Whether you’re looking to brush up on your freight shipping and logistics vocabulary, or just looking for information as you get your feet wet,  this guide is for you. Here’s a few of the most common freight shipping acronyms, what they stand for, and the situations where you might find them.

Acronyms Used in Shipping Options

Before you send an RFQ (Request for Quote), you should first understand what type of carrier you’ll need. Here are some of the more common freight carrier options:

• TL – full truckload
  Often the most cost-effective method of shipping your products – provided you have enough to fill the entire truck. When you ship TL your freight goes straight to its destination via long haul. Unlike LTL shipments, TL shipments do not transfer to other trucks or stop at any terminals mid-haul.
• PTL – partial truckload
  If you do not have enough product to ship TL, PTL is the next step down. Similar to TL shipping, your products will typically stay on one truck from its pick up point to final destination – but is not accessible during the trip.
• LTL – less than truckload (or less than load)
  For many businesses small and large LTL transportation allows you to ship minimal quantities. But for this method to be effective for all parties, the load must consist of a minimum of 1-6 pallets or weigh under 4,000 pounds. When shipping LTL, your items are combined with shipments from other shippers, plus they may be transferred one or more times before they reach their final destination.
• STL – shared truckload
  The STL method of shipping is a hybrid whereby multiple shipments can be combined onto one truck moving in the same direction. This intent is to bypass the hub and spoke system thereby reducing the number of stops. This helps avoid damage caused through the extra handling of a shipper’s freight.

Typical Freight Acronyms

Once you have a freight quote form in front of you, you may find a number of unfamiliar associated acronyms. In order to communicate clearly and efficiently with your logistics partner, you’ll need to be familiar with these common terms plus a few more:

• FAK – Freight of all Kinds
  The term FAK is used to refer to a pooling of different products into one load for the purpose simplification of rating and pricing.
• BOL – Bill of Lading
  As one of the most important documents associated with moving your goods, a BOL is a detailed, legally binding contract between a shipper and a freight carrier. Every BOL includes details that define the names and addresses of the shipper and carrier, shipment description, packaging details, expected pickup date, freight class, and hazardous material designations.
• NMFC – National Motor Freight Classification
  NMFC is a series of classification codes assigned to commodities by the National Motor Freight Traffic Association (NMFTA). NMFTA created the National Motor Freight Classification tariff to help classify all commodities into 18 different freight classes determined by four factors; shipment density, stow-ability, handling, and liability.
• EDI – Electronic Data Interchange
  At the basic level, EDI is the business-to-business interconnection of computers for the rapid exchange of documents. In the freight shipping industry, this would be items like bills of lading, invoices and tracking information.
• FOB – Free on Board
  FOB is a term used to indicate when ownership and liability of goods is transferred from seller to buyer. When used with a physical location such as a shipping port, FOB specifies which party assumes responsibility for the payment of freight charges, and at what exact point title for the shipment passes from seller to the buyer.

• GVW – Gross Vehicle Weight
  Because weight is such an important factor in freight transportation, GVW is the term used to quantify the total weight of the transport vehicle and its cargo. Likewise, GVWR, or Gross Vehicle Weight Rating is often used to express the maximum operating weight of a vehicle as specified by the manufacturer.
• LG – Lift Gate
  A lift gate is a powered tailgate used to lift pallets from ground level to the same level of a truck trailer deck. Many LTL truck fleets have lift gates as do smaller shipper locations with no loading docks.
• DV – Declared Value
  Declared value refers to the monetary value of a shipment as reported by you, the shipper. Being an extremely important declaration, it serves as a disclosure used to determine shipping charges and as a tool to control carrier liability for damage and loss.

Other Terms Used in Freight Management

As the saying goes, “But wait, there’s more!”. The acronyms don’t stop there. Because documentation and performance are an important part of the evolving transportation and logistics industry, you could benefit from a little familiarity with them. Here are a few important terms worth knowing:

• POD – Proof of Delivery / Port of Discharge / Port of Destination
  Having a number of different meanings within the transportation industry, how this term is used depends on its context.
  The port of discharge or destination implies where the container is correspondingly loaded or unloaded from a vessel and picked up by the consignee.
  Proof of Delivery is the paperwork authorized by the consignee indicating the receipt of a load. In this context, a BOL can often double as a POD upon delivery and must be signed for the carrier to get paid.
• CNOR / CNEE – Consignor / Consignee
  More like contractions rather than acronyms, these are fairly straight forward: a CNOR or consigner is the entity sending a shipment, whereas a CNEE or consignee is the entity receiving a shipment.
• OS&D Report – Overage, Shortage, and Damage
  Mistakes and problems do happen therefor they must be accounted for. For instance, a CNEE can file an OS&D report if there are issues with a shipment they received. As implied, an overage occurs when the recipient gets more product than ordered, while a shortage is the opposite. Shipment items that are delivered unusable or unsellable are considered damaged.
• TONU – Truck Ordered but Not Used
  A common result of miscommunication (hence the need for this article) or happenstance, a truck arrives to pick up a shipment, but the load isn’t ready – that’s TONU. If it’s due to your error, you may find yourself having to pay a fine and compensate the carrier for misuse of their time and resources.

As you can see, it’s extremely important to be familiar with these terms and how they apply to your business. It would be wise to take a few minutes and learn them so you get accustomed to seeing and hearing them in context throughout your shipping processes.

Through standardization, integration, automation, and simplification, EDI (Electronic Data Interchange) has become the lifeblood of the logistics industry, and something you might want to be aware of if you’re shipping products.

What is Modern EDI?

Modern EDI is a protocol that allows two systems to connect with one another for the purpose of exchanging data electronically.

Developed in the early 1960’s, this EDI protocol was first used to send shipment information between the Du Pont company and Chemical Leahman Tank Lines.

Later in 1982, other large companies like Ford and GM realized the potential benefits and began requiring their suppliers transfer information through EDI. Within a decade EDI was being used by roughly 12,000 businesses.

Since then, their numbers have continued to grow as businesses capitalized on the efficiencies gained by exchanging information through this secure channel.

How Does EDI Work?

To understand the fundamentals of how EDI works, we must first understand the terminologies. According to EDI Basics, the following definitions apply:

• Standard format– Because EDI documents must be processed by computers rather than humans, a standard format must be used so that the computer will be able to read and understand the documents. A standard format describes what each piece of information is and in what format (e.g., integer, decimal, mm/dd/yy). Without a standard format, each company would send documents using its company-specific format and, much as an English-speaking person probably doesn’t understand Japanese, the receiver’s computer system doesn’t understand the company-specific format of the sender’s format.

  • There are several EDI standards in use today, including ANSI, EDIFACT, TRADACOMS, and ebXML. And, for each standard, there are many different versions, e.g., ANSI 5010 or EDIFACT version D12, Release A. When two businesses decide to exchange EDI documents, they must agree on the specific EDI standard and version.
  • Businesses typically use an EDI translator – either as in-house software or via an EDI service provider – to translate the EDI format so the data can be used by their internal applications and thus enable straight-through processing of documents.

• Business documents– These are any of the documents that are typically exchanged between businesses. The most common documents exchanged via EDI are purchase orders, invoices, and advance ship notices. But there are many, many others such as the bill of lading, customs documents, inventory documents, shipping status documents, and payment documents.

• Business partners– The exchange of EDI documents is typically between two different companies, referred to as business partners or trading partners. For example, Company A may buy goods from Company B. Company A sends orders to Company B. Company A and Company B are business partners.

• Computer-to-computer– EDI replaces postal mail, fax, and email. While email is also an electronic approach, the documents exchanged via email must still be handled by people rather than computers. Having people involved slows down the processing of the documents and also introduces the potential for a host of errors. Instead, EDI documents flow straight through to the appropriate application on the receiver’s computer (e.g., the Order Management System) and processing can begin immediately. A typical manual process involves lots of paper and people, the EDI process does not.

EDI for Logistics

Logistics companies rely on EDI data to simply get things done. From on-boarding a new trading partners, to customer communications, connecting and integrating EDI transport data across the supply chain is of the utmost importance.

Being able to scale quickly is what every logistics company wants to be able to do. Modernized EDI systems give organizations the control needed to do business with customers and trading partners around the planet.

These critical data exchanges are based on four key factors:

• standardization
• automation
• integration
• and simplification

Using this foundation, companies can send and receive electronic documents: Tradacoms, EANCOM, X12, EDIFACT, HIPAA, ODETTE, VDA, and much more.

Modern EDI provides the capability to accommodate and leverage all of these communication standards quickly and efficiently across the entire logistics industry.

Moreover, every industry, from transportation and logistics to manufacturing and retail has its own recurring EDI transactions. And for the record, each EDI document transaction contains a certain amount of important data. Without it, the EDI document is practically useless.

EDI and Transportation

As transportation has evolved, Electronic Data Interchange has become a requirement in the transportation industry. Shippers, brokers and carriers all try to integrate and exchange information as fast as possible.

With logistics blooming and escalating to millions of transactions, EDI enables the exchange of invoices, remittances, shipping manifests, BOLs, and shipping statuses.

The major benefits of EDI in transportation is in reduced manual tasks, decreases costs, and the eduction human error.

Transportation Related EDI Examples

The Downsides of Modern EDI

For one, EDI communication is always one-way; information is sent from system A to system B without confirmation in the transaction set. To confirm reception, system B would have to send a transaction back to system A.

The second major disadvantage of EDI is that, due to network issues, transmission delivery times can be unpredictable. In other words, transmissions can take anywhere from fifteen minutes to four hours.

This can be a major deterrent to EDI in an age where time is money, and information needs to be exchanged immediately.

Electronic Data Interchange (EDI) refers to a means by which businesses replace paperwork and the sharing of physical documents with the use of electronic documents.

The use of this technology has found its way into the logistics industry. Let’s look at how this solution is used in logistics and its benefits.

What are the standards of EDI?

EDI standards is a broad term used by software developers to describe templates used in EDI. These are standard across all platforms on which they are to be used or, if not, can easily be suited to the businesses that use them. EDI standards are necessary if business communication is to be effective, especially for logistics companies.

What are the types of EDI?

There are several types of EDI that a logistics company can work with. The following is a list of some of the most common EDIs.

• Direct EDI – Also known as point-to-point EDI, this is a prominent EDI that allows a business to deal with each of its partners as separate individuals. This is very beneficial for a business that partners with several logistics companies or a logistics company that partners with many businesses. Each business can book work, manage its account, and send invoices without interfering with another business on the same platform.
• EDI via AS2 – This is a type of EDI that allows documents and data to be shared over the internet. It continues to gain market in the logistics industry because of its ability to connect with several computers.
• Web EDI – This is an even better form of the EDI via AS2. This type of EDI allows access of documents via an ordinary browser.
• EDI outsourcing – Here, a firm chooses to hire another one to help it manage its EDI systems. This is common for many businesses that may need EDI services without the capacity to set up in-house teams.

What is the Importance of EDI?

If you are asking yourself, what is the importance of EDI, anyway? Then, to answer your question, the word ‘efficiency’ comes to mind.

EDI helps to streamline logistics services and allows easy record keeping and sharing of files. This allows for more efficiency in the handling of value tasks that help make logistics more possible.

What are the Benefits of EDI?

Aside from its importance in improving the efficiency of a logistics company, EDI also benefits a company in other many ways.

• Saving on costs – Logistics firms don’t need to set aside a massive budget for printing and mailing of documents. With EDI, the files can be shared with clients instantaneously.
• Time-saving – Compared to the past, when the document had to be crafted from scratch and then submitted to clients, EDI increases efficiency and cuts down on lost time. EDI systems have in-built templates that help make work easier.

Why EDI?

EDI is an aspect of technology that can’t be left behind in today’s logistics industry. If a  logistics company is to streamline its transactions with clients, EDI is necessary.