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3PL Glossary Terms & Definitions




  3PL A 3PL (third-party logistics) provider offers outsourced logistics fulfillment services, which encompass anything that involves management of one or more facets of procurement and fulfillment activities.
  4PL A 4PL provider will typically allocate resources to a company in order to manage its supply chain. A 4PL will work as an extension of this company, exercising its strategy and driving initiatives.
  Active Stock Products that are stored in readily accessible areas for easy order fulfillment.
  Advanced Shipping Notice (ASN) A pending Delivery document that include shipment information about the products, quantities, and nature the of shipment.
  Apparel fulfillment Apparel fulfillment allows apparel companies to move quickly, evolving with the fashion industry. It involves the pick, pack and shiping as well as return management.
  Application Programming Interface (API) An API is a set of programming instructions and standards. It’s often used to help different software applications work together.
  Arrival Notice A message, usually automated, where the carrier notifies the appropriate party that the shipment has arrived.
  B2B Business-to-business, in which one business purchases products from another business.
  B2C Business-to-consumer, in which an end customer purchases products from a business.
  B2R Business-to-retailer, in which a retailer purchases product from a business.
  Backorder Taking orders while waiting on stock to arrive in the warehouse.
  Batch fulfillment Fulfilling a large number of orders all at the same time.
  Beauty & Cosmetics Fulfillment Beauty and cosmetics fulfillment involves the pick, pack and shiping of items as well as return management, lot tracking, and expiry tracking. It oten uses different fulfillment methods such as FEFO
  Bill of Lading (BOL) A BOL is used to indicate where a shipment is going, the weight of the shipment, the commodity, etc. There are usually 3 copies for reference – one for the transportation company, one for the 3PL, and one for the customer.
  Bundling/Kitting Bundling or Kitting is when two or more products are purchased in one order for one price.
  Cargo Goods being transported on a ship, aircraft, rail, or vehicle.
  Carrier Liability Circumstances in which carriers are liable for damage to your stock.
  Carrier limitations The maximum amount of money for which a carrier is legally liable for loss or damage to cargo.
  Case Picking This is when a full case is shipped as a single unit instead of individual items.
  Channel A method that a business distributes its products, such as a retail or distribution channel, call center, or a web-based electronic storefront.
  Chargeable Weight The amount of weight a freight carrier can charge for.
  Clearing and forwarding agent (CFA) A government agent that deals with all the documentation related to your international freight transport.
  Code 128 A type of bar code, often used in logistics. It is often used for the product bar code in lieu of a UPC.
  Commercial Invoice A document created by the seller with their contact information, and information on the products being shipped such as their value for customs and insurance. (We fill these out for our clients based on the information they have on the product).
  Commodity Code A code used for determining the type of goods and the applicable tarrifs when importing or exporting.
  Consignee The receiver of a shipment of goods. Typically, the buyer is the consignee, but it can also be the buyer’s bank in some situations.
  Consolidation Combines two or more shipments to have lower transportation rates.
  Container Packaging used in shipping, such as cartons, cases, boxes, bundles, and bags.
  Containerization A shipment method in which goods are placed in containers and then unloaded at the destination.
  Courier Service Door-to-door delivery service, usually local.
  Cross-docking Involves supplying products from a manufacturing plant straight to customers with little or no material handling in between. A facility that operates without storage in supply chains.
  Crowd-funding fulfillment The inventory management, picking, packing, and shipping of a product that was funded online.
  Cubic foot storage The measurement of space available or required for transportation and storage. It is calculated by multiplying length by width by height.
  Custom packaging Packaging that is uniquely tailored for a company’s specific brand or need.
  Customs The authorities who collect duties on imports and exports. Also colloquially used to refer to duties paid on imports and exports.
  Customs Value The value of the imported goods on which duties will be assessed. Usually includes the price of the goods themselves and the prorated price of the freight or air shipping.
  Cycle count An inventory auditing procedure, which falls under 3PL inventory management, where a small subset of inventory, in a specific location, is counted on a specified day.
  Cycle time A measurement of how many units of product are received, produced and shipped in a certain period of time, and it indicates the general efficiency of the supply chain.
  DDP Delivered Duty Paid are fees/taxes/duties that are paid by The shipper of the order.
  DDU Delivered Duty Unpaid are taxes or duty charges that have to be paid for by the recipient of the shipment on delivery.
  Delivery time The amount of time that it takes for goods that have been bought to arrive at the place where they are wanted
  Demand Chain Management The same as supply chain management, but with an emphasis on consumer pull versus supplier push.
  Demand forecasting, demand forecast The process of predicting future sales by using historical sales data to make informed business decisions about everything from inventory planning to running flash sales.
  Demand planning The supply chain management process of forecasting demand so that products can be reliably delivered and customers are always satisfied.
  Destination The location goods are sent to.
  Demurrage Charges are applied when rail freight cars and ships are retained beyond a specified loading or unloading time.
  Detention Costs incurred by a customer for using equipment beyond the given free time, typically outside of the terminal.
  DIM factor Itt is the volume of a shipment allowed per unit of weight.
  Dimensional weight/DIM weight A pricing technique for commercial freight transport (including courier and postal services), which uses an estimated weight that is calculated from the length, width and height of a package. The shipping fee is based upon the dimensional weight or the actual weight, whichever is greater.
  Distribution All logistics from the end of production to shipment to the end user.
  Distribution Center (DC) A warehouse facility which holds inventory before being sent to stores.
  Distribution Channel A company or person who participates in distribution of goods.
  Distributor A business that purchases and resells products.
  Dock to Dock This term is used to ascertain if there is a lift gate or a dock at the end location, so that the truck can pick up from one dock, deliver to another, no lift gate needed.
  Drop Ship Drop shipping is a method of order fulfillment in which a company sells products by delivering them directly from the manufacturer or third party. Drop shipping merchants do not warehouse nor ever handle their inventory.
  Dunnage A packing material used to protect a product from damage during transport.
  eCommerce fulfillment The entire ecommerce fulfillment process behind getting an order delivered to a customer after they order it online. This includes receiving and storing inventory, processing orders, picking items, packing boxes, and transporting the items to the customer’s shipping destination.
  eCommerce platform The software enabling the commercial process of buying and selling over the internet.
  Economic order quantity (EOQ) The ideal quantity of units a company should purchase to meet demand while minimizing inventory costs such as holding costs, shortage costs, and order costs.
  EDI Electronic Data Interchange. The way in which multiple systems communicate with each other to transfer information.
  Education fulfillment Education and book fulfillment has several requirements, such as temperature control so book and materials do not warp.
  Electronics fulfillment Electronics fulfillment requires a delicate touch. This unique fulfillment process may require secure areas, climate control, and HazMat shipping. As part of the order fulfillment process, testing, return management, and lot tracking may be used.
  Expedited shipping A delivery method that ensures shipments arrive at their destination faster than standard shipping options.
  Expediting Shipping faster than normal.
  Export Sending goods to another country.
  Export Broker A company that intermediates between a buyer and seller. They require a fee for their services.
  Fashion accessories fulfillment  
  FBM/Fulfillment by Merchant A method of selling where a seller lists products on Amazon, but manages storage, shipping, and customer support in-house or through a third party. Merchant Fulfilled Network (MFN) is Amazon’s terminology for FBM.
  FEFO (First Expire First Out) FEFO is to ensure that product with the shortest expiry date is placed into the market first. This makes it possible to reduce business overheads from wastage and the additional work and cost associated with returns
  FIFO (First In First Out) FIFO means that products stored first are to be retrieved first.
  Fill rate The fill rate is the fraction of customer demand that is met through immediate stock availability, without backorders or lost sales.
  Footwear fulfillment Due to high SKU counts, footwear fulfillment can be expensive. It involves the pick, pack, and shipping often at high inventory turn rates. Fulfillment can also mean handling reverse logistics.
  Forward logistics The forward movement of goods as they transition from raw materials to end-consumers.
  Freight Freight are goods transported in bulk by truck, train, ship, or aircraft.
  Freight forwarder A company that arranges the transportation of products on behalf of either a seller or buyer.
  Freight forwarding/freight forwarder The coordination and shipment of goods from one place to another via a single or multiple carriers.
  Freight shipment Any shipment over 150lbs and/or with dimensions larger than 30” L X 30” W X 30” H.
  Fulfillment The act of fulfilling a customer order. Fulfillment includes order management, picking, packaging, and shipping.
  Fulfillment center A fulfillment center is where customers’ inventory is stored, managed, picked, packed, and shipped to their customers.
  Full Truckload (FTL) When goods take up a full truckload of space.
  Handling Costs The cost involved in moving, transferring, preparing, and otherwise handling inventory.
  Household Good Fulfillment Household goods fulfillment has a variety of requirements depending on the product. Fragile items often require specialized packaging, while other goods may require temperature control, such as candles. Order fulfillment may also include kitting, assembly, and return management.
  Import Goods brought into one country from another.
  Inbound logistics The management of materials from suppliers and vendors into production processes or storage facilities.
  Inventory The quantity of products you own and store for later sale.
  Inventory forecasting, inventory forecast A method used to predict inventory levels for a future time period.
  Inventory management The tracking of inventory levels, orders, sales, and deliveries. Complete inventory control with a technology focused 3PL can allow sellers to view real-time inventory counts, provide reporting to track inventory trends to better forecast sales.
  Inventory planning The process of determining the optimal quantity and timing of inventory for the purpose of aligning it with sales and production capacity.
  Inventory Turnover Rate The tracking of inventory levels, orders, sales, and deliveries. A technology focused 3PL can allow sellers to view real-time inventory counts, provide reporting to track inventory trends to better forecast sales.
  Invoice A detailed statement showing goods sold or shipped and amounts for each.
  Item Any unique manufactured or purchased part, material, intermediate, sub-assembly, or product.
  Key performance indicator Also known as KPI, this is a measurable value that demonstrates how effectively a company is achieving key business objectives
  Kitting Assembling different products and components as a single SKU into custom packaging. Learn more about kitting services
  Landed Cost Cost of product plus relevant logistics costs, such as transportation, warehousing, handling, etc.
  Last Mile (Delivery) The final leg of delivery, where the shipment is delivered to the customer.
  Lead time How long it takes to restock between the time of the order to when it’s received.
  Less-Than-Truckload (LTL) When goods take up less than a full truckload of space.
  Logistics Logistics refers to the processes involved in the organization, implementation and services which facilitate the efficient movement and management of inventory from storage to fulfillment and delivery.
  Manifest A document which describes individual orders contained within a shipment.
  Master Carton A master carton holds multiple units of the same SKU. Shipping products in a master carton help the customer save money by consolidating the shipment.
  Multi-channel fulfillment (MCF) The method by which sellers can sell items through various sales channels and have Amazon handle the packaging and shipping aspects for them.
  Net Weight  The weight of the merchandise, unpacked.
  Node  A place in a logistics system where goods rest – plants, warehouses, etc.
  Omni-Channel The way a customer interacts with a retailer over multiple channels without experiencing a noticeable change in customer experience.
  Order An order is a request to ship products, following a purchase by a customer. Orders are usually received and processed through our API and shopping cart integrations, but can also be submitted manually via our app.
  Order Fulfillment Order fulfillment is the start-to-finish process of an order being received, prepared, packed and shipped to the customer.
  Order management system (OMS) The tools that help retailers track orders, inventory, and fulfillment. The OMS simplifies the sales process from order creation to delivery, for all sales channels.
  Order Tracking Order tracking allows a merchant and a customer to track the status of a shipped package, via a tracking number that represents the specific order.
  Outbound Logistics The movement and storage of products from the production line to the customer.
  Packing Preparing a container to ship. This term is also used for packing “products” for an order.
  Packing List All shipped orders include a list which itemizes the SKU, description and quantities of every item contained in the order. This list is prepared by the fulfillment center.
  Pallet A standardized platform cartons are stacked on, often made of wood.
  Palletized shipping When multiple products or cases of merchandise are loaded onto pallets and secured for bulk shipping. Pallets are often wrapped with plastic film to hold the items in place.
  Physical inventory count An actual count of the materials and products a business owns.
  Pick and Pack The pick and pack is the process of pulling the products of an order from storage and packing it in preparation for shipping.
  Picking Pulling products from storage for an order.
  Port of Discharge Port where vessel is offloaded.
  Port of Entry A port at which foreign goods are admitted into the receiving country.
  Prepaid Freight Freight paid by the shipper to the carrier.
  Publishing fulfillment Publishing and book fulfillment has several requirements, such as temperature control so book and materials do not warp.
  Purchase Order (PO) A purchaser’s authorization to formalize purchase with a supplier.
  Putaway The warehouse processes that happen between receiving a supply of goods from a vendor and having it all stored away in racks and shelves in your warehouse.
  Receiving The acceptance of incoming inventory.
  Re-Order Point The re-order point is an inventory level set by the merchant which indicates that inventory levels are approaching a low count and it is time to re-order them to keep stock at the desired level. A threshold for an email reminder can be set through our app.
  Return Merchandise Authorization (RMA) An RMA is used as an authorization for return. RMAs help the merchant keep an organized record of their returns and allows the customer to return the item with a reference number to the fulfillment house.
  Returns/Reverse Logistics Logistics for management of products after delivery to customer, such as returns management and repairs.
  RMA (Return Management Authorization) Return merchandise authorization, return authorization (RA) or return goods authorization (RGA) is a part of the process of returning a product to receive a refund, replacement, or repair during the product’s warranty period.
  Seasonality Changes in demand based on time periods (weekly, monthly, etc.)
  Self-fulfillment A fulfillment option in which the seller picks, packs, labels, and ships orders by themselves.
  Serial Number Often used with items such as electronics, serial numbers are used to represent a specific unique item; as opposed to an SKU, which represents a group of the same items. 
  SFP (Seller Fulfilled Prime) Amazon Seller Fulfilled Prime. Items are sold by a third-party on Amazon and shipped by the third party through their own facility or through a 3PL. The seller retains the Amazon prime treatment (i.e. Prime badge) and the buyer gets all the benefits of buying a Prime product (i.e. free 2-day shipping).
  Shipment Cut-off Time This represents the cut-off time for an order to be entered in order for it to be shipped that day.
  Shipper The party that tenders goods for transportation.
  Shipping Tasks related to the outgoing shipment of goods. It includes packaging, weighing, labeling and loading for shipment.
  Shipping zones The regions and countries that you ship to. Each shipping zone includes shipping rates that apply to customers whose addresses are within that zone. Carrier transit times and prices may increase as the zone number increases.
  Shopping Cart Integration Shopping cart integration allows fulfillment software to be directly linked and integrated with a shopping cart platform. This direct integration provides the fulfillment house instructions for packing and shipping the order.
  Shrinkage When inventory has disappeared, either due to damage, theft, or improper handling.
  SKU Acronym for a Stock Keeping Unit, a code which identifies a product so that it may be tracked in inventory. A unique code that identifies a product based on its characteristics, such as brand, style, color, and size.
  Slotting The placement of products within a warehouse.
  Stockout (out of stock) When you have inadequate inventory levels to meet current demand.
  Storage fees The cost to store inventory in a warehouse or fulfillment center.
  Supplement & Vitamins Fulfillment Vitamin and supplement fulfillment involves the pick, pack and shiping of items as well as return management, lot tracking, and expiry tracking. It oten uses different fulfillment methods such as FEFO. Temperature controlled facilities are often needed for these products.
  Supply Chain The supply chain consists of everything from the acquisition of raw materials to the delivery of finished products to the end user.
  Tariff Code  A tariff code is a number field used for customs clearance which classifies a product, allowing customs to clearly define what the product is.
  Uniform Product Code (UPC) A common type of bar code.
  Volumetric Weight A pricing technique for commercial freight transport (including courier and postal services), which uses an estimated weight that is calculated from the length, width and height of a package. The shipping fee is based upon the dimensional weight or the actual weight, whichever is greater.
  Warehouse A place to store goods.
  Warehouse Management System (WMS) A software solution that offers visibility into a business’ entire inventory and manages supply chain fulfillment operations from the distribution center to the store shelf.
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