Bill of lading, Incoterms, demurrage, TEU, 3PL… If you work in transport, imports or warehousing, you hear these every day. If you're new to the industry, they sound like a foreign language. And in recent years, new terms have joined the vocabulary: CO₂e, Scope 3, CBAM and the shipping ETS.
This logistics glossary explains the key terms of freight forwarding and supply chain management in plain English, together with the "green" terms that now matter to every carrier and importer.
Jump to letter: A · B · C · D · E · F · G · H · I · J · K · L · M · N · O · P · R · S · T · V · W
A
Accessorial Charges: Carrier charges for services beyond basic transport, such as tail-lift loading, waiting time, residential delivery or out-of-hours delivery.
Active Inventory: Stock expected to be used in production or sold within a short, defined period.
ADR: The European agreement on the international carriage of dangerous goods by road. It sets rules for packaging, labelling, documents and driver training.
Advance Shipping Notice (ASN): An electronic message the supplier sends before delivery, listing the contents, packaging and expected arrival of a shipment. Usually transmitted via EDI.
Air Waybill (AWB): The transport document for air shipments. It serves as a receipt and contract of carriage but, unlike an ocean bill of lading, it is not a document of title.
B
Bill of Lading (B/L): The key document in ocean shipping. It is a receipt for the cargo, evidence of the contract of carriage and a document of title representing ownership of the goods.
Break-Bulk: Either cargo shipped as individual pieces rather than in containers, or the splitting of a consolidated shipment into smaller ones for distribution.
Broker: An intermediary who connects shippers with carriers without performing the transport. A customs broker handles customs clearance.
Bunker Fuel: The fuel used by ships. Its cost, and now the carbon cost that comes with it, is passed on to freight rates through surcharges such as BAF.
C
Carrier: The company that physically moves the goods by road, rail, sea or air.
CBAM (Carbon Border Adjustment Mechanism): An EU mechanism that charges for the CO₂ embedded in imported goods (steel, aluminium, cement, fertilisers, hydrogen, electricity). It directly affects importers and customs brokers.
CII (Carbon Intensity Indicator): An International Maritime Organization (IMO) indicator that, since 2023, rates ships from A to E based on CO₂ emitted per unit of transport work.
CIF (Cost, Insurance and Freight): An Incoterm for sea transport. The seller pays freight and minimum insurance to the destination port, but risk passes to the buyer once the goods are loaded on board.
CO₂e (CO₂ equivalent): A unit expressing all greenhouse gases as the amount of CO₂ with the same warming effect. It is the common language for measuring the carbon footprint of transport.
Cross-Docking: Incoming goods are sorted and loaded directly onto outbound vehicles with little or no storage.
Customs Clearance: The process of getting goods approved for import or export by customs authorities, including filing a declaration and paying duties and taxes.
D
DAP (Delivered at Place): An Incoterm where the seller delivers to the named destination, ready for unloading. The buyer handles import clearance and duties.
DDP (Delivered Duty Paid): The Incoterm with the most obligations for the seller, who delivers to the destination with import clearance done and duties paid.
Demurrage: A charge applied when a container stays inside the port or terminal beyond its free days. In ship chartering, it is compensation for delays in loading or unloading.
Detention: A charge applied when a container is kept outside the port, at the customer's premises, beyond the free time. Often confused with demurrage.
E
EDI (Electronic Data Interchange): The standardised exchange of documents (orders, invoices, ASNs) between computer systems, without manual re-keying.
EU ETS for shipping: Since 2024, CO₂ emissions from large ships calling at EU ports have been phased into the EU Emissions Trading System. The cost is often passed on to freight rates as an "ETS surcharge".
EXW (Ex Works): The Incoterm with the fewest obligations for the seller, who makes the goods available at its own premises. From there, the buyer takes care of everything.
F
FCL / LCL: FCL (Full Container Load): one shipper fills an entire container. LCL (Less than Container Load): cargo from several shippers is consolidated in the same container.
FOB (Free on Board): An Incoterm for sea transport. Risk and cost pass from seller to buyer once the goods are loaded on board the vessel at the port of loading.
Free Zone: An area where goods can be stored or processed before import duties and taxes are paid. Many major ports operate free zones.
Freight Forwarder: A company that organises transport on behalf of the shipper: booking freight, coordinating carriers, preparing documents and often handling customs clearance.
FuelEU Maritime: An EU regulation that, from 2025, progressively limits the greenhouse gas intensity of the energy used by ships, pushing them towards cleaner fuels.
G
General Average: A principle of maritime law: when part of the cargo or ship is sacrificed to save the voyage, the loss is shared proportionally by all parties involved.
GLEC Framework: A globally recognised methodology for calculating greenhouse gas emissions from transport and logistics across all modes. It is aligned with ISO 14083.
Goods Received Note (GRN): An internal document confirming that goods have been received at the warehouse, in quantity and condition.
Green Logistics: Practices that reduce the environmental footprint of transport and warehousing: route optimisation, modal shift, alternative fuels and electrification.
H
HazMat / Dangerous Goods: Materials that need special handling because of risks to health, safety or the environment. They are regulated by ADR (road), IMDG (sea) and IATA DGR (air).
I
Incoterms® 2020: The international trade terms of the International Chamber of Commerce (ICC). They define where cost and risk pass from seller to buyer. The current edition is 2020, with 11 terms.
Intermodal Transport: Transport using more than one mode (e.g. ship, rail, truck) in the same loading unit, without handling the goods themselves when changing modes.
ISO 14083: An international standard (2023) for quantifying and reporting greenhouse gas emissions from transport chains. It is increasingly used in ESG and Scope 3 reporting.
J
Just-In-Time (JIT): A strategy where materials arrive exactly when they are needed in production, keeping inventory to a minimum.
K
KPI (Key Performance Indicator): A measurable indicator of how well an operation meets its goals, e.g. OTIF, cost per order or kg CO₂e per tonne-kilometre.
L
Last Mile: The final leg of delivery to the customer. It is often the most expensive and most polluting per parcel, which is why electric vans, cargo bikes and parcel lockers are spreading there.
Logistics: The planning, execution and control of the flow and storage of goods and information from origin to consumption.
LTL / FTL: LTL (Less Than Truckload): small shipments sharing the same truck. FTL (Full Truckload): one truck dedicated to a single shipment.
M
Manifest: A detailed list of all cargo on a ship, aircraft or vehicle, also submitted to customs authorities.
Merge-in-Transit: Shipments from different suppliers are combined at a point along the route and delivered to the customer as a single delivery.
Modal Shift: Moving freight from road to lower-emission modes such as rail or short-sea shipping. It is one of the most effective ways to cut transport emissions.
N
Node: A fixed point in the supply network, such as a factory, warehouse, distribution centre or port.
NVOCC (Non-Vessel Operating Common Carrier): A company that issues its own bills of lading and acts as a carrier towards the customer without operating ships. It buys space from shipping lines and often consolidates LCL cargo.
O
Order Fulfillment: The whole process from receiving an order to delivery: picking, packing, shipping and customer updates.
OTIF (On Time In Full): A KPI measuring the share of deliveries that arrived on time and with the full quantities ordered.
P
Pallet: A platform for stacking and moving loads. The standard Euro pallet measures 1200 × 800 mm.
Procurement: The process of sourcing and buying goods and services: selecting suppliers, negotiating, ordering and follow-up.
Proof of Delivery (POD): A document or digital record (signature, photo, GPS) confirming that a shipment was delivered.
R
Reverse Logistics: Managing the backward flow: returns, repairs, remanufacturing and recycling. It is a key part of the circular economy.
RFID (Radio Frequency Identification): Tag technology that can be read wirelessly without line of sight, enabling fast counting and tracking of goods.
S
Scope 3: Emissions caused in a company's value chain outside its own operations, e.g. from transport it outsources. For many companies, it is the largest part of their footprint.
SKU (Stock Keeping Unit): A unique code for each product variant (size, colour, pack) used in inventory management.
Supply Chain: The network of suppliers, manufacturers, warehouses, carriers and retailers that brings a product from raw materials to the end customer.
T
3PL (Third-Party Logistics): An external provider that takes over warehousing, transport, distribution or a company's entire logistics operation.
TEU (Twenty-foot Equivalent Unit): The standard unit of capacity in container shipping. A 40-foot container counts as 2 TEU.
TMS (Transport Management System): Software for route planning, carrier selection, shipment tracking and, increasingly, calculating the CO₂ emissions of each shipment.
V
Visibility: The ability to know in real time where a shipment is and how much stock is at each point in the chain.
W
Well-to-Wheel (WTW): An emissions method that includes fuel production and distribution (well-to-tank), not just combustion in the vehicle (tank-to-wheel).
WMS (Warehouse Management System): Software that manages receiving, storage locations, order picking, stock counts and dispatch within a warehouse.
Green logistics: 5 ways to cut your transport footprint
Transport is one of the largest sources of emissions in Europe, and customers increasingly ask for the carbon footprint of each shipment. Five practical steps:
- Measure properly: calculate emissions with ISO 14083 or the GLEC Framework, so your figures are comparable and credible.
- Fill your vehicles: higher load factors and fewer empty runs mean less fuel per tonne.
- Optimise routes: a modern TMS cuts kilometres, time and cost.
- Shift modes where possible: rail and short-sea shipping emit far less per tonne-kilometre than trucks.
- Electrify and go solar: electric vans for the last mile, and solar panels on the warehouse roof to charge them with your own power.
To compare your performance with your sector, see carbon benchmarking, and for the regulatory picture read how CO₂ regulations are reshaping industries.
Frequently asked questions
What's the difference between demurrage and detention?
Demurrage is charged when a container stays inside the port beyond its free days. Detention is charged when you keep it outside the port, at your premises, longer than allowed.
Which Incoterm should I choose?
It depends on who you want to control transport and risk. EXW puts almost everything on the buyer, DDP almost everything on the seller. FOB and CIF are meant for sea transport, while FCA, CPT or CIP are often preferred for containers. Ask your freight forwarder.
How is the carbon footprint of a shipment calculated?
Weight is multiplied by distance (tonne-kilometres) and by an emission factor for each mode and fuel type. The GLEC and ISO 14083 methodologies define how to do this consistently, usually on a well-to-wheel basis.
The takeaway
The supply chain has its own language, and that language is changing. Alongside Incoterms and bills of lading, we now have tonnes of CO₂e, Scope 3 reporting and carbon surcharges on freight rates. Those who understand them early gain on cost and credibility.
Is there a term you use every day that's missing? Let us know and we'll add it. For climate and emissions terms, see our CO₂ Term Glossary.