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Glossary: 18 Common Supply Chain Terms

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There’s enough to focus on when managing a supply chain, without worrying about what each term and phrase means. So we’ve pulled together eleven common supply chain terms, to make your lives just a little bit easier.

Whether you’re a new business or an established one, knowing the shipping terms used in the industry is essential. It helps you understand the terms your customers, carriers, and vendors use so that you can make informed decisions when it comes to shipping your products. Here's a look at some of the most commonly used shipping terms.

Common Supply Chain Terms

Bill of Lading (B/L)

A bill of lading is a document that is used to list the items that are being shipped, as well as the sender and recipient information. The bill of lading must be signed by the sender in order to be valid.

 

Carrier

A carrier is a company that is responsible for transporting goods from one location to another. Carriers can be either land-based, such as a trucking company, or water-based, such as a shipping line.

 

Consignee

The party (usually a buyer) in transportation documents (bill of lading) that orders the cargo. The consignee is typically located where the cargo will ultimately be delivered, unless otherwise instructed. They are the owner of the cargo for the purpose of filing customs declaration and paying duties and taxes.

 

Consignor

A party (usually a shipper) in transportation documents (bill of lading) that made or sold the cargo.

 

Customs Declaration

A customs declaration is a document that is used to list the items that are being shipped, as well as their value, in order to calculate import duties and taxes. The customs declaration must be completed by the sender and submitted to customs authorities prior to shipment.

 

Dimensional Weight (DIM)

Dimensional weight is a method of calculating shipping charges based on the dimensions of the shipment, rather than its actual weight. Dimensional weight is typically used for shipments that are lightweight but large in size, such as furniture or appliances.

 

Freight Forwarder

Also known as a destination or origin agent, the freight forwarder is a person or company that facilitates cargo movement and arranges shipments for arrival at the destination or origin port.

 

Full Container Load (FCL)

A shipment that takes up the entire container. Container types can include: 20’, 40’ 40’HC, 45’.

 

Hazardous Materials (HAZMAT)

Hazardous materials are any materials that are classified as being dangerous or potentially harmful to human health or the environment. Hazardous materials must be properly labeled and packaged in order to be shipped legally.

 

House Bill of Lading (HBL)

A bill of lading issued by the freight forwarder to a shipper as a receipt of goods. This bill will show the shipper as the consignor. It will also show the buyer or importer of record as consignee.

A house bill allows for the transfer of ownership of goods from the shipper to the buyer, once released.

 

Incoterms

Incoterms are international trade terms that specify which party is responsible for various aspects of the shipment, such as transportation, insurance, and customs clearance. Incoterms are typically used for international shipments.

 

In-Distribution Center Date (In-DC Date)

The (ideally pre-planned) date at which your shipment arrives at your distribution center.

 

Master Bill of Lading (MBL)

A bill of lading issued by the carrier to a freight forwarder as a receipt of goods. This bill will show the origin freight forwarder as the consignor and the destination forwarder as the consignee.

 

Palletization

Palletization is the process of loading goods onto pallets (wooden platforms) in order to facilitate shipping and handling. It allows for shipments to be easily moved with forklifts or pallet jacks and can also help to protect goods from damage during transit

 

Release Date

The date the shipment is released. There are two important release dates: (1) the master bill release by the origin freight forwarder to the destination freight forwarder and (2) the house bill release by the shipper to the buyer.

 

Special Cargo

Cargo that faces additional regulations from various other government agencies — in addition to the requirements of U.S. Customs — are considered special cargo. Examples include food, plant and wood products, drugs, and firearms.

 

Transport Type

The service that is requested of the shipping carrier. Available services include: container yard to container yard (CY CY), container yard to door (CY Door), and container freight station to container freight station (CFS CFS).

 

U.S. Customs and Border Protection (CBP)

A U.S. government agency in charge of reviewing entries documents and collecting import or export taxes. Learn more about the U.S. Customs clearance process here.