Logistics Vocabulary Flashcards

Introduction to Logistics Vocabulary

Understanding the language of logistics is essential for anyone involved in the movement, storage, and management of goods. This lesson covers key terms, incoterms, inventory methods, and technology concepts that appear frequently in supply‑chain discussions. Each concept is defined, contrasted with related ideas, and illustrated with examples to reinforce learning.

Air Freight

Air freight refers to the cost and process of transporting goods by aircraft. In Vietnamese, this cost is called Cước hàng không. Unlike land‑based transportation, air freight offers speed but typically higher expense.

• True statement: Air freight involves aircraft, not trucks or trains.
• False statement: Air freight is a land transportation method.

Customs Processes

When goods cross international borders, they must undergo customs procedures.

Customs Clearance

The English term for the Vietnamese "Thông quan" is Customs clearance. This is the final approval that allows goods to move freely after all duties and regulations are satisfied.

Customs Declaration

While clearance grants permission, a Customs declaration is the detailed paperwork submitted to customs authorities. It provides information about the goods, their value, and origin.

In summary, clearance is the authorization; declaration is the information supplied.

Inventory Valuation Methods

Two common methods determine which inventory items are sold first.

FIFO (First In, First Out)

FIFO means the oldest items are sold first. This approach matches the natural flow of many perishable goods and helps maintain accurate cost accounting. The statement "FIFO means the most recently received items are sold first" is False.

LIFO (Last In, First Out)

LIFO sells the newest items first, which can be advantageous in environments where prices are rising, as newer, higher‑cost items are recognized as cost of goods sold.

Incoterms: FOB

Incoterms define responsibilities between buyers and sellers in international trade. FOB stands for Free On Board. Under FOB, the seller’s obligation ends when the goods are loaded onto the vessel. Therefore, the claim that the seller is responsible for freight costs to the destination port is False.

Third‑Party Logistics (3PL) and Fourth‑Party Logistics (4PL)

Logistics providers are categorized by the scope of services they offer.

3PL – Third‑Party Logistics

A 3PL provider offers logistics services such as transportation, warehousing, and distribution. Most 3PLs do not own the transportation assets they use; they lease or contract them. Hence, the statement that 3PL providers own the transportation assets is False.

4PL – Fourth‑Party Logistics

A 4PL acts as a logistics coordinator, integrating and managing the entire supply chain rather than merely providing services. It oversees multiple 3PLs and aligns them with the client’s strategic goals.

Technology in Logistics

RFID – Radio Frequency Identification

RFID stands for Radio frequency identification. It uses radio waves to identify and track tags attached to objects, offering real‑time visibility without line‑of‑sight. RFID is not a type of barcode; barcodes rely on optical scanning, whereas RFID relies on radio communication.

WMS – Warehouse Management System

WMS stands for Warehouse management system. This software controls warehouse operations, including receiving, put‑away, picking, shipping, and inventory counting. It is more comprehensive than a simple inventory count tool.

TMS – Transportation Management System

While WMS focuses on storage and handling, TMS manages transportation planning, routing, and freight payment. Together, WMS and TMS provide end‑to‑end logistics visibility.

Key Shipping Document: Bill of Lading

The Vietnamese term for "Bill of lading" is Vận đơn. This document serves three critical functions:

1. Receipt for shipped goods.
2. Contract of carriage between shipper and carrier.
3. Title to the goods, which can be transferred to others.

Therefore, the statement that a Bill of lading is not a contract of carriage is False.

Summary Table

Conclusion

Mastering these logistics terms equips you to communicate clearly across supply‑chain functions, negotiate contracts, and leverage technology effectively. By distinguishing between similar concepts—such as clearance versus declaration, or FIFO versus LIFO—you can make informed decisions that optimize cost, speed, and reliability in the movement of goods.