Welcome to TLI University!
With more than 20 years in the industry we thought it was time to pass along some of the knowledge that helped us get to where we are today. This is the start of a weekly publication aimed to educate anyone who is curious about transportation and shipping.
This week covers any common shipping terms in regards to the industry. Understanding these general shipping terms can help to reduce costs and understand why a cost has been used.
Accessorial charges (also called assessorial charges)
Charges made for performing services beyond normal pickup and delivery, such as inside delivery or storage charges.
Air freight forwarder
An air freight forwarder provides pickup and delivery service under its own tariff, consolidates shipments into larger units, prepares shipping documentation and tenders shipments to the airlines. Air freight forwarders do not generally operate their own aircraft and may therefore be called "indirect air carriers." Because the air freight forwarder tenders the shipment, the airlines consider the forwarder to be the shipper.
An air waybill is a shipping document for airline use. Similar to a bill of lading, the air waybill is a contract between the shipper and airline that states the terms and conditions of transportation. The air waybill also contains shipping instructions, product descriptions, and transportation charges. See also waybill.
Articles of Extraordinary Value
Carriers are not liable for "documents, coin money, or articles of extraordinary value" unless the items are specifically rated in published classifications or tariffs. Exceptions may be made by special agreement. If an agreement is made, the stipulated value of the articles must be endorsed on the bill of lading. Articles may include precious stones, jewels and currency. Many tariffs include restrictions on goods with values in excess of a specified amount.
Asset-based logistics provider
Owns many or all of the assets necessary to run a client's supply chain. These assets include trucks, warehouses and distribution centers, among others.
Bill of lading (BOL or B/L)
A bill of lading is a binding contract that serves three main purposes:
- a receipt for the goods delivered to the transportation provider for shipment;
- a definition or description of the goods; and
- evidence of title to the relative goods, if "negotiable".
Bill of lading exceptions
The terms and conditions of most bills of lading release transportation providers from liability for loss or damage arising from:
- an act of God,
- a public enemy,
- the authority of law or
- the act or default of the shipper.
In addition, except in the case of negligence, a transportation provider will not be liable for loss, damage, or delay caused by:
- the property being stopped and held in transit at the request of the shipper, owner or party entitled to make such request;
- lack of capacity of a highway, bridge or ferry;
- a defect or vice in the property; or
- riots or strikes
Blind Shipment Charge
A charge assessed by a carrier for processing a shipment where either the shipper is not allowed to know where a shipment is destined to, or a receiver is not allowed to know where a shipment has originated from – this is generally a flat charge per occurrence.
A transportation provider U.S. Customs allows to carry customs-controlled merchandise between customs points.
To separate parts of a load into individual shipments for routing to different destinations.
Consolidation and distribution center. A terminal in the carrier’s system that unloads and consolidates shipments received from its smaller terminals and from other breakbulks. This terminal may have its own city operation. Example: Freight destined for Texas from several New England states will be consolidated at Stroudsburg, Pa., breakbulk terminal for forwarding to Texas.
A broker is an independent contractor paid to arrange motor-carrier transportation. A broker may work on the carrier's or shipper's behalf.
Canadian Processing Fee
A charge assessed by a carrier for processing shipments going from or to Canada – this charge can be assessed as either a flat rate per border crossing or as a rate per hundredweight (CWT) per border crossing.
An industry term regarding loss or damage of goods. Carmack is governed by 49 U.S.C 14706, which states that a motor carrier must:
- issue the bill of lading and
- pay the actual loss or injury to the property.
However, carriers limit their liability for release-value products, and can limit their damages to $25 a pound or $100,000 a shipment.
Trucking companies that could be LTL (less than truckload), truckload, expedite, or volume.
A carrier who performs pickup or delivery in areas that original carrier does not serve.
- Cartage agents use their own paperwork while transporting the shipment.
- Cargo: A Cargo Claim is a demand made on a transportation company for payment for goods allegedly lost or damaged while the shipment was in the transportation provider's possession. Pursuant to the National Motor Freight Classification (NMFC) Uniform Bill of Lading, all cargo claims must be filed within nine months.
- Overcharge/Undercharge: Overcharge or undercharge claims are demands on a transportation company for a refund of an overcharge from the erroneous application of rates, weights and/or assessment of freight charges.
A shipment for which the transportation provider is responsible for collecting the sale price of the goods shipped before delivery.
COD Cancellation / Correction Charge
A charge assessed for requesting the carrier to cancel or make a change to a COD – this charge is generally assessed as a flat rate.
Any article of commerce. Goods shipped.
Company that provides transportation services to the public in return for compensation.
Shortage or damage not evident at delivery.
The person or place where a shipment will be transferred for the last time (destination); the individual or organization to whom the goods are addressed.
Construction Site / Limited Access Delivery
A charge assessed for requesting a carrier to execute a delivery or pick-up at a construction site, or a limited access area, which is defined as locations such as prisons, schools, piers and military bases, etc. – this charge is generally assessed as a flat rate.
Cubic Capacity Rule
LTL carriers impose minimum cubic capacity rules to effectively counter very light, fluffy shipments that take up more than their fair share of a trailer. In most cases, LTL carriers state that if a shipment consumes 750 cubic feet of space or more, AND the shipment has a density of less than 6 pounds per cubic foot, it’s not paying it’s fair share. Most carriers use the 750 cubic feet as the threshold, but not all. One national carrier uses a threshold of 250 cubic feet and another 350 cubic feet (if less than 3lbs/ft3) as the threshold before implementing the rule. Thus, some shipments as small as 3-4 pallets might have the rule applied.
As we see in the retail industry, companies will advertise “70% off original ticketed price” to attract customers, but they don’t tell you that the original ticketed price may have been 20% higher than it should have been in the first place – trucking companies have also learned to play this game a long time ago – they inflate their base rates to a point where they can offer more attractive discounts, such as the 90% discounts mentioned above – this may easily become deceiving – for example, say YRC Freight is offering us a base rate on a shipment of $400 and they are offering an 80% discount to arrive at a discounted rate of $80 – then consider that Estes approaches and states that they can offer us an 85% discount – however, they neglect to inform us that the base rate on the same shipment is $550 – their discounted rate with this “better” discount would become $82.50 and hence more costly than YRC Freight regardless of their discount level o In order to avoid this issue, TLI operates off of a standard tariff base called CzarLite – since all TLI carriers utilize this tariff, their base rates are the same and it becomes easy to determine a carrier’s competitiveness based solely on their discount levels.
Trailers with rows of tracking on each sidewall and deck load bars. The load bars fit into the tracks to form temporary "decks" on which goods can be loaded. Decks allow more goods to be loaded in the trailer, reduce damage and speed loading and unloading.
As mentioned previously, hundredweight (CWT) rates decrease at weight breaks as weight increases – the carrier will utilize deficit weight pricing by rating a shipment at a higher weight with a lower hundredweight (CWT) rate if it is beneficial to the shipper – this rule is generally put in place when a weight gets above 80% of the next weight break.
- A shipment weighs 1,800 pounds with a CWT rate of $10.00 for a freight charge of $180.00
- The 2,000-pound weight break has a CWT rate of $8.00
- The carrier will declare the shipment as 2,000 pounds to improve the shipper’s pricing as:
- 1,800 pounds @ $8.00 per CWT = $144.00
- 200-pound deficit weight @ $8.00 per CWT = $16.00
- The deficit weight rule would result in a $160.00 total charge and a savings of $20.00 for the shipper
Document a consignee or its agent dates and signs at delivery, stating the condition of the goods at delivery. The driver takes the signed delivery receipt to the terminal for retention. The customer retains the remaining copy.
Density Based Pricing
Density pricing means that the shipping price is based on package volume that matches the amount of space a package occupies in relation to its weight. This way, the dimensional weight method combines physical volume and actual weight of a particular shipment to determine shipping cost.
A charge assessed when a shipper or consignee takes too much time to load and/or unload a truckload carrier’s trailer.
determined by multiplying the shipment length (in inches) x the shipment width (in inches) and the shipment height (in inches) and divide by a factor of 194 – the shipment will move as the resultant weight of this formula or the actual weight, whichever is higher.
Once the overall rate is determined for a shipment given the origin zip code, destination zip code, weight and freight class, hardly any shipper in the country will ever pay the full rate – the carrier will negotiate discounts with all of their customers based on various factors – in today’s LTL industry, it is not unusual to see discounts between 70% and 90% off of the base rate tariffs.
The act of sending a driver on his/her assigned route with instructions and required shipping papers. YRC Freight maintains contact with drivers throughout the day by phone, pager, radio, satellite communication or cellular phone.
A platform, generally the same height as the trailer floor, where trucks are loaded and unloaded.
Converter that provides an extra axle and fifth wheel and is used to connect multiple trailers.
Vehicle configuration in which a tractor pulls two trailers connected by a dolly or jifflox.
Also known as connecting road haulage.
The hauling of a load by a cart with detachable sides (dray).
Road transportation between the nearest railway terminal and the stuffing place.
a trucking company that is primarily responsible for picking up an empty container from the railyard and taking it to the shipping point for loading – once loaded, the drayage carrier will transport the container to the railyard for loading onto the rail.
Electronic data interchange (EDI)
The electronic transmission of routine business documents, such as purchase orders, invoices and bills of lading, between computers in a standard format. The data formats, or transaction sets, are usually sent between mainframe computers. Learn more in the EDI Resource Center.
An exception is any delivery in which the recipient or driver notes a problem on the delivery receipt before signing it. Typically, exceptions concern shortage and/or damage.
A shipper pays a premium rate for the sole use of a trailer. The trailer will be sealed at loading, and the seal number is recorded on the manifest. The seal number is verified before the trailer is unloaded at destination. When a shipper requests an exclusive-use trailer, no other freight may be added to the unit even if space permits.
Products that are exempt from federal regulation, such as agricultural and forestry products.
Stands for “Freight All Kinds” – this is a negotiation tactic used by the Logistics Department and any other Logistics Manager to group freight classes under a lower freight class – the FAK also lowers the probability that a shipment will get “reclassed” out of a negotiated rate level – for example, Logistics could negotiate an FAK 100 for classes 110-150 – in this example, a shipment with a freight class of 125 would move at the class 100 hundredweight (CWT) rate for a specific zip to zip lane.
Under this arrangement, title and risk remain with the seller until it has delivered the goods to the location specified in the contract.
Title and risk pass to the buyer at the moment the seller delivers the goods to the carrier. The parties may agree to have title and risk pass at a different time or to allocate shipping charges by a written agreement.
Last mile is a term used in supply chain management and transportation planning to describe the movement of people and goods from a transportation hub to a final destination in the home- see Last Mile.
Free along side (FAS)
A basis of pricing meaning the price of goods alongside a transport vessel at a specified location. The buyer is responsible for loading the goods onto the transport vessel and paying all the cost of shipping beyond that location.
Free on board (FOB)
An acronym for free on board when used in a sales contract. The seller agrees to deliver merchandise, free of all transportation expense, to the place specified by the contract. After delivery is complete, the title to all the goods and the risk of damage become the buyer's.
Any product being transported.
Shipping document the carrier prepares to confirm shipment delivery and indicate payment terms (prepaid or collect). The document describes the shipment, its weight, the amount of charges and taxes and whether the bill is collect or prepaid. If the bill is prepaid, the shipper pays the shipping charges. If the bill is collect, the consignee pays the shipping charges.
Any person that sells transportation without actually providing it. The term usually refers to an agent for truckload shipments, matching small shippers with carriers. Freight brokers often do not accept any responsibility for their shipments. (See also freight forwarder and shipper's agent).
A freight forwarder combines less-than-truckload (LTL) or less-than-carload (LCL) shipments into carload or truckload lots. Freight forwarders are designated as common carriers. They also issue bills of lading and accept responsibility for goods. The term may also refer to the company that fills railroad trains with trailers. (See also freight broker and shipper's agent).
A charge assessed to help the carrier recoup excess costs for high fuel costs – this charge is assessed as a percentage of the freight bill.
Gross vehicle weight (GVW)
The combined weight of the vehicle (tractor and trailers) and its goods.
A service that is utilized when standard LTL or truckload service is not fast enough to meet the customer’s required delivery date or time.
Guaranteed Date Delivery
A charge assessed when the carrier is instructed to guarantee delivery on a certain day or time – this charge is generally assessed as a percentage of the freight bill.
Hazardous materials are defined by the U.S. Department of Transportation in accordance with the Federal Hazardous Material Law. A substance or material may be designated as hazardous if the transportation of the material in a particular amount and form poses an unreasonable risk to health and safety or property. Hazardous material may include: an explosive, radioactive material; etiologic agent; flammable or combustible liquid or solid; poison; oxidizing or corrosive material; and compressed gas.
High Cost Delivery / Pick-up Surcharge
A charge assessed when a carrier is requested to make a delivery or a pick-up in an area that is costly for the carrier to reach such as areas with high tolls or heavy traffic congestion – examples would be the Florida Keys, New York City or Washington, DC – this charge is generally assessed as either a flat rate or as a rate per hundredweight (CWT) with minimum charges.
Shipments move under bond from point of entry to an interior U.S. destination for clearance or to another border location for clearance.
Inside Delivery / Pick-up Surcharge
A charge assessed when the carrier is requested to make a delivery or pick-up inside a building – this charge is generally assessed as a rate per hundredweight (CWT) with a minimum amount – this is also generally an additional charge if the carrier has to deliver on higher floors in a building.
Shipment moves by more than one mode of transportation (ground, air, rail or ocean). See also multimodal.
Converter that provides an extra axle and fifth wheel and is used to connect multiple trailers. See also dolly.
A charge assessed when a driver needs to stay overnight at an origin or a destination due to no fault of his own – this charge can also occur when a driver is asked to deliver a day or more after the expected delivery date based on the mileage of his trip.
Last mile is a term used in supply chain management and transportation planning to describe the movement of people and goods from a transportation hub to a destination in the home- see Final Mile.
Goods weighing less than 10,000 pounds from several shippers loaded onto one trailer. YRC Freight is primarily an LTL carrier, using a nationwide network to efficiently move goods from origin to destination.
Lift Gate Charge
A charge assessed when a carrier is requested to supply a hydraulic lift gate at pick-up or delivery – this charge is generally assessed as a flat rate.
Movement of goods between cities or between the carrier’s terminals, particularly between origin terminal and destination terminal, excluding pickup and delivery service.
The lowest charge for which a shipment will be handled after discount and/or adjustment.
Mode of Transport
Means by which a shipment is moved from point 'A' to point 'B', such as by air, rail, road, or sea. There are also subcategories such as TL, LTL, VOL for road transport.
Shipment moves by more than one mode of transportation (ground, air, rail or ocean). See also intermodal.
National Motor Freight Classification (NMFC)
Industry standard tariff published by motor carriers containing rules, descriptions and rating on all products moving in commerce; used to classify goods to rate the freight bill.
Non-Asset based logistics service provider
Does not own the assets necessary to manage and implement a supply chain. Instead, a non-asset based provider offers its expertise in negotiating contracts with carriers, maintaining carrier relationship management programs, warehouses, and distribution centers in order to manage your supply chain at the lowest possible cost to your business. A non-asset-based logistics provider realizes that every client has different priorities for their logistics operations, and since they do not need to utilize an inventory of assets to remain profitable, non-asset based third party logistics companies exhibit a flexibility in supply chain solutions that asset-based logistics providers do not.
Non-vessel operating common carriers (NVOCC)
A type of ocean freight forwarder. NVOCCs book space in large quantities for a reduced rate, then sell space to shippers in lesser amounts. NVOCCs consolidate smaller shipments into a container load that ships under one bill of lading.
A charge assessed when a carrier is requested to notify a consignee that a shipment is arriving – TLI generally has this charge waived and the carrier provides us this service for no charge when it is necessary.
Also called negotiable bill of lading, this is a shipment requiring the consignee to surrender the original endorsed bill of lading at delivery. A shipper may use this method to guarantee payment for goods shipped. It's most commonly used with truckload shipments.
Site where the shipment first enters the carrier’s system.
Number of units received is in excess of the quantity shown on shipping documents. Overages should not be delivered to a customer. They're returned to the terminal unless the terminal receives more information while the driver is making pickups and deliveries.
The payor of the shipping charges files an overcharge claim to dispute a discrepancy in charges that can stem from overpayment, weight or description corrections, etc.
Overdimension / Overlength Charge
A charge assessed when a single piece of a shipment is over a certain length or dimension – each TLI contracted LTL carrier has different specifications of what they consider overdimension or overlength – this charge is generally assessed as a flat rate.
Using only a portion of a truckload carrier’s trailer – similar to a Volume LTL quote, except we’re using a primarily truckload carrier as opposed to an LTL carrier.
Generally, the shipper is responsible for payment for prepaid shipments, and the consignee is responsible for payment for collect shipments unless a third party is indicated as payor on the shipping papers.
Pickup and delivery (P&D)
Local movement of goods between the shipper (or pickup point) and the origin terminal or between the destination terminal and the consignee (or delivery point).
An acronym for progressive rotating order; it is a 10-digit number assigned to each shipment and is a tracking number and an LTL carrier invoice number.
A charge assessed when a carrier is requested to deliver a shipment to a location different from the consignee on the original Bill of Lading – this charge is generally assessed as a flat rate as well as any additional charges that may be incurred from making this change, especially if the carrier needs to reroute the shipment.
A charge assessed when a carrier attempts to make a delivery to a consignee, but is unable to deliver due to no fault of the carrier – this charge is generally assessed as a rate per hundredweight (CWT) with a minimum charge.
Residential Delivery Charge
A charge assessed when a carrier is requested to make a delivery or pick-up at a residential address – this charge is generally assessed as either a flat rate or as a rate per hundredweight (CWT) with a minimum charge.
Shipping charges the transportation provider receives for transporting goods.
Reweigh / Inspection Charge
A charge assessed when a carrier needs to reweigh or inspect a shipment – 3PLs generally has this charge waived with our carriers – however, the payor may be responsible for additional charges if the weight or freight class is determined to be inaccurate as a result of the reweigh or inspection – we would merely not be responsible for the charge of the carrier performing the actual reweigh or inspection.
A shipper's agent is not a carrier, freight forwarder or broker. Shipper's agents generally arrange for truckload or container load shipment transportation. Shipper's agents commonly provide services related to warehousing or loading and unloading. (See also freight forwarder and broker).
Papers accompanying a shipment as it moves through the carrier’s system, including bills of lading, packing slips, customs paperwork, manifests and shipment bills.
The number of units received is less than the quantity shown on shipping documents. The outstanding units may be delivered later.
Single Shipment Charge
A charge assessed when a carrier only picks up one shipment on a single day from a certain location – this charge is generally assessed as a flat rate and is normally waived for TLI.
Sort and Segregate Charge
A charge assessed when a carrier is asked to sort and segregate shipments in one of their distribution facilities – this charge is generally assessed by the higher of a rate per piece or a rate per hundredweight (CWT) with a minimum charge.
Stop off Charge
A charge assessed when a truckload carrier makes a stop-off en route to the final destination.
A charge assessed when a carrier is requested to store a customer’s freight at one of their facilities – this charge is generally assessed as a rate per hundredweight (CWT) with a minimum flat rate per day.
A Tariff is a document setting forth applicable rules, rates and charges to move goods. A tariff sets forth a contract for the shipper, the consignee and the carrier. Since Jan. 1, 1996, motor carriers are not required to publish tariffs. However, in accordance with federal law, tariffs must be provided to a shipper on request.
The carrier’s building and grounds where shipments are prepared for local delivery or transportation to other terminals.
A party other than the shipper or consignee that is ultimately responsible for paying the shipment charges.
Third Party Logistics companies (3PLs)/Logistics Solutions Providers (LSPs)
For the most part, 3PLs and LSPs are synonymous terms. They work as an extension of companies’ logistics departments, providing the tools and management needed to handle the transportation needs of distributors and manufacturers. The extent of the tools and management provided by 3PLs varies among them and the needs of their customers.
The number of business days that a carrier advertises it will take to deliver a shipment from origin to destination. Note that transit days are NOT guaranteed by LTL companies – Guaranteed service may be requested at a surcharge – most LTL companies will meet advertised transit times between 90% and 98% of the time
Truck Ordered Not Used
A charge assessed when a shipper orders a truckload for pick-up but does not use the truck
The weight (in tons) of a shipment transported by truck.
Large-volume shipment from a single customer that weighs more than 10,000 pounds or takes up all the trailer space, so no other shipment can be loaded.
An internationally accepted four-digit number used to identify hazardous material.
Shipments larger than a typical LTL shipment but smaller than a TL. Typically moves on a LTL carrier with a special one-time rate or as a TL if the rate is lower than an LTL quote.
A "Waybill" is a non-negotiable document prepared by or on behalf of the carrier at origin. The document shows origin point, destination, route, consignor, consignee, shipment description and amount charged for the transportation service.
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