Logistics Terms Glossary

Cross-Docking: The logistics practice where products are directly transferred from inbound to outbound transportation with minimal or no storage time. This reduces handling and storage costs.

Customs Brokerage: A service provided by customs brokers to facilitate the import and export of goods across international borders. They handle all the necessary paperwork and ensure compliance with regulations.

EDI (Electronic Data Interchange): The electronic exchange of business documents between organizations. In logistics, EDI is used to exchange documents like purchase orders, invoices, and shipping notifications.

Freight Audit: The process of examining, adjusting, and verifying freight bills for accuracy. It ensures that the charges are correct and that the carrier is paid the right amount.

Freight Forwarding: A service used by businesses to arrange the shipment of goods from one place to another. Freight forwarders typically handle logistics, including the planning and coordination of the movement of goods.

Inventory Management: The process of ordering, storing, and using a company’s inventory. This includes the management of raw materials, components, and finished products.

Kitting: The process of gathering individual items into ready-to-ship sets, or kits, which are then sent to customers. This is often used in eCommerce to create bundled products.

Last-Mile Delivery: The final step of the delivery process where the product is delivered from a transportation hub to the final delivery destination, typically the customer’s door.

Lead Time: The amount of time that passes from the start of a process until its completion. In logistics, it often refers to the time it takes for an order to be delivered after it is placed.

Order Fulfillment: The complete process from point of sales inquiry to delivery of a product to the customer. It includes warehousing, picking, packing, and shipping the product.

Reverse Logistics: The process of moving goods from their final destination for the purpose of return, repair, remanufacture, or recycling. It is the opposite of traditional supply chain processes.

SKU (Stock Keeping Unit): A unique identifier for each distinct product and service that can be purchased. It helps in tracking inventory and sales.

Supply Chain: The entire system of production, processing, and distribution of goods from raw materials to the final customer. It includes all the steps involved in getting a product from supplier to customer.

3PL (Third-Party Logistics): A service that allows businesses to outsource elements of their distribution and fulfillment services. 3PL providers typically handle warehousing, inventory management, order fulfillment, and shipping.

Warehousing: The process of storing goods within a warehouse. It involves the management of inventory, space, and the movement of goods within the storage facility.