If you are new to logistics or coming from a purely technical background, here are the key terms you will encounter in OTM and day-to-day freight operations.
Parties Involved in Freight:
Carrier: A transportation service company that moves freight from one location to another. Carriers typically own or operate trucks, cargo planes, vessels, or rail cars. Each carrier is identified by a four-letter SCAC code (Standard Carrier Alpha Code) used on all shipping documents.
Supplier / Seller: The party that receives a Purchase Order from your company (the Buyer), manufactures or sources the goods, and ships them to your warehouse.
Consignee: The party receiving the freight at the destination.
3PL (Third Party Logistics): A company to which the Buyer outsources transportation management. The Buyer sends a Purchase Order to the Supplier and a copy to the 3PL. The 3PL coordinates with the Supplier to collect goods, consolidates freight where possible, negotiates rates with carriers, and arranges shipment to the Buyer. After delivery, the 3PL invoices the Buyer for freight costs and pays the carriers.
Freight Forwarder: A specialist that focuses on moving goods internationally — arranging transportation, handling customs clearance, and managing documentation. Unlike a 3PL, a freight forwarder typically does not handle warehousing or order fulfillment.
Shipment Types & Transport Modes:
Inbound Shipping: Movement of goods from suppliers into company-maintained warehouses.
Outbound Shipping: Movement of goods from company-maintained warehouses to customers or other warehouse locations.
TL / FTL (Truck Load / Full Truck Load): The carrier dedicates an entire truck to a single customer's freight moving from one point to another. Charges are typically based on distance and equipment size.
LTL (Less than Truck Load): The carrier allocates only part of a truck's space or weight capacity to each customer. Multiple customers share the truck. Charges are based on weight and volume.
Parcel: A transport mode used for individual packages weighing less than 150 lb. Each package is tracked individually using a tracking number issued by the carrier. Examples: UPS and FedEx packages.
Drayage: Short-distance freight movement — for example, moving a container from a port to a nearby truck pickup location. Drayage charges are typically paid in local currency.
Packaging & Equipment:
SKU (Stock Keeping Unit): An individual item or product unit placed inside cartons for shipping.
Carton: A cardboard box used to package individual items for shipping.
Pallet / THU (Transportation Handling Unit): A flat wooden platform used to stack and move cartons within a warehouse. Pallets are also loaded directly into trucks. In OTM, these are referred to as THUs.
Shipping Container: A large, reusable steel box that holds cartons and pallets during transport. Intermodal containers follow standard dimensions defined by ISO 6346, meaning the same sealed container can travel across multiple transport modes — ocean vessel, truck, and rail — without being opened.
Reefer: A refrigerated container used for perishable goods such as food, beverages, and pharmaceuticals. Reefer equipment is classified by temperature range.
Ocean Freight Terms:
FCL (Full Container Load): A single customer's freight fills an entire shipping container.
LCL (Less than Container Load): Multiple customers share space in a single shipping container.
TEU / FEU: Twenty-foot Equivalent Unit and Forty-foot Equivalent Unit — standard measures of container capacity. For example, a 3PL might request an ocean carrier to reserve 2,000 TEU of space on a vessel voyage.
CY (Container Yard): A storage area at a port or warehouse where containers are staged before loading or after unloading.
CFS (Container Freight Station): A facility where LCL cargo is consolidated into containers (at origin) or broken down (at destination).
CY/CY: Container Yard to Container Yard move — used for FCL shipments where a single shipper's container moves intact from origin to destination.
CFS/CFS: Container Freight Station to Container Freight Station — used for LCL shipments where freight is consolidated at origin and deconsolidated at destination.
CY/CFS: FCL at origin, broken down at destination. Used for shipments going to multiple consignees (also referred to as FCL/LCL).
CFS/CY: Multiple sellers consolidated at origin, single consignee at destination (also referred to as LCL/FCL).
Documents:
Bill of Lading (BOL): A document issued by the carrier to the party handing over the goods for transport. It serves as a receipt confirming the carrier has accepted the freight and specifies the destination. The carrier is then responsible for delivering the goods to that location.
INCOTERMS: Internationally recognized trade terms agreed between buyer and seller that define at which point in the journey the buyer takes on responsibility and risk for the goods. For example, FOB (Free on Board) means the buyer assumes responsibility once the seller has loaded the goods onto the vessel or truck arranged by the buyer.
NMFC (National Motor Freight Classification): Classification codes assigned to freight items to standardize and estimate accurate freight costs across the trucking industry.
FCR (Forwarder's Cargo Receipt): A document issued by a freight forwarder to the shipper upon receipt of cargo — also referred to as Forwarder's Certificate of Receipt.
Pro Number: A progressive tracking number assigned by the carrier to TL and LTL shipments, similar to a UPS or FedEx tracking number.
Freight Charges:
Fuel Surcharge: A variable fee added to shipment costs to offset fluctuating fuel prices. Typically calculated as a percentage of the base freight charge and updated periodically.
Demurrage / Detention: Penalty charges levied by the carrier on the consignee for holding transportation equipment (containers, trailers) beyond the agreed free-time period at a carrier or port facility.
Stopoff Charges: Charges levied by the carrier when the shipper requests the truck to stop and load or unload at locations between the origin and final destination — i.e., on a multi-stop shipment.
Warehouse & Yard Operations:
Yard: A designated parking area at a warehouse or distribution center, organized into rows and slots, where trailers and containers are staged before being moved to a dock door for loading or unloading.
Loading Dock: A door in the warehouse building that aligns with the rear of a truck so goods can be loaded or unloaded directly between the truck and the warehouse staging area.
Diversion: Changing the destination of a shipment while it is already in transit. The shipper or 3PL notifies the carrier of the new destination before the freight reaches the original delivery point.
Note: In OTM, you will encounter most of these terms in screen field names, rate configurations, shipment records, and integration documents. Familiarity with these terms will make it significantly easier to understand OTM's data model and configuration options.
What’s Next:
Now that you are familiar with core logistics terminology, the next topic walks through a complete end-to-end OTM configuration — from setting up a domain, items, and locations through to bulk planning, tendering, invoicing, and cost allocation. Working through this series hands-on in a non-production environment is the most effective way to build practical OTM skills.
Next Topic: End-to-End Basic Configs — Domain, Items, Locations, and Equipment