Brokerage Terminology



GLOSSARY

The purpose of this glossary is to provide a basic interpretation of commonly used terminology in the brokerage field. It is intended as an informational guide, and not as legal interpretation.
B | C | D | E | F | G | H | I | L | M | N | O | P | Q | R | S | T | U | W |

B

Backhaul - When a motor carrier has delivered a load from his home city to another city. Instead of driving home with an empty trailer, the will try to find a load going back to their home city.
Bill of Lading - A bill of lading is a binding contract that serves three main purposes:
  1. A receipt for the goods delivered to the carrier for shipment.
  2. A definition or description of the goods.
  3. Evidence of title to the relative goods, if negotiable.
Bill of Lading Exceptions - The terms and conditions of most bills of lading release carriers from liability for loss or damage arising from:
  1. An Act of God
  2. The public enemy
  3. The authority of law
  4. The act or default of the shipper
In addition, except in the case of negligence, a carrier will not be liable for loss, damage, or delay caused by:
  1. The property being stopped and held in transit upon the request of the shipper, owner, or party entitled to make such request.
  2. Lack of capacity of a highway, bridge, or ferry.
  3. A defect or vice in the property.
  4. Riots or strikes.
Bonded Carrier - A carrier licensed by U.S. customs to carry customs-controlled merchandise between Custom points.
Break-Bulk - This is when loads are separated into individual shipments for routing to different destinations. One example of this would be how FedEx directs large shipments into its regional centers where they are then re-devided for delivery.
Break-Bulk Terminal - Consolidation and distribution center. This is typically a facility where loads are unloaded and then re-consolidated into shipments. These shipments usually come from both its smaller terminals and from other break-bulks. Often each city or region could have its own break-bulk terminal.

C

Carmack - An industry term regarding loss or damage of cargo. Carmack is governed by 49 U.S.C 14706, which states that a motor carrier must (1) issue the Bill of Lading and (2) pay the actual loss or injury to the property. However, carriers do limit their liability for release value commodities, and can limit their damages to $25.00 per pound or $100,000 per shipment.
Claim (Cargo Claim) - A "Cargo Claim" is a demand made upon a transportation company for payment, due to freight loss or damage alleged to have occurred while shipment was in the possession of carrier. Pursuant to the National Motor Freight Classification (NMFC) Uniform Bill of Lading, all cargo claims must be filed within 9 months.
COD - A shipment for which the carrier is responsible for collecting the sale price of the goods shipped prior to delivery.
Combination Vehicle - An equipment configuration which includes a separate power unit (tractor) and at least one trailer.
Commodity - Refers to the goods being shipped - any article of commerce.
Common Carrier - A company that provides transportation services to the public in return for compensation.
Consignee - The consignee, or the buyer, is the entity who is financially responsible for the receipt of a shipment. Generally, the consignee is the same as the receiver.
Consignor - The consignor, or the shipper, is the person or place in which a shipment will originate.

D

Deck Trailers - Trailers with rows of tracking on each sidewall and deck load bars. The load bars fit into the tracks to form temporary "decks" on which freight can be loaded. Decks allow more freight to be loaded in the trailer, reduce damage, and speed loading and unloading.
Delivery Receipt - Document dated and signed by the consignee or its agent at the time of delivery stating the condition of the goods at delivery. The signed delivery receipt is returned to the driver for retention at the terminal, the customer retains the remaining copy.
Dispatch/Dispatcher - The act of sending a driver on his or her assigned route with instructions and required shipping documents. Contact is maintained with the driver throughout the day via phone, radio, satellite communication, or cellular phone.
Dock - A platform, generally the same height as the trailer floor, where trucks are loaded and unloaded.
Dolly - An auxiliary axle assembly having a fifth wheel used for purpose of converting a semitrailer to a full trailer. Dollies can be used to haul multiple trailers behind a single power unit - also referred to as a "Bogie". This is a converter that provides an extra axle and fifth wheel and is used to connect multiple trailers.
Doubles - A combination of two trailers pulled by a power unit; this usually refers to a power unit pulling two 28' trailers (see also Rocky Mountain Double and Turnpike Double). This is also a vehicle configuration in which a tractor pulls two trailers connected by a dolly or jifflox.
Drayage - Also known as connecting road haulage. This may refer to:
  1. The hauling of a load by a cart with detachable sides (dray).
  2. Road transportation between the nearest railway terminal and the stuffing place.

E

Electronic Data Interchange - The electronic transmission between computers in a standard format of routine business documents such as purchase orders, invoices, and bills of lading. The data formats, or transaction sets, are usually sent between mainframe computers. Learn more in the EDI Resource Center listed on our webpage.
Exceptions - An exception is any delivery in which the receiver or driver notes a problem on the delivery receipt before signing it. Typically exceptions concern shortages and/or damages.
Exempt Commodity - Such commodities are exempt from federal regulation such as, agricultural and forestry products.

F

Fifth Wheel - A device used to connect a semi-trailer and tractor together.
Free on Board (F.O.B) - This is when the seller agrees to deliver merchandise free of all transportation expense to a location specified by the contract. Once the delivery is complete, the title to all the goods, as well as the risk of damage, becomes the buyer's responsibility.
Freight - These are shipping documents used to confirm delivery of the freight and indicate the terms of payment. They are given to the motor carrier. The freight bill gives a description of the freight, its weight, amount of charges, taxes, and whether collect or prepaid. Charges paid in advance are called prepaid freight bills. If the bill is prepaid, freight charges are paid by shipper. If the bill is collect on delivery, freight charges are paid by the receiver of the goods.
Freight Broker - A freight broker is an independent contractor paid to arrange motor carrier transportation. A broker may work on behalf of a carrier or shipper.
Freight Broker Software - Otherwise known as Transportation Management Systems, are software solutions that facilitate the procurement of transportation services; the short-term planning and optimization of transportation activities, assets and resources, and the execution of transportation plans.
Freight Forwarder - An individual or company that accepts less-than-truckload (LTL) or less-than-carload (LCL) shipments from shippers and combines then into carload or truckload lots. Designated as a common carrier under the Interstate Commerce Act. Freight forwarders issue a bill of lading for shipments and accept responsibility for cargo. A freight forwarder combines less-than-truckload (LTL) or less-than-carload (LCL) shipments into carload or truckload lots. Freight forwarders are designated as common carriers. They also issue bills of lading and accept responsibility for cargo. The term may also refer to the company that fills railroad trains with trailers.
Finding a Freight Broker or Forwarder - This refers to the act of looking for a freight broker to move your load from point A to point B.
Find an LTL Motor Carrier - This refers to the act of looking for a freight broker to move your load from point A to point B.
F.O.B Destination - This refers to the location where title and risk pass changes. Under this arrangement, title and risk remain with the seller until they have delivered freight to the delivery location specified in the contract.
F.O.B Origin - This refers to the title and risk pass to the buyer at the moment of the sellers delivery to the carrier. The parties may agree to have title and risk pass at a different time, or to allocate freight charges by a written agreement.

G

Gross Combination Weight (GCW) - The maximum allowable fully laden weight of a truck and its payload. This is the most common classification scheme used by manufacturers and by states.

H

Hazardous Material - Hazardous materials are defined by the U.S. Department of Transportation in accordance with the Federal Hazardous Material Law. A substance or material may be designated as hazardous if the transportation of the material in a particular amount and form poses an unreasonable risk to health and safety or property.

I

Intermodal Transportation - Transportation movement involving more than one mode, e.g. rail-motor, motor-air, or rail-water.

L

Less-Than-Truckload (LTL) - Also known as less-than-load, this refers to a uantity of freight less than that required for the application of a truckload rate. The historical definition for LTL freight is shipments under 10,000 pounds. LTL carriers are carriers which specialize in shipments under 10,000 pounds. However, competition from other freight carriers restricts shipments for most LTL carriers to the range between 300 and 3000 pounds.
Linehaul - Movement of freight between cities or between break-bulk terminal facilities. Usually this is between the origin terminal and destination terminal. This does not refer to the initial pick-up or final delivery of the freight.

M

Multimodal Transportation - Freight movement involving more than one mode of transportation (ground, air, rail, ocean).

N

National Motor Freight Classification (NMFC) - Industry standard tariff published by motor carriers containing rules, descriptions, and rating on all commodities moving in commerce; used to classify freight for the purpose of rating the freight bill.
Negotiable Bill of Lading (Order Notify) - A shipment requiring the consignee to surrender the original endorsed bill of lading at the time of delivery. This is a method for the shipper to use to guarantee payment for goods shipped. More commonly used with truckload shipments.

O

Overcharge/Undercharge Claim - Overcharge or undercharge claims are demands upon a transportation company for the refund of an overcharge from the erroneous application of rates, weights, and assessment of freight charges.

P

Piggyback - The transportation of highway trailers or removable trailer bodies on rail cars specifically equipped for the service. It is essentially a joint carrier movement in which the motor carrier forms a pickup and delivery operations to a rail terminal, as well as a delivery operation at the terminating rail head..
Power Units - - The control and pulling vehicle for trailers or semitrailers.
Perils of the Sea - Fortuitous accidents or casualties peculiar to transportation on navigable water, such as sinking, collision of vessel, striking a submerged object, or encountering heavy weather or other unusual forces of nature.

R

Rating - Determination of the correct legal rate for a shipment.

S

Semitrailer - Truck trailer equipped with one or more axles and constructed so that the front end rests upon a truck tractor.
Shipping/Freight Agent - A Shipper’s Agent is not a carrier, freight forwarder, or broker. Shipper’s agents generally arrange for the transportation of truckload or container load shipments. They work under a freight broker using his DOT authority. Shipper’s agents coordinate all aspects of an intermodal move, hiring drayage at both ends, and providing shippers with a single invoice.
Shipping Documents - This is a collection of documents that are needed for each load. They include a bills of lading (PDF), a packing slips (PDF), manifests, shipment bills and any necessary customs paperwork.
SIC Code - These are standard Industrial Classification Codes. It’s a classification of establishments by type of activity in which they are engaged; for the purpose of facilitating the collection, tabulation, presentation and analysis of data relating to establishments, e.g. SIC 42 Motor Freight Transportation and Warehousing SIC 421 Trucking, Local and Long distance.
Straight Truck - A vehicle with the cargo body and tractor mounted on the same chassis.

T

Tariff - A Tariff is a document setting forth applicable rules, rates, and charges for the movement of goods. A tariff sets forth a contract of carriage for the shipper, the consignee, and the carrier. Since January 1, 1996, motor carriers are not required to publish tariffs. However, in accordance with federal law, tariffs must be provided to a shipper upon request.
Third-Party - This is the party other than the shipper or consignee that is ultimately responsible for paying the shipment charges.
Truck Classifications
  1. Class I Truck = A truck with gross vehicle weight (GVW) of 6,000 lbs or less.
  2. Class II Truck = A truck with gross vehicle weight (GVW) of 6,001-10,000 lbs.
  3. Class III Truck = A truck with gross vehicle weight (GVW) of 10,001-14,000 lbs.
  4. Class IV Truck = A truck with gross vehicle weight (GVW) of 14,001-16,000 lbs.
  5. Class V Truck = A truck with gross vehicle weight (GVW) of 16,001-19,500 lbs.
  6. Class VI Truck = A truck with gross vehicle weight (GVW) of 19,501-26,000 lbs.
  7. Class VII Truck = A truck with gross vehicle weight (GVW) of 26,001-33,000 lbs.
  8. Class VIII Truck = A truck with gross vehicle weight (GVW) of over 33,000 lbs.
Truckload (TL) - Large-volume shipment from a single customer that weighs over 40,000 pounds or takes up the trailer space so no other shipment can be loaded. Also a quantity of freight required to fill a truck. Or when used in connection with freight rates, the quantity of freight necessary to qualify a shipment for a truckload rate. Historical definition is a shipment of 40,000 pounds or more.
Twin Trailer (Short Semi-Trailer) - A short semi-trailer (under 29 feet) designed to be operated as part of a combination vehicle with a tandem trailer of similar length.

U

UN Number - An internationally accepted 4-digit number used to identify hazardous material.
United States Department of Transportation (U.S. DOT) - The government organization that oversees and regulates the transportation in the U.S.

W

Waybill - Description of goods with a common carrier freight shipment. A waybill is a non-negotiable document prepared by or on behalf of the carrier at the point of shipment origin. The document shows point of origin, destination, route, consignor, consignee, description of shipment, and amount charged for the transport service.