ABC's of Logistics

Logistic Terminology

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Allocated Inventory

Inventory that is reserved for a specific order, customer, promotional event or other purpose and is not to be used for standard order fulfillment purposes. Once allocated, this stock is no longer available as usable inventory for new orders. A sophisticated WMS (Warehouse Management System), such as the FulEx system, will offer a variety of ways to indicate a reserved or on hold status for specified inventory.

Allocation

Inventory is allocated to a specific order.

Anniversary Billing

A method of billing where the client is billed for one month of storage once inventory is received. If this product remains in inventory, it will be billed an additional monthly charge each month on the anniversary of its arrival.

Annual Inventory

Physical count of all product in the warehouse done on a yearly basis.

ASN

An Advance Shipping Notice (ASN) is received from the client to inform FulEx of the contents of an inbound shipment prior to its arrival. The ASN is referred to in the FulEx Warehouse Management System as an "In-transit" (i.e. on its way). An ASN can be communicated by telephone, fax, e-mail or EDI. It should include product detail and preferably also includes inbound vehicle information (trailer number, railcar number, etc.). The advance shipping notification provides details on the products being shipped such as roll or carton I.D. numbers.

Assembly Area

Location in the warehouse where products and loads are collected and combined.

Available Inventory

The amount of shippable product in the warehouse; does not include product designated as damaged, on hold, or pending shipment.

Bar Code

A UPC code that identifies product. It consists of a series of black bars and is scannable. The bar code represents an identification

number that is stored in the computer system along with other information about the product.

Back Haul

When an outbound shipment is delivered, instead of coming back empty, a load is picked up from a destination close to the final

stop-off and then delivered either back to the warehouse or a Consignee location near the warehouse. A Back Haul creates revenue

as opposed to coming back empty which would be an expense.

Banding

A type of plastic or metal strapping that helps support a load and hold it together. Can be used to strap and secure product on a pallet or skid.

Batch picking

A picking method whereby one SKU is picked one time for all applicable orders and then distributed across multiple orders in a staging or packing location.

Bay

An area in the warehouse designated by markings on the columns or floor.

Bay Storage

Use of the bay for storage.

Beginning Inventory

Inventory level and count at the beginning of a period.

Bill of Lading

The Bill of Lading (BOL) is an official document that accompanies every shipment. It serves as the contract between the party that

owns the freight and the carrier. The each driver prior to vehicle departure. When a driver for an outside carrier signs the Bill

of Lading, he/she accepts responsibility for the shipment. Upon arrival at the destination, the consignee or customer signs the

Bill of Lading to indicate that the shipment was received and all goods are present as itemized. This customer-signed Bill of Lading then serves as a Proof of Delivery (POD) document.

Bin

A four-sided structure that is mounted on a pallet. A bin may or may not have a cover.

Or, an area in the warehouse used for storage of inventory that is being staged or at rest.

Blind counts

Blind counts are used during physical inventories to prevent counter bias. The location and item code are provided to the counter, but the counter must provide the quantity of the item found in the given location without knowledge of the desired quantity according to the WMS (Warehouse Management System) or inventory records.

Bonded Warehouse

A bonded warehouse is one that has been approved by the U.S. Treasury Department who, due to observance of revenue laws, has

put the warehouse under bond or guarantee. A bonded warehouse can also be a warehouse utilized for the storage of merchandise

that is on hold until duty is paid.

Bubble Wrap

Sheet of plastic with air bubbles that is used as a packing material.

Bulk Storage

Storage of large quantities of product in shipping containers. May also be the storage of product that is not packed (loose).

Carrier

The carrier transports goods from the client to FulEx and from FulEx to the consignee. The carrier can be FulEx (FulEx owned truck), a transportation company, or the railroad. Responsibilities include carrying the goods safely, in good condition and in a timely manner.

Carton

A unit of product, a protective casing around a product.

Commodity

Product identified with specific clients (i.e. paper).

Concealed Damage

Damage to product that is not obvious until the product is examined or the condition becomes apparent during storage or transfer.

Consignee

The client's customers are referred to as the consignee. Just think of the consignee as the end user or the company where FulEx ships the stock.

Consignment inventory

Inventory that is in the possession of the customer, but is still owned by the supplier. Consignment inventory is used as a marketing
tool to make it easier for a customer to stock a specific supplier's inventory. Read my article on Consignment Inventory.

Consolidate

Combine two or more shipments going in the same direction or to the same destination on a single trailer.

Container

A container is a box that is used to transport product, and is widely used for international shipments. Marine containers or
intermodal containers can travel on ocean liners, railroads, and on truck frames (chassis).

Contract

A binding agreement between FulEx and a client stating terms of the agreement, storage fees, transportation rates, and accessorial
charges.

Contract warehouse.В

A warehouse operation managed by a third party logistics (3PL) provider for a specified period of time. The 3PL manages a client's
inventory and order fulfillment processes. Pricing scenarios may vary, and storage, labor and equipment resources are typically dedicated to the client for the duration of the contract. The client may or may not share in the building and equipment expense.

Cross-dock

Product or orders that are brought into the warehouse but not put-away. Instead of the stock arriving and being placed into
storage, the stock is temporarily stored at the dock to be delivered or goes out immediately on another vehicle to be shipped. This
stock is usually shipped immediately or within a day and does not go into storage.

Cross-Training

Allowing employees to have experience in multiple tasks, job functions, or across multiple accounts in order to increase productivity
and provide backup.

Cube Utilization

Space utilized versus space available.

Customer Pick-up

Load that is picked up at the warehouse by the customer (usually within the same day the order is placed).

Cycle Counting

The physical counting of portions of inventory on an on-going basis. After a period of time all products have been counted.
A cycle is then defined as the time it takes to count all inventory once.

Date Code

A label that shows when a product was manufactured.

DC

Abbreviation for Distribution Center. A warehouse that manages and distributes inventory per the direction of corporate systems
and customer demand.

Dead Stock

Product that has been in inventory for an extended period of time without being moved or ordered.

Dock

A warehouse door with an extending platform where trailers are loaded and unloaded.

Drayage

A container or piggyback is moved from a rail yard to another location (which is most likely a FulEx Distribution Center) and then returning that piggyback / container back to the initial pick-up point, is known as a dray. It is important that these containers get unloaded quickly and returned back to the original point so not to incur detention charges.

Dunnage

Refers to packing materials such as cardboard, empty pallets, air bags, air pillows, packing peanuts, or other materials utilized to protect freight.

EDI (Electronic
Data Interchange)

Electronic Data Interchange refers to a computerized exchange of information with the client through the warehouse management
system. It is a method of exchanging orders, invoices, shipping forms and other documents over the computer.

By eliminating the clerical, mailing and other costs associated with paper-based information, EDI reduces costs, time delays and errors.

Emergency Order

Also known as an expedited order, this order is placed and processed to be picked and shipped in an expedited manner.

Ending Inventory

Inventory levels at the end of a specified period.

Expiration Date

Date when merchandise is no longer able to be shipped.

Facility

The physical warehouse or plant where storage takes place.

FIFO (First In, First Out)

Inventory allocation method whereby the first product stored is the first product that is utilized or allocated for the fulfillment of orders.

FILO

First-in, last-out system of inventory.

Finished Goods Inventory

Products that are ready to ship.

Finished Product Inventory

Available products to ship to customers.

Floor Load

Refers to product stacked directly onto the floor of a trailer without pallets or slip sheets; product must be unloaded manually
without the use of a forklift.

Forklift

A warehouse vehicle, also called a lift truck, which is used for lifting and transporting pallets of product. A forklift may have a special attachment on the front for specialized handling of product.

Freight Bill

An invoice for transportation charges generated when a load is delivered.

Freight Charge

Compensation paid to FulEx by the client for transportation services performed.

Freight Cost

This is the compensation paid to the contracted carrier by FulEx for the transportation services performed.

Fulfillment

The picking and processing of orders for shipping from a distribution or warehouse.

Full Truckload

This term refers to a shipment comprising a full or almost full load on a truck. A full or almost full load is considered to be 39,000 - 44,000 pounds.

Gaylord

Large corrugated carton that has the same length and width as a pallet. Gaylords are usually used to protect loose parts in bulk and are frequently used in manufacturing.

Gross Weight

The total weight without deduction for tare (includes packaging and container).

Handling

The labor involved in moving product received from the trailer into the warehouse dock and then into the storage location on the warehouse and moving the product out of the storage location and into a staging location to then be loaded onto a trailer on the
warehouse. The Warehouse Forklift / Clamp Operator moves product IN and OUT. If additional handling is involved such as opening
on days off, pick packing etc., that are not the normal handling as defined in the warehouse contract, these would be defined as additional accessorial charges for handling.

Handling Charge

Charge for normal warehouse handling (inbound or outbound, or both) to customer.

Handling Costs

Cost to warehouse or 3PL for all handling operations.

Hand Truck

Western hand truck is a device used to transport goods manually with wheels within the side rails. The Eastern hand-truck is similar except the wheels are outside the side rails.

HazMat

Short for “hazardous material.” Material is deemed hazardous by the government or a carrier. HazMat may require special handling or special facilities. Not all warehouses or carriers will handle HazMat.

Hi-Lo

AKA Forklift. References the ability of the truck to lift and put down freight.

Housekeeping

Keeping the warehouse presentable, organized, and safe for all parties.

In-House Damage

Damage to product that occurred while in the warehouse (i.e. water leak, dropped product, etc.).

Intermodal

Intermodal means using 2 or more, modes of transportation: rail,truck or ship. The stock can move over sea by ship, over land
by rail and then, at the main rail switch, the container is removed and put on truck chassis. The stock is then carried by truck to our Distribution Centers.

Initial Storage

Warehouse storage charge for the month when product is received; it is typically billed when product is received.

Inner Packaging

Also known as “dunnage,” includes materials such as foam, paper, or wood used to minimize movement within the container.

Inventory Turns

The number of times inventory turns is calculated using the following method:

a) Sum the Inventory In and the Inventory Out, and then divide by 2 to arrive at the Throughput.

b) The number of Inventory Turns is equal to the Throughput divided by the Average Inventory.

JIT, Just-in-Time

An inventory system that aims to coordinate the arrival of materials or supplies at a facility at the moment that they are needed in an effort to reduce storage and holding costs.

Kitting

Assembly of product or parts within the warehouse.

Labels

Some clients require inventory or shipment labels to be attached to packaging (i.e. box, case, pallet, etc.). Many labels contain
bar-coded information, to allow scanning devices to quickly and automatically transfer the information into inventory systems. In some cases, labels are pre-printed and pre-affixed by the manufacturer. In other cases, labels must be created and applied by the Distribution Center prior to shipment of the product in accordance with retailer or customer requirements.

Layout

Design and set-up of warehouse storage.

Less Than Container Load (LCL)

Shipments weighing less than required for the application of a full container rate. When the shipment is less than a full container load, the freight may be calculated as an LCL shipment.

Less Than Truckload (LTL)

Shipments weighing less than required for the application of a truckload rate. A typical full truckload shipment is 39,000
- 44,000 pounds. Weight breaks may vary across LTL classifications and in some instances it is less expensive to apply a full truckload rate even thought the shipment size may be less than 39,000 -
44,000 pounds.

LIFO (Last In, First Out)

Inventory allocation method that selects newest inventory first.

Lift truck

A vehicle that is utilized to move and transfer product/freight in a distribution center, warehouse, terminal, manufacturing site, or dock. Often referred to as a forklift.

Load

The product that is picked and loaded onto a truck and transported to a consignee.

Location

Each product has a specific location in the warehouse.

Location Audit

Routine audit of location records to ensure that records are compatible with actual placement of product within the warehouse.

Locator System

Locator systems allow for more effective inventory-tracking. Product can be stored in a way that makes sense for the warehouse,
such as high demand product in more accessible locations. Locator systems assist in better accuracy with inventory tracking and
control as well because it is all computerized.

Logistics

The processes and services associated with planning and implementing flow of storage and shipments in a 3rd Party operation required to meet the customers’ needs in an efficient manner.

Loose

Product remainder in a specific location or layer.

Lot

A group of product with the same run or manufacturing date.

Lot Number

Identification number assigned to specific product for tracking purposes that is usually tied to a date or a production run.

Lot Number Traceability

The ability to trace items through their lot number. This is helpful when a specific product is needed or information about a specific product is required.

LTL, Less-than-truckload

Transportation term that describes shipments that are less than a trailer load. LTL also is used to describe the carriers that handle these loads. LTL carriers generally use strategically placed hubs to sort and consolidate LTL shipments into full-truck-load shipments.

Manifest

A document that lists all of the products being transported; used when loads are combined. The Manifests (Loading and Driver) are generated by transportation in Phoenix.

A loading Manifest will be printed to the Warehouse so that they know who will be picking up the load and how to properly load the trailer. A Driver Manifest will be auto-faxed to the carrier so that they know the order of the stop(s), the address and shipping requirements of the client(s).

Master Carton

A large carton that is used to hold and protect smaller cartons or packages of product. Using a master carton reduces handling as one larger piece instead of multiple small pieces.

Master Pack

A carton containing a specific number of product or multiple case quantities.

Material Handling

The services and processes the warehouse must utilize to move, store and otherwise handle materials.

Man-up

Lift trucks that raise the operator as well as the load. Two types of man-up lift trucks are turret trucks and order selectors.

Narrow aisle (NA)

Specialized lift trucks designed to be used in narrow aisles of 8 to 10 feet.

Net Storage Area

Space in the warehouse (in square feet or meters) that is actually used for storage. This does not include aisles, docks, offices and staging areas.

Net Weight

Product weight before being packed with materials or packaging. The total weight of the product with deduction for tare or packaging.
For example, the net weight on a roll is the total weight of the roll less the fiber core and wrap.

Obsolete Stock

Stock that has no useable purpose that remains in the warehouse.

On-Hand Inventory

The amount of product in the warehouse. The product may be designated as shippable, damaged, on hold, or pending shipmen (allocated to an order).

On Hold

Refers to product that is designated as unable to be shipped; may be product with damage, questionable quality, expired shelf life, etc.

Order

A directive, sent by the owner of the goods, to ship product out of the warehouse. An order specifies product, quantity, shipping date, and destination and may contain special instructions.

Order cost

The cost of labor, time, and other activities needed in an instance that a product is ordered.

O.S. & D.

Over, Short and Damage; it refers to the condition of a load of product which arrives in a defective condition, or whose quantity
does not match the bill of lading (cases over or short).

OSHA

Occupational Safety & Health Administration, a branch of the US Department of Labor.

Overage

When more has shipped on a load than was intended or was indicated on the BOL.

Over the Road Carrier

A truck or trailer used in hauling freight by road to destinations outside a 70 mile radius of the FulEx facility.

Packing List

The packing list is created in the Distribution Center. The packing list identifies the quantity and weight of each product on the
order and each individual item # (unit ID, serial number, etc.) if applicable. It is a comprehensive list identifying exactly
what is being shipped on the order.

Pack Size

Describes how a product is packaged such as  cartons per palletв or units per cartonв.

Pallet

A wooden or plastic base upon which layers of product are stacked for storage and transporting with a forklift or pallet jack.

Pallet ID

The bar code tag that is placed on a pallet for tracking purposes.

Palletize

To put materials and product onto a pallet.

Pallet Jack

Material handling equipment consisting of pallet forks on small wheels that is used in the warehouse to move cases of product. It may be a motorized unit guided by an operator who stands on a platform; or it may be a motorized or manual unit guided by an operator who is walking behind or beside it.

Pallet Tag

Refers to the bar code sticker placed on a pallet of product.

Paper-roll clamp

Designed specifically for the handling of large paper rolls, the paper roll clamp is a lift truck attachment that clamps around the roll and also allows for a full 360 degree rotation.

Partial

Less than a full pallet of product.

Perpetual Inventory System

A continuous inventory tracking method where inventory taken out is recorded with each outbound order and new inventory is recorded with each inbound order.

Physical Inventory

Refers to the process of counting all inventory in a warehouse or plant.В Operations are usually shut down during a physical inventory.

Pick/Pack

A warehouse operation that involves picking individual items from cases and putting them together a carton or pack for shipment.

Picker

The person in charge of picking specific stock for orders.

Picking

Picking is the movement of stock from a storage area to a staging area. The Fork Lift / Clamp Operator will  the stock which is assigned to a particular order. The Fork Lift / Clamp Operator must pay close attention and match the items listed on the Pick Ticket to the information on the product.

Pick Ticket

The Pick Ticket is a document used by the Forklift / Clamp Operator or picker in the Distribution Center who will be locating the
stock for the order. The Pick Ticket contains information such as, product location, quantity, lot numbers, serial numbers or unit numbers.

Pick Time

The time it takes to pick and document specific stock for an order.

Pick Slot

Location in warehouse where dedicated stock is stored. Also known as a primary location.

Pick-to-clear

Warehouse picks from locations with the least amount of product on hand in order to clear the area.

Piggy Back

The process of transporting a trailer on a railroad flatbed; the trailer is then hauled to its final destination by truck.

Pig

A type of trailer that can be transported on a rail car and also pulled by truck.

Pinwheel

Pinwheeling is a process of arranging pallets on a truck or product on a pallet to make the best use of space when dealing with items
of different sizes.

P.O.D.

Proof Of Delivery; a signed bill of lading.

Product Code

A series of characters assigned by the manufacturer to identify each of its products. This is usually the SKU.

Pro Number

A number assigned to a shipment by the carrier for tracking purposes.

Quality Assurance, Quality Control

The inspection of product as it comes in or goes out of the warehouse in order to ensure quality.

Queue time

Amount of time before set-up or processing of a job.

Rack

Metal framework in the warehouse used to store products several evels high.

Rate Sheet

A schedule of warehouse or transportation charges for a client.

Reach truck

The reach truck is a narrow-aisle (8”-10”) lift truck specially designed for racked pallet storage. It is also known as a stand-up
reach, straddle reach, or double-deep reach. The reach truck is designed with outriggers in front and telescoping forks controlled
by a hydraulic mechanism. This mechanism allows you to pick up the load and pull it back over the outriggers in order to reduce
the overall truck and load length. It is helpful for turning down a narrow aisle. The reach truck has a mechanism that allows
for extended reach in order to store pallets two-deep in a double deep rack.

Real Time

Information is updated and saved instantaneously.

Receiving Report

A record of the condition of all inbound stock as it arrives.

Receiving Tally

A list of all the inbounds received in an effort to ensure accuracy.

Recurring Storage

An amount charged to a client for monthly storage; it is based on the amount of product stored in the warehouse on the first day of the month or specified by the contract.

Refrigerated Warehouse

Temperature controlled warehouse that serves well for storage of food and other perishable products.

Release

Authorization to ship.

Re-order point

Inventory reaches a specific point based on demand where it is set for replenishment.

Repack

Packaging material differently than how it arrived. Example: making a pallet of 60 cartons into 3 pallets of 20 cartons.

Replenishment

Refilling of a picking location.

Return Authorization

Permission given to a carrier or consignee to return product to FulEx.

Return Authorization Number

This is usually a number supplied by the client authorizing the return of product from a consignee to FulEx (i.e. RPC or RMA).

Reverse Logistics

The logistics needed to plan return of product or a load. This may include a return order, transportation, and put-away.

Safety stock

Used to ensure availability of stock in case of deviations in supply or demand. These are calculated by using past deviations. To determine the optimal safety stock level, a required service level multiplier is needed.

SCAC

Standard Carrier Alpha Code; a unique 2 to 4 letter code assigned to transportation companies for identification purposes. SCAC
codes are required for EDI, and are printed on bills of lading and other transportation documents.

Serial Number

Number assigned to a single item in order to identify and differentiate it from others.

Shipment

Freight that is transported from one location, such as a regional distribution center (RDC) or manufacturing site, to another, such as a consignee.

Ship To

Delivery address for the consignee.

Shrinkage

Reduction in inventory measurement (often referred to as a result of loss or theft).

SKU

Stock Keeping Unit; A number (product code) assigned to a single item or items by the manufacturer.

Slip Sheet

A sheet of cardboard on which product is stacked; used instead of a pallet.

Slip Sheet Attachment

An attachment to the front end of a forklift that is used to handle product on a slip sheet.

Slotting

Approach used to determine the best placement and locations for products in the warehouse depending on its dimensions and how
often the item is picked.

Soft Allocation

Initial allocation of inventory to an order which will commit the inventory to the order but not specifically pull it from a certain lot.

Split Month Billing

Split month billing is a variation on monthly billing. The client is charged:

A rate for inbound storage in the first half of the month, and

A rate (i.e., 50% discount) for inbound storage with a receipt date after the 15th of the month.

This billing option can address client resistance to monthly billing (having to pay for a whole month’s storage for inbound stock that arrives later in the month).

Split Shipment

A partial shipment where the remainder of the order is on backorder and the warehouse cannot fulfill the entire request.

Spotting Horse

A specialized tractor used only to move trailers around the warehouse facility and place them at doors where they can be loaded or
unloaded.

Stack Height

The number of pallets rolls & skids that can be safely stacked on top of each other; the client supplies this information.

Stacking

Placing stock on top of other merchandise in order to more efficiently use space.

Staging

The process of getting product from its storage area and placing it near the loading area for later shipment; or in cross docking,
the process of unloading product and organizing it for immediate shipment.

Staging Area

A designated area of the warehouse near the loading dock where product is placed or arranged for shipment.

Stencils

Stencils are markings placed on the product with the ID information required by the customer for the product that they are receiving.
This can be in different forms dependent on the specifics for the customer. It can be a label or just a chalk inscription with the product ID.

Stretch Wrap

Clear plastic film that is wrapped around a pallet of product to secure it.

Stock

Inventory.

Stock Allocation

When the “computer looks for and allocates stock”, it checks to see if it is available. Available stock can be used to fill
the orders. When an order is input, the system will automatically look for available stock and allocate the stock to the particular
order.

Third Party Warehouse

Warehouse operated by a 3PL Company that houses the products of their clients.

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Trailer

An enclosed vehicle, towed by a truck, which is used for transporting product. There are a few different types of trailers. These include tractor trailers, semi-trailers, flat beds and reefers (refrigerated trailers). Most trailers are 45', 48', or 53' long.

Tractor

The truck that pulls a trailer.

Transaction Set

A group of data elements that represent the information on a business document, like a shipment order, and which are transmitted
through EDI.

TMS, Transportation management system

System used by the transportation department which aids in such tasks as manifesting shipments, finding rate quotes, and managing
carriers.

Traceability

Ability to track a shipment from the time it leaves the warehouse until the time it arrives at the consignee.

Trackable

Total quantity of weight, space, and pallets.

Transportation Tariff

A document published by a carrier that describes charges for transportation between 2 or more points, and contains other terms
and conditions governing the transportation activity.

Unit loadВ

Otherwise known as a unitized load, a unit load is any arrangement of materials that are moved by material handling equipment, such
as a lift truck, as a single unit (example: palletized loads).

Value-Added

Value is added to the distribution process when there is a contribution made to the functionality, value, or usefulness of a product.

Value Added Services

Extra services that a distribution center will perform in order to meet the needs of their customers. Typically refer to special assembly, packaging, or picking services.

Vendor-managed inventory

In a 3PL, this describes the instance of a client (vendor) controlling the inventory at the 3PL warehouse. This type of inventory control
can be managed in multiple ways including a periodic physical check of inventory by the vendor in order to determine what needs
to be supplied to the warehouse. The vendor can also have remote access to the warehouse’s inventory control system (MRP) and order based on the levels of supply and demand visible electronically.

Warehouse Receipt

Receipt for product received into the warehouse.

Wave picking

Method of picking for multiple item orders where all zones are picked simultaneously and the product is sorted later. This method
of picking is often used when picking shipments for specific carriers so that the product for each carrier is in the same place and can be sorted after it is picked.

WMS, Warehouse Management System

WMS is a software designed to function around three main components: putaway, replenishment, and picking. By directing these three components, the system can logically manage the movement and storage of product in the warehouse.

Zone

Zones are locations in the warehouse where usage is determined by the characteristics of the product being stored such as special
handling, or special inventory management requirements.

Zone picking

Method of order picking where the warehouse is divided into pick zones. Items are picked from each zone and then transferred on a conveyer system from one zone to the next.