Freight shipping is overwhelming for any business owner. However, if you want to find the best shipping strategy that will work for you and your customers, it’s critical to understand common shipping terms.
We don’t expect you to know everything under the sun about freight services. However, you should at least know the important terms that you will encounter during deliveries.
Adding these 5 shipping terms to your vocabulary is a great way to start taking control of your business shipping strategy.
Bill of Lading (BOL)
As a business owner, it’s important that you keep track of all documents, including the ones involved with shipping.
Bills of ladings are important for the shipment because they serve as:
- Receipts for shipped goods
- Evidence of a contract between shipper and carrier
- A document of title
The bill of lading serves as the receipt for every shipment –– the carrier issues it upon picking up your package.
This contract between you (the shipper) and the carrier will contain details, including:
- The type of goods being shipped
- The owner of the goods
- Pick-up destination
- Final destination
Any mistake in the bill of lading can cause delays in shipment or even delays in payment for a shipment. Without a correct bill of lading, packages can get lost and it will be difficult to receive compensation for the loss.
There are different types of bills of lading forms depending on the method that you transport your goods. The most common are:
- Straight bill of lading: for goods where the end-user has already made payment.
- “To order” bill of lading: negotiable documents for the transfer of ownership of goods outlined in the BOL to another party. This document is endorsed by the party listed as the ultimate consignee.
- Inland bill of lading: first transportation document for international cargo traveling by road or rail
- Ocean bill of lading: for shipment of goods overseas by sea that authorizes other parties to take possession of the package; can be a straight bill of lading or a “to order” bill of lading
- Air bill of lading: the equivalent of an ocean bill of lading by air freight; however, it does not involve negotiable documents
- Multimodal bill of lading: for packages shipped through a variety of shipping methods
Less than Truckload
Less than truckload or LTL shipment is the transportation of freight that is more than 150 pounds but is less than the capacity of a trailer. In other words, it is used by shippers with more than a parcel shipment but less than a full truckload.
Various shippers will transport goods in one truck, and each will pay only for the space consumed by their goods. Small businesses usually switch to LTL as an efficient and scalable shipping method over parcel shipping. This is because it’s such a cost-effective option.
When calculating for less than truckload prices, the dimensions of the parcel, freight route, distance traveled, type of goods, and delivery time will be factored into the costing.
To give you an idea of how less than truckload shipments work, carriers will usually collect LTL shipments from different shippers into one container.
This truck will then move through a network of hubs and spokes. It starts from the collection terminal until the end destination. Basically, hoods are collected at spoke terminals and then to hub terminals where they are sorted and transported.
Estimated Shipping Time
Estimated shipping time shouldn’t be confused with shipping time.
An estimated shipping time or date is an educated guess on when the delivery will be shipped out. It may not always be accurate due to delays and order fulfillment cutoffs.
Estimated shipping times are given to customers to let them know when they should expect their order to be shipped and delivered.
The shipping time, on the other hand, is the exact date and time that an order goes from the seller or warehouse to the customer. If you offer same-day shipping or two-day shipping, then customers will expect their package to arrive at a date based on the actual shipping date.
Guaranteed Capacity
For regular freight bookings, carriers will try to ensure that a shipment is on a trailer before the estimated shipping date. Since space is not a guarantee, carriers will have to inform the shipper of any delays.
Forwarders will need to look for alternative space by offering premium space, space with a different carrier, or delayed space with the same carrier at an updated price.
Due to the high demand for freight services, Carriers are offering “guaranteed capacity” to shippers who want to prepare for the anticipated peak season. This is due to the high demand for freight services, Shippers who want to get a degree of certainty with shipping volume will need to pay a premium to lock in that capacity.
With guaranteed capacity, forwarders will pass the booking to the carrier once the booking receives confirmation. The vessel and transit details will then be provided by the carrier.
24/7 Service
24/7 refers to services that are provided around the clock, from Monday through Sunday.
Some carriers might only accept bookings on weekends until 5 PM. Shipping services that offer 24/7 service will allow convenient quotation, booking, and confirmation any time of the day. This is important for small businesses that need to meet strict deadlines for shipment.
24/7 service is critical for shipping, especially for customer support. Should you need to inquire about the status of your delivery, the carrier will be able to address them.
An online freight marketplace will usually offer 24/7 services to small businesses.
Shipping with GoShip.com
Understanding small business shipping can be difficult, especially if you’re just starting out. You can trust a convenient and reliable freight marketplace like GoShip.com to assist you through the process!
GoShip.com works with the top freight providers in the US. So you don’t have to break your back looking for affordable and secure shipping services for your business.
All you have to do is enter your cargo details (load type, pick-up date, pick-up destination, and end destination) in our online calculator. We’ll then connect you with the best freight companies for you.