Logistics and trade terms, clearly explained.

A 3PL (third-party logistics provider) is a company that runs logistics for other businesses, such as storage, order fulfilment, shipping and returns, so brands don’t need their own…

ABC Inventory Control is a sophisticated inventory management approach that applies different control strategies to different categories of inventory items based on their value and importance to the…

Actual Time of Arrival (ATA) is the exact time when a vehicle, vessel, aircraft, train, or shipment physically arrives at a terminal, warehouse, hub, or final delivery point.

Actual Time of Departure (ATD) is the exact time when a vehicle, vessel, aircraft, train, or shipment physically leaves its origin point.

In logistics and supply chain management, attach rate refers to the ratio of secondary or complementary products sold together with a primary item.

The Automated Export System (AES) is the US system for filing Electronic Export Information (EEI) on goods leaving the United States, run by the Census Bureau and US…

The Automated Manifest System (AMS) is the US Customs and Border Protection system carriers use to transmit cargo manifest data electronically before goods arrive in the United States,…

A bill of lading (B/L) is the document a carrier issues for goods shipped by sea. It is a receipt for the cargo, evidence of the transport contract…

Binding Origin Information (BOI) is a decision by an EU customs authority on the origin of specific goods. It is legally binding throughout the EU, generally for three…

Binding Tariff Information (BTI) is a written decision by an EU customs authority on the tariff classification of specific goods. It is legally binding across the EU for…

Bonded goods are imported goods on which customs duty and import VAT have not yet been paid. They must stay in a customs-supervised location, such as a bonded…

A bonded warehouse is a secure, customs-authorised facility where imported goods can be stored with import duty and VAT suspended until they are released for sale, re-exported or…

A Centralised Examination Station (CES) is a privately operated facility approved by US Customs and Border Protection where imported or exported cargo is unloaded and physically inspected.

CMR is the international convention for road freight between countries, and the CMR consignment note is the transport document that travels with the goods and sets the carrier’s…

A commercial invoice is the seller’s invoice for goods shipped across a border. Customs uses it to check the value, description and origin of the goods and to…

A Common Health Entry Document (CHED) is the EU document used to pre-notify and clear imports of animals, animal products, certain food and feed, and plants at a…

In logistics, consolidation refers to the process of combining multiple smaller shipments—often from different suppliers, sellers, or locations—into a larger, single shipment for transport.

Consumer-to-Administration (C2A), sometimes written as C2G (Consumer-to-Government), describes all digital interactions where private individuals use online channels to communicate, transact, or exchange information with public authorities.

CITES is an international agreement between governments that controls trade in wild animals and plants, and products made from them, so that trade does not threaten their survival.…

A cost trade-off is the deliberate decision to increase one type of cost in order to reduce another, with the goal of improving overall performance in the supply…

CPNP is the EU’s Cosmetic Products Notification Portal. Every cosmetic product must be notified there by its EU Responsible Person before it is placed on the EU market.

Cross-docking is a logistics method where incoming goods are unloaded, sorted and loaded onto outgoing transport with little or no storage, usually within a day.

A customs broker is a licensed specialist who prepares and files customs declarations, calculates duties and deals with customs authorities on behalf of importers and exporters.

Customs clearance is the process of getting imported or exported goods approved by customs: declaring them, paying any duties and taxes, passing any checks and obtaining release.

The Customs Declaration Service (CDS) is HMRC’s electronic system for UK import and export declarations. It fully replaced the older CHIEF system in 2024.

A customs entry is the formal declaration filed with customs to clear imported goods. It identifies the goods, their value, classification and origin so duties can be assessed…

CHIEF (Customs Handling of Import and Export Freight) was the UK’s electronic customs declaration system for imports and exports. It was replaced by the Customs Declaration Service (CDS)…

A customs power of attorney (POA) is a written authorisation that lets a customs broker or representative carry out customs business, such as filing entries, in the name…

CTPAT (Customs Trade Partnership Against Terrorism) is a voluntary CBP programme in which companies secure their supply chains in exchange for benefits such as fewer inspections and faster…

A customs warehouse is an authorised EU facility where non-EU goods can be stored without paying import duty or VAT until they are released for sale in the…

Dangerous goods are items that can endanger people, vehicles or the environment in transport, such as lithium batteries, aerosols and perfumes. They must be classified, packed and labelled…

DAP (Delivered at Place) is the Incoterm under which the seller delivers the goods to a named destination, while the buyer handles import clearance and pays duty and…

DDP (Delivered Duty Paid) is the Incoterm under which the seller delivers to the buyer’s named place and pays all costs, including import clearance, duty and taxes.

Demurrage and detention are daily charges for keeping a shipping container beyond its free time: demurrage inside the port terminal, detention outside it.

In logistics, depots are facilities used to store, stage, or transfer goods, vehicles, or equipment close to where they are needed.

Dock-to-stock time is how long it takes a warehouse to turn an incoming delivery into stock available for sale, from arrival at the receiving dock to put-away in…

An EORI number is the ID that EU customs use to identify businesses that import goods into or export goods out of the EU. One number is valid…

EPR (Extended Producer Responsibility) makes the businesses that put packaging, electronics, batteries and other products on a market pay for collecting and recycling them, usually with registration in…

A EUR pallet (Euro pallet) is the standard European wooden pallet measuring 1200 × 800 × 144 mm, used for storage and transport across Europe and exchangeable between…

FBA prep is preparing products to Amazon’s requirements before they are sent to Amazon fulfilment centres, including labelling, bagging, bundling and carton packing.

FCL (full container load) is sea freight where one shipper books a whole container for its own goods, paying per container rather than per cubic metre.

FEFO (first expired, first out) is a stock rotation method where items with the earliest expiry or best-before date are picked first, using batch and date tracking.

A fiscal representative is an EU-based person or firm that a foreign business appoints to handle its VAT obligations in a country, and who is often jointly liable…

A Foreign Trade Zone (FTZ) is a secure area in the United States that is treated as outside US customs territory, so goods can be stored, processed or…

Fourth-party logistics (4PL) is a strategic logistics model where a single expert partner takes responsibility for designing, coordinating, and optimising the entire supply chain on behalf of a…

Freight refers to goods transported in bulk by road, rail, sea, air, or intermodal combinations.

GPSR is the EU General Product Safety Regulation. Since 13 December 2024 it requires consumer products sold in the EU to be safe, traceable and backed by a…

The Harbor Maintenance Fee (HMF) is a US fee of 0.125% of the value of commercial cargo loaded or unloaded at US seaports. It funds port and harbour…

An HS code is a product classification number from the Harmonized System, the World Customs Organization’s global nomenclature. Its first six digits are the same worldwide and determine…

HAWB stands for House Air Waybill, a transport document issued by a freight forwarder or consolidator to the shipper in air freight.

ICS2 (Import Control System 2) is the EU system for advance safety and security data on goods arriving from outside the EU, filed as an entry summary declaration…

Import VAT is the VAT charged when goods enter the EU from outside it. It is calculated on the customs value plus duty and transport costs, and can…

The Importer of Record (IOR) is the party legally responsible for imported goods: declaring them correctly, paying duties and taxes and making sure they meet all import rules.

Importer Security Filing (ISF), also called 10+2, is a US requirement for importers to send CBP 10 data elements about ocean cargo at least 24 hours before it…

Incoterms are the International Chamber of Commerce’s standard trade terms. They define who pays for transport, insurance and customs, and where risk passes from seller to buyer. The…

An indirect customs representative is a broker or forwarder that makes EU customs declarations in its own name on behalf of another business, and is jointly liable for…

IOSS is the EU scheme that lets sellers charge VAT at checkout on imported goods in consignments worth up to €150 and report it in one monthly return.

Kitting is assembling separate items into one ready-to-ship kit or bundle, such as a gift set or starter pack, either in advance or when the order is placed.

Last-mile delivery is the final leg of a shipment, from a local depot or hub to the customer’s door, parcel locker or pickup point.

LCL (less than container load) is sea freight where several shippers share one container, each paying for the space their goods use, usually per cubic metre.

In logistics, a leg is a distinct segment of a shipment’s journey between two defined points—such as warehouse to hub, hub to depot, or airport to distribution centre.

A line item is an individual entry that appears on an order, invoice, purchase order, packing list, or inventory record.

The Merchandise Processing Fee (MPF) is a US customs user fee that CBP charges on imports to cover the cost of processing entries. For formal entries it is…

Merge in transit is a logistics strategy where products or components from different origins are brought together and combined whilst they are already moving through the network, rather…

OSS is the EU VAT scheme that lets businesses declare VAT on cross-border sales to consumers in other EU countries in one quarterly return in a single country.

Overage refers to the situation in which a shipment contains more goods than were ordered or documented.

A packing list is a shipping document that details the contents of each package, carton or pallet in a shipment, including quantities, weights, dimensions and markings.

A perfect order is an order delivered on time, in full, undamaged, with accurate documentation and to the right customer and location.

Pick and pack is the fulfilment process of collecting the items in an order from warehouse stock and packing them into a shipment ready for the carrier.

Picking in logistics is the process of selecting and retrieving the correct items from storage locations in a warehouse or fulfilment centre to satisfy customer or replenishment orders.

Place utility refers to the added value created by making a product available at the location where customers need it.

Proof of Delivery (POD) is the documented confirmation that a shipment has been delivered to the intended recipient, at a specific place and time, and in an agreed…

A receiving dock is the designated area in a warehouse, fulfilment centre, or distribution facility where inbound goods first arrive.

Reverse logistics is the flow of goods back from customers to the seller, covering returns, inspection, restocking, repair, resale and recycling.

Rules of origin are the criteria customs use to decide which country a product comes from. Origin determines duty rates, trade agreement preferences, anti-dumping duties and labelling.

A SKU (stock keeping unit) is a unique code a business uses to identify each distinct product variant it stocks, such as a T-shirt in one size and…

T1 transit is the EU customs procedure for moving non-EU goods between two points without paying duty or import VAT, for example from the port of arrival to…

A tail gate exam is a US customs inspection in which CBP officers open a container’s doors and inspect the cargo visible at the back, without fully unloading…

A tariff is a tax charged on imported goods, calculated from the goods’ classification, customs value and origin. Governments use tariffs to raise revenue, protect industries and pursue…

The 7 Storage Technique is a fundamental warehouse organisation method designed to optimise space utilisation, improve picking efficiency, and enhance inventory management.

Throughput refers to the amount of product, inventory, or work that flows through a warehouse, fulfilment centre, or logistics process within a specific time period.

Trade remedies are extra duties or quotas that governments impose under WTO rules to counter dumping, foreign subsidies or sudden import surges that harm domestic industry.

U.S. Customs and Border Protection (CBP) is the US federal agency that clears imports, collects duties and fees, enforces trade rules and secures the border. It is part…

Wall-to-wall inventory is a comprehensive, full-coverage stock-taking method where every item within a defined storage area is physically counted in a single, coordinated effort.

WEEE is the EU framework for waste electrical and electronic equipment. Businesses selling electrical products must register in each EU country they sell to and finance collection and…