A Brief Glossary of E-commerce Logistics Lingo

2PL

Also known as “second-party logistics”, 2PL refers to the practice in which a customer buys services including customs, goods, or storage, from a provider.

3PL

Also known as “third-party logistics”, 3PL refers to the practice in which a company outsources its entire supply chain services to an external company, named “3PL provider”.

4PL

Also known as “fourth-party logistics”, 4PL refers to when a service provider handles both its customer’s entire supply chain logistics services as well as directing and developing their logistics processes.

B2B

This acronym stands for “business-to-business”, and it refers to all trading practices that occur between two different businesses.

B2C

This acronym stands for “business-to-consumer”, and it refers to all trading practices between a company and its end customers.

Back Order

A back order refers to a product that a company promises to ship as soon as it becomes available after being out of stock when a customer had initially ordered it.

Barcode / EAN

A barcode is a stamp that is present on products or labels and is formed of a series of bars and spaces. Barcodes contain encoded information about that specific product, and can be scanned, read, and interpreted by electronic barcode readers.

Bill of Materials

A bill of materials refers to a list of all the components that are required to produce a specific item.

Billing Schedule

A billing schedule is a regular plan that a warehouse follows in order to produce and issue invoices to its customers.

Box Delivery

Box Delivery, delivering the products to a parcel locker. See also: Parcel Locker.

Bulk Area

A bulk area is a space inside a warehouse that is designed to store larger items, often handled by the palled load.

Business Process Outsourcing

This refers to the practice of outsourcing functions such as IT, logistics, accounts, payroll, and HR to a third-party provider.

Cargo

A cargo refers to goods and items that are handled via a large transportation carrier. 

Carrier

A carrier, or transportation carrier, refers to the company that is used to deliver goods or cargo.

Carrier Liability

Carrier liability indicates all the areas that a carrier is responsible and liable for. Such areas include loss, delay, and damage.

Conveyor

A conveyor is a device that is used to handle and move goods and products from different areas of a warehouse. There are, generally, two types of conveyors: roller conveyors, and conveyor belts.

Cross Docking

Cross docking is the act of moving items and goods from the area in which they are received straight to the shipping area, where they can be prepared for distribution. For this practice to be successful and efficient, it is paramount to synchronize all shipment movements – both inbound and outbound. By doing so, logistics providers can drastically slash distribution-related costs and save time.

Delivery Confirmation

A delivery confirmation refers to an electronic message or notification that the carrier sends to the customer in order to confirm that their goods have been delivered successfully.

Dispatch Confirmation

A dispatch confirmation refers to an electronic message or notification that the carrier sends to the customer in order to confirm that their goods have been shipped successfully. Often, dispatch confirmation notes also contain information such as parcel number and tracking number.

Distribution Center

A distribution center is a warehouse facility that stores inventory from either manufacturing or another warehouse, before the goods are shipped to their relevant retail destinations.

Distribution Channel

A distribution channel refers to a company or individual – or a number of companies and individuals – who take part in the distribution of products and services from the manufacturer to the end consumer.

Dropshipping

Dropshipping refers to a business model in which the owner of an e-commerce store sells items via that store, but the manufacturer handles the delivery directly to the end customer.

D2C

D2C stands for Direct to Consumer. E-commerce is D2C when manufacturers or producers sell their products online directly to end consumers.

E-Commerce Fulfillment

This refers to the practice of trading and conducting business in a digital way, often on the Internet. 

Electronic Data Interchange

This refers to the digital transmission of electronic information in a traditional format. This information only contains business-related data, and it often refers to order exchange from a website or online store to the physical warehouse that is in charge of processing and managing the order.

Freight

This refers to goods and products that are being moved and transported across different locations, often happening via container.

Fulfillment

Also known as ecommerce order fulfillment, this refers to the act of managing, selecting, packaging, and shipping a customer order, and it often refers to the e-commerce world.

Fulfillment Services Provider

A ecommerce fulfillment services provider is a company that is charged by a business with receiving stock items, managing inventory, and fulfilling customer orders.

Gross Weight

Gross weight indicates the total weight of a vehicle as well as the payload of passengers or freight.

Infinite Capacity Scheduling

This refers to a planning system for manufacturing that virtually does not consider factors such as schedules and capacity constraints. For this to be successful and efficient, manufacturing planners must continually monitor the production schedule and compare it to capacity, making adjustments when necessary.

Last-Mile Delivery

Last-mile delivery is the last leg of the journey from a transportation hub to the final destination. The last mile is the final step of the delivery process and the point at which the package finally arrives at the buyer's door.

Lead Time

The lead time is the total amount of time that goes between order placement and order receipt. This includes processes such as order transmittal, order processing, order preparation, and transit.

Order Management System, OMS

This refers to the provision of a centralized system that enables to manage orders coming in from different sales channels, including online, mobile, and physical stores.

Outbound Logistics

This refers to the process in which products are moved and stored from the end of the production line all the way to the end consumer.

Parcel Locker

A parcel locker is an out-of-home delivery method. It is typically an automated postal box or parcel machine that allows users to collect their deliveries or dispatch parcels from a specific place. Various service providers offer this kind of solution, and it is increasingly gaining popularity. See also: Box Delivery.

Pick and pack

Pick and pack relates to a phase in the order fulfillment process.

When picking and packing orders, the warehouse is literally doing just that: collecting the products form the shelf according to the product order list, and packing and preparing the products for shipment.

POS

This is an acronym that can either stand for “point of sale”, or “point of shipment.”

Proforma Invoice

A proforma invoice is a preliminary bill or estimated invoice which is used to request payment from the committed buyer for goods or services before they are supplied. A proforma invoice includes a description of the goods, the total payable amount and other details about the transaction.

Proof of Delivery

A proof of delivery refers to the information that a carrier provides and which includes the full name of the person who signed for the parcel, as well as the time and date of the delivery. Sometimes, proof of delivery can also contain additional information related to the shipment.

Random-Location Storage

This refers to a storage technique whereby goods received in a warehouse are stored away in a random fashion, based on the currently available space as opposed to other, and more specific storage criteria.

Replenishment

This refers to the process in which stock is moved from a secondary storage area to a specific, and fixed, storage area.

Reverse Logistics

This refers to the process that takes into consideration elements such as customer returns, service returns, and product warranty. In this process, the focus is on goods or services flowing from the end customer back to the supplier or provider of those goods or services.

Serial Number

A serial number is a unique number that a manufacturer, provider, or distributor assigns to a specific item, and that can and will never be used again for any other items.

Warehouse Management System, WMS

Also known by its acronym WMS, a warehouse management system refers to all the software tools and applications that enable a provider to automate the processes of a warehouse. Such processes include, but are not limited to, distribution, storage, inventory, and fulfillment.

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