Beginner’s Guide: Transportation Terms

Are you new to the transportation industry? Does logistics speak leave you feeling a bit confused or overwhelmed? It’s completely understandable. What the heck is a bill of lading or GEO fencing. And who or what is the FMCSA and what do they have to do with HOS rules (what are HOS rules)?  

Worry no longer. Here at AM Transport, we’ve been in the logistics industry for over 30 years. We get it; some of the terminology is confusing. And it can be costly too if you don’t have a basic understanding of certain terms. That’s why we’ve compiled this brief list of transportation terms you should know.

 

A

Accessorial Charges:

Accessorial charges are the additional charges for freight duties beyond normal pickup and delivery often associated with LTL (less-than-truckload) freight, including: inside delivery, wait time, fuel surcharges, detention, reclassification and reweigh, liftgate, and residential.

 

Asset-based:

Asset-based simply means a transportation company owns its own equipment. 

 

B

Backhaul:

A backhaul is the return trip of a commercial truck that has made its delivery at a certain destination point. Carriers and brokers rely on one another for backhauls because carriers want to get home quickly and brokers can often find them freight to move while heading home.

 

Bill of Lading:

A BOL is a binding contract between the shipper and the carrier or broker. The BOL covers the nature of cargo by weight, size, and/or number of pieces as well as the origin and destination. (We once had a customer who referred to the Bill of Lading as a Bill of Ladle.)

 

Blocking and Bracing:

These are supports–typically lumber and metals bars used to secure shipments and to inhibit front-to-rear shifting in trailers.

 

Bulk Cargo:

Cargo stored loose for transport to destination. Examples of bulk cargo include: grain, petroleum, coal, and chemicals.

 

C

Capacity:

Simply put, capacity refers to the availability of trucks to haul your freight. When a broker tells you capacity is tight, they mean empty trucks are hard to find and it will very likely be more expensive to get your freight from point A to point B.

 

Cab:

The cab is where the driver of a commercial truck operates the vehicle.

 

Cargo:

Goods or products to be transported.

 

Carrier:

A person or company that transports goods. Often referred to as a trucking company.

 

Chassis:

A special trailer or undercarriage used to transport ocean containers over-the-road.

 

Certificate of Insurance:

Proof of insurance to cover damages or loss to freight while in transit.

 

Claim:

A claim is a charge made against the carrier for lost or damaged freight.

 

Cold Chain:

Cold chain refers to a temperature-controlled supply chain.

 

Commodity:

Commodity refers to the raw material or product that needs to be transported. It is the type of cargo being shipped.

 

Concealed Loss:

Damage or loss that can’t be determined until the package is opened.

 

Consignee:

The individual, company, or location taking delivery and financial responsibility for the shipment. Typically the receiver.

 

Cross-Docking:

Unloading materials from incoming trailers or railroad cars and loading these materials directly onto outbound trucks, trailers, or rail cars with no in-between storage time.

 

Cubic Capacity: 

Carrying capacity of truck measured in cubic feet.

 

D

 

Deadhead:

The operation of a semi-truck with an empty trailer or no cargo.

 

Department of Transportation (DOT):

The DOT is a Federal Cabinet department of the US Government dedicated to keeping the nation’s transportation systems safe.

 

Detention:

Penalty charges assessed by a carrier to a shipper or consignee for holding transportation equipment (trailers, containers, railcars) due to untimely loading or unloading.

 

Distribution Center:

Commonly referred to as a DC, a distribution center is a location where goods are stored until ready to be moved to a final destination.

 

Dock:

Platform where trucks are loaded and unloaded.

 

Driver Shortage: 

The American Trucking Association (ATA) estimates that the US could be short about 100,000 drivers in five years and 160,000 drivers in 2028. The driver shortage is often cited as one reason for tight capacity.

 

Drop Trailer:

A truck trailer left (or dropped) by a driver  at a facility to be loaded or unloaded at a later date and picked up at pre-arranged time.

 

Dynamic Pricing:

Often used during freight market upheavals, dynamic pricing allows shippers to lock in rates for a short period of time. For example, in a dynamic pricing agreement, a shipper would agree to pay a certain rate for 30 days. This rate is honored for that 30 days regardless of the market and then renegotiated at the end of the short contract.

 

 

E

 

Electronic Data Interchange:

EDI is the business-to-business interconnection of computers to exchange documents such as purchase orders and invoices. EDI saves time and money and cuts down on paperwork.

 

Electronic Logging Devices:

ELDs monitor a vehicle’s engine to capture data on whether the engine is running, the vehicle is moving, miles driven, and duration of engine hours. The ELD is used to keep track of a driver’s hours of service.

 

Enroute:

Enroute means a shipment is in the process of transport.

 

Exceptions:

A shortage or damage noted at the time of delivery and noted on the Bill of Lading before it is signed.

 

Expedited:

An expedited shipment has an accelerated transit time.

 

F

 

Federal Motor Carrier Safety Association:

The FMCSA conducts many activities with the primary mission to prevent motor-vehicle accidents and injuries.

 

Flatbed:

Often used for oversized shipments, a flatbed is an open bed truck with no sides or roof.

 

Freight:

Products or goods transported from point A to point B.

 

Freight Broker:

Intermediaries between shippers with goods to move and carriers with equipment to move goods.

 

Freight Class:

Used in LTL shipping, freight class classifies shipments based on freight weight, length, height, density, handling, and value.

 

Full Truckload (FTL):

Shipments that use the entire truck. Typically more than ten pallets.

 

Fuel Surcharge:

Extra fee charged by trucking companies or brokers to cover the fluctuating costs of fuel, calculated as a percentage of the base rate of transportation.

 

G, H

 

Geofencing:

GPS or RFID technology that creates virtual and geographic boundaries enabling software to keep customers apprised of when a shipment leaves or enters the specific area.

 

Hazmat:

Materials that may pose a threat or risk during transportation. Examples include: explosive, radioactive, infectious, flammable, toxic, or corrosive substances.

 

Hotshot:

Used for moving small or expedited loads, hotshot loads are usually transported on smaller trailers pulled by heavy-duty pickup trucks.

 

Hours of Service:

HOS refers to the regulations limiting the number of hours a commercial motor vehicle driver may drive during a given time frame.

 

I, J

 

Intermodal:

Transportation using a container that can be transferred between different modes of transportation; for example, rail to truck.

 

Just-In-Time:

JIT refers to a system of manufacturing in which parts and supplies are delivered as needed to minimize inventory.

 

L

 

Lane: 

The regular freight route between point A and point B.

 

Less-than-Truckload (LTL):

Shipments that do not require the use of an entire trailer.

 

Liftgate:

A liftgate is a mechanized platform installed on the back of a truck that enables freight to be lifted for loading or unloading.

 

Lumping:

When a driver helps to load or unload at pickup or delivery.

 

M

 

Milk Run Routes:

A delivery method for mixed loads from different suppliers, utilizing shorter and more frequent routes.

 

Mode:

The method of transportation: truckload, LTL, and intermodal.

 

O

 

Overage:

Excess freight, more than the quantity shown on shipping documents.

 

Over-the-Road:

Transportation of goods by public roadways.

 

Owner-Operator:

Truck drivers who own and operate their own equipment.

 

P, Q

 

Pallet:

A platform used to package, store, move, and protect goods in freight shipping. Pallets come in a variety of materials (wood, metal, plastic, cardboard) and the standard size is 40X48.

 

Proof of Delivery (POD):

A delivery receipt copy of the signed freight bill at the time of delivery.

 

Quick Pay: 

Freight brokers use Quick Pay to expedite payments to carriers.

 

R

 

Rate Confirmation:

A document listing all pertinent information related to a load, given to the carrier by the shipper or the broker.

 

Receiver:

The party receiving the shipment or the consignee.

 

Reefer:

A refrigerated container used to haul temperature-sensitive freight.

 

S

 

Same day Pickup and Same Day Delivery:

Freight that must be picked up the day the order is taken or freight that must be delivered the day the order is picked up.

 

Semi-Truck:

The combination of a tractor unit and one or more semi-trailers to haul freight.

 

Shipper:

The consignor or the supplier/owner of the product being transported.

 

Shipping Container:

Ranging from reusable steel boxes to corrugated cardboard, these strong containers are used to protect freight during shipment, handling, and storage.

 

Spot Market:

Spot market rates are based on current supply and demand for trucks.

 

Supply Chain:

A system of organizations, activities, resources, and logistics involved in the production and movement of goods from suppliers to customers.

 

T

 

Tanker:

A cylinder used to transport and deliver liquid freight.

 

Temperature-Controlled:

A trailer with a system that maintains a specific temperature for perishable goods or temperature sensitive products.

 

Terminal:

A location where freight originates, delivers, or is handled during the transportation process.

 

Tracking:

Technology used in the transportation industry that includes GPS tracking of shipments, location services, and notifications of departures and arrivals.

 

Transportation Management System (TMS):

A logistics platform allowing users to manage and optimize operations with greater efficiency.

 

Truck Ordered Not Used:

A cancellation fee charged a shipper that cancels a truck.

 

U, V, W

 

USDOT Number:

Companies that operate commercial vehicles transporting passengers or hauling cargo in interstate commerce must register with the FMCSA and have a USDOT number. Commercial intrastate hazmat carriers who haul types and quantities requiring a safety permit must also have a USDOT number.

 

Van:

Rectangular box freight trailer. The most common type of freight transportation, they are designed to haul pallets or boxes.

 

White Glove Delivery:

Premium delivery service often utilized for high-value items.