Warehouse Terminology Explained

Even if you work in the warehouse and logistics industry there will likely be some existing phrases or warehouse definitions you do not know the meaning of, or new abbreviations that you’ve never heard before.  Below we go through the most common warehouse terminology to explain their meaning, so you always know where you stand.

3PL

Short for third-party logistic providers. These are outsourced logistic providers who specialise in distributing, warehousing and fulfilment, depending on the requirements of the client.

ASIN

Amazon assign a unique 10-character alphanumeric code to every product. ASIN stands for Amazon Standard Identification Number.

ADC

Automated Data Collection is the electronic capture of data from physical sources. It makes it easier to gather a large amount of data that can be tracked via a central system.

Backhaul

Moving goods from their final destination back to their origin point. With warehousing, backhauls can be truckloads of goods that customers have returned or requested an exchange.

Batch picking

A method of order picking where multiple orders are picked by an individual picker.

Back order

A purchase order for an item that is currently out of stock.  Often with fast selling items, a warehouse runs out of stock before they get more from the supplier or manufacturer.

Bar coding

A machine-readable identification system used to track, scan, and process inventory.

BOL

An official document detailing items contained within a shipment.

BOM

A bill of materials details all the items that are need to build a particular product.

Bonded Goods

Imported shipments that have various duties, taxes and any penalties still outstanding for payment.

Buy-to-Detail Rate

How many items were purchased per the amount of times the item was viewed.

Cantilever rack

Storage solution with prongs rather than shelves that are used to store long and/or oddly shaped items. Cantilever racks may be free-standing or mounted to a wall.

Cart-to-Detail Rate

How many products were added to a shopping cart per the amount of times the item was viewed.

Cargo Manifest

A full list of details of the goods (quantity, type, destination etc.) that will be declared at customs.

Certificate of Origin

Documentation that shows which country a particular product has originated from.

Cross Docking

The movement of goods from the incoming area to the shipping area before being shipped. There is no storage of goods in this process.

Cold Storage

Acold storage warehouse is building or facility designed to maintain certain environmental conditions to keep temperature sensitive products safe

COGS

This stands for the cost of goods sold.

CPG

Consumer packaged goods relates to products that are frequently purchased and replaced by customers.

Cross Aisle

This is a right angled passageway that is used to move around equipment, supplies and for staff.

Customs Declaration

Official documentation that shows details of the goods that are being exported or imported.

Dimensional weight (DIM):

A measurement used by couriers and shipping carriers to determine the cost of sending goods.

Drop Tailer

A truck trailer that is dropped off for loading and then picked up at a later time. Sometimes couriers will have a driver drop off an empty trailer and pick up a full one to maximize efficiency

Drop-Shipping

A delivery method where the company does not have store goods in a warehouse and uses a third-party company to deliver direct to the customer. Learn about comparing drop-shipping and stock management here.

EPC

Stands for Electronic Product Code. This code serves as a unique identifier of a particular product.

EXW

Ex-works is when a seller packages goods and makes them available at a certain place, usually their depot or factory, and the buyer is responsible for collection and delivery.

FMCG

Fast Moving Consumer Goods. This refers to products that sell out quickly and are in high demand, such as shampoos, eggs, milk etc.

FIFO

First In, First Out, is based on the assumption that the oldest merchandise is always the first sold. It’s an accounting method used to work out profitability of a particular line of goods.

Freight Shipping

This is when goods are transported either by land, sea or air.

Free Zone

A free zone is a designated tax free zone (usually an airport, seaport or warehouse) which enables companies to import their goods without any tax or custom duty charges.

Flat Rate Shipping

Regardless of a packages size or weight, flat rate shipping applies a single rate.

MSRP

Manufacturer’s suggested retail price. It can also be known as suggested retail price (SRP) or recommended retail price (RRP).

Multichannel Retailing

A selling technique used by brands that involves making goods available across an array of channels both in physical and in digital form.

QR Code

Stands for Quick Response Code. A scannable code comprised of black and white blocks used by cameras, mobile and handheld devices to store various points of data.

Omnichannel Retail

These enables customers to have access to a unified shopping experience across all channels – including physical stores, mobile devices and desktop.

Order Management Software

Technology that allows you to track and fulfil orders, helping to increase efficiency and cost saving practices.

Order Picker

A member of staff that is responsible for picking orders from storage units and making them available for packing being shipping.

Order Tracking

Companies have constant visibility of their products from the moment it leaves their warehouse until it is delivered.

Picking Lists

Information given to warehouse workers responsible for picking and fulfilling customer orders.

Prohibited Items

These are goods that are not allowed to be sent via delivery as they are considered too dangerous. This could be things such as aerosols, perfume or nail varnish.

Real-Time Carrier Shipping Rates

When your exact shipping rates (based on the carrier’s latest rates) are sent to the customer when they are placing an order so you do not over or undercharge.

RFID

Stands for Radio Frequency Identification. An electronic field commonly used in handheld devices to identify and track tags that are attached to products in storage.

Same-Day Delivery

A delivery service that enables goods to be delivered directly to the customer on the same day they were ordered.

Ship Contents or Goods

This relates to the products or goods that are inside the parcel being delivered.

Shipping Zones

Geographical zones that the delivery carrier will send your products to. Costs vary from zone to zone and you can opt out of some zones if the costs are too expensive.

Shrinkage

This is the calculation of stock lost as a result of damage, theft or admin errors.

SKU

Stock Keeping Units are codes that are used to identify stock and attach other relevant information to.

Storage Racks

Supply Chain

The supply chain is the flow of events that occur across manufacturing, storage and delivery.

Transit Times

How long it should take goods to travel from port to port. This the planned time and can change depending on how many hubs are involved in the order.

Universal Product Code (UPC)

A unique barcode and 12-digit number assigned to products and managed by the Global Standards Organization.

Waybill

The official label giving instructions and details that will be placed inside the shipment package.

WMS

Warehouse Management System. A centralised digital system that is used to manage the inventory stored in the warehouse.

Volumetric Weight

This is the total weight of the package. You calculate the volumetric weight by multiplying the width, length and height in centimetres. Divide that total figure by 5,000 (some carriers use 4,000), with the final measurement in volumetric kilograms.

Zone Picking

A picking process where a team of pickers picks products from a particular zone and then combines picked items before packing. Often used in larger warehouses with clearly designated storage areas.