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The ABCs of Logistics Acronyms

The world of logistics and eCommerce is filled with acronyms! Newcomers and die-hards alike may get tripped up sometimes. That’s why we’ve put together a list of the most common acronyms.  


A third-party logistics provider (3PL) is a company that provides logistics services to a retailer, often who has an online presence. These services often include order management, fulfillment, and warehousing.



Logistics Service Provider (LSP) is an umbrella term for all businesses that provide logistics services. This can include supply chain management, transportation support, warehousing, and distribution services. A 3PL is a type of LSP.  


Moving into logistics tech with API. An application program interface (API) consists of code that allows computer programs to communicate with each other. The API enables communication between the two programs.  

For example, imagine you’re using an order management application on your warehouse computer. That app can connect with an inventory management application using an API. Then, the inventory management app can provide the order management app with up-to-date inventory information seamlessly. APIs are important because they allow different programs and services to work together seamlessly, even if they were developed by different teams or companies.


There are several types of software that help logistics professionals.  

A TMS is a transportation management software. This software is designed to assist businesses in managing the transportation of goods by planning, executing, and optimizing their physical movement.

A WMS is a warehouse management software. This software is designed to help businesses manage operations within the warehouse or distribution center. Services may include pick and pack instructions, label printing, virtual warehousing, and turn-by-turn directions in a warehouse.  

A TWMS is a transportation and warehouse management software. This type of software combines the capabilities of traditional TMS and WMS programs and includes features that help businesses manage and optimize transportation and warehouse operations.  


Enterprise Resource Planning (ERP) is another logistics tech software. This software’s primary function is to assist with business management. This includes services such as budget planning, forecasting, and reporting.  



Another logistics software is an order management system (OMS). OMS systems help businesses manage the lifecycle of customer orders. This type of software tracks sales, orders, inventory, and also has some fulfillment capabilities.  


The final software we’ll overview in the world of logistics is a point-of-sale system (POS). This is a program where the purchase of items occurs and where someone pays for the order. For example, a cash register at the coffee shop counter will be run by a POS system.  


A purchase order (PO) is a document created to outline the terms between a supplier and buyer of goods. For example, when a customer puts an order in for 50 t-shirts, the business will create a PO outlining the quantity, price, and type of t-shirt that will be included in the order.  


DIM, often called “DIM weight” is the technique shipping carriers use to price their services. Most carriers use a formula to find the parcels volumetric weight. To calculate, multiply the length, width, and height of a package. This gives the cubic size of the package. Then, divide the cubic size of the package in inches by the DIM divisor to calculate the dimensional weight in pounds. The DIM divisors are dictated by the shipping carriers and can be found on their websites (the major carriers can be found here: FedEx, UPS, and USPS).  


SKU and UPC are sometimes used interchangeably but, there are some key differences between the two. A stock-keeping unit (SKU) and universal product code (UPC) are both codes given to products to assist with identification and are often accompanied by a barcode. A SKU, however, will often include letters and numbers and is primarily used for internal use by individual retailers or manufacturers, while a UPC is (as the name indicates) more universal. UPCs can be used to identify a product no matter who is selling it.  


In addition to UPCs and SKUs, Amazon has created their own identification system. Their identifying alphanumeric codes are called Amazon standard identification numbers (ASIN) and are important to keep track of for sellers who have an Amazon presence.  


Radio frequency identification devices (RIFD) are a type of technology that is used in the logistics industry to help track the movement and condition of items as they move through the supply chain. Carriers, UPS in particular, are experimenting with these in their operations.



Another type of tracking technology used in the logistics industry is the internet of things (IoT). This term describes any tech that connects to the internet and gives information about the physical state of an object. This information can include location, temperature, and moisture level.  


Just in time (JIT) is a warehousing or trucking strategy. JIT strategies attempt to fulfill orders or deliver products at the same time as the customer demands them. The goal of this method is to reduce storage costs and increase turnover.  


This group of acronyms all refer to different inventory and financial strategies. The first, first in first out (FIFO) strategy is to sell or send the oldest inventory on hand before selling newer inventory. Last in, first out (LIFO) is just the opposite. The inventory that has more recently been received will be the first to be sold.  

FEFO and NIFO are less common strategies. First expire, first out (FEFO) ensures that product with the nearest expiration date is processed first. Next in, first out (NIFO) is a valuation method. It dictates that an item is valued based on a replacement value, rather than previous costs.  


Fast moving consumer goods (FMCG) is exactly what it sounds like, items that sell quickly. This term typically refers to consumers goods that are packaged for individual purchase and sold at a relatively low price.  


Estimated time of arrival (ETA) is the time a shipping carrier expects an item to be delivered to its destination. Estimated time of departure (ETD) on the other hand is the time a carrier expects a delivery to leave the origin location (like a fulfillment center or warehouse).  


In-DC and In-DC date refer to the preplanned date when a shipment is supposed to arrive at a distribution center.


The general rate increase (GRI) is an adjustment in the base price of a shipment. These are dictated by the shipping carriers and are typically announced once per year.  


Cost of goods sold (COGS) is an accounting term. COGS refers to the total cost of producing the goods sold. This often includes the costs of raw materials, labor, and the overhead cost of each unit sold.  

The logistics industry is complex and constantly evolving, and understanding the language used within it is crucial for success. The acronyms discussed in this blog post are just a few of the many that are used in logistics and supply chain management. Familiarization with these common terms equips logisticians to communicate effectively with others in the industry and navigate the many challenges that arise in logistics operations.  

Whether you're an entrepreneur, logistics manager, or a supply chain professional, it's essential to stay up to date with the latest terminology and trends in logistics. We hope that this post has been informative and helpful in shedding some light on the acronyms commonly used in logistics. If you’d like to contact us about our industry expertise, contact us here! https://www.idrivelogistics.com/talk-with-an-expert ?utm_source=linkedin_idl&utm_medium=blog&utm_campaign=contact_idl_blog_mar9&utm_id=contact_idl_blog_mar9

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