Most Used Jargon: Logistics Terminology (update 2024)
5 min read
Logistics has lots of complicated proce­sses, systems, and technology. That's why it de­veloped its own special language­. Words like "supply chain management," "ware­housing," and "transportation" are crucial to understand. If you work in logistics, knowing the­se terms helps e­veryone communicate be­tter. This blog will explain some common logistics words. It will make­ this complex field easie­r to understand.

General Logistics

JIT (Just-in-Time)

An inventory management strategy that minimizes the amount of inventory held at any given time.

EDI (Electronic Data Interchange)

The electronic exchange of business documents between companies, such as purchase orders, invoices, and shipping notifications.

KPI (Key Performance Indicator)

A measurable value used to track the effectiveness of a logistics process. Examples include on-time delivery rate, order fulfilment accuracy, and warehouse throughput.

LTL (Less Than Truckload)

A shipment that does not fill an entire truck trailer. LTL shipments are typically consolidated with other shipments to optimize transportation costs.

FCL (Full Container Load)

A shipment that fills an entire container.

EDI (Electronic Data Interchange)

Particularly important for supply chain visibility, as it allows for real-time data exchange between partners.

Track & Trace

The ability to track the location and status of goods throughout the supply chain.

Control Tower

A central location that monitors and manages all activities within a supply chain, providing real-time visibility and enabling proactive decision-making.

Inventory Management

ABC Analysis

A method of classifying inventory items based on their value and annual usage. It helps prioritize inventory control efforts.

Safety Stock

Extra inventory held to buffer against unexpected fluctuations in demand or supply.

Lead Time

The time it takes to receive an item after it is ordered.

FIFO (First-In, First-Out)

A method of inventory management that ensures the oldest items are sold or used first.

LIFO (Last-In, First-Out)

A method of inventory management that assumes the most recently received items are sold or used first.

Kanban System

A visual inventory control system that uses cards to signal when to replenish stock.

Customs & Trade

HS Code (Harmonized System Code)

An international system for classifying traded goods.


Ex Works (EXW); Free Carrier (FCA); Cost and Freight (CFR); Cost, Insurance, and Freight (CIF); Delivered Duty Paid (DDP).


A tax imposed on imported goods.

Anti-Dumping Duty

A tariff imposed on imported goods that are believed to be sold at a price below their fair market value.

Certificate of Origin (CO)

A document that verifies the country of origin of goods.


Penalties imposed on a country by another country or group of countries, which can restrict trade.

Free Trade Agreement (FTA)

An agreement between two or more countries that reduces or eliminates tariffs and other trade barriers.

Letter of Credit (LOC)

A document issued by a bank guaranteeing payment to a seller if the buyer fails to meet their obligations.

Export Declaration

A document required by a government to track goods that are being exported from a country.

Import Permit

A document required by a government to allow goods to be imported into a country.

Transportation Management

Intermodal Transportation

The movement of goods using multiple modes of transportation, such as truck, rail, and ship.


The process of unloading goods from an inbound shipment and loading them directly onto an outbound shipment, without storing them in a warehouse.


The short-distance transportation of goods, typically between a terminal and a warehouse or customer location.


A company that transports goods from one location to another. This can include trucking companies, airlines, shipping lines, and railroads.


A trip made by an empty vehicle. Optimizing routes to minimize deadhead miles is a key goal in logistics.


The transportation of goods on a return trip, which helps to utilize space on vehicles and improve efficiency.


The combining of multiple smaller shipments into a larger, more cost-effective shipment.


Stock Keeping Units (SKU) Rationalization

The process of optimizing the number of SKUs a company carries to improve efficiency and reduce costs.

Pick & Pack

The process of selecting and packaging goods for order fulfilment.


The process of storing goods in a warehouse after receiving them.

Value-Added Services (VAS)

Additional services offered by warehouses, such as labelling, kitting (assembling multiple items into one), and light assembly.


The process of assigning storage locations to products in a warehouse based on factors like size, demand, and weight.

Double Picking

The practice of picking items for two or more orders at the same time to improve efficiency.

Cross-docking for Retail (Milk Run)

A specific type of cross-docking where deliveries are consolidated for multiple stores located along a route, reducing the number of deliveries needed.


IoT (Internet of Things)

The network of physical devices embedded with sensors that collect and exchange data. In logistics, IoT can be used to track the location and condition of goods in real time.


A distributed ledger technology that can be used to securely track the movement of goods throughout the supply chain.

Cloud Computing

The on-demand delivery of IT resources over the internet. Cloud-based logistics software can improve scalability and accessibility.


Understanding logistics terms makes it easier to work in this fie­ld. As you can see, logistics has many specialized terms that may seem daunting at first. However, learning what they mean is essential for effective collaboration and becoming more professional.

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