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You may already be an expert within the industry, but just in case you aren't, here are some helpful terms.




A business that provides one or many of a variety of logistics-related services. A 3PL will act as your distribution center by providing all related services from receiving your goods to the final distribution, including all value added services.





A supplemental activity or material, outside normal handling and storage, that is billable in accordance with the client’s contract.


Accessorial Charge

The amount charged to the client for providing accessorial service or materials.



An inflatable bag used to fill empty space on a load of product to keep the product from shifting.


Allocated Inventory

Inventory that is reserved for a specific order, customer, or promotional event.  Once allocated, this stock is no longer available as usable inventory for new orders.


Annual Inventory

The physical count of all products in the warehouse done on a yearly basis.


Available Inventory

The amount of shippable product in the warehouse. It does not include product designated as damaged, allocated, or pending shipment. 





Plastic or metal strapping to support a load and hold it together. Can be used to secure product on a pallet or skid.


Bill of Lading

The Bill of Lading (BOL) is an official document that accompanies every shipment. It serves as the contract between the party that owns the freight and the carrier.


Blind counts

Counts performed without prior knowledge of existing quantities.


Bonded Warehouse

A bonded warehouse is one that has been approved by the U.S. Treasury Department who, due to observance of revenue laws, has put the warehouse under bond or guarantee. A bonded warehouse can also be a warehouse utilized for the storage of merchandise that is on hold until duty is paid.


Bubble Wrap

Sheet of plastic with air bubbles that is used as a packing material.


Bulk Storage

Storage of large quantities of product in specific areas not put away into racks.





A frame with wheels that supports a container that is being transported over land.


Clear Height

The height pallets can be stacked while leaving clearance for product movement or for lights, sprinklers, etc., hanging from a ceiling.



Product identified with specific clients.


Concealed Damage/Shortage

Damage to product that is not obvious until the product is examined or the condition becomes apparent during storage or transfer. 


Consolidated Picking

A picking method whereby one SKU is picked one time for all applicable orders and then distributed across multiple orders.



The end user who receives the products.



Combining two or more shipments going in the same direction or to the same destination on a single trailer.


Contract Warehouse

A warehouse operation managed by a third party logistics (3PL). The 3PL manages a client's inventory and order fulfillment processes. Pricing varies to include storage, labor, equipment, and other resources that are dedicated to the client. 



Product or orders that are brought into the warehouse and not put-away, but rather shipped out in a relatively short time.



Allowing employees to have experience in multiple tasks, job functions, or across multiple accounts in order to increase productivity and provide backup.


Cube Utilization

Space utilized versus space available.


Cycle Counting

The physical counting of portions of inventory on an on-going basis.




Dead Stock

Product that has been in inventory for an extended period of time without being moved or ordered.


Distribution Center (DC)

Distribution Centers are warehouse facilities that store, manage, and ship inventory on behalf of its clients.



A warehouse door with an extending platform where trailers are loaded and unloaded.


Dock Leveler

A plate at the dock door entrance that is raised and lowered either manually or hydraulically to accommodate trailer floor heights.



The act of brining in a container to the DC from the harbor and returning said container.


Drive-In Rack

Storage racking equipment that has side rails to enable warehouse operators to stack product high in deep rows.




EDI (Electronic Data Interchange)

Electronic Data Interchange refers to an exchange of information with the client through the warehouse management system. It is a method of exchanging orders, invoices, shipping forms and other documents over the computer.



FIFO (First In, First Out)

Inventory allocation method whereby the first product received is the first product out.


Floor Load

Refers to product stacked directly onto the floor of a trailer without pallets or slip sheets.



The picking and processing of orders for shipping from a distribution center or warehouse.





Large corrugated carton that has the same length and width as a pallet. – 40” wide x’ 48” deep x 48” high




Handling Charge

Charge for normal warehouse handling (inbound or outbound, or both) to customer.



The situation that occurs when a lot (see Lot) is partially depleted and the remaining space is wasted because it cannot be utilized.




In-House Damage

Damage to product that occurred while in the warehouse.



Intermodal means using 2 or more, modes of transportation: rail, truck or ship.


Initial Storage

Warehouse storage charge for the month when product is received; it is typically billed after 15 days.


Inner Packaging

Also known as “dunnage,” includes materials such as foam, paper, or wood used to minimize movement within the container.


Inventory Turns

The number of times inventory turns is calculated using the following method:
a) Sum of the Inventory In and the Inventory Out, and then divide by 2 to arrive at the Throughput.
b) The number of Inventory Turns is equal to the Throughput divided by the Average Inventory. 


JIT, Just-in-Time

An inventory system that aims to coordinate the arrival of materials or supplies at a facility at the moment that they are needed in an effort to reduce storage and holding costs. 




Assembly of product or parts within the warehouse. 




Different labels consist of any information from the simple product identification to complicated UCC-128 barcodes.  Sizes vary from a 1” x 1”  size to a full 8 ½” x 11 to


Less Than Container Load (LCL)

Shipments requiring less cube than a full container.  LCL is more costly to ship than a full container rate.




Master Pack

A master carton containing a specific amount of smaller units.   That quantity is the Master Pack.


Material Handling

The services and processes the warehouse must utilize to move, store and otherwise handle materials.



Net Weight

Product weight before being packed with materials or packaging.  



Obsolete Stock

Stock that has no useable purpose that remains in the warehouse.


On-Hand Inventory

The amount of product in the warehouse. The product may be designated as shippable, damaged, or allocated.



A directive, sent by the owner of the goods, to ship product out of the warehouse.


Order cost

The cost of labor, time, and other activities needed in an instance that a product is ordered.


O.S. & D.

Over, Short and Damage; it refers to the condition of a load of product which arrives in a defective condition, or whose quantity does not match the bill of lading (cases over or short).



When more has shipped on a load than was intended or was indicated on the BOL.


Over the Road Carrier

A truck or trailer used in hauling freight by road to a destination outside a 100 mile radius. 



Packing List

The packing list is a comprehensive list identifying exactly what is being shipped on the order.



A wooden or plastic base upon which layers of product are stacked for storage and transporting with a forklift or pallet jack.  Pallets come in different grades and are often specified by the final users as to grade required.  Each grade has a different cost. 


Pallet ID

The bar code tag that is placed on a pallet for tracking purposes.



To put products onto a pallet.


Pallet Tag

Refers to the bar code sticker placed on a pallet of product.


Physical Inventory

An actual count of all product in the warehouse.



A warehouse operation that involves picking individual items from cases and putting them together a carton or pack for shipment.



Picking is the movement of stock from a storage area to a staging area or production area.


Pick Ticket

The Pick Ticket is a document used in the D.C. to locate the stock for the order. The Pick Ticket contains information such as, product location, quantity, and UPC number.



Warehouse picks from locations with the least amount of product on hand in order to clear the area.



Proof Of Delivery; a signed bill of lading.


Pool Distribution

A combination of less than truckload (LTL) freight put together to build a full truckload.


Primary Location

Location in warehouse where dedicated stock is stored.


Product Code (UPC)

A series of characters assigned by the manufacturer to identify each of its products.


Pro Number

A number assigned to a shipment by the carrier for tracking and billing purposes.


Public Warehouse

A business that provides space for storage to a variety of clients.



Movement of stock from receipt to its final location. 



Quality Control (QC)

The inspection of product as it comes in or goes out of the warehouse in order to ensure proper client specifications.




Random Location Storage

A storage method where products are randomly put away.  A benefit of random storage is that it allows more productive utilization of space.


Rate Sheet

A schedule of warehouse or transportation charges for a client.


Real Time

Information is updated and saved instantaneously.


Receiving Report

Report that contains the quantity, location and condition of all inbound stock as it arrives.


Recurring Storage

An amount charged to a client for monthly storage; it is based on the amount of product stored in the warehouse after the free time specified by the contract.



Packaging material differently than how it arrived.



Refilling of a picking location.


Return Authorization

Permission given to the D.C. to accept returned goods usually accompanied with a return authorization number.


Reverse Logistics

The ability to receive, repair, sort and revive merchandise after it has been returned by the final vendor. 



Radio Frequency scanning and transmission of data.


RFID, Radio Frequency identification

Small barcode placed within the product so the vendor can track the inventory.





Standard Carrier Alpha Code; a unique 2 to 4 letter code assigned to transportation companies for identification purposes. SCAC codes are required for EDI, and are printed on bills of lading and other transportation documents.


Serial Number

Number assigned to a single item in order to identify and differentiate it from others.



Reduction in inventory measurement (often referred to as a result of loss or theft).


SKU (Stock Keeping Unit)

A number (product code) assigned to a single item or items by the manufacturer (Stock Keeping Unit).


Slip Sheet

A sheet of cardboard on which product is stacked; used instead of a pallet.



The ability to put product in the best locations based upon dimensions and frequency of use of the product.


Split Month Billing

Billing twice each month with monthly rates charged out at 50% each time.


Split Shipment

A partial shipment where the remainder of the order may not fit on a truck or balance of stock in not available at the time the shipment is picked up.



To place a trailer in a designated location or warehouse door.


Stack Height

The number of pallets, cartons or skids that can be safely stacked on top of each other.



Placing stock on top of other merchandise in order to more efficiently use space.



The process of placing goods that are ready to ship in an area designated for outgoing goods. 


Staging Area

A designated area in the warehouse by the loading dock where product is placed for shipment.


Stretch Wrap

Clear plastic film that is wrapped around a pallet of product to secure it.


Stock Allocation

When the “computer looks for and allocates stock”, it checks to see if it is available. Available stock can be used to fill the orders. When an order is input, the system will automatically look for available stock and allocate the stock to the particular order.


Storage Charge

Charge to client for holding stock that has not moved beyond the free time contracted.


Storage Rate

Charge to client for all storage costs.



Used for securing goods onto a pallet.





A count performed when shipments are received in order to track and record their condition.



The weight of the wrapping securing the goods.

Third Party Warehouse

Warehouse operated by a 3PL Company that houses the products of their clients.



Method of calculating average product movement.



Units per Layer


Transaction Set

A group of data elements that represent the information on a business document, like a shipment order, and which are transmitted through EDI.





To take individual items and combine them to save spaces.


Unit of Measure (U/M)

The type of measurement unit used to track inventory such as pallets, cases or individual pieces in an inventory system.


Unit-of-Measure Conversions

Used when goods received in one manner and shipped in another manner.  (Received in cases and shipped in pieces).





Value is added to the distribution process when there is a contribution made to the functionality, value, or usefulness of a product.  This includes but is not limited to; Ticketing, stuffing or assorting of products making the product Shelf Ready.


Value Added Services

Extra services that a distribution center will perform in order to meet the needs of their customers. Typically refer to special assembly, packaging, or picking services.


Vendor-Managed inventory

In a 3PL, this describes the instance of the vendor controlling the inventory at the 3PL warehouse. Inventory control can be managed by physical check of inventory by the vendor in order to determine what needs to be supplied to the warehouse. The vendor can also have remote access to the warehouse’s inventory control system and order based on the available information. 



Warehouse Receipt

Receipt for product received into the warehouse.


WMS, Warehouse Management System

Software designed logically manage the movement and storage of product in the warehouse. 





Zones are locations in the warehouse where usage is determined by the product being stored such as kitting area, production, staging, storage and unloading.


Zone picking

Method of picking orders from specific areas within the D.C. 

Used when goods received in one manner and shipped in another manner.  (Received in cases and shipped in pieces).


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