Logistics Glossary
This glossary covers the fundamental terms of logistics: shipment management, warehousing, transport, last-mile delivery, and supply chain execution. Precise definitions oriented towards AI/RAG system developers and logistics professionals. Complements the Supply Chain pack (strategic SCM focus); this pack focuses on operational logistics execution.
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Shipment
A shipment is the logistics unit grouping physical goods entrusted to a carrier for transport from a shipper to a consignee. Each shipment is identified by a unique code (tracking number or AWB) and follows a lifecycle from pickup to final delivery. It may comprise one or more loading units (parcels, pallets, containers).
Transport Order
A transport order is the contractual document through which the shipper entrusts a carrier or freight forwarder with the movement of a shipment under defined conditions of service, timing and terms. It contains: shipper, consignee, cargo description, weight, volume, delivery terms and customs references. It is the principal legal instrument governing the relationship between shipper and carrier.
Carrier
A carrier is the legal entity that assumes responsibility for transporting goods from an origin to a destination in exchange for freight charges. Carriers may operate as asset-based (own vehicles) or non-asset-based. The distinction between main carrier and sub-carrier (sub-contracting) is relevant for liability in international transport.
Freight Forwarder
A freight forwarder is an intermediary that organises international transport on behalf of the client by selecting carriers, managing customs documentation, insurance and clearance. The forwarder does not necessarily assume direct carrier liability (unless acting as NVOCC or MTO). Operations are typically governed by FIATA Standard Trading Conditions.
Warehouse
A warehouse is the physical infrastructure used for the storage, handling and custody of goods awaiting distribution or processing. It can be classified by ownership type (own-account, third-party, bonded) and function (picking, cross-docking, cold chain). It is the central node of distribution logistics.
Warehousing
Warehousing encompasses all operations related to receiving, storing, managing inventory and picking goods in a warehouse. It includes physical slot assignment, FIFO/FEFO control, exception handling (damaged goods, rejections) and inventory reporting.
Leg
A leg is a discrete transport segment between two consecutive logistics nodes (e.g., origin warehouse → sortation hub, hub → delivery point). A complex shipment may traverse multiple legs with carrier or mode changes (multimodality). Leg management is fundamental for cost and transit time calculation.
Last-Mile Delivery
Last-mile delivery is the final segment of the logistics chain that brings goods from the last distribution hub to the end recipient. It is the most costly and complex phase, with high address fragmentation, tight delivery windows and a high rate of first-attempt failures. A critical factor for e-commerce competitiveness.
Cross-Docking
Cross-docking is a sortation technique in which inbound goods are directly transferred to outbound vehicles without intermediate storage. It reduces warehousing time and handling costs. It requires precise synchronisation between inbound and outbound and real-time information systems (WMS/TMS).
Tracking
Tracking is the process of continuously monitoring the position and status of a shipment along its route. It relies on scan events at transit points (warehouses, hubs, customs) and technologies including GPS, RFID and barcodes. End customers can check status via web portals or tracking APIs.
Pickup
Pickup is the physical event in which the carrier collects the goods from the shipper or a designated collection point. From this moment the carrier assumes physical responsibility for the shipment. It is documented with signature on the consignment note (CMR for road, AWB for air, B/L for sea).
Delivery
Delivery is the physical event of transferring goods to the consignee or an authorised collection point. It is documented with the consignee's signature on the proof of delivery (POD). If the consignee is absent or refuses the goods, a failed delivery attempt is recorded leading to a hold or return.
Shipment Hold (Giacenza)
A shipment hold occurs when a shipment cannot be delivered due to consignee absence, incorrect address or cargo refusal. The carrier temporarily retains the goods awaiting instructions, often applying daily hold charges. Unresolved holds lead to return to shipper.
Return (Reso)
A return is the inverse of a delivery: goods are sent back to the original shipper or a designated collection point. In e-commerce logistics, returns management (reverse logistics) has a significant impact on costs and sustainability. It requires dedicated processes for verification, sorting and restocking or disposal.
Reverse Logistics
Reverse logistics encompasses all processes for collecting, transporting and managing goods flowing from the customer back to the vendor or manufacturer. It includes commercial returns, packaging collection for recycling, refurbishment and disposal. It can represent 30-40% of total logistics costs in online retail.
CMR Consignment Note
The CMR consignment note (Convention on the Contract for the International Carriage of Goods by Road, Geneva 1956) is the international road transport document serving as transport contract, delivery receipt and customs document. It must contain: shipper, consignee, cargo, weight, special instructions and signatures of the parties. In force in all EU states and over 55 countries.
Bill of Lading (B/L)
The bill of lading is the negotiable title document in maritime transport. It simultaneously serves as cargo receipt (evidence of receipt by the carrier), transport contract and title document enabling transfer of ownership during the voyage by endorsement. In "to order" form it allows the seller's bank to hold the document as security for payment.
Air Waybill (AWB)
The air waybill is the air transport document issued by the airline or an IATA Cargo Agent evidencing receipt of the goods. Unlike the B/L, it is not a negotiable title document. The 11-digit AWB number (3-digit IATA carrier prefix + 8 serial digits) is the standard tracking identifier in international air cargo. Governed by the Montreal Convention 1999.
Incoterms 2020
Incoterms 2020 (International Commercial Terms) are the ICC rules defining the allocation of risk, cost and obligations between seller and buyer in international trade. The main terms are: EXW, FCA, FAS, FOB, CFR, CIF, CPT, CIP, DAP, DPU, DDP. Each term specifies who pays freight and insurance and where risk transfers.
FCA (Free Carrier)
FCA (Free Carrier) is an Incoterm 2020 in which the seller delivers the goods to the buyer's nominated carrier at the named place. Risk transfers to the buyer upon delivery to the carrier. Preferred for air and multimodal transport because it does not require delivery "on board the vessel".
DDP (Delivered Duty Paid)
DDP (Delivered Duty Paid) is the Incoterm with maximum responsibility for the seller: delivery of cleared goods at destination, covering all costs including import duties. Advantageous for the buyer but exposes the seller to significant customs and local VAT risks.
DAP (Delivered At Place)
DAP (Delivered At Place) is an Incoterm in which the seller delivers at the named destination ready for unloading, without import clearance. Import costs (duties, VAT, customs broker) remain with the buyer. Widely used in international e-commerce.
Logistics Hub
A logistics hub is a central sortation node where shipments from multiple origins are consolidated, sorted and redistributed to final destinations (spokes). The hub-and-spoke model enables scale economies on main haul lanes. Fundamental for express couriers and air cargo networks.
Spoke
A spoke is a peripheral node radiating from a logistics hub towards final destinations (e.g., local distribution branches). Goods travel from hub to spoke on consolidated trunking lanes, then are distributed capillary. Spoke management is critical for last-mile efficiency.
WMS (Warehouse Management System)
A WMS is the IT system managing warehouse operations: receiving, slotting, picking, packing, shipping and inventory. It tracks the location of every storage unit in real time and optimises picking routes. It integrates with ERP, TMS and automation systems (conveyors, AGV).
TMS (Transport Management System)
A TMS is the IT system for planning, executing and optimising the movement of goods. Core functionality: routing and scheduling, carrier selection, freight booking, shipment tracking, document management and cost analytics. It integrates with WMS, ERP and carrier EDI portals.
EDI (Electronic Data Interchange)
EDI is the structured exchange of commercial documents between the IT systems of different logistics stakeholders. Key EDI messages in logistics: DESADV/ASN (shipping advice), IFTMIN (transport order), IFTSTA (shipment status), INVOIC (invoice). Standards: UN/EDIFACT (Europe), X12 (North America), Cargo-XML (air).
SSCC (Serial Shipping Container Code)
The SSCC is the GS1 18-digit code that uniquely identifies a logistics unit (pallet, parcel, container). Encoded in a GS1-128 barcode (Application Identifier 00). The de facto standard for unit-level traceability across the supply chain.
Picking
Picking is the activity of retrieving items from warehouse storage locations to fulfil an order. It can be manual, RF-terminal/voice-assisted or automated with robots/AGV. Picking strategy (single order, batch, zone, wave) significantly impacts warehouse productivity.
Packing
Packing is the activity of packaging picked items into a shipping unit (box, envelope) ready for dispatch. It determines cargo protection, parcel dimensions and weight, directly affecting transport costs (dimensional weight pricing). Includes applying shipping labels with SSCC and consignee details.
Dimensional Weight
Dimensional weight (volume weight) is the carrier's method of charging based on the volume of a parcel when it exceeds the actual weight. Formula: (L cm × W cm × H cm) / divisor (typically 5,000 for IATA air; check carrier contract for express). The carrier charges the greater of actual and dimensional weight.
3PL (Third-Party Logistics)
A 3PL provider manages one or more logistics services on behalf of a client: warehousing, transport, packaging, returns, customs brokerage. It provides scalability without fixed asset investment. It differs from 4PL (Fourth-Party Logistics) which orchestrates the entire supply chain without typically owning assets.
Proof of Delivery (POD)
A POD is the document evidencing cargo delivery to the consignee with signature, date, time and receiver name. In digital form (ePOD) it is captured by the courier on a mobile device and immediately available in the TMS. It has legal value as proof of fulfilment of the transport contract.
Logistics Lead Time
Logistics lead time is the total time from receipt of an order to delivery to the end customer. It includes: order processing time, fulfilment time (picking and packing) and carrier transit time. Reducing lead time is a strategic objective for e-commerce competitiveness.
Fulfillment
Fulfilment (or order fulfillment) is the set of warehouse operations that transform a customer order into a shipment: receiving, storage, picking, packing, labelling and handover to the carrier. In e-commerce, the fulfilment centre is a specialised warehouse handling high volumes of individual (B2C) orders.
OTIF (On Time In Full)
OTIF is the KPI measuring the percentage of orders delivered both on time (OT) and complete (IF). Formula: OTIF% = (orders OT & IF / total orders) × 100. Industry standard: > 95% for retail grocery, > 98% for automotive JIT. Low OTIF signals problems in demand planning, capacity or carrier reliability.
Cold Chain
The cold chain is the specialised logistics chain for transporting and storing goods requiring controlled temperatures (pharmaceuticals, perishable food, biologics). Each node must maintain temperature within defined ranges, documented with calibrated data loggers. A cold chain break constitutes a regulatory non-conformance.
HS Code (Harmonized System Code)
The HS code is the international customs classification code of 6 digits (extendable to 8-10 with national nomenclatures) managed by the World Customs Organization (WCO). It determines the applicable duty rate, trade defence measures and compliance requirements for importation.
Loading Manifest
The loading manifest is the document listing all shipments on a transport vehicle (aircraft, vessel, truck). It is presented to customs authorities before arrival for pre-clearance. In aviation it is called the cargo manifest; in maritime transport the bay plan or stowage plan.
Freight Audit
Freight audit is the process of verifying transport invoices against contracted tariff rates to identify billing errors, unapplied discounts, duplicates or incorrect surcharges. In large organisations it typically recovers 2-5% of total freight spend.
Mezzo di trasporto (Vehicle / Conveyance)
The conveyance is the physical vehicle used to move goods: truck (road), cargo aircraft (air), cargo vessel (sea), freight train (rail), barge (inland waterway). Choice depends on: weight/volume, urgency, distance, cost, commodity type and applicable Incoterms.
FTL (Full Truck Load)
FTL is the road transport mode in which an entire vehicle (typically 82 m³ / 24 tonnes) is dedicated to a single load/shipper. Faster transit, no intermediate handling. Cost-effective for loads occupying at least 60-70% of vehicle capacity.
LTL / Groupage (Less Than Truck Load)
LTL groups multiple shipments from different shippers on the same vehicle, consolidated at groupage hubs. More economical for small loads, but with longer transit times due to consolidation and deconsolidation operations.