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1. Landed Cost
Landed cost is the total cost of a product to the point it’s ready to be delivered to your customer. That includes not only the base cost to purchase your products from your supplier overseas, but also costs associated with transportation, duties and taxes, insurance, handling fees, etc. Knowing the landed cost helps you price your product correctly to adequately cover your costs and better understand profitability.
Working closely with your international freight forwarder helps predict and minimize negative impacts to your landed cost.
A consignee is the entity that the shipper is sending the goods too. That’s typically you, the importer, but there are exceptions. (A consignee could be someone that acts in your name, for example.) Typically, you’ll see consignee along with the word consignor and consignment. The “consignor” is the shipper of your goods; the “consignment” is the actual goods being shipped.
3. Bill of Lading
Two common bills of lading types are the house and master.
The house bill of lading (HBL) is a receipt or contract between you and your NVOCC/freight forwarder. Learn more about a house bill of lading.
The master bill of lading (MBL) is the contract between your NVOCC/freight forwarder and the actual carrier. Learn more about a master bill of lading.
LCL stands for less than container load. If you ship LCL, your shipment shares the container with cargo from other importers. Transit time is longer for LCL due to the consolidation and deconsolidation before and after ocean transit, but is more economical for smaller shipments.
FCL stands for full container load. This means only your cargo occupies the container (rather than sharing space as is the case in LCL). It’s usually cheaper (from a landed cost perspective) and faster to ship via FCL, and the risk of damages or loss are decreased since your goods aren’t handled as LCLs.
Drayage is a truck service that moves containers to and from a port. Learn more about the origins of the word drayage.
The term “Incoterms” is short for International Commercial Terms. Specifically, they are trade terms published by the International Chamber of Commerce (ICC) and are internationally recognized by the shipping industry. As an importer, incoterms are what you and your supplier use to define responsibilities and risks in a transaction.
Two common incoterms used by your importers and exporters are Free on Board (FOB) and Cost Insurance and Freight (CIF). Find out how to choose the right incoterm for your shipments.
8. Steamship Line/Carrier
These two terms are often used interchangeably in ocean freight and refer to the operator of the vessel itself. When you see an ocean container that says Maersk, Evergreen, OOCL, etc. – those are names of steamship lines (or ocean carriers).
Large volume importers typically sign contracts directly with steamship lines to take advantage of their buying power. Smaller and mid-sized shippers typically are best served by freight forwarders to provide the best mix of competitive rates, value added services, and flexibility.
NVOCC stands for non-vessel operating common carrier and is a type of Ocean Transportation Intermediary (OTI). Although the term NVOCC is often used synonymously with the term freight forwarder, there are some technical distinctions. NVOCCs act as “virtual” carrier and issues their own bill of lading. Per Federal Maritime Commission (FMC) requirements, an NVOCC must also publish and maintain a regulated tariff.
10. Marine Insurance
Marine insurance is insurance for ocean freight. As we discussed in a previous blog, marine insurance can cover damage or loss to your cargo while in transit. For most commodities, marine insurance is relatively cost effective and helps mitigate the risk of common losses or even a general average situation.
3PL stands for “third party logistics.” A 3PL service provider offers outsourced solutions for a company’s fulfillment and distribution needs. The term 3PL is relatively broad but often involves other related transportation, warehousing, IT, and/or supply chain services
To point out the ambiguity of the word, we created a parody video back in 2012 for April Fool’s day and launched a fictional 10PL service. Check it out below.
What Are the Most Important Logistics Terms?
Comprehension of logistics terminology improves overall efficiency and ensures clear communication across a range of different channels, platforms and individuals. Fluency in logistics terminology however, portrays confidence and a complete understanding of the industry in which you conduct business.
Organizations & Departments
A commercial business used to transport various types of freight shipments to and from customers and suppliers.
Orchestrates freight, driver and equipment movement from one place to another while keeping close communication with drivers.
An intermediary between a freight shipper and a carrier who can transport their freight. Brokers are used to connect carriers and trucks to shipment that need transportation.
Truck, Trailer, & Driver
The individual behind the wheel of the tractor-trailer. The “driver” is not necessarily the owner of the truck, or the motor carrier company who operates it.
A mode of freight shipping in which two drivers alternate shifts driving the same truck with the goal of reducing transit time and delivering a shipment sooner.
Self-employed commercial truck driver or a small business owner that operates tractor-trailers for the transporting of freight shipments.
A compartment attached to the cabin of a truck used for rest or sleeping. Alternately used to describe any tractor-trailer in which a sleeper cab is attached.
A tractor-trailer in which no sleeper cab is attached to the cabin of the truck. Alternately used to describe any tractor-trailer in which a sleeper cab is not attached.
Driving a tractor without a trailer attached
A trailer used to transport temperature-sensitive goods. Includes a refrigeration unit and corresponding insulating material.
Van (48’ or 53’)
A standard semi-trailer used to transport non-temperature sensitive freight. A basic van trailer is 53’ feet long, though 48’ trailers are not uncommon and frequently used in local and LTL deliveries.
Bulk & Bulk Trailer
A type of cargo that is transported unpackaged in large quantities and requiring of a trailer designed to such cargo.
A large standardized freight container designed for intermodal freight transport. Shipping containers are easily transition from ship to rail to truck without the need to unload the container.
The route routinely served by the carrier.
A route or shipment that returns a carrier to its primary area of operations. A backhaul shipment generally cost less to secure as it is the preferred shipment for most carriers.
The highest revenue generating shipping lane from shipper to receiver.
The transport of freight over a short distance, typically from a rail yard or port to the final destination.
Drop & Hook
When a driver “drops” their trailer at a designated location and “hooks” to another trailer.
Freight & Facilities
Generally refers to cargo that is palletized for shipment.
The origin location of a shipment. The shipper is not necessarily the freight owner.
The destination location of a shipment. The consignee is not necessarily the freight owner.
Blocking and Bracing
The method used to secure freight inside a trailer or shipping container.
Refers to the amount of space inside a trailer or shipping container expressed in volume.
A business, service or individual who is paid to load and unload freight.
The total weight of a shipment of freight, including all packaging and pallets.
The weight of a freight shipment without any packaging or pallets.
Pricing & Rates
Refers to the standard cost of moving freight from one location to another, usually city-to-city.
Establishes the cost and contract of a freight shipment between the shipper and the carrier.
Refers to a carrier’s ability to transport specific freight. Capacity is subject to freight seasons, fluctuations in fuel costs, and the availability of trucks and drivers.
Now that you know how to “talk the talk” you can sling freight with the best of them and “walk the walk” straight into logistics success. Commoot makes it easy for brands to utilize truck space to deliver engaging, captivating advertising. Learn more today!