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Inventory, warehouse, and distribution technology for logistics professionals

The Ultimate Logistics Technology Glossary

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Ever wonder what 3PL means or how RFID is going to help the logistics world? You’re in luck. Here, we present the ultimate guide to logistics technology – assuming you don’t count Wikipedia, which has a few more entries than we can manage.

logistics technology glossary

3PL

3PL is shorthand for “third-party logistics,” which is just a way of saying “outsourced.” 3PL providers offer logistics capabilities to companies that don’t have in-house logistics operations. So if you run a company that needs to warehouse and ship a product, for instance, but you don’t own a warehouse or any trucks, these guys can take care of the heavy lifting.
The clear trade-off is between cost – which is kept low – and control – also low. Some consumer brands, like Ryder and Penske, also offer 3PL services.

API 

An API is an acronym for “Application Programming Interface,” which is a term no one ever says aloud, except when explaining what API stands for. An API is a fairly basic piece of the modern world, but it has special meaning in logistics.
APIs are often used to connect one type of software or service to another. Google Maps, for instance, has an API that regular schmucks can use to pull information from the service to use in their own programs. In logistics, APIs are what we’re all assuming will eventually lead to the death of EDIs (see EDI, below). APIs offer more flexibility, less headache, and are just generally a better way of talking to the enterprise you’re dealing with.

Augmented reality 

Augmented reality is like the half step between virtual reality and actual reality. Imagine looking at your desk and seeing a digital cat superimposed on the world. That’s augmented reality.
In logistics, AR has some incredible applications. Imagine looking out at a warehouse and seeing the status of all your operations. Or stepping up to a trailer and seeing its contents without opening the door. Or just having GPS directions overlaid in your vision, instead of having to look at a screen. AR is both cool and useful

Autonomous trucking 

Autonomous trucks are the future – especially if you believe the future that’s laid out in the new Wolverine movie. Autonomous trucks offer all the benefits of drivers without all the personnel issues. The idea of a completely autonomous fleet is still a ways out – I think – but I’ve seen some interesting ideas about convoys of these things, lead by a single human navigator. That’s interesting.

Collaborative logistics 

Collaborative logistics is a term for the emerging shared logistics economy. It’s a bit of a halfway house between classical logistics and 3PL (see 3PL, above), where companies share their resources instead of reaching out to a third-party.
Imagine four companies all managing and working out of the same warehouse or sharing a fleet of trucks. These scenarios give you more control over your own operations than a 3PL but still save on costs by sharing the load.

EDI 

An electronic data interchange is a holdover from the 1970s that makes working with large companies frustrating and complex. It’s also the standard for logistics data conversations, for the time being.
At its core, EDIs are just ways to structure data so that everyone agrees on the contents of the data. Instead of having your funny looking invoice with the duck logo in the middle and the total written out in longhand, EDIs work of a common structure that puts everyone’s information all in the same place each time.
Instead of Walmart getting a billion invoices that have to be hand-sorted, it gets a billion invoices that can be easily read and processed with minimal human intervention. EDIs are likely to disappear as APIs catch on.

ERP 

Enterprise resource planning. An ERP is software that takes all the disparate parts of a business and slams them together. Traditionally, ERPs were used in manufacturing, but they can now be found in all sorts of businesses.
The key to an ERP – again, from my perspective – is that it allows the user to see one version of the truth. In a siloed business, you may have six different ways to count and attribute revenue. In an ERP, there is one measure. This makes it easier to manage a complex system, where customers, employees, products, and sales efforts are all intertwined. ERPs are some of the more interesting bits of software around.

Fleet management 

Fleet management is the process of keeping a collection of vehicles operating at peak performance. This used to require huge reams of paper and stickers and drivers remembering to do things, but it’s now mainly taken care of by software.
Current fleet management software options allow you to schedule maintenance, track usage through GPS, collect service data on mobile devices, and send reminders to crew members when they need to bring vehicles in for service. A well-run fleet management system can keep an enormous number of trucks and vans running smoothly with little undue stress.

Freight forwarding 

Freight forwarding is a service that manages the complexities of shipping for a customer. Imagine having to send products to five different countries. Each one is going to have different shipping rules, taxes, packing requirements, and final mile (see below) systems.Freight forwarders know the ins and outs of shipping and can get a package from point A to Z without too much headache.
Freight forwarding is knowledge game. It’s all about knowing the right people and the right systems to get things done. As more information and availability is moved online, freight forwarding is likely to move into a more niche world – managing shipments to developing countries, for instance.

Intermodal freight transport

Intermodal freight transportation uses intermodal containers to move goods around the world. Intermodal containers, in turn, are containers that are designed to be used with a variety of different transportation options.
An intermodal container can ride on a truck, be turned into a train car, and then be stacked on a ship. When you drive by a port or see a train roll by, you’ll see hundreds or thousands of these things. It’s an incredibly basic idea – same box, different vehicle – but it’s changed the way we ship products since WWII.

IoT 

The internet of things is a collection of everyday devices all talking to each other in intelligent ways. The old example is your fridge texting you when you’re low on milk – which is stupid. Instead, think of a device that sits on a truck, tracks the contents of the truck using RFID (see below), keeps a running log of stops, door opens, speed, and temperature. If anything is out of place, connects to a central unit and alerts the monitoring team.
That’s already a real thing. It’s called BlackBerry Radar, and it’s one of the most interesting IoT devices out there. As we get further and further into the IoT world, more and more monitoring and processing will happen automagically.

Last mile 

Last mile logistics is a term for the hardest part of any shipment. Interstates, train tracks, and ports are all over the USA, but no one lives on them. You can’t just throw an Amazon package out the window while cruising down I-10 and have it land on the right doorstep.

Last mile logistics is a term for the hardest part of any shipment. Interstates, train tracks, and ports are all over the USA, but no one lives on them. You can’t just throw an Amazon package out the window while cruising down I-10 and have it land on the right doorstep.
Last mile logistics is the process of moving cargo from shipping hubs to its final destination. This is a space where Uber and other shared-economy businesses are starting to see some value. It’s one of the most interesting parts of shipping because it’s so inconsistent.

RFID 

Radio frequency identification is a way to track and manage shipments – or cats – using small transmitters that emit radio frequencies either on their own or when electronically prodded.

Radio frequency identification is a way to track and manage shipments – or cats – using small transmitters that emit radio frequencies either on their own or when electronically prodded.
RFID tags allow you to quickly scan products, without using a barcode scanner and without opening or interfering with containers. RFID can help speed up processing and automate sorting and picking.  

Warehouse management system

A WMS is a piece of software that does what it says on the tin – it helps manage a warehouse. Imagine this as a step up from inventory management and a step back from an ERP. If you need more than just to know what’s in a room, but you don’t need to know which customer is working with your sales team at every given moment, a WMS might be for you.
The beauty of warehouse management is that it helps you keep track of a real physical space. You can manage sublocations within a warehouse, for instance, so that you can easily locate inventory. Very helpful when your warehouse is literally spread out over acres.

I know I’ve missed something out. Feel free to drop a line in the comments to let me know what it is and we’ll get this updated to keep the knowledge coming.

Looking for Logistics software? Check out Capterra's list of the best Logistics software solutions.

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About the Author

Andrew Marder

Andrew Marder is a writer for Capterra. His background is in retail management, banking, and financial writing. When he’s not working, Andrew enjoys spending time with his son and playing board games of all stripes.

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