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
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Fulfillment

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

7 terms
Fulfillment Center
A warehouse facility optimized for receiving, storing, picking, packing, and shipping individual consumer orders.
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SKU (Stock Keeping Unit)
A unique identifier assigned to each distinct product variant in a warehouse inventory.
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Receiving (Inbound)
The process of accepting, inspecting, and putting away incoming inventory at a warehouse.
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Cross-Docking
A logistics process where inbound goods are immediately transferred to outbound transport with minimal warehouse storage time.
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Inventory Management
The process of tracking, ordering, and optimizing stock levels to meet demand without overstocking.
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FIFO (First In, First Out)
An inventory management method where the oldest stock is picked and shipped before newer stock.
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Safety Stock
Extra inventory held beyond forecasted demand to buffer against supply delays or demand spikes.
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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.
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FTL (Full Truckload)
A freight shipping method where a shipper books an entire truck exclusively for their goods.
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Freight Broker
A licensed intermediary that connects shippers with trucking carriers to move freight.
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Drayage
The short-distance transport of shipping containers from a port or rail yard to a nearby warehouse or distribution center.
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Freight Class
A standardized rating (50-500) assigned to LTL freight that determines pricing based on density, handling, and liability.
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Zone Skipping
A shipping strategy that consolidates orders and injects them directly into a regional carrier facility near the customer, bypassing long-haul zones.
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Dimensional Weight (DIM Weight)
A pricing method carriers use to charge for package size, not just actual weight, based on volume relative to weight.
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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.
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Technology

3 terms
WMS (Warehouse Management System)
Software that controls and optimizes all operations inside a warehouse — inventory location, picking, packing, and shipping.
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EDI (Electronic Data Interchange)
A standardized format for exchanging business documents electronically between trading partners.
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ASN (Advance Shipment Notice)
An electronic notification sent to a receiver before a shipment arrives, detailing contents, quantities, and packaging.
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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.
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FTZ (Free Trade Zone)
A designated area where goods can be imported, stored, processed, or manufactured with duty deferral or reduction benefits.
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cGMP (Current Good Manufacturing Practice)
FDA regulations establishing minimum standards for the manufacturing, processing, and storage of food, drugs, and dietary supplements.
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Lot Tracking (Batch Tracking)
The ability to track inventory by production lot or batch number from receipt through to outbound shipment.
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SQF (Safe Quality Food) Certification
A globally recognized food safety and quality certification for food manufacturers and handlers.
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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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