Common LCommon Logistics Terminology That Every Shipping Manager Needs to Knowogistics Terminology That Every Shipping Manager Needs to Know

According to Michigan State University, careers in shipping management have a positive outlook and should grow by at least 4% by 2029. Salaries for this position have increased rapidly too, going from around $94,000 during 2019 to over $110,00 last year.

That’s because the recent pandemic has brought home the importance of the supply chain in both economic growth as well as the wellbeing of US citizens.  

If you’re interested in pursuing this career path, you’ll need a bachelor’s degree and should also learn the basics of logistics terminology before you arrive at your first interview.

Get started here. 

The ABCs of Logistics Terminology

Many of the admin tasks involved in shipping management involve the ABC system. This is a type of product taxonomy (classification) that varies according to the data you’re working with. 

For instance, take note of the following:

  • ABC Costing (Activity-Based Costing) – measures the cost and performance of objects, activities, and resources. 
  • ABC Analysis – classifying inventory items according to their importance
  • ABC Classificationarranging and grouping items in decreasing order of dollar value
  • ABC Inventory Control – Managing inventory according to their value depending on volume vs revenue
  • ABC Model- A representation of resource costs by time period

In short, the ABC system refers to the process of analyzing data according to resources, activities, objectives, and measures. 

Common Logistics Acronyms

ABC isn’t the only acronym you need to know if you want to succeed in shipping and logistics. Some of the other common ones used in freight terminology include:

TL, FTL, and LTL

These terms refer to different sizes of truckloads. TL and FTL both mean the trailer’s maximum capacity or weight. LTL means less-than-truckload and refers to freight that doesn’t take up the whole trailer.

FTL loads usually comprise 10 pallet spaces or less and weigh between 150 and 150,000 lbs. 

Intermodal (INT)

INT refers to instances where a logistics instance involves two or more types of transportation. These could be trains, airplanes, ships, or trucks.

Over-The-Road (OTR) 

This term means something totally different from what the name implies. OTR means sending goods over long distances instead of via nearby local routes.

Third-Party Logistics (3PL)

Third-party logistics refer to outsourced services that encompass more than one facet. These include fulfillment, transportation, and procurement activities. 

Other commonly used shipping terminology acronyms include DOT which refers to the Department of Transport and FMCSA, which stands for Federal Motor Carrier Safety Administration.

Supply Chain Terminology Related to Charges

As a logistics manager, a large part of your job entails keeping your company profitable. That means you need to make sure you’re aware of all the different terminologies involved in this important aspect.


This term describes extra services beyond dock-to-dock transportation. These include the use of special equipment like liftgates, or things like inside pick up, delivery, and non-commercial destinations.


These charges relate to costs involved after the shipment’s delivered. They include things like discrepancies between the weight and dimensions of the delivered freight compared to what you quoted.

Both accessorials and adjustments can affect demurrage charges too.

What is demurrage? It’s just a fancy French word for storage charges. It’s charged per container or day and may vary according to your location.

Back Haul and Headhaul

The back haul refers to a return trip after delivering the goods. It’s usually a cheaper option for clients. Often the freight carrier offers a discount to secure a load instead of hauling an empty trailer back to its destination.

Headhaul means the shipping lane from the shipper to a receiver that generates the highest revenue. 

Linehaul and Through Rate

Linehaul refers to the cost of moving freight from one place to another. This term usually applies from city to city. So, you would calculate the charges for an in-between destination according to the nearest major center.

A related term, called through rate, works on the actual distance between the delivery destination and the point of origin. 


Tariffs are the agreed costs between the shipper and the carrier. These usually form part of an ongoing contract between the two.


Although capacity refers to the carrier’s maximum ability to transport freight, the associated costs vary. These influencing factors include seasons, the availability of drivers and trucks, as well as fuel costs.

Warehouse Infrastructure Terminology

Finally, some of the more important terms you need to understand include those related to the infrastructure of the industry. These include:

Bonded Warehouse

A warehouse is a building used for storing goods until the client pays import duties. These buildings must have Treasury Department approval and are under bond for observing relevant revenue laws.

Caged Goods

Items placed in a fenced-off area in the warehouse. These are usually items that have a high value or that are unusually sensitive.

Charging Area

A space in the warehouse dedicated to keeping extra batteries and battery chargers for powering electrically powered handling equipment. As the shipping manager, it’s your duty to ensure this area complies with stringent government safety regulations. 


Conveyors move freight between different areas of the warehouse. There are two main types of conveyors:

  • Roller conveyors that use gravity
  • Belt conveyors with motors

Again, the warehouse manager must know and enforce all the safety regulations concerning this equipment.

Cross Docking

This distribution system helps cut costs by moving merchandise received at the warehouse straight to waiting trucks ready to deliver it to the customer.

You’ll need to stay on top of your game to synchronize all the aspects involved in his type of warehousing.

Working on Your Future

Learning logistics terminology is a good way to get a head start in the field of shipping management. You’ll need a few more tips to bag the job you want though.

The field of logistics is evolving rapidly with modern times, so make sure you stay on top of all the latest ‘industry speak’ as a matter of course. 

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