3PL & Logistics Glossary

Logistics Terms,
Plain English

30 essential terms every eCommerce brand needs to know before choosing a 3PL. No jargon, no filler.

📦 Fulfillment🏭 Warehousing🚚 Shipping & Transport💻 Technology📋 Compliance & Regulatory
📦

Fulfillment

6 terms
3PL (Third-Party Logistics)
An outsourced logistics provider that handles warehousing, fulfillment, and shipping on behalf of a brand.
4PL (Fourth-Party Logistics)
A supply chain integrator that manages multiple 3PLs and logistics providers on behalf of a brand.
Pick and Pack
The fulfillment process of retrieving (picking) items from warehouse storage and packaging (packing) them for shipment.
Kitting
Assembling multiple individual items into a single packaged bundle or kit for sale or shipment.
Returns Management (Reverse Logistics)
The process of handling returned merchandise — from customer return through inspection, restocking, or disposal.
Dropshipping
A fulfillment model where a retailer sells a product without holding inventory, and the manufacturer or distributor ships directly to the customer.
🏭

Warehousing

7 terms
Fulfillment Center
A warehouse facility optimized for receiving, storing, picking, packing, and shipping individual consumer orders.
SKU (Stock Keeping Unit)
A unique identifier assigned to each distinct product variant in a warehouse inventory.
Receiving (Inbound)
The process of accepting, inspecting, and putting away incoming inventory at a warehouse.
Cross-Docking
A logistics process where inbound goods are immediately transferred to outbound transport with minimal warehouse storage time.
Inventory Management
The process of tracking, ordering, and optimizing stock levels to meet demand without overstocking.
FIFO (First In, First Out)
An inventory management method where the oldest stock is picked and shipped before newer stock.
Safety Stock
Extra inventory held beyond forecasted demand to buffer against supply delays or demand spikes.
🚚

Shipping & Transport

8 terms
LTL (Less Than Truckload)
A freight shipping method for loads too large for parcel carriers but too small to fill a full truck.
FTL (Full Truckload)
A freight shipping method where a shipper books an entire truck exclusively for their goods.
Freight Broker
A licensed intermediary that connects shippers with trucking carriers to move freight.
Drayage
The short-distance transport of shipping containers from a port or rail yard to a nearby warehouse or distribution center.
Freight Class
A standardized rating (50-500) assigned to LTL freight that determines pricing based on density, handling, and liability.
Zone Skipping
A shipping strategy that consolidates orders and injects them directly into a regional carrier facility near the customer, bypassing long-haul zones.
Dimensional Weight (DIM Weight)
A pricing method carriers use to charge for package size, not just actual weight, based on volume relative to weight.
Last-Mile Delivery
The final leg of the shipping process — moving a package from a local hub or distribution point to the customer's door.
💻

Technology

3 terms
WMS (Warehouse Management System)
Software that controls and optimizes all operations inside a warehouse — inventory location, picking, packing, and shipping.
EDI (Electronic Data Interchange)
A standardized format for exchanging business documents electronically between trading partners.
ASN (Advance Shipment Notice)
An electronic notification sent to a receiver before a shipment arrives, detailing contents, quantities, and packaging.
📋

Compliance & Regulatory

6 terms
Bonded Warehouse
A CBP-approved facility where imported goods can be stored without paying duties until they are released for domestic sale.
FTZ (Free Trade Zone)
A designated area where goods can be imported, stored, processed, or manufactured with duty deferral or reduction benefits.
cGMP (Current Good Manufacturing Practice)
FDA regulations establishing minimum standards for the manufacturing, processing, and storage of food, drugs, and dietary supplements.
Lot Tracking (Batch Tracking)
The ability to track inventory by production lot or batch number from receipt through to outbound shipment.
SQF (Safe Quality Food) Certification
A globally recognized food safety and quality certification for food manufacturers and handlers.
Vendor Compliance
The set of shipping, labeling, and packaging rules a retailer requires suppliers to follow before delivering to its distribution centers.

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