Logistics Glossary

The process of bringing goods or services from a foreign country into the home country. Importing allows businesses to access a wider range of products or materials that may not be available domestically. It involves activities such as sourcing suppliers, negotiating contracts, arranging transportation, and complying with customs regulations.

The process of sending goods or services from the home country to a foreign country. Exporting offers businesses the opportunity to expand their market reach and increase sales. It involves tasks such as market research, identifying potential buyers, negotiating trade agreements, arranging shipping, and ensuring compliance with export regulations.

A tax or duty imposed on imported or exported goods by the government. Tariffs are usually levied to protect domestic industries, regulate trade, generate revenue, or address trade imbalances. It’s essential for businesses to understand tariff rates and classifications to calculate costs accurately and remain competitive in the global market.

The government agency responsible for regulating and controlling the flow of goods in and out of a country. Customs administrations enforce customs laws, conduct inspections, assess duties and taxes, and facilitate trade by ensuring compliance with regulations. Businesses need to work closely with customs authorities to meet import and export requirements, submit accurate documentation, and facilitate smooth clearance of goods.

Taxes or fees imposed on imported or exported goods by customs authorities. Duties are based on factors such as the product’s value, classification, origin, and trade agreements. Businesses must consider duties as part of their cost calculations and ensure compliance with duty payment and reporting requirements to avoid penalties and delays.

International commercial terms that define the rights and responsibilities of buyers and sellers in international trade contracts. Incoterms specify who is responsible for various aspects of the transaction, such as transportation, insurance, customs clearance, and delivery. Understanding and using Incoterms correctly helps businesses establish clear terms of trade, allocate risks and costs effectively, and prevent misunderstandings.

The adherence to laws, regulations, and policies governing international trade activities. Trade compliance involves complying with import and export controls, trade sanctions, customs procedures, product safety standards, and documentation requirements. Ensuring trade compliance is essential to mitigate legal and financial risks, maintain a good reputation, and facilitate smooth trade operations.

An agreement between two or more countries that eliminates or reduces barriers to trade. Free trade agreements aim to promote economic integration, expand market access, and encourage trade liberalization. They typically involve the reduction or elimination of tariffs, quotas, and other trade restrictions, creating more favorable conditions for businesses to engage in international trade.

International standard codes used to classify and categorize products for customs, statistical, and logistical purposes. HS codes are numeric codes that represent specific products and help classify goods uniformly across different countries. They are crucial for determining customs duties, trade statistics, regulatory controls, and supply chain management. Proper classification of goods using HS codes is vital for accurate documentation, customs compliance, and trade data analysis. Read more about HS codes in China

The process of planning, implementing, and controlling the efficient flow and storage of goods, services, and information. Logistics encompasses activities such as inventory management, transportation, warehousing, packaging, and order fulfillment. Effective logistics management ensures timely delivery, cost optimization, inventory optimization, and customer satisfaction. Read more about Logistics Fulfillment & Distribution Services in China

The network of organizations, resources, activities, and information involved in the production, distribution, and delivery of goods or services to customers. The supply chain includes suppliers, manufacturers, wholesalers, retailers, logistics providers, and end customers. Managing the supply chain involves coordinating and optimizing activities such as procurement, production, inventory management, transportation, and demand planning to ensure a smooth flow of goods and meet customer demand. Read more about professional supply chain management in China

The storage and management of goods in a warehouse facility. Warehousing involves activities such as receiving, inspecting, storing, inventory management, order picking, packing, and shipping. Efficient warehouse operations are critical for optimizing inventory levels, minimizing handling costs, ensuring product availability, and facilitating timely order fulfillment.

The process of overseeing and controlling the flow of goods into, within, and out of an organization’s inventory. Inventory management aims to ensure adequate stock levels while minimizing carrying costs and stockouts. It involves tasks such as demand forecasting, inventory planning, procurement, stock replenishment, and monitoring inventory performance metrics.

The process of delivering goods from the manufacturer or supplier to the end customer. Distribution includes activities such as order processing, order picking, packaging, transportation, and delivery. Effective distribution management focuses on optimizing the delivery network, reducing lead times, managing transportation costs, and enhancing customer service.

The process of managing the return of products from customers to the manufacturer or supplier for purposes such as repairs, recycling, or disposal. Reverse logistics involves tasks such as product retrieval, evaluation, refurbishment, repair, replacement, or recycling. Proper management of reverse logistics helps reduce waste, recover value from returned products, maintain customer satisfaction, and comply with environmental regulations.

A logistics practice where goods are directly transferred from inbound transportation to outbound transportation without being stored in a warehouse. Cross-docking minimizes warehousing and handling costs, reduces order processing times, and enables faster order fulfillment. It is commonly used for high-volume goods with a short shelf life or when immediate delivery is required.

Outsourcing logistics activities to a specialized company that provides services such as transportation, warehousing, and distribution. 3PL providers offer expertise, infrastructure, and technology to manage various aspects of the supply chain on behalf of the client. Businesses leverage 3PL services to reduce costs, improve flexibility, access specialized capabilities, and focus on core competencies.

An advanced form of logistics outsourcing where a company manages multiple logistics providers to provide end-to-end supply chain solutions. A 4PL provider acts as a strategic partner, coordinating and integrating the services of various logistics providers to optimize the entire supply chain. 4PL services typically involve strategic planning, network design, performance monitoring, and continuous improvement.

A company or agent that organizes and coordinates shipments for individuals or businesses. Freight forwarders handle various logistics tasks, including transportation booking, documentation, customs clearance, and tracking. They act as intermediaries between shippers and carriers, ensuring smooth and efficient movement of goods across international borders. Freight forwarders have expertise in freight rates, shipping regulations, and logistics best practices.

The transportation of goods by aircraft. Air freight offers fast transit times, global reach, and is suitable for high-value, time-sensitive, or perishable goods. It provides reliable and efficient transportation for businesses that require quick delivery or have urgent supply chain needs.

The transportation of goods by sea using ships or vessels. Ocean freight is the most common mode for international trade due to its cost-effectiveness, capacity for large volumes, and global coverage. It is suitable for non-perishable goods, bulk commodities, and goods with longer lead times.

The transportation of goods over land using trucks, trailers, or other road-based vehicles. Land transportation offers flexibility, door-to-door service, and is suitable for regional or domestic shipments. It is commonly used for shorter distances or when connecting different modes of transportation.

The transportation of goods by rail or train. Rail transportation provides an efficient and cost-effective mode for moving large volumes of goods over long distances, particularly for intercontinental trade. It is suitable for bulk commodities, containers, and goods with longer transit times.

A transportation method that combines multiple modes of transport, such as rail, road, sea, or air, to move goods from the origin to the destination. Intermodal transportation offers advantages such as cost savings, reduced transit times, and enhanced supply chain efficiency. It involves the seamless coordination of different carriers and modes to ensure the smooth movement of goods.

Companies that specialize in the delivery of small parcels, documents, or time-sensitive shipments. Courier services offer fast, reliable, and trackable deliveries. They are commonly used for express shipments, e-commerce deliveries, and urgent shipments that require door-to-door service.

The final stage of the delivery process, where goods are transported from a distribution center or local hub to the end customer’s location. Last-mile delivery is a critical and often challenging aspect of logistics, especially in urban areas. It focuses on optimizing delivery routes, reducing delivery times, and ensuring customer satisfaction.

A legal document issued by the carrier or its agent that serves as a receipt of goods and evidence of the contract of carriage. The bill of lading includes details such as the type and quantity of goods, shipper and consignee information, port of loading and discharge, and terms of shipment. It is required for the release of goods at the destination and serves as a title document for the transfer of ownership.

A document issued by the seller to the buyer that provides a detailed account of the goods sold, their value, and the terms of sale. The commercial invoice serves as evidence of the transaction and is used for customs clearance, calculation of duties and taxes, and as a basis for payment.

A document that itemizes the contents, quantities, and packaging details of a shipment. The packing list helps ensure accurate receipt and verification of goods, aids in customs inspection, and assists in the organization of warehouse operations.

A document that certifies the country where the goods were produced or manufactured. The certificate of origin is used for customs purposes to determine eligibility for preferential trade agreements, calculate duties, and comply with import regulations.

A document issued by the importing country’s government or relevant authorities that grants permission to import specific goods into the country. An import license is required for certain regulated products, controlled substances, or goods that require special approval or compliance with import regulations.

A document issued by the exporting country’s government or relevant authorities that authorizes the export of specific goods from the country. An export license may be required for goods that are subject to export controls, trade restrictions, or licensing requirements imposed by the exporting country.

A financial instrument issued by a bank on behalf of the buyer, guaranteeing payment to the seller upon satisfactory fulfillment of specified conditions. A letter of credit provides a secure payment method in international trade, ensuring that the seller will receive payment and the buyer will receive the goods as per the agreed terms and conditions.

A formal statement or document provided by the importer or its authorized agent to the customs authorities, declaring the details of the imported goods, including their nature, quantity, value, origin, and other relevant information. The customs declaration is necessary for customs clearance and assessment of applicable duties, taxes, and import restrictions.

An international customs document that allows the temporary importation of goods for exhibitions, trade shows, or professional purposes without paying import duties or taxes. ATA Carnet simplifies customs procedures and facilitates the temporary movement of goods across multiple countries.

A set of laws, regulations, and policies governing international trade. These ensure adherence to legal, regulatory, and ethical standards, encompassing export controls, sanctions, customs laws, anti-bribery regulations, and guidelines related to product safety, labeling, and intellectual property rights.

A mandatory certification system implemented by China to ensure that products imported or sold in the Chinese market comply with specified safety, quality, and environmental protection standards. The CCC mark is required for a wide range of products, including electrical and electronic devices, automotive parts, toys, and medical devices.

A document that provides detailed information about the composition, properties, and quality of a product. A certificate of analysis is typically issued by a laboratory or testing facility and is used to verify that the product meets specified standards, particularly in industries such as pharmaceuticals, chemicals, and food.

A document issued by a certification body or authorized organization that confirms that a product meets specific standards, regulations, or technical requirements. A certificate of conformity is often required for goods to demonstrate compliance with safety, quality, or performance standards imposed by regulatory authorities or import/export regulations.

A document that provides detailed information about the hazards, handling, storage, and emergency measures related to a chemical substance or product. An MSDS is typically prepared by the manufacturer or supplier and is used to communicate essential safety information to users, emergency responders, and regulatory authorities.

 are a set of trade term definitions developed by the international chamber of Commerce (ICC) and recognized internationally.

An Incoterm is where the seller’s responsibility is fulfilled when the goods are made available at their premises. The buyer is responsible for all transportation costs, risks, and customs formalities from the seller’s location to the final destination.

An Incoterm where the seller delivers the goods, cleared for export, to the carrier specified by the buyer at a named place or point. The seller is responsible for the export customs clearance, while the buyer assumes responsibility for transportation costs and risks from that point forward.

An Incoterm where the seller is responsible for delivering the goods alongside the vessel at the named port of shipment. The buyer bears the responsibility and costs for loading the goods onto the vessel, as well as subsequent transportation and risks.

An Incoterm where the seller’s responsibility ends when the goods pass over the ship’s rail at the named port of shipment. The buyer takes on the responsibility and costs of loading the goods onto the vessel, as well as transportation and risks from that point onwards.

An Incoterm where the seller is responsible for delivering the goods on board the vessel at the named port of shipment. The seller covers the costs and freight charges to transport the goods to the named port of destination. The buyer assumes the risks and any additional costs after the goods are loaded onto the vessel.

An Incoterm similar to CFR, but with the addition of insurance. The seller is responsible for delivering the goods on board the vessel at the named port of shipment, as well as arranging and paying for marine insurance coverage until the goods reach the named port of destination.

An Incoterm where the seller delivers the goods to the carrier or another person nominated by the seller at a named place. The seller covers the transportation costs to transport the goods to the named place of destination, while the buyer bears the risks from that point forward.

A trade term under Incoterms where the seller delivers the goods to a specified destination, handling all transportation costs and risks until the goods are prepared for unloading at the designated location.

An Incoterm in which the seller is accountable for delivering the goods to a specified destination for the buyer. This includes bearing all expenses, such as transportation, import customs duties, taxes, and any other relevant charges, up until the goods are prepared for unloading at the designated location.

In this Incoterm, the seller’s duty is to deliver the goods to a specified destination for the buyer. However, responsibilities such as import customs clearance and duties are not borne by the seller. These obligations, including import clearance, customs duties payment, and any other relevant taxes or charges, are assumed by the buyer.

An Incoterm similar to CPT, but with the addition of insurance. The seller delivers the goods to the carrier or another person nominated by the seller at a named place, covers the transportation costs to the named place of destination, and provides insurance coverage for the goods during transit.

An Incoterm is primarily used in land transportation where the seller is responsible for delivering the goods, cleared for export, to a named place at the frontier. The buyer takes over responsibility for transportation, import customs clearance, and any risks from that point onwards.

Specifications and guidelines that define the requirements for packaging goods, including dimensions, materials, weight limits, and handling considerations. Packaging standards ensure the protection, safety, and efficient handling of goods during transportation and storage.

The materials used to wrap, cushion, protect, and contain goods during transportation and storage. Common packaging materials include cardboard boxes, shrink wrap, bubble wrap, foam inserts, pallets, and crates.

The practice of packing goods into standardized shipping containers for efficient transportation and handling. Containerization allows for easy transfer between different modes of transport, such as ships, trucks, and trains, while ensuring the security and protection of the goods.

The process of arranging goods on pallets for efficient handling and storage. Pallets provide stability, facilitate loading and unloading, and allow for the use of forklifts or pallet jacks. Palletization optimizes space utilization and enhances the speed and efficiency of logistics operations.

Labels, symbols, or codes applied to packages or containers to provide identification, tracking, and handling instructions. Marks and numbers may include information such as the product name, quantity, country of origin, destination, handling instructions, and barcodes for scanning purposes.

Labels and markings applied to packages containing hazardous materials to indicate the presence of potential hazards and communicate necessary precautions. Hazmat labeling follows international standards and regulations to ensure the safe handling, storage, and transportation of dangerous goods.

Regulations and guidelines imposed by individual countries regarding labeling and marking requirements for imported goods. These requirements may include language, content, size, placement, and specific information needed for compliance with local laws and consumer safety regulations.

The total weight of a shipment, including the weight of the goods and any packaging or containers.

The weight of the goods alone, excluding any packaging or containers.

The volume of a shipment, is calculated by multiplying the length, width, and height of the cargo. Cubic measurement is used to determine space utilization, freight rates, and loading capacities.

A shipment that does not occupy a full shipping container. In LCL shipments, multiple smaller shipments from different exporters are consolidated into a single container to optimize space and reduce costs.

A shipment that occupies an entire shipping container. In FCL shipments, the exporter has enough goods to fill a container, and the container is dedicated solely to their shipment.

A measure on which the shipment is freighted, calculated based on either weight or measure (W/M), whichever is higher. Weights are in metric tons, measured in cubic meters, RT=1 MT or 1 CBM. The Revenue Ton (RT) determines charges for shipping goods in air, ocean, and rail freight, optimizing revenue generation and capacity utilization.

The process of fulfilling the necessary customs requirements and documentation to allow goods to enter or exit a country legally. Customs clearance involves submitting relevant documents, paying any applicable duties or taxes, and complying with customs regulations and procedures.

A tax imposed by the importing country on goods entering its territory. Import duties are usually based on the customs value of the goods and are collected to protect domestic industries, regulate trade, and generate revenue for the government.

Government regulations and restrictions are imposed on certain goods, technologies, or services to prevent their unauthorized exportation for reasons such as national security, proliferation of weapons, or protection of intellectual property. Export control regulations vary by country and are designed to ensure compliance with international agreements and non-proliferation efforts.

A government-imposed restriction or prohibition on trade and commercial activities with a particular country or countries. Trade embargoes are political measures typically implemented for reasons such as national security, human rights concerns, or international disputes.  

A standardized system for classifying goods in international trade based on a six-digit code. The HS code classification is used globally to facilitate the uniform classification of products and enable accurate customs documentation, tariff calculation, and trade statistics reporting. Exporting Your Products to China? You Better Check Their Up-to-date HS Codes

The process of screening individuals, organizations, or entities against government-issued lists of denied or restricted parties. Denied party screening aims to prevent engaging in business transactions with prohibited or high-risk parties, such as individuals associated with terrorism, money laundering, or illegal activities.

Goods that are subject to specific regulations, licensing, or permits for import or export due to their nature, potential risks, or strategic importance. Restricted goods may include firearms, controlled substances, hazardous materials, endangered species, or sensitive technologies.

Duties are imposed on imported goods that are priced below fair market value to protect domestic industries from unfair competition. Anti-dumping duties are levied when a country determines that imported goods are being “dumped” into its market at prices lower than their normal value, causing material injury to domestic producers.

Formal agreements between two or more countries establish the terms and conditions for their trade relationship. Trade agreements aim to facilitate and promote trade by reducing tariffs, removing barriers, and establishing rules for fair and equitable treatment of goods and services.

Tariffs are applied to imported goods from certain countries that are lower or exempt compared to the standard tariffs. Preferential tariffs are typically granted as part of trade agreements or schemes to promote economic cooperation and provide benefits to eligible trading partners.

Standard tariffs are applied to imported goods in the absence of any preferential or special trade arrangements. Treaty or conventional tariffs are the default tariffs established by a country’s customs authority for goods imported from all countries.

The tariff rate applied to imports from one country that is no higher than the rate applied to imports from any other country. MFN treatment is a fundamental principle of the World Trade Organization (WTO) and promotes non-discriminatory trade practices among member countries.

A risk management tool that provides financial protection against potential losses or damages. In the context of logistics and international trade, insurance policies are commonly used to cover risks associated with the transportation, storage, and handling of goods.

Insurance coverage is specifically designed to protect goods against loss, damage, or theft during transit. Cargo insurance provides compensation for the value of the goods being shipped and may include coverage for various transportation modes, such as air, ocean, road, or rail.

Insurance coverage that protects against legal liabilities and financial losses arising from claims or lawsuits. In the logistics industry, liability insurance may include coverage for third-party bodily injury, property damage, errors and omissions, or other risks associated with transportation, warehousing, or distribution activities.

The process of identifying, analyzing, and evaluating potential risks and their impacts on business operations. Risk assessment helps in understanding and prioritizing risks, implementing appropriate risk mitigation measures, and ensuring the continuity and resilience of the supply chain.

A contractual clause that relieves parties from fulfilling their contractual obligations due to unforeseen circumstances beyond their control. Force majeure events may include natural disasters, political unrest, labor strikes, or other extraordinary events that disrupt normal business operations.

The process of filing a claim for compensation due to loss, damage, or discrepancies related to shipped goods. Loss and damage claims are typically initiated by the consignee or the party with a financial interest in the cargo and involve documentation, evidence, and communication with relevant stakeholders, such as carriers, insurers, or logistics service providers.

Any event or circumstance that interrupts or hampers the normal flow of goods, information, or services within a supply chain. Supply chain disruptions can result from various factors, such as natural disasters, transportation disruptions, supplier issues, regulatory changes, or market volatility.

Procedures and practices implemented to safeguard goods, facilities, and transportation operations from theft, vandalism, terrorism, or unauthorized access. Security measures may include physical security controls, surveillance systems, access control mechanisms, cybersecurity protocols, and compliance with relevant security regulations and industry best practices.

The process of developing alternative strategies and actions to mitigate and respond to potential disruptions or emergencies. Contingency planning involves identifying risks, establishing contingency plans, setting up backup systems, and defining clear procedures to ensure the continuity of operations and minimize the impact of unexpected events.

The ability of a business to continue its essential functions and operations during and after a disruptive event. Business continuity planning involves developing strategies, processes, and resources to ensure the uninterrupted flow of goods, services, and information, even in the face of disruptions or crises.