer for receipt of the finished goods.

Collaborative Planning The process through which a firm works together with its suppliers and customers to design and forecast demand for products.

Continuous Replenishment Process (CRP) A system used to reduce inventories and safety stocks while improving service to customers and consumers.

Crossdocking The holding and movement of goods directly from a receiving position to accumulation of full order and direct loading to an outbound carriers, to eliminate storage and handling expense.

Current Ratio A ratio Used to determine the difference between total current asset and total current liabilities.

Customer Service Activities occurring between the buyer and seller that enhance or facilitate the sale or use of the seller’s products and/or services.

Database Mining The analysis of information residing in collective databases across a supply chain network to develop information for sales groups. The sales force can then offer opportunities and solutions for specific business customers and consumer groups.

Deadhead A transportation industry term used to describe when a truck & trailer is moving down the highway without a load on the trailer. Also referred to as “Deadheading”.

Direct Store Delivery A logistics system designed to improve service and reduce warehouse inventories by having the seller move the ordered goods directly to the retail outlet.

Distribution The transfer of goods from a manufacturer, producer, or distributor to a business customer or end consumer.

Downstream The processes in a supply chain that occur after manufacturing or conversion that are dedicated to getting goods and services to customers and consumers. These processes usually involve warehousing and distribution, with subsequent transportation to retail outlets.

Driver Assist Cost This is where a driver is asked to assist in the loading or unloading process. Depending on contract or situation, this is treated as an extra charge on a per hour or flat rate basis.

Dry Van A non-refrigerated, non-insulated semi-trailer handling general commodity freight or Freight-All-Kinds (FAK) which can withstand outside temperatures without suffering damage. Dry vans come in varying lengths and widths – Lengths of 45′ to the most common and popular length of 53′ and widths of 96″ to 102″. Dry vans also have either duel swing doors in the rear of the trailer or a roll-up single door. Depending on the unladen weight of the tractor, most dry vans can legally carry up to 46,000 lbs in product weight.

e-Business The use and application of electronic commerce models and techniques to improve internal and external processes that impact on the creation, manufacture, storage, and delivery of products across a full supply chain system.

e-Commerce The use of computer-to-computer technology to transfer information important to the buying, manufacture, selling, distribution, servicing, and accounting processes inherent in supply chain activities.

e-Networks The system of collaborating firms, linked electronically across a full supply chain system, so the business customer or final consumer perceives that a seamless system of response is at work delivering the desired goods and services.

e-Supply Chain Systems designed to create the necessary Internet-enabled links among data, communications, and network effectiveness.

Economic Value Added (EDA) The calculation of real return on assets employed.

Economic Data Interchange (EDI) Computer-to-computer communications between two or more companies so such entities can enter purchase orders, generate bills of lading, expedite orders, and most commonly, pay invoices. EDI enables a firm to access the information systems of suppliers, customers, and carriers and to determine the current status of inventory, orders, and shipments.

Enterprise-Wide Resource Planning (ERP) An advanced planning and scheduling system through which orders are entered directly into the company’s planning systems, and manufacturing is coordinated to take advantage of full systems integration, from material supply through final goods production. Various systems will include a menu of possible applications.

Exclusive Use a common option in shipper where a shipper will request exclusive use of a truck – meaning that their freight is the only freight on the truck from origin to final destination.

Extranet A network based on Internet technologies that provides private and proprietary connections. Computer-to-computer technology between external partners to a supply chain network is used to transfer information important to the buying, selling, manufacture, distribution, and accounting processes inherent in the supply chain activities.

Fill Rate The percentage of ordered items that are completely delivered in one shipment.

Finished Goods Inventory (FGI) The products ompletely manufactured, packaged, stored, and prepared for distribution to a business customer or end consumer.

Fixed Cost/Expenses Costs that do not flucuate with the volume of business in the short term.

Flatbed flatbeds are trailers that are flat and solidly built to handle heavier and bulkier loads like metal, equipment, and machinery. Flatbeds come in varying sizes – Lengths: 42′ to 53′, Widths: 96″ to 102″, and most can handle up to 48,000 lbs. Flatbeds are usually equipped with chains & binders, straps, tarps, and even sometimes ramps to haul cars, utility vehicles, and miscellaneous machinery.

Forecasting A prediction of future levels of business commerce, particularly in items of anticipated volumes of product orders, demanded by customers in a specific time unit (week, month) in a forthcoming time period (quarter, year).

Full Truckload (TL or FTL) a full truckload is one with a total weight of 30,000 lbs or more and takes up 30′ or more of the trailer’s deck.

Information Systems (IS) Managing the flow of data within an organization and between its external partners in a systematic, structured, and effective manner, to assist in planning, implementing, and controlling all of the process involved.

Information Technology (IT) The systems, procedures, software, and hardware involved in establishing an effective and leading-edge methodology for enabling a total supply chain network of response – from incoming materials through delivery and satisfaction with finished goods and services.

Integrated Enterprise Resource Planning (I-ERP) The integration of ERP systems across a full value chain (manufacturer > distributor > logistics provider > contractor > end-user), whereby the network constituents share demand and supply information to optimize the use of total assets and achieve above-industry average standards of customer satisfaction.

Intranet A private network based on Internet technologies that provides an inexpensive electronic network, through which a nucleus organization and its internal constituents are given access to priviledged information permitting them to add value to supply chain processing.

Inventory Management Administering the amount of inventory and safety stocks required to meet or exceed current actual customer demands. This process includes proper planning, adequate stock positioning, monitoring of stock levels, and ensuring of product availability at the point of need to meet current demand.

Just-In-Time Inventory Systems (JIT) An inventory control system that reduces inventory levels by coordinating demand and supply to the point where the correct amounts of the desired items arrive just in time for use.

Kitting The process through which individual items are grouped or packaged to create a single shipment.

Layover A delay preventing a driver from unloading as scheduled at destination or loading at scheduled origin. Carriers charge anywhere from $50 to $150 per layover (24 hour period).

Less-Than-Truckloads (LTL) loads weighing less than 30,000 lbs and taking up less than 30′ of deckspace on the trailer. LTL’s are significantly cheaper in price ranging from $.50/mile to $1.00/mile depending on the characteristics of the partial load. LTL’s are usually combined to make up a full truckload using multiple resources (other customers, brokers, or competing carriers). LTL shipments using a truckload carrier usually takes up to 4-10 days to deliver so that carrier can fill out the rest of the trailer.

Logistics The process involved in transferring goods through manufacture, storage, and transportation to business customers and end consumers.

Logistics Channel The network of intermediaries engaged in the transfer, storage, handling, and communications that contribute to the efficient flow of goods to customers.

Materials Requirement Planning (MRP) A decision-making technique used to determine how much material to purchase and when to purchase it, so it meets the needs of the manufacturing plan.

Network-Focused Metrics Measurements that are based on the performance of the entire supply chain network – from raw materials to end consumer – such as total cycle time or returns from the entire chain.

Order Cycle Time The time that elapses from placement of order until receipt of order, including time for order transmittal, processing, preparation, and shipping.

Order Fulfillment The process involved in receiving and entering orders, passing the orders through planning, and scheduling and completing delivery of the orders after manufacture.

O, S,&D Is a term pertaining to a load that means “over, short or damaged”.

Partial Alliances Limited financial investments with suppliers, distributors, or customers designed to achieve revenues for all members of the alliance.

Point-of-Sale Information (POS) Price and quantity data from the retail outlet as sales transactions occur, reflecting the actual consumption of specific items.

Process Mapping The drawing out of the process steps involved in a particular portion of a supply chain or the totality of the supply chain network, with particular depiction of the hand-off that occurs between members of the supply chain.

Project Logistics Specific internal warehouse, transportation, or distribution projects.

Purchasing The functions associated with acquiring the goods and services a firm needs to operate its business.

Quick Response A method of maximizing supply chain efficiency by rapidly responding to specific orders with the correct amount of product drawn from a minimized inventory.

Ragtops A type of trailer in the form of a large box open at the top, on top of which a canvas is spread to protect the cargo from outside elements. They are primarily used for large, bulky bales, boxes, loose materials, nursery stock shipments, and some grains.

Reefer A refrigerated, insulated semi-trailer that required maintained, pre-determined temperatures controlled by a temperature control unit located in front of the trailer. Reefer units come in varying sizes from 30′ to 53′ in length. Reefer’s are also considered specialized equipment since most can be separated into two to three sections (frozen, refrigerated, and dry area sections). Mainly used for perishable item transport.

Reengineering A fundamental rethinking and radical redesign of business processes to achieve dramatic improvements in performance.

Reverse Logistics The process of collecting, moving, and storing used, damaged, or outdated products and/or packaging from end users. Safety Stock – The inventory a company holds beyond normal projected needs, as a buffer against delays of receipts of orders or changed in customer buying patterns.

Round Trip also called “round robin” a round trip is where a driver moves a load to a point, reloads at that point, and returns with a load back to the original point of pickup. Round trip loads are usually priced at a discount since the driver does not incur any deadhead cost once he delivers.

Sourcing The methodology involved in procuring the necessary materials, supplies, and services necessary to sustain a supply chain system.

Stepdeck also referred to as “dropdeck” is a type of trailer that is similar to a flabed but has one built in step to the deck to provide the capabilities of loading higher dimensional freight on the lower deck. Stepdecks can usually load a commodity as high as 10′ tall without being over the 13”6″ height regulation and still load up to 45,000 lbs. Most trailers have either 8 ft on the top deck with 40 ft on the bottom deck or 11 ft on top and 37′ on bottom. These trailers are known for hauling specialized equipment/machinery.

Stock-keeping Units (SKU) A single unit of a manufacturer’s line of products, such as a particular gauge of steel coil or type of lumber.

Stop-Off(s) Additional drops a driver makes before final destination to create full load. Stop-off charges vary from $25 to $75 per stop depending on requirement plus any additional out-of-route miles the driver incurs.

Supply Chain The core business processes that allow a company to create and deliver a product or service from concept through development and manufacture or conversion into a market for consumption.

Supply Chain Management (SCM) The methods, systems, and leadership that continuously improve an organization’s integrated processes for product and service design, purchasing, inventory management, manufacturing, or production, order management, logistics, distribution, and customer satisfaction. Implementing SCM principles involve such techniques as working with suppliers to optimize the cost of supply, introducing flexible manufacturing strategies and systems, and using process redesign to streamline systems.

Supply Chain Optimization The development of the lowest-cost and most effective system of supply chain interaction through sharing of best practiced between constituents, resulting in virtually no waste across the network and above-industry levels of customer satisfaction.

Supply Chain Network The linkage of business firms into a concerted effort to apply mutual resources for achieving mutual benefits across the full supply chain system, from primary raw materials through consumption and recycling. Firms might be part of several such networks.

Supply-Demand Linkage The connection of a demand chain (forecasted buying patterns modified by the flow of incoming orders) with a supply chain (flow of products and services in response to actual orders), whereby replenishment is in response to actual pull-though consumption.

Tankers A type of trailer in the shape of a large tank that is designed to handle liquid and dry bulk product. Some tankers are gravity fed through a top dome lid and emptied through a center or rear valve, while others are pumped or fed pneumatically. Most outside shells of tankers are made out of aluminum or stainless steel. Tankers mainly haul food grade products (juices, milk, sugar, syrup, etc) chemicals, refined products (gas, diesel etc), asphalt, and dry bulk (grain, flour etc).

Third-Party Logistics Provider (3PL) A firm that supplies logistics services (particularly transportation and warehousing) to other companies.

Total Quality Management (TQM) A management approach in which managers constantly communicate with all organizational stakeholders, to emphasize the importance of continous quality improvement and total elimination of waste.

Upstream The processes that occur before manufacturing or conversion into a deliverable product or service, usually dedicated to getting raw materials from suppliers.

Value-Based Metrics Measurements that catalog the network’s ability to optimize total systems cost, while delivering the highest possible customer satisfaction.

Value Chain The result of transforming a full supply chain system through the application of activity-based costing techniques, into a process map that includes all significant costs at each step in the process. This determines the total cost of delivering the final product or service to a satisfied customer.

Value Chain Constellation A consortium of companies linked together to build a superior supply chain network with a focus on specific markets, customers, products, and end consumers. The purpose of the constellation is to use collective assets and resources to build a seamless network of supply that will distinguish the network from any competing group.

Variable Cost A cost that flucuates with the volume of business.

Vendor-Managed Inventory (VMI) A customer service strategy used to manage inventory for customers to reduce cost and react more directly to customer demand.

Virtual Inventory Systems An online network in which one can find the location of inventory anywhere in the entire supply chain network (in manufacturing, warehouses, or in transit) and divert it, if necessary.

Work-In-Process (WIP) Parts and subassemblies in the process of becoming completed assembly components.