Freight Payment Glossary

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Below are freight payment terms commonly used in our industry.


3rd Party Logistics (3PL):
used to describe a company that arranges for the transportation of freight when they are not the manufacturer of goods, nor the owner of goods. 

Accessorial charges:
Additional charges assigned by trucking companies for services considered to be outside the origin scope.

BOL or Bill of lading:
document that is the contract carriage between the shipper and carrier.

Break Bulk:
the separation of consolidated, bulk load into individual, smaller shipments for delivery to the ultimate consignee.

Break Points:
mathematical weight point, after which it becomes less expensive for the client to pay for a delivery at the next higher weight classification, which will also be a lower weight. For example 0-500lbs at one price, and 501-1000lbs at slightly less expensive rate.

an intermediary between the shipper and the carrier who arranges transportation.

same as delivery.

cash on delivery.

Collect billing:
freight charges are paid by consignee.

to transfer to another's custody or charge.

the receiver of a freight shipment.

the sender of a freight shipment.

a storage unit that does not have wheels permanently attached to the bottom and is at ground height. Sizes can range from 10-40feet. The most common sizes are 20 feet and 40 feet.

"Cost plus" model:
when a freight management company agrees to haul merchandise for a predetermined percentage that is in addition to the freight costs.

the volume of the shipment or package (length x width x height).

When freight is unloaded from one trailer onto a dock and then reloaded onto another trailer that is headed toward the freight's final destination.

the charges assessed by the motor carrier when the shipper/receiver holds a truck trailer beyond the free time allowed for loading or unloading. Industry standard in truckload transportation is four hours free.

industry slang term used in airfreight to describe the dimensional weight of merchandise.

a term used to describe the unloading of containers on a steam ship.

Expedited Shipment:
when the normal transit time of a shipment will not get the merchandise to the destination when needed, and a faster form of transportation is used. Examples of expedited shipments: hot shots, team drivers, and airfreight.

the trailer used by over the road motor carrier, which allows for the transportation of oversized or specialty items that can be exposed to outside conditions.

Freight Bill:
the carrier's invoice for transportation charges applicable to a freight shipment.

Freight Claim:
when merchandise is either delivered over, short or damaged and reconciliation must be made with the trucking company for payment of goods.

Freight Class:
a number ranging from 50 to 500 that is assigned by the NMFC and used by less than truckload carriers to determine at what rate freight should be charged.

Freight Management:
when a 3rd party logistics provider is utilized to negotiate and manage the shipping of all goods, no matter which modes of transportation are necessary to get product there.

Fuel Surcharge:
an additional charge by carriers to compensate the rising and lowering price of fuel, usually a percentage of an established rate.

Gross Weight:
the total weight of the vehicle and payload of freight or passengers.

Inside Delivery:
when driver is expected to unload freight and place inside building in predetermined area. This does not include un-cartoning, set up, or installation.

two or more carriers work together to haul shipments to a destination.

Less than truckload (LTL) shipment:
when only part of the loading capacity of a trailer is used.

Line-haul carrier:
carrier that picks up goods from a region they are domiciled out of, but goods are consigned to an area in which they are not domiciled.

NMFC (National Motor Freight Classification system):
a numbering system that is used to determine the rate at which freight charges should be applied according to weight for less than truckload carriers.

OS&D (overage, shortage or damage):
Typically referred to as Loss & Dage claims when a shippers freight is damaged or lost in transit by the carrier they tendered the freight to.

Prepaid billing:
freight charges paid by shipper or third party.

Small (usually 20' to 28') trailer that is utilized by less than truckload carriers. Often, these trailers are hooked together in groups of two or three to ship merchandise from one destination to another.

when the full loading capacity of a trailer is used for shipping product. The most common types of truckload trailers are 53 feet and 48 feet long.

Slang term for an enclosed trailer used by over the road motor carriers, which allows for the transportation of up to 45,000+ lbs or a 48' to 53' truck, whichever is greater.  Also known as a standard trailer.

Our Enterprise

Commercial Traffic was founded in 1923 and serviced clients with personalized audit and payment of their freight bills. It was the start of CT Logistics.

CT Logistics' Global Freight Audit unit, based in Birmingham UK, provides a wide range of global service offerings.

Commercial Transportation Management Services provide a complete 3PL product delivery system based on procurement services and management of a national contracting system.

Commercial Transportation Services provides freight rating, freight payment, auditing, expense allocations, freight bill auditing, freight billing process and management reporting software.