Glossary of Shipping and Freight Terms

Below is a list of common shipping and freight terms often used within the industries.

• Accessorial Fee: A fee charged for carrier-provided service (for example, address correction).
  
  
• Air Waybill: Waybill indicates shipments destination address and includes info for consignor and consignee.
  
  
• BOL (Bill of Lading): Basically a contract between the owner of the goods and the carrier. It includes information about the type of goods shipped, where the shipment is coming from, and where the shipment is going. It serves as a receipt once the carrier has picked up the goods.
  
  
• Commercial Invoice: A document for international transactions that detail what is being shipped, who shipped the package, and the end consignee. Basis of other documents required for shipment. See also Why are commercial invoices showing the full price instead of the lower customs value?
  
  
• Commodity: Any commercial good shipped.
  
  
• Consignee: Receiver of shipment. A consignment is a shipment of goods to a consignee.
  
  
• Customs: The government agency responsible for collecting duties/taxes and enforcing import/export regulations.
  
  
• Customs Broker: Helps shippers navigate customs requirements.
  
  
• Customs Invoice: A document required by the country's customs authority. Similar to a commercial invoice, but also contains a COO (certificate of origin).
  
  
• Customs Value Only: If no transaction of monetary value occurs, shipments are still subject to duties and taxes. Shipper/exporter is responsible for including customs value only statements on the customs or commercial invoice. More information is here.
  
  
• Collect Shipment: Billing option where consignee (receiver) is responsible for freight charges. See also How to Add FedEx Ground Collect.
  
  
• Dimensions: Length, width, and height measurements of freight.
  
  
• DIM Weight (Dimensional Weight): Multiplying length x width x height (round up to the nearest inch) = total cubic inch of the package. For UPS, Fed Ex, and DHL, divide the cubic inches by 139 for dimensional weight. For USPS, divide cubic inches by 166, only if the cubic inch value is greater than 1728. See also How to calculate DIM weight.
  
  
• Dunnage: Material used to stabilize and secure freight during transport (void fill).
  
  
• Dangerous Goods: Materials that are corrosive, flammable, poisonous, toxic, explosive, etc. May require special documentation or packaging for safety. See also How to Ship Dangerous Goods.
  
  
• Dangerous Goods Declaration: A form completed by the exporter providing details on the dangerous goods in the shipment. Separate forms are used for air and sea shipments.
  
  
• Drayage: The transport of goods over a short distance. Definitions vary, but a typical scenario is when a shipment is moved from port to a staging warehouse.
  
  
• Duties: Taxes collected on importing and exporting goods (Tariffs).
  
  
• EDI (Electronic Data Interchange): The electronic transmission of business documents including invoices, purchase orders, packing slips, and bills of lading. See also How to Set Up EDI with UPS.
  
  
• Freight Forwarder: Company that arranges transportation on behalf of shippers.
  
  
• FTL (Full Truckload): A carrier that contracts an entire truck’s capacity to a single customer.
  
  
• FOB (Free On Board): Seller agrees to deliver goods, free of all transportation expenses, to the place specified by contract. Once delivery is complete, title to goods and risk become the buyer's responsibility.
  
  
• FOB Destination: Title and risk remain with the seller until the goods are delivered per specs in the contract.
  
  
• FOB Origin: Title and risk pass to the buyer the moment the seller delivers goods to the carrier.
  
  
• Harmonized System Code: An international standard for classifying goods. They are used for customs purposes. See also How to use Tariff Codes (HS Codes) in ShipHero.
  
  
• Last-mile Delivery: The movement of goods from a transportation hub to the final destination.
  
  
• LTL (Less than Truckload): Carrier contracts truck's capacity to multiple customers. Medium-sized shipment. See also Freight Shipping.
  
  
• LCL (Less than Container Load): Like LTL but for ocean shipments.
  
  
• Manifest: A document providing a detailed description of shipment contents. See also Using DHL eCommerce in ShipHero.
  
  
• NMFC (National Motor Freight Classification): Industry-standard tariff published by carriers containing rules, descriptions, and ratings on all products. Used to classify goods to rate the freight bill.
  
  
• Origin: Site where shipment first enters the "carriers" pipeline.
  
  
• PRO (Progressive Rotating Order): 10-digit number assigned to each shipment, commonly used as a tracking number.
  
  
• Surcharge: Charge above usual or customary shipping charge. It is used to offset fuel or peak operation fluctuations.
  
  
• Third-party Billing: The billing of freight costs to a third party, not the shipper (consignor) or receiver (consignee).
  
  
• Zone Skipping: Shipper consolidates packages going to a specific zone and delivers directly to the final sort facility. Advantages: saves money and time. Disadvantages: requires creating a front-end network and needs decent volume to work.