FreightPOP Glossary
A deep dive into supply chain industry terms
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3PL
A Third-Party Logistics (3PL) provider is a company that manages logistics operations for businesses, including warehousing, transportation, fulfillment, and freight management. Businesses partner with 3PLs to improve efficiency, reduce costs, and scale their supply chain operations without managing logistics in-house.
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API Integration
API integration connects different logistics and business systems to enable real-time data sharing and automation. Freight API integrations improve efficiency, enhance visibility, and streamline transportation workflows.
Automated Freight Quoting
Automated freight quoting is the process of instantly generating accurate shipping rates from multiple carriers. Businesses use freight quoting tools to compare rates, optimize costs, and streamline their shipping processes.
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Backhaul
Backhaul refers to the return trip of a truck after delivering its primary shipment, often used to transport goods back to the truck’s point of origin or another destination instead of running empty. Optimizing backhaul opportunities helps shippers and carriers reduce empty miles, lower transportation costs, and improve overall supply chain efficiency. Backhaul loads can be planned or secured through spot quotes to maximize truck utilization.
Bill of Lading (BOL)
A Bill of Lading (BOL) is a legal document issued by a carrier that serves as a shipment receipt, outlining the details of transported goods and the terms of delivery.
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Carrier Management
Carrier management is the process of selecting, monitoring, and optimizing relationships with freight carriers to ensure efficient and cost-effective shipping. A strong carrier management system helps businesses improve performance, reduce costs, and maintain reliable transportation networks.
Cross-Docking
Cross-docking is a logistics strategy where inbound shipments are unloaded and immediately reloaded onto outbound trucks with minimal or no storage time. It speeds up distribution and reduces warehousing costs.
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Demurrage
Demurrage is a fee carriers charge when a shipment remains at a terminal, port, or rail yard beyond the allotted free time. These charges are imposed to encourage quick cargo movement and prevent congestion. Demurrage fees can quickly add up, making it essential for businesses to monitor shipment timelines and streamline logistics to avoid unnecessary costs.
Drayage
Drayage is the short-distance transportation of freight between ports, rail yards, and warehouses. It plays a critical role in supply chain logistics, ensuring seamless transitions between shipping modes.
Drop and Hook
Drop and hook is a freight shipping method where drivers drop off a full trailer and pick up a preloaded one, eliminating wait times for loading and unloading.
Freight Audit
Freight audit is the process of reviewing and verifying freight invoices to ensure accuracy and prevent overpayments. It helps businesses detect billing errors, validate carrier charges, and optimize freight spend.
Freight Class
Freight class is a standardized classification system used to categorize shipments based on density, handling, liability, and stowability to determine shipping rates.
Freight Consolidation
Freight consolidation is the practice of combining multiple smaller shipments into a single larger shipment to reduce transportation costs and improve efficiency.
Freight Payment
Freight payment is the process of auditing, processing, and paying freight invoices for shipments. Businesses use freight payment systems to ensure accurate billing, avoid overcharges, and manage logistics costs efficiently.
Freight Procurement
Freight procurement is the process of sourcing and negotiating transportation services from carriers to optimize shipping costs and performance. Businesses use freight procurement solutions to secure the best rates, build carrier relationships, and improve logistics efficiency.
Full Truckload (FTL)
FTL shipping is a transportation method where a single shipment fills an entire truck. It is ideal for large, high-volume shipments that require dedicated transport.
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Last-Mile Delivery
Last-mile delivery refers to the final stage of the shipping process, where goods are transported from a distribution hub or fulfillment center to their final destination—typically a customer’s home or a retail location. It is one of the most critical and costly components of logistics, directly impacting delivery speed, customer satisfaction, and operational efficiency.
Less Than Truckload (LTL)
LTL shipping is a cost-effective transportation method for shipments that don’t require a full truck. It allows multiple businesses to share truck space, reducing costs while maintaining reliable delivery service.
Load Optimization
Load optimization is the process of strategically planning and arranging shipments to maximize efficiency, reduce costs, and improve overall logistics performance. Businesses use load optimization tools to consolidate shipments, utilize available space effectively, and enhance delivery speed.
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Multi-Carrier Shipping
Multi-carrier shipping allows businesses to access and ship with multiple carriers, providing greater flexibility, cost savings, and improved delivery options. With the right multi-carrier shipping solution, companies can optimize their shipping strategy across different carriers and modes.
Multi-Stop
Multi-stop freight shipping involves transporting a single truckload or LTL (less-than-truckload) shipment to multiple delivery locations along a planned route. This strategy helps businesses consolidate shipments, reduce transportation costs, and improve delivery efficiency. Multi-stop loads are commonly used in retail distribution, manufacturing supply chains, and e-commerce fulfillment to streamline operations and maximize truck capacity.
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Rate Shopping
Rate shopping refers to the process of comparing shipping rates from multiple carriers to find the most cost-effective and efficient shipping option for a specific shipment. This practice is commonly used in logistics and e-commerce to optimize costs, delivery speed, and service levels.
Reverse Logistics
Reverse logistics refers to the process of managing returns, refurbishments, and recycling of goods after delivery. It helps businesses recover value and improve sustainability.
Route Optimization
Route optimization is the process of determining the most efficient delivery and transportation routes to reduce transit times, lower costs, and improve operational efficiency. Businesses use route optimization tools to streamline logistics and maximize fleet utilization.
Shipping API
A shipping API connects businesses with carriers to automate rate shopping, booking, tracking, and freight management directly within their systems.
Spot Quote
A spot quote is a one-time freight rate offered by a carrier based on current market conditions, shipment urgency, and capacity availability. Unlike contract rates, which are negotiated for long-term consistency, spot quotes provide shippers with flexible pricing for immediate or irregular shipments. Spot rates fluctuate due to factors such as fuel prices, seasonal demand, and carrier availability, making it crucial to compare options to secure the best rate.