Understanding Freight Terminology

The freight industry is complex and the supply chain gives rise to a wide range of terms and acronyms that refer to key aspects of the industry. Whether you are new to the freight industry or a seasoned veteran, keeping track of what each of these terms means can sometimes be challenging.

In this post, we do a quick refresher of some common industry acronyms, what they mean and how each one plays a role in helping the global supply chain work safely and efficiently.

Below are some of the most commonly used acronyms in the freight industry:

BOL: Bill of Lading

A bill of lading (BOL) refers to a document that a carrier provides to a shipper to acknowledge the receipt of the freight they are carrying. Some common details included in a BOL are what the freight is, its quantity and destination. The BOL also accompanies the freight to its final destination to serve as a way for the receiver to acknowledge its successful delivery. Most companies will not pay a freight bill unless a clean BOL is received showing there were no damages or missing product.

CDL: Commercial Driver’s License

Operating a commercial vehicle is a big responsibility. In order to ensure the proper training, most commercial drivers are required to obtain a commercial driver’s license (CDL) in their home state. To receive a CDL, potential license holders must pass both a skills and knowledge test. Some additional endorsements may be required if a driver is operating a special vehicle such as a tank truck or one hauling potentially hazardous materials.

CMV: Commercial Motor Vehicle

Just as commercial drivers need to obtain a special license, the federal government also classifies commercial motor vehicles (CMVs) in their own category. A CMV is defined as a vehicle used on the highways in interstate commerce to transport passengers or property. In addition to how it is used, a vehicle is classified as a CMV if it meets certain weight and passenger thresholds, as well as if it is hauling material designated as hazardous.

CSA: Compliance, Safety and Accountability

To be aware of these possibilities you must look beyond your own payment experiences and see what is happening through the eyes of others. How you do that is by getting a credit report. How you do that safety and compliance program of the Federal Motor Carrier Safety Administration. The program is designed to keep carriers and their drivers accountable for safety on our nation’s roadways. The program utilizes data from roadside inspections, crash reports and investigation results to identify carriers most at-risk and to prioritize them for interventions to improve their safety and potentially avoid future accidents and violations. TransCredit provides analysis reports on carriers that includes CSA data.

DSO: Days Sales Outstanding

Days sales outstanding (DSO) is a measure of the average number of days that it takes a company to collect payment for a sale. DSO is often determined on a monthly, quarterly, or annual basis. To compute DSO, divide the average accounts receivable during a given period by the total value of credit sales during the same period and multiply the result by the number of days in the period being measured. TransCredit provides credit reports with in depth analysis to help you maintain or improve your DSO.

DTP: Days to Pay

DTP refers to a company’s average days to pay. This number is compiled from the references reporting on a particular company and time it takes for a particular company to pay an invoice after a load is moved. TransCredit created the average DTP (Days to Pay) and trademarked this term over 30 years ago. You can find out your company’s average Days to Pay by contacting us today.

ELD: Electronic Logging Devices

An electronic logging device (ELD) is used to electronically track a driver’s Hours of Service. ELDs connect directly with a vehicle’s engine to record driving time, helping to improve the accuracy and visibility of driver records to help improve safety on the road for all drivers. ELDs became required for many fleets in the U.S. in 2019. Fleets can utilize the driver data provided by ELDs to improve driver and vehicle performance, empowering them to optimize available driver hours, proactively spot potential compliance issues and integrate driver and vehicle information with back-office systems.

FMCSA: Federal Motor Carrier Safety Administration

The Federal Motor Carrier Safety Administration or FMCSA is the lead transportation regulatory body of the U.S. federal government. The FMCSA is tasked with regulating and providing safety oversight to help reduce accidents and fatalities involving commercial vehicles. The FMCSA was established within the Department of Transportation and came into existence on January 1, 2000.

OS&D: Over, Short and Damaged

As freight moves throughout the supply chain, sometimes issues will arise - whether it is the wrong item(s) or quantities being shipped or freight is damaged in its journey. Over, Short & Damaged (OS&D) refers to any freight that fits this category and is used to help specify what went wrong so that carriers and receivers can rectify the situation appropriately.

HOS: Hours of Service

Hours of Service (HOS) refer to the time that CMV drivers spend on duty. This time can include driving time but can also encapsulate other time drivers spend on the clock. The FMCSA regulates HOS to ensure drivers are getting the proper amount of rest to ensure they stay awake and alert when behind the wheel.

POD: Proof of Delivery

Proof of Delivery (POD) is a document used to confirm that a shipment successfully made it to its destination. Initially paper-based, technology has evolved to digitize PODs and to help improve document management. Not only does this reduce paperwork but an electronic solution can help carriers speed up the invoicing process.

TMS: Transportation Management System

A transportation management system (TMS) manages the entirety of a transportation organization’s operations - from order entry, load planning and tracking to customer service, driver management and dispatch. By utilizing a TMS, transportation organizations get critical information in one place, including location data, statuses, ETAs, load details and driver and equipment information - all adding up to increased operational efficiency and productivity.

Expand Your Transportation Knowledge with TransCredit

The transportation industry has a lot of acronyms and understanding some of the more common ones is important. Continue checking TransCredit’s blog to stay up to date on the latest news from around the industry or Contact us today to learn more about our suite of services to help you navigate the transportation industry.