The transportation industry is in the midst of a technological revolution. Not only are the inner workings of the global supply chain changing, so are the words used to describe the intricacies of the industry.
This glossary aims to identify, define and properly frame the keywords and phrases that play an integral role in the modern supply chain.
Accessorial charge – A charge for supplemental services that go above and beyond what’s considered normal. Carriers will often charge “accessorials” for time being detained by a shipper, having to load or unload freight, securing odd-sized freight to a flatbed trailer, etc.
Actual Time of Arrival (ATA) – While the acronym is similar to the American Trucking Association, your ATA is usually referred to as your approximate time of arrival.
Backhaul – The return trip, which usually pays a lower rate than the headhaul.
Bill of Lading (BOL) – Itemized list of goods contained in a shipment which states the shipper and receiver
Broker – An intermediary who arranges transportation services. Shippers often hire freight brokers to find carriers to transport their goods.
Capacity – In the trucking industry, this buzzword refers to the availability of trucks that can be hired to haul freight. Example: Capacity is tight (scarce) during spring produce harvests.
Carrier – A trucking company or individual owner-operator that transports goods.
CB – Citizens Band Radio. This is a two-way radio system used to communicate traffic conditions, help requests, and conversation.
Certificate of Insurance (COI) – Your COI represents the level of coverage your vehicle has and must always be up to date. This is an absolute must in trucking.
Cold Chain – The transportation of temperature-sensitive products along a supply chain through thermal and refrigerated packaging methods, as well as logistics planning in order to protect the integrity of these deliveries.
Contract rate – The agreed-upon rate per mile for an extended term, such as a 1-year contract.
CDL – Commercial Driver’s License. A CDL is required to drive a truck or bus weighing over 26,000 pounds gross vehicle weight.
Deadhead – Driving with an empty trailer. Since most trucks are paid by the mile only when they’re loaded, deadhead often means moving the truck for no pay.
Detention – Charge by the carrier for excess retention of their equipment. Typically caused by untimely loading or unloading. Demurrage is the charge that occurs where a container is not timely picked up from a port or intermodal rail yard. Detention is the amount charged by a carrier for waiting time at a shipper or a consignee.
Dedicated route – A driver or carrier who transports cargo between regular, prescribed routes. Regular route drivers usually are at home at regular intervals, given the scheduled nature of their routes.
Dispatch – A procedure for assigning drivers and vehicles to shipments.
DOT – Department of Transportation. This Federal agency regulates interstate trucking in the United States.
Drop and Hook – When a driver leaves a trailer at a loading dock and hooks up to a different trailer for the return trip. This eliminates the need for the driver to wait for “live” loading or unloading.
ELD – Electronic Logging Device. An on-board device that records information about the movement of a truck, including speed and time in service, as well as the driver’s hours of service and duty status. As of December 2017, ELDs are required on all trucks (with some exceptions), replacing paper logs kept by drivers. Trucks that were previously equipped with AOBRDs were permitted to continue using those devices until December 16, 2019, when they must switch to ELDs, as well.
EOBR – Electronic On-Board Recorder. A device hooked into the truck that transmits useful management information such as truck location, speed, and idle time.
Factoring – In the trucking industry, factoring is when a carrier receives payment from a third-party financial company before delivering a load and waiting for payment, thereby improving cash flow. The factoring company retains a fee, typically based on a percentage of what the carrier would have earned. Freight brokers may also rely on factoring to improve cash flow.
Flatbed – An open-deck trailer consisting of a platform for transporting large or odd-shaped freight that must be loaded or unloaded from the top of the side, as well as freight that cannot fit inside a standard van trailer.
Fleet – A collection of vehicles owned by the same company.
FMCSA – Federal Motor Carrier Safety Administration. Regulates the US commercial trucking industry.
Freight Management System (FMS) – Software designed specifically to manage all facets of freight including accounting, booking, analytics, reporting, and communication between customers and drivers. Also interchangeable with the term TMS. (See below)
Governor – A device that regulates the truck’s top speed. Large fleets use these to ensure their drivers stay within guidelines to improve fuel efficiency and safety.
Headhaul – The higher paying segment of a round trip. Also referred to as a linehaul. The lower-paying return trip is called a backhaul.
Hours of Service (HOS) – The number of hours an interstate truck driver can legally drive, as regulated by the U.S. Department of Transportation.
Intermediary – In trucking, this term usually refers to a freight broker or third-party logistics (3PL) company that manages transportation on behalf of a shipper.
Intermodal – Freight that requires more than one mode of transportation for the same shipment. Typical modes include air, rail, sea, and truck.
Lane – A particular route, defined as an origin and destination pair. For example, the route from Chicago to Dallas is a lane, and Dallas to Chicago is a distinct lane.
Load Board – An on-demand freight exchange used by shippers, freight brokers, motor carriers, and other logistics companies to find freight and trucks.
LTL – Less Than Truckload. A shipment whose weight and size characteristics allow it to be consolidated with other shipments in a single truckload, or to be shipped as-is.
Motor Carrier Number (MC#) – FMCSA license number designating for-hire carriers.
OTR – Over-the-Road. Long-haul trucking, as opposed to local or regional.
Owner-operator – A subset of the carrier market, describing an individual who both owns the truck and drives it on a regular basis. Owner-operators may lease onto a larger carrier and operate under that carrier’s authority.
Pallet – A wooden (or sometimes plastic) platform on which boxes or cargo are stacked and sometimes shrink-wrapped. Usually refers to the entire palletized stack of boxes, although it can refer to the platform itself.
Power only – If a shipper provides the trailer, he may request only a power unit (truck or tractor) to pull the trailer.
Power unit – The tractor portion of a tractor-trailer, which contains the engine.
Proof of Delivery (POD) – The page of a bill of lading that shows that a shipment was received at the delivery location by the signature of the consignee.
Purchase Order (PO) – Typically issued by the shipper or customer, this slip entails all details relative to the freight being hauled, including delivery date, billing address, and item details.
Rate Per Mile (RPM) – The most common form of pricing used in the spot market. The total price is calculated as follows: Rate per mile (including fuel surcharge) x number of miles = total price.
Reefer – A refrigerated trailer used to move freight that requires a temperature-controlled environment.
Shipper – The sender (such as a manufacturer, grower, retailer, or distributor) who hires a carrier to transport goods.
Spot market – Spot market freight — sometimes called exception freight — is not under a long-term contract between a shipper and a carrier. Spot market freight rates are typically determined by short-term supply and demand conditions.
Third-Party Logistics (3PL) – Designate of an individual or company that serves as a liaison between another individual or company that needs shipping services, but does not function as a shipper or carrier. Used mainly to describe brokers, freight forwarders, and IMC’s, but technically includes any third-party service provider, including carriers and warehouses.
TMS – Transportation Management Software, a type of computer software designed specifically for transportation professionals, helping them manage almost every aspect of their business. These can also be known as an FMS (Freight Management System).
Trailer – The non-motorized unit pulled by a tractor (truck). Common trailer types include vans, flatbeds, and refrigerated units (reefers).
Truckload – A shipment that fills an entire trailer, either by reaching its maximum weight or volume. Also, see “LTL” or a less-than-truckload shipment.
Van – The most common trailer type, a van is an enclosed rectangular box that holds freight. The most common type of van is 53 feet long. Also called a “dry van.”
