Find out the meaning behind the most common terms in delivery, logistics, and supply chain management in this glossary.
The logistics industry is full of delivery terms which you will often use in business operations.
That is why we compiled this super in-depth glossary of shipping terms and meanings.
Bookmark this blog post so you can return to it anytime you need a reminder or a quick check of a supply chain term’s true meaning in the delivery industry!
ABC analysis is a form of analysis used in the transportation industry for selective inventory management control. The inventory data is assessed by multiplying annual demand (or turnover velocity) by cost unit, with the collective inventory then ranked by cost.
ABC classification comes after ABC analysis. The classification involves three categories (categories A, B, and C), with the criteria being stock control and planning.
In delivery, APIs are a set of functions and procedures that allow the integration of a logistic functionality into an eCommerce system. This way, the application can access vital data.
A items refer to a small category of goods. Even though they make up around 15% of inventory goods, they make up around 80% of yearly demand, usage, and production volume.
Backhaul stands for the return of goods via delivery fleet from point B to point A. Delivery businesses perform it after the delivery of the original load.
Benchmarking is a practice used by businesses to improve their processes. It is done by comparing the company’s procedures with the competitor’s operations (usually a leading name in the industry). Or, it’s done internally by comparing current performance with past performance.
A bill of exchange refers to a non-binding written order. The seller issues the order along with an instruction to the buyer. The order details the payment of a certain amount of capital in a fixed or determinable time frame.
B items are the second category in the ABC classification. They make up 5-10% of the annual demand, usage, and production value.
Cash on delivery is a term used to describe a payment method for delivered goods. In this scenario, the customer pays for the goods in cash upon the delivery to the final destination.
C items are the third category in the ABC classification. They make up 65% of the inventory but make up just 10-15% of the annual demand, usage, and production value.
Concealed damage refers to the damage on the shipped goods that isn’t apparent immediately upon delivery. A good example would be broken products in an intact package.
Concealed loss refers to a missing part of the order that isn’t apparent immediately upon delivery. The loss may refer to a shortage or a completely missing order.
A delivery performance KPI (key performance indicator) is a metric that points out how well your delivery operations are performing.
Delivery management is the organization, administration, and supervision that ensures supplies and materials are effectively transported from one location to the next.
A delivery management software is a cloud-based delivery method that automates and optimizes the entire delivery process.
Delivery speed refers to how fast you ship a product or provide services to a customer after they have placed an order.
Dedicated courier companies offer bespoke transportation services when you need to deliver something particularly valuable or fragile. They often provide extra levels of delivery security.
Delivery as a service is a logistics business model of offering delivery as a service. Third-party companies provide on-demand deliveries to businesses, so they don’t have to hire and manage their shipping fleets.
Delivery logistics refers to the step-by-step organization and procedure of a complex delivery operation that involves the accommodation and movement of products and delivery of services to customers.
Downtime in delivery refers to the period during which the delivery operation isn’t in motion. The downtime can be planned and unplanned, with the former mostly caused by a setup of an operation, and the latter caused by repairs.
Driver management is the procedure of managing fleet drivers to ensure profitability, productivity, delivery fulfillment, and driver safety.
Driver telemetry is the remote and automatic measurement of a driver’s performance and a vehicle’s state. Sensors are placed within the vehicle to record and collect data.
See “Green logistics”.
E-commerce refers to selling and buying products and services over the internet. It refers to the transmission of funds and data via the internet by individuals and companies.
An external fleet means hiring an outside delivery fleet for your business. These delivery fleets act as third-party service providers and perform last-mile deliveries while delivering goods and services to the hiring company’s customers.
Field service is the process of performing work at a customer’s site or performing services at their site. It is the act of dispatching employees and contractors to destinations where installation, repairs, or maintenance is needed.
Fleet Dispatching is the organization and management of drivers of vehicles in a delivery business. It is the action of managing your staff to deliver goods and dispatching them to provide field service.
Fuel fraud involves inflating fuel card transactions related to business trip mileage. It refers to authorization of multiple pump expenses made by personal or mix-use vehicles.
Geocoding refers to the process of converting a description of a location, such as the address and coordinates, into a precise location on the map through coordinates. These latitudes and longitudes are outputs as geographic features with attributes that are used for mapping analysis.
Geofencing refers to the virtual tracking of your fleet. You predefine the tracking zone and area. It can spot delays, and irregular service times. Automated geofencing helps streamline the check-in and check-out processes of fleet drivers.
GPS is a satellite-based navigation system that pinpoints the location of different things on Earth. It operates 24/7, anywhere in the world. It’s free of charge and owned by the U.S. Department of Defense.
Gross weight refers to the total weight of a product or the shipment, along with the packaging and pallets.
Green logistics refers to a sleuth of moves that make up a sustainable policy in the logistics industry. Green logistics aims to lower harmful environmental actions through sustainable transportation and warehousing activities.
HVAC is a system that uses different technologies to regulate the temperature, humidity, and purity of air. It controls moving air between indoor and outdoor areas through residential and commercial buildings.
Intellectual capital explains the value of collective knowledge, experience, and education of a business’s workforce. It makes up the trio of vital organizational resources along with financial and physical capital.
An internal delivery fleet refers to the use of in-house drivers and vehicles. Rather than using a third-party service provider, this means independently using a fleet to deliver goods and services to customers.
Last mile is a widely-used phrase that refers to the final stage of the logistics process - the transportation of goods, services, and people from the destination to the end-user.
LTL refers to products that weigh less than 10,000 pounds. Usually, it describes supplies from several different shippers loaded onto one trailer. These shippers operate as LTL carriers and have their own network to efficiently transport goods from point A to point B.
Map routing is a term that describes the most efficient way of transporting goods and services from point A to point B. It is the operation of finding the most optimal routes for transporting the goods and services to the client in the pre-estimated timeframe.
The term defines the gradual erosion of a business’ margin dollars once a job has been secured.
Multi-stop routing defines the selection of the best route for cost-efficient deliveries when the delivery involves a route with multiple stops. The factors most often considered here are fuel consumption and the time frame.
Net weight refers to the weight of a shipment minus the weight of the packaging and pallets.
Next-day delivery refers to product and services shipping to clients in a 24-hour timeframe.
An order management system is a virtual way of handling the lifecycle of a customer’s order. It is a tool that helps track orders, inventory, and sales.
The term point of origin in the delivery industry refers to the original location of an LTL shipment.
Proof of delivery is a document proving the successful delivery of a package to the intended destination. Delivery companies should strive to use electronic proof of delivery nowadays.
Purchasing lead time stands for the interval of time between the decision to acquire goods and the time when the supplier dispatches them.
Retail stands for the sale of products directly to customers. It mainly refers to the sale of goods for the customer’s use rather than for resale.
Reverse logistics stands for activities that you perform after selling a product. The aim is to end the product’s lifecycle by recapturing value.
ROI refers to the measurement of your investment’s profitability. It’s about comparing the costs and generated revenue.
Other terms for “rolling resistance” are rolling drag or rolling friction. The term refers to the force that resists motion when a body rolls on a surface. It impacts the vehicle’s fuel consumption - the higher the RR, the higher the fuel consumption.
Route optimization stands for planning cost-efficient routes in the delivery industry. Automated route optimization means using intelligent software that helps businesses deliver goods and services as fast as possible.
Scalability is the growth model a business implements. It is the act of growing in business and profit while under expanding workload.
Scheduling in the delivery industry is the process of planning the date of shipping and arrival of a service or product in advance. A fixed time window is usually picked for the shipper and agreed upon by the customer.
Supply chain management is the centralized management of the flow of products and services. It involves all the steps needed to transform raw materials into finished goods to maximize customer value and gain a competitive advantage in the marketplace.
Telematics refers to communication technology implemented in vehicles used in the delivery industry for sending, receiving, and collecting data on driver behavior and the vehicle’s state vehicle.
Transportation costs are all the transportation expenses of materials, products, services, and employees.
A vendor hub is a third-party player in a logistics operation where a company offers its warehousing services to supplying companies.
Vendor-managed inventory is a type of inventory where the supplier has control over some of the management decisions that impact the seller or retailer. In these cases, the seller or retailer agrees to hand over the stock decisions to the vendor.
White glove delivery is a term used to describe methods of shipping products that require more delicate care due to their fragility, value, and size. The deliveries are performed by well-trained delivery staff that bring tools to assemble and install the products.
Now you know how to start your path toward fast fulfillment.
We laid out many strategies, some of them advanced, that can help you towards your goal.
To start taking precise steps towards faster fulfillment, take notes from our playbook.
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