An ABC analysis involves customers, products and even delivery flows being divided into three categories based on a certain value (revenue, consumption, etc.). The categories are given priorities, making it possible to obtain a rough picture of the actual situation (status quo). The result makes it possible to estimate expenditure and funds available for marketing campaigns.
Activity-based costing is used for the process-oriented recording and tracking of overheads for products, customers, supply channels or logistics. It is used as a method for developing logistics-oriented cost accounting and time analysis accounting. Activity-based costing makes it possible to show costs incurred by indirect service areas, based on requirements. The focus of activity-based costing is on identifying process variables, reference figures or cost drivers.
APS have established themselves, particularly in supply chain management, for simulation purposes and complement production planning and control systems (PPC systems) and ERP systems in the area of cross-company planning and control. The range of tasks covered by APS includes long, medium and short-term planning in the areas of procurement, production, distribution and sales.
The so-called aftermarket comprises specific services and offerings after the sale of a product. They include, for instance, replacement or servicing of parts. The aftermarket is particularly prevalent in the automotive industry.
Air freight is the transport of goods by air.
Air waybills document the completion and contents of a transportation order by air.
The ATA Carnet, also referred to as the "merchandise passport", is a customs booklet for temporary imports.
An audit refers to "examining and verifying a company's financial records". Audits are a recognized method of examining virtually all areas of a company in terms of costs, progress, efficiency and quality. It is frequently a matter of comparing the target and actual situation, in other words, looking for deviations from targets set and achieved. To ensure they are successful, audits need to be carried out at regular intervals - either by internal or external auditors.
With ATP, a supplier guarantees the customer that goods will be delivered on a specific date. It is hence part of a customer-oriented logistics system and means "readily available".
Backstage areas are behind-the-scenes areas of stores and shops where stock is held and where logistics support and services are also managed.
Balanced Scorecard defines a management and communication tool for companies and organizations. It is used to formulate, implement and review corporate strategies. American economists Robert S. Kaplan and David P. Norton developed the scorecard in the early 1990s. While a strategy is being implemented, progress can be determined and developments in the wrong direction can be corrected, if necessary.
Barcodes are used to label, identify and trace all types of articles. They are read automatically with the aid of barcode scanners. These scanners must be passed over the barcode in order to scan it.
Benchmarking is a comparison of specific process parameters within a company or between competing companies. The focus is on functional and process areas. Aspects considered include costs, performance, customer satisfaction and organizational structures. As a rule, the key indicators of the best competitor are used as a yardstick.
A bonded warehouse is a facility or consolidation center that is authorized by customs to store goods. The payment of duties and taxes are only payable once the goods are removed.
A box car is a closed freight car.
A budget is a schedule, formulated in qualitative parameters, which is given to a manager in a decision-making unit as part of an annual plan. In corporate practice, mainly monetary parameters are used. The process of drawing up a budget is referred to as budgeting.
Bulk cargo comes in the form of grains, dust or piecemeal in different sizes and includes, for example, ores, sand, coal and cereals. A characteristic feature of bulk cargo is that it retains its shape during transport and cannot be consolidated into a unit without using other resources.
B2B describes the exchange of goods, services and information between companies.
B2C describes the exchange of goods, services and information between companies and end consumers.
C-TPAT is a security partnership established by US Customs and Border Protection in the wake of the attacks on the World Trade Center. The companies agree to adhere to stricter, contractually regulated guidelines and security standards. In return, US Customs and Border Protection offers, among other things, expedited customs clearance and personal customs officers.
A campus is a site where multiple distribution centers share resources such as employees and transport to maximize time and cost efficiencies.
When items are sent COD, the recipient is not handed the goods until he has paid upon delivery. The delivery agent accepts the money and transfers it to the sender who can be fairly certain that the goods will be paid for.
As a rule, CEP service providers transport items with a relatively low weight (up to approx. 31 kilograms) and volume, such as letters, small packets and documents. These service providers usually distinguish themselves by a high level of reliability and above all fast transport. They frequently offer additional services such as same-day or overnight delivery.
A certificate of origin is a document in which the origin of goods is certified or attested by an agency which is authorized to do so. In Germany, the Chambers of Industry and Commerce are responsible for issuing the certificate of origin for exports of goods.
In order to ensure that the delivery actually matches the order in regard, for example, to quality, number, composition, price and external make-up, a Clean Report of Findings is required. The reasons for this are that, owing to the abstract nature of documentary credit transactions, the processing of payments is based solely on documentary references and is separate from the underlying commodity transaction.
CMR is the abbreviation for the French term "Convention relative au contrat de transport international de marchandises par route" (Convention on the Contract for the International Carriage of Goods by Road (CMR). This international convention regulates liability and competencies in respect of the international carriage of goods by road. It is used in cross-border road transport and comes under the provisions of the CMR Agreement, which most European countries have adopted.
Combined transport means goods are transported on a route using several different means of transport. Special types of combined transport include container transport, piggy back transport and ro-ro (roll-on roll-off) transport (road/rail + ship). With these variants, the whole vehicle or parts of the vehicle (containers, swap bodies) are loaded onto another means of transport to continue their journey.
The CTO issues the Combined Transport bill of lading and is responsible for the overall transport. He may carry out the transport on a particular section himself and may contract various subcarriers for the other sections.
The documents used in foreign trade transactions normally include a commercial invoice. It should contain all the particulars relating to the merchandise: the name and address of the recipient (purchaser), an exact description of the merchandise, an indication of the weight (gross and net) and the price (unit and total price).
CKD is a term used in outbound logistics and describes the complete assembly of a machine. The product is taken apart in the country of origin before it is transported to another country. It also comprises assembly in the destination country. CKD is particularly widespread in vehicle transport. It is a way of saving on high import duties for fully-assembled vehicles.
Consolidated consignments mostly involve the transportation of small shipments. First, the dispatching freight forwarder collects freight items from different shippers. He conveys them to the receiving freight forwarder as a consolidated consignment. The latter in turn distributes the items to the respective recipients. As such, these tasks do not necessarily need to be performed by several freight forwarders, they can also be handled by a single freight forwarder.
Generally, consolidation means bundling. In logistics, a distinction is made, in principle, between two types: time consolidation and geographical consolidation. Both cases involve organizing goods and their transportation more cost-effectively.
A consolidation center is a warehouse in which goods are packaged into larger units for onward distribution.
A consular invoice is a listing of the goods that reach a purchaser in connection with a shipping order. These listings must be entered on set forms using specific wording and must be presented to the consulate of the importing country for certification (generally in the port of shipment).
In logistics, a container is a sealable, standardized cargo-carrying unit with a volume of more than three cubic meters and a loading capacity of more than five tons. Containers are used to transport different loads such as LCL, refrigerated products or bulk cargo but they can also be used for tank loads. The designations and facilities vary depending on the area of use. There are, for instance, land containers, waste disposal containers and ISO containers.
Contract logistics involves the organization of product flows, storage, transport and information transfer services. The logistics operator takes on these tasks on behalf of companies that require these services and are unable or unwilling to perform them independently. The aim of contract logistics is, among other things, to improve efficiency at the customer end, enabling customers to dispense with the relevant administrative structures and focus more strongly on their core competencies.
If a freight forwarder issues a bill of landing it is acting as a contracting carrier. Opposite: an actual carrier, who issues a carrier-typed document.
A correction to consular invoices, which frequently needs to be presented to Latin-American consulates, in particular, if a consular invoice contains errors.
Cross-docking describes the transshipment of goods bypassing intermediate storage or with the fewest possible warehouse contacts. The aim is to speed up the flow of goods and reduce costs as a result of being able to dispense with storage. This method is used for goods that are quickly transshipped (also "fast-moving consumer goods"), such as foodstuffs.
CRM is a customer-oriented corporate philosophy/policy which, with the aid of modern information and communication technologies, aims to build up and consolidate long-term, profitable customer relationships through holistic and differentiated marketing, sales and service concepts.
The handling of customs formalities around the import and export of goods on behalf of importers.
A customs invoice basically has the same features as a consular invoice, although legalization by a consulate is not required. In many cases, however, the exporter's signature needs to be attested by a witness. Customs invoices are required, in particular, for exports to countries that are or were part of the British Commonwealth (exception: the UK). In these countries, they carry the designation "combined certificate of value and of origin" or "special customs invoice".
A customs agent is a person who has sworn to uphold the interests of Customs and carry out customs activities on behalf of the customs authorities.
CMT refers to the transport and customs management of fashion materials and products following a procedure that avoids customs payment.
Delivery flexibility indicates whether the supplier's delivery system allows special customer requirements to be taken into consideration or whether the customer's supply logistics has to follow rigid rules of distribution logistics. By and large, delivery flexibility depends on three influencing factors - order procedures, delivery procedures and information supplied by the customer.
Delivery orders are required for commodity transactions where the importer needs the aid of a third person to deliver consignments effectively. The importer needs a delivery control. In order to safeguard against a situation where the purchaser circumvents this control, the vendor obliges the purchaser only to receive the goods under the supervision of the bearer of the bill of lading, which is a legal document between the shipper and the carrier. He uses the delivery order form for this purpose.
The delivery quality measures the extent to which the delivery itself gives the customer cause for complaint. The delivery quality depends on two factors - the delivery accuracy and the condition of the consignment. The delivery accuracy indicates to what extent the products ordered are delivered in the required type and quantity. The condition of the consignment mainly depends on the extent to which the packaging performs its protective function when the goods are delivered.
Delivery reliability (meeting delivery targets and schedules) means the reliability (probability) with which the delivery time is adhered to. Delivery reliability depends on two influencing factors - the reliability of the work process and the readiness to deliver. The work processes involved in the individual phases of the delivery time must be implemented on schedule within the envisaged timeframe. The readiness to deliver indicates the extent to which the respective quantity requested can be delivered.
Delivery service essentially covers the delivery time, delivery reliability, delivery quality and delivery flexibility.
The delivery time covers the period from receipt of the order by the supplier through to receipt of the goods by the recipient. It includes the processing of the order, the order picking and load securing as well as the loading, transport and unloading of the goods at the destination.
Depot is frequently used as a synonym for warehouse. Specifically, the start and end point for route planning for transport vehicles is called a depot.
Deregulation refers to liberalizing state-regulated activities or companies from regulation and allowing market forces to work.
Distribution refers to the process of storing and transporting finished goods between the end of the production line and the final customer.
A distribution center is a facility that accepts inbound consignments of raw materials, components or finished goods, divides and then recombines them into outbound shipments. Many DCs also contain specialized handling/storage equipment and IT systems and serve as warehouses.
Distribution logistics deals with all physical, bureaucratic and planning processes relating to the distribution of goods from an industrial or commercial enterprise to the next economic level or to the end consumer. It ultimately involves bringing the right goods in the required quality and number to the right place at the right time. Another requirement in distribution logistics is to keep the processes as cost-effective as possible.
Door-to-door transport involves goods being transported directly from the sender to the recipient. There is no warehousing involved. One can also change the means of transport used.
In international business, it is standard practice in certain countries to enclose a bill of exchange (sight draft) issued by the exporter and drawn on the importer. The regulations in some importing countries even stipulate this. Sight drafts are used if there is no intention of extending credit to the purchaser, term drafts are used if the vendor intends to extend credit.
A drop shipment is the direct shipment of goods from a manufacturer to a dealer or consumer, bypassing the wholesaler.
Dual-use goods are goods which can be used both for civilian and for military purposes. To avoid the spread of conventional weapons and weapons of mass destruction to hot spots, dual-use-goods are under strict export regulations. Foreign policy, security and human rights play an important role.
The EAN code is a specific barcode standard. It usually consists of a country code, a so-called subscriber number and the article number. There are several variants of this standard. The most important code for logistics is the EAN-128 standard. It comprises 128 digits and is used to identify dispatch and commercial units. The EAN code is now recognized beyond Europe's borders and is also used in Japan and the US, among other countries.
E-commerce refers to all transactions that are handled electronically, leading to the purchase or sale of a product or service. Buying and selling over the Internet is one of the main areas of e-commerce.
Economies of scale is a concept for reducing a company's costs. As such, the aim is to reduce costs by increasing the number of units of a service or product. For example, the production costs drop if a company produces 100,000 tennis balls a day instead of 100.
EDI links companies by means of information and communication technologies, facilitating accelerated order processing in B2B relationships and thereby leading to faster response times to customer orders. Electronic data transfer offers the possibility of making point-of-sale data available immediately and at any time along the entire supply chain, thereby increasing planning and organizational certainty.
End-of-life refers to goods that have reached the end of their shelf life. These can include obsolete items or items that cannot be repaired.
End-to-end refers to the complete cycle of logistics activity. End-to-end supply chain management comprises the sourcing and transport of goods from point of origin to final customer destination.
ERP is a comprehensive computerized system that displays the business processes and resources in a company and can be used to manage the way processes are handled. As such, ERP systems can manage both materials administration and production, finance and accounting functions, human resources management, research and development, marketing and master data administration. The largest provider of ERP systems is SAP, with products such as SAP R/3 or mySAP.
EAN used to be the name of the "European Numbering Association", an organization that developed labeling standards for barcodes. Today the organization "EAN International" has its headquarters in Brussels and around 100 national EAN organizations all over the world are affiliated to it.
EFTA was established in 1960 by countries not belonging to the then European Community (EC). The aim was to protect the trade interests of its Member States. In the meantime, some of these countries have joined the EU. Iceland, Liechtenstein, Norway and Switzerland are members of EFTA.
EXW is a term of sale in which the customer of the logistics services (e.g. freight forwarder, carrier) pays all the logistics costs that accrue. The services of the shipper (vendor or manufacturer) end when the means of transport has been loaded. This expression is one of the so-called incoterms.
The FBL, which was developed by the International Federation of Freight Forwarders Associations (FIATA), is a negotiable bill of lading for combined transport involving several carriers - often known as multimodal transport. The issuer, generally a freight forwarder, is liable for loss or damage if the latter can be clearly determined. The FBL is recognized as a letter of credit document by the International Chamber of Commerce (ICC).
FIFO is a way of organizing a warehouse. Goods stored first (which were first in) should therefore be the first to be consumed or removed (first out). This principle is intended to prevent inventory obsolescence. FIFO is frequently used with perishables.
Fleet management ensures that the required number of vehicles is available and encompasses the purchasing, maintenance and control of all vehicles belonging to a fleet. It also involves operational scheduling, planning of transport runs, tracking and controlling.
An FCR is a document similar to the duplicate of a railway consignment note used by railroad companies. By using the FCR, the forwarding agent certifies that he has received the consignment for irrevocable shipment to the designated recipient. The consignment can only be revoked if the original document is returned. The FCR is a letter of credit document.
A 4PL Provider is a supplier of supply chain coordination and management services that generally does not own or operate the underlying assets and resources. When acting as a lead logistics provider (LLP), it may also coordinate and integrate the services of others with complementary or supporting capabilities.
Franking relates to certain clauses in a transport agreement between the customer and the freight forwarder. It regulates who covers the transport costs. If a shipment is sent "free of all charges" or "prepaid", the sender covers the costs. If a shipment is sent "non-prepaid", the recipient pays.
The shipper must provide all of the logistics services until the ocean-going vessel takes over. The transfer of risks and costs takes place at the ship's rail in the port of lading. This expression is one of the so-called Incoterms.
There are different types of free trade zones. A free trade zone may involve an association of several states with the aim of eliminating trade barriers such as customs duties. However, there are also free trade zones within countries, often near large transshipment centers such as ports, where exemptions from the payment of duty also apply. In addition, these regions offer attractive tax concessions. As a rule, the aim of these types of free trade zone is to attract foreign investors and to strengthen industry in those areas.
Freight distribution hubs are used to link local and long distance haulage routes. They are usually comprised of large warehousing systems belonging to one or several companies.
A freight forwarder is a merchant who organizes the dispatch of goods from A to B. It has the option of hiring a carrier or of managing the job itself - which is referred to as self-contracting on the part of the freight forwarder. Freight forwarders generally accept orders from the party wishing to dispatch the relevant freight. The freight forwarder's responsibilities also include selecting and monitoring warehouse keepers and other service providers - where it does not perform the required services himself.
The Freight management refers to the managing of third party carriers to ensure the swift, safe and cost-efficient delivery of shipments, often involving the integration of a range of services.
A freight transport center is a logistics node in the transport network. It combines at least two, but as a rule three, different types of transport (road, rail, sea, air). One of the aims is to ease the congestion on high-use routes such as roads. The possibility of switching to rail or shipping is also intended to reduce environmental pollution.
The term freight transport industry refers to the institutions that provide logistics services as primary services for shippers. Within the freight transport industry, whose primary function is to physically convey goods from a place of dispatch to a place of destination, a distinction can be made between three service areas: services which involve the means of transport moving from one location to another; services which are provided at a fixed location, e.g. transshipment, warehousing, picking and packing; and services which involve consulting, provision, organization and sale of transport services.
With FCL, the whole container is loaded by a shipper and is handed over to a freight forwarder.
A full truck load describes a truck that is fully laden with goods. FTL makes transportation particularly cost-effective as the full capacity of the means of transport is utilized.
GOH represents a special market in logistics. As such, the freight forwarder transports hanging garments from the manufacturer to the individual customer. Standard containers are fitted with bars and ropes to keep clothes neat during transport so that they can be placed directly on shop shelves.
GPS is a satellite-based navigation system developed by the US Department of Defense. It is used for global positioning and is now also used in civilian life. The system is based on the information provided by a total of 24 satellites that are located at an altitude of around 20 kilometers.
Globalization refers to the internationalization of trade, by which domestic economies become inter-dependent.
Goods distribution centers or transit terminals are a special type of distribution center. They are characterized by stockless management. This means that incoming goods are not stored but converted into outlet-based units (individual order picking) immediately upon arrival. Therefore, the main task of goods distribution centers is order picking.
Groupage service involves partial loads and small shipments by different senders that are loaded along a transport chain into transport containers. At the destinations, the goods are unloaded by different recipients. This does not necessarily have to be performed by several shippers; one shipper can offer all services. Groupage service differs from LCL in that the goods may be carried via virtually any form of transport.
Any substances or objects that can cause harm during transport are referred to as hazardous goods. These include radioactive, explosive, combustible, poisonous and caustic chemicals.
Home delivery is a logistics concept where the supply chain reaches as far as the end consumer. The transport chains are geared to the orders placed by the customer. Home delivery is an important component of home shopping. As such, a distinction is made between companies that rely fully on home delivery (e.g. sales of frozen foods) and those that offer the service in addition to their traditional business (e.g. department stores' online shopping services).
In logistics, Hub stands for a main transshipment base. Hubs are used as collection and nodal points for transshipment and for combining flows of goods in all directions. In the postal service, hubs are frequently parcel centers. The means of transport used for onward conveyance vary (ships, aircraft, trucks).
The provision of pre-retailing services within shops, often in backstage areas. Services can include stock replenishment, storage and packaging.
Inbound logistics involves supplying production and assembly plants. The supply chain reaches from the suppliers right through to the individual workplaces at a factory. Inbound logistics comprises planning, transport, interim storage and delivery right up to the conveyor belt.
The sourcing and transport of goods from their point of origin/manufacture through to the manufacturing facility.
Incoterms, or international commercial terms, are stipulations used to regulate the international movement of goods between countries. They stipulate the terms and conditions of delivery or the obligations and rights of vendors and purchasers. Individual Incoterms are differentiated, in particular, based on the places where the transfer of costs and risks occurs.
An inland waterway bill of lading is the bill of lading used in river transport. It is a document issued by the shipper (not by the ship owner) in respect of its duty to deliver the cargo to the legitimate holder of the document. Essentially, the same applies to this document as the ocean bill of lading; it is a "document of title" like the bill of lading.
Insourcing describes the contracting in of services within one's own company which were previously provided externally.
An insurance policy (or certificate) is a document signed by the insurer with regards to the conclusion of an insurance contract. While an individual policy serves as an instrument of evidence for the insurance of a single merchandise item, a general policy provides evidence of an ongoing insurance contract with insurance protection for all shipments carried out and notified to the insurer over an extended period. The insurer is only obliged to pay upon presentation of the policy.
An integrated carrier has its own aircraft and provides door-to-door parcel services (and also conveys traditional air cargo).
The coordinated movement of freight using different methods of transport, often a combination of truck and rail.
IATA is an international association of airlines. It regulates airfares and coordinates air schedules between countries. IATA was established in 1945 and has its headquarters in Montreal, Canada.
Inventory includes raw materials, components, unfinished goods and/or end products. Inventory refers either to individual warehouses, to storage areas or to all of the articles that a company has in stock.
Activities, including deliveries, are JIT when they are completed at the right time in order to meet production and client schedules. These techniques help companies improve their return on investment by reducing in-process inventory and its associated cost.
When goods are delivered "just-in-sequence", the supplier brings them to the recipient at a certain time and in a specific order. This type of delivery is used particularly in the automotive industry. One example is steering wheels, which are supplied to the conveyor belt in the order in which they are to be fitted.
KANBAN is a system used to move parts along production lines (material flow management). Workstations that require specific individual parts notify suppliers of their requirement in one of two ways: either they leave empty containers in a certain place, where they are returned full; or they order the parts using an order card (called kanban in Japanese) indicating the type and number of parts needed. The aim of KANBAN is to minimize local inventories as far as possible and to be able to respond flexibly to changing demands.
Kerbside or curbside delivery refers to delivery to and/or collection from the roadside.
The term kitting comes from the area of supply and production logistics. "Kitting" is derived from the word "kit" which means an assembly of components. Kitting involves the logistics operator assembling kits according to the customer's requirements and delivering the entire assembly either as a kit or preassembled, as desired. This enables the customer to reduce its warehouse capacity and speed up manufacturing of the end product.
Lading can be used as another word for cargo or freight. It can also refer to the loading and placement of cargo into the vessel for transportation to its destination. When the carrier issues a receipt for this type of cargo, it is called a bill of lading.
An LLP is the lead supplier of supply chain coordination and management services. While the LLP might own some of the services provided, it may also coordinate and integrate services of others with complementary or supporting capabilities.
LCL involves partial loads and small shipments by different senders that are loaded along a transport chain into transport containers. At the destinations, the goods are unloaded by different recipients. This does not necessarily have to be performed by several shippers; one shipper can offer all services. The term LCL originates from container transport. Groupage service differs from LCL in that the goods are generally carried via ship.
An LTL shipment does not fill a standard truck.
If goods, mostly of one kind, are consolidated onto a load carrier such as a pallet for transport, transshipment or warehousing purposes, we talk about a load unit. Load units are the foundation for transport chains; ideally, load carriers are standardized.
Logistics involves the process of planning, implementing and controlling the most efficient and cost-effective flow and storage of goods, including raw materials, in-process stocks, finished goods and related information. Transportation is effected on behalf of the customer from the point of origin to the point of consumption. Essentially, it is the science and art of ensuring that the right products reach the right place in the right condition and the right quantity at the right time at the minimum possible cost.
The function of logistics controlling derives from the transfer of controlling tasks to the logistics area. It can be perceived as a functional controlling sub-system that is used to assist logistics management. The important tools used in logistics controlling are targets and key figures, budget, cost accounting and time analysis accounting, balanced scorecards, ecology orientation, audits and systems analysis.
A Mate's Receipt is a temporary receipt (provisional document) issued by the ship owner in respect of goods which have been delivered to a ship for loading. The Mate's Receipt is generally associated with the entitlement to have the bills of lading handed over to the bearer. Although the Mate's Receipt is a fully valid on-board receipt, it certainly does not have the legal validity of a bill of lading.
The milk run is a special type of direct transport. The route, the time and the number of goods to be transported are already fixed. The delivery agent drives to the recipients' address directly along the route where the goods are either collected or unloaded. As a rule, there is no transshipment center. The principle leads to a measured daily workload and makes it possible to reduce safety stock.
The minimum inventory level refers to the quantity of goods in stock below which, in planning terms, the inventory should never fall. It helps to make up for quantity-related and deadline-related fluctuations in inbound and outbound stock. The minimum inventory level depends on the replacement time, the probability of the replacement time being exceeded and of excessive stock withdrawals, the readiness to deliver and the number of warehouses.
Material Requirements Planning (MRP I and MRP II), is a program system used in production planning and control (PPC) for quantity planning. MRP II refers to a higher integration level of planning than MRP I because the results are incorporated into additional operational schedules. By linking the planning results back to the preceding planning steps, they are used for the planning of the production program.
An MTO is a combined transport operator for shipments involving several carriers and several transfers. The freight forwarder issues the negotiable FIATA Combined Transport bill of lading for this purpose.
MIME is an extension of the traditional Internet Protocol for e-mails. It enables e-mail clients to send multimedia objects such as animations, audio and video files in e-mails.
Anything that has an incorrect or missing barcode (goods, loads, etc.) is referred to as "no-read", meaning it cannot be read by the relevant barcode scanner.
An NVO is a carrier who charters ships but is not a ship owner himself; also a company that carries out shipments using its own containers but does not have its own ships
NVOCC is a term used in the United States, referring to companies which operate as consolidators on a global scale and which quote handling rates in their transactions with the US and lodge them with the FMC (Federal Maritime Commission in the US); they do not have their own ships. Also: bill of lading shipper without its own ship. In Europe, NVOCCs have mostly appeared in the freight forwarding area of consolidated transportation.
NAFTA is used to describe the North American Free Trade Agreement, launched by the United States, Canada and Mexico in 1994. NAFTA is the world's largest free trade zone alongside the European Economic Area.
Open register is a term used in the shipping industry. It describes the shipping registers of states that also allow foreign companies or persons to enter themselves in the national shipping register. Anyone who does so is entitled to sail under the flag of the particular country.
An operator is a carrier offering a continuous transport chain with continuous liability on a carrier basis in international transport operations.
With order picking, one or several "order pickers" (or picking machines) compile goods from an overall range. The goods are always part of the overall range of goods. The order can come from both internal and external customers. A distinction is made between basic order picking, zone picking, batch picking and wave picking.
Order processing involves the transfer, processing and checking of order data from the time the order is accepted from the customer until the consignment documents and invoices reach the customer. A distinction can be made between technical and commercial order processing. Whereas technical order processing involves writing sales offers, design, job planning, procurement, parts manufacturing, assembly and dispatch, commercial order processing involves costing, procurement and financial accounting.
Origin services refer to support/added-value services offered at the point of origin of merchandise or materials. Can include procurement, purchase order processing, vendor compliance, quality inspection, document management, container optimization, pick and pack, pallet loading, customs processing and consolidation.
The OECD is an international organization that currently has 30 member states and maintains close relations with another 70 countries. The OECD's tasks include ensuring currency stability, promoting global trade, planning and promoting economic growth and coordinating economic aid for developing countries. The organization has its headquarters in Paris.
Outbound logistics covers the entire goods supply chain from manufacturing and retailing right through to the end customer. It includes, among other things, manufacturing waste management, packaging, intermediate storage, picking, packing, final assembly, dispatch and spare parts management.
The subcontracting to external companies of tasks considered to be outside an organization's core competence. Logistics outsourcing is one of the most popular forms.
An overcarrier is a shipping company in a pool arrangement that ships a larger volume of cargo than its legitimate, allotted volume. The opposite is the undercarrier. In the pool arrangement, an overcarrier has to compensate an undercarrier - if the latter has adhered to its schedule.
Packaging means the removable, complete or partial wrapping of goods (parcels) in order to protect them or to fulfill other functions. In principle, packaging fulfills four functions: production, marketing, utilization and logistics. The logistics functions of packaging can be broken down into the following five functional areas: protective, storage, transport, manipulation and information functions.
A packing list is a detailed list of all the parcels indicating their markings, type, weight and contents.
Pallets are flat wooden trays that can be used to store and transport goods. There are many different types of pallet (e.g. flat pallets and box pallets). Pallets can be made of wood, plastic and metal, as well as other materials. The "Europool" pallet (120 x 80 centimeters) is the most widely-used type.
A palletizer is a machine that is frequently used in warehouses and at transshipment points. It stacks parcels and packages onto pallets according to a prearranged pattern.
A parcel post receipt is simply a confirmation of receipt issued by the post office to a designated recipient for a mail item. With the aid of the parcel post receipt, it can be proven that an item has been dispatched through the post to the recipient named in the receipt. The date on the postmark indicates the date on which the mail item was dispatched. If an item is being dispatched by airmail, the relevant document is the airmail receipt.
Piggy back transport is a variant of combined transport. Road vehicles such as truck-trailer combinations and semi-trailers are loaded onto trains with the aid of ramps or by crane and continue their journey atop a flatcar.
Point of sale describes a type of collection point for information at the "electrotechnical" interface between the customer and commercial enterprises. For example, POS encompasses scanner cash registers or terminals that capture sales on an article basis, as well as credit card purchases and other electronic payment facilities. The information obtained, combined with other data (for instance, from merchandise information systems), is intended to show potential rationalization options and improve customer service.
Postponement occurs when a product is kept in a neutral state without being allocated to a customer or market segment for as long as possible at the beginning of the logistics channel, and product differentiation according to individual customer criteria does not occur until fairly late, this is referred to as postponement. The opposite of postponement is the strategy of speculation. This involves a product being moved to the end of the logistics channel at an early stage based on predicted customer demand.
In logistics, the prefix designates the country identification code within the EAN code. It can have two or three digits. For instance, the numbers from 400 to 440 stand for Germany, 00 to 13 for the USA and Canada, and 45 and 49 for Japan.
Production logistics is an integral part of the logistics system in manufacturing companies. This type of logistics encompasses planning, management and control of the flow of materials - from the raw materials warehouse and the different manufacturing stages right through to the warehouse for the finished goods. In the complete value cycle, production logistics comes after supply logistics and before distribution and waste logistics.
The pull or pick-up principle is a method for controlling production processes. The replenishment of materials for all the parties involved occurs on a demand-oriented basis. To this end, the entire production flow is divided up into segments. That means, for instance, that on a manufacturing line each segment requests replenishment autonomously from the segment upstream or from the warehouse, according to demand. The aim is to keep production flowing on a permanent, continuous basis without interruptions.
Quick response relates to ordering systems which can respond rapidly to customer enquiries and requests. Such systems are generally computer-based and work with barcode systems on an article basis. One of the aims of quick response is to reduce stock and to ensure that deliveries to warehouses and branches in the commercial sector can be better planned.
Rail freight is the transport of any kind of goods by rail.
Railway bills are the freight documents that are issued for rail transport. As with all types of freight documents, the sender receives a copy of the bill, whereas the original accompanies the shipment.
A railway consignment note is issued only for rail consignments. It documents the actual lading by means of a stamp issued by the railroad station of origin. It should be emphasized that the consignor only receives the "duplicate copy" of the railway consignment note and the original accompanies the merchandise.
Re-insourcing describes a process where a service that has hitherto been provided by an external company is taken over by the commissioning company again. This often happens when an outsourcing contract expires and the customer has discovered that it previously handled the task more efficiently or more cost-effectively in-house.
Real-time refers to something occurring in the present. A real-time system that enables an immediate response to external events. Often used in relation to tracking.
Returns logistics plays an important role in the mail-order industry. If a consignment is "returned", it means goods are sent back to the retailer by the recipient. The reasons for this can include defects in the goods or the fact that the customer does not like the item (as part of the retailer's take-back guarantee).
The process of collecting, handling and transporting used, damaged, unwanted or end-of-life goods and/or packaging for disposal, recycling or recovery. Can also refer to the return of reusable transit equipment (pallets, containers etc.) to a point further up the supply chain (i.e. upstream).
RFID is a system that uses radio signals to locate and identify merchandise, batched products or transportation assets fitted with special electronic tags. The tags - also known as smart labels or intelligent tags - enable the automatic track- and-trace of merchandise/assets throughout the supply chain. RFID can help to reduce administration, improve productivity, optimize the use of warehousing space and increase accuracy and control.
Road freight describes the transport of goods by road using motor vehicles. First and foremost, a distinction is made between private carriage - transport for the company itself (short-haul road freight) and commercial freight transportation by logistics service providers specializing in that area (long-haul road freight).
Roadside delivery refers to delivery to and/or collection from the side of the road.
The Routing is the process for arranging the course of direction of goods for transport.
RSI analysis is a method of optimizing item inventories. To this end, product lines are divided into three categories, as with ABC analysis. However, the focus is on the use of an item. The letters RSI stand for regular, seasonal and irregular use - hence, the product range is classified according to R, S and I items. Inventories of R items can therefore be optimized at little expense as their use can be calculated optimally.
A seaway or linerway bill is a non-negotiable document that proves a contract for the transportation of goods by sea and furnishes proof of the fact that the shipper has accepted the goods or has taken them on board and that the latter has given an undertaking to deliver the goods to the recipient listed on the document. It is not required for purposes of verifying the lawful recipient at the final destination.
Sea freight is the transport of goods in the form of bulk cargo, less than container load shipments or entire transport units (containers) by sea - either in inland transport or in international maritime transport. This mode of transport is particularly suited to heavy consignments, large-volume consignments or large quantities and/or consignments with a low commodity value. Shipment by sea is relatively slow but is often more cost-effective than airfreight.
Service logistics describes activities relating to the management of parts to and from customers.
The shipper is the person who offers the goods to the carrier for transport and concludes the ocean freight contract with the carrier. The shipper can also be the freight forwarder. Under the law of freight forwarding, the shipper is the consignor on the waybill.
Single sourcing is a procurement strategy where a manufacturer procures its industrial raw materials, resources and supplies from a single supplier (the opposite is multiple sourcing). As a result, the producer aims for a longer-term business relationship with the supplier. The benefits of single sourcing include potential volume discounts as well as transaction and handling cost savings. One disadvantage to the manufacturer is the fact that it is relatively dependent on the supplier.
Solution sets are Ppackages of core services that cover multiple supply chain activities. Solution sets are based on standardized processes and pre-configured IT products.
In materials handling and warehousing, the source describes the place of origin of goods.
Sourcing is the practice of locating and procuring goods and products.
Spare parts logistics is a special area of logistics in industry. Many products need to be supplied with spare parts on an ongoing basis. They are usually independent systems with central warehouses.
Storage place allocation (also warehouse management, warehouse organization) involves determining the storage places for goods that are to be stored in the warehouse. With fixed storage place allocation, a fixed storage place is assigned to every item. With free storage place allocation (also chaotic storage), every item can be stored in any place that happens to be free, thus ensuring that the warehouse space can be used with optimum efficiency.
Sub-assembly is the processes for putting together individual units to fit with other components to make a finished product.
SCM can be described as the sequence or chain of activities aimed at servicing customers and/or markets successfully - in other words, a way of working more efficiently and effectively. To this end, chains within a company and between companies are viewed holistically. This overview is intended to enable supply chains to be organized proactively, transparently and across different corporate divisions.
Supply logistics represents the link between the supplier's distribution logistics and a company's production logistics. The task of supply logistics is to provide the company with raw materials and supplies as well as with purchased parts and goods according to its requirements.
Swap bodies are used to store and transport goods using combined rail/road transport. The size of these containers is standardized and they cannot be stacked. The four collapsible or folding legs under their frame are characteristic of swap bodies.
Key figures are used to measure the efficiency and effectiveness of logistics systems. Key figures are empirically observable and measurable facts that describe the logistics target or the logistics target system as accurately as possible (e.g. transport costs, inventory costs, throughput time). In a system of key figures, different key figures are organized in a hierarchical structure, enabling the information requirements of the recipients of the key figures to be met in a specific way.
Tare designates the weight of the packaging of goods. It can be calculated by deducting the gross weight from the net weight.
A type of shipment is referred to as being temperature-controlled when it the temperature is kept at as constant a level as possible. When certain goods such as fruits, meat and vegetables are being shipped or stored, the temperature should not fluctuate and must not exceed a certain value.
A third party logistics provider is a provider of logistics services who generally uses its own facilities, means of transport and resources. It represents the "third party" between the manufacturer or retailer and the end customer.
Time-definite refers to a freight or delivery service that specifies or guarantees a day or time.
A toll is a fixed charge for using constructions, usually roads or tunnels. In Germany, a so-called truck toll for HGVs weighing more than 12 tons was introduced in 2005.
TQM refers to a holistic management strategy encompassing the entire company with all its activities and staff. Besides the consistent application of different quality management methods and techniques, TQM also involves the corporate culture demonstrated by the entire management team (quality culture), which places quality at the center of all thinking and action, and extends through to value orientation for personal (human) quality.
Tracking and Tracing (also known as Track and Trace) is an electronic system used to locate shipments. With tracking, the current status of a shipment is determined - answering the question: "Where is a consignment right now?" Tracing describes the possibility of being able to reconstruct retroactively where a shipment has been. The aim is to document the route taken by a consignment and all the relevant events (incorrect handling or loss, delays, etc.).
Transit terminals are a special type of distribution center. They are characterized by stockless management. This means that incoming goods are not stored but converted into outlet-based units (individual order picking) immediately upon arrival. Therefore, the main task of goods distribution centers is order picking.
The transload is the transfer of 40ft container loads into truck-driven 53ft containers to reduce costs per unit and achieve faster and more accurate deliveries.
The term transponder is a combination of the words transmitter and responder. Transponders usually consist of an antenna and a microchip. There are active transponders that have their own power supply in the form of batteries. With passive transponders, the energy field of a relevant reading device provides the power supply. They are seen as promising successors to barcodes. They can be used to retrieve and even update data, for instance on the contents and destination of goods, remotely and without visual contact.
TIR is a custom procedure for international road haulage. It was made to reduce the bureaucratic work for international transportation of goods. The advantage for those who use TIR is a faster customs clearance, because the lading is only checked in exceptional cases. Within each participating country a national organization guarantees for the payment of the necessary tolls and other fees - it also issues the relevant documents
Transshipment traffic is an organizational principle in the transport business. Two means of transport drive toward each other at a synchronized time. At a central point, they swap loads. Ideally, both would have standardized load units such as containers or swap bodies. Organizing this type of transport chain is intended to help reduce the number of idle runs, to increase the utilization of vehicle capacity and, in general, to optimize route planning.
A transshipment warehouse is a place where goods that have been taken off one means of transport are stored on a very short-term basis until they are transferred to the next means of transport. This enables the number of transport links between points of delivery and points of destination to be reduced.
TUW processes describe the basic physical logistics operations.
TEU is equivalent to a "standard container unit". It is a unit of measurement for the container transport capacity of ships and port facilities. A TEU is equivalent to a container which is 20 feet long (6 meters) and 8 feet wide (2.40 meters).
The underwriter refers to the insurance company.
The Universal Product Code is one of a wide variety of barcode languages called symbologies. It was introduced in the U.S. in 1973 and is considered to be the parent of the EAN (European Article Number).
Value-added services refer to services that are not part of a company's core business but are part of its portfolio, generating added value. Examples in logistics are a packaging service or pick-up from the customers' premises.
VMI is a warehousing concept involving a supplier managing the customer's inventory level. As such, the supplier's focus is on the delivery capacity and the inventory level. Frequently, the warehouse is also located at the premises of the customer who receives the goods.
Visibility is a term used in the area of supply chain management. Visibility describes the fact of being able to see detailed information on the different processes within a supply chain. This occurs in real time or approximately in real time. This transparency makes it easier to analyze and, if necessary, improve processes.
Warehouses are the premises of a company where stocks of materials or equipment are stored. These may be semi-finished and finished products or also spare parts and basic materials for further processing. In some cases, warehouses are also used to improve products (cheese, wine, whiskey).
When goods are placed in storage, a warehouse receipt is given in which the warehouse keeper certifies that the goods have been accepted for storage. Warehouse receipts can also be issued to order and are then documents of title. A warehouse keeper is a person who handles the warehousing and storage of goods on a commercial basis. In international trade, the FIATA Warehouse Receipt (FWR) was created as a negotiable document.
Warehousing (also inventory management) involves all the decision-making facts that have a bearing on inventory. In particular, it encompasses what goods are to be stored and in what quantity as well as what quantities are to be ordered and when in order to replenish the inventory.
Waste management logistics involves applying the logistics concept to residues (secondary raw materials, waste). Waste management logistics is guided by both economic and ecological objectives. By performing specific waste management tasks, waste management logistics actively contributes to solving ecological problems and demonstrates the role that logistics plays in the area of environmental protection.
A waybill is an accompanying document, commonly used in consolidated consignment transport, which lists the individual items (similar to a loading list) but also tells the receiving agent what charges he needs to collect from the recipients. Conversely, this document is the basis for the receiving agent's return account to the sending agent in respect of the charges he has incurred. Waybills are now often forwarded using remote data transmission.
The WTO is the only global international organization dealing with the rules of trade between nations. It was established in 1994 and has its headquarters in Geneva. Its aim is to promote lower trade barriers and liberalize world trade. The WTO has 153 members (as of: April 2009). The WTO monitors the trade policy of the member states by unanimous agreement and offers to act as an arbitrator if disputes occur.
XYZ analysis is a method of classifying materials by level of demand. X components are materials with a constant level of demand and high production quality. Y components have a level of demand that follows a trend and average production quality. Z components refer to materials that have an irregular level of demand and whose consumption is the least predictable.
Yield management originates from the field of pricing. According to this concept, pricing is to be based on the capacity utilization of so-called service systems (e.g. line networks). In concrete terms, that means charging high prices at times of high capacity utilization. Conversely, prices will fall if the system is working at less than full capacity.