43 shipping and fulfilment terms that you need to know

2022-05-11

Written by David Renwick

Shipping and fulfilment can get complicated. Whether it’s working out the difference between a 3PL and a 4PL, DDP and DDU or what exactly a webhook is, there’s a lot to get your head around. We’re here to help.

We’ve asked the Starshipit team of experts in customer success and sales – and they’ve answered. In this article, you’ll find a list of the most common shipping and fulfilment terms that we come across on a daily basis.

Of course, if there’s a term you think we’re missing, feel free to let us know!

3PL (Outsourcing warehousing)

Third-party logistics (3PL or TPL) is when an organisation uses third-party businesses to outsource elements of fulfilment. For example, elements like distribution, shipping and warehousing.

4PL

Fourth-party logistics (4PL or FPL) enable businesses to completely outsource supply chain management, typically by overseeing other 3PLs, warehouse operations, and shipping.

API

Application programming interfaces (APIs) are sets of protocols, tools and procedures that allow different applications and systems to work together. An API enables businesses to incorporate new solutions with minimal effort. An API connects to separate business tools together. E.g., connecting Shopify with Starshipit, and Starshipit to MyPost Business.

Actual weight/Dead weight

This is the physical weight of your product. When you place the package on a set of scales, this is the actual weight/dead weight.

Automation

The process of making a process, system or technology operate automatically. In shipping, automation can be a powerful tool for freeing up staff and introducing efficiencies.

Commercial invoice

An export document that serves as legal evidence of a sale transaction between a buyer and a seller. It's mainly used for clearance purposes for customs and helps in the assessment of duties and taxes payable.

Courier (Not carriers)

Companies or employees that deliver messages and packages from one location to another.

eCommerce

Also known as electronic commence or internet commerce, eCommerce refers to the process of buying and selling goods or services over the internet, as well as the related transactions. We don’t use: Ecommerce, e-commerce or any other variation.

CSV

A comma-separated values (CSV) file is a text file which contains a list of data. When using Starshipit, if your eCommerce platform isn’t supported, you can use a CSV file to import your orders into Starshipit.

DDP (Delivered Duties Paid)

Delivered duty paid (DDP) is a delivery agreement where a seller assumes all responsibility of transporting the goods until they reach an agreed destination as well as paying any applicable duties or taxes that are related to the goods.

DDU (Delivered duties unpaid)

Delivered duty unpaid (DDU) means that it's the customer's responsibility to pay for the destination country's customs charges, duties or taxes. These must be paid in order for customs to release the shipment after it arrives.

Drop shipping

A method of retail fulfilment where a business doesn’t keep the products it sells in stock, Instead, the business purchases the products from a third party that ships the products directly to a customer.

Duties and taxes

Duty refers to a form of taxation levied on certain goods, services, or other transactions. People and corporations may be required to pay levies on imports and exports by governments in the form of customs duties and other taxes (E.g., GST or VAT).

Freight aggregator (Freight broker)

Fulfilment automation solution that offers pre-determined shipping rates to businesses

Also a solution which controls the shipping rates available for businesses.

Freight enabler

Fulfilment automation solution that allows businesses to negotiate their own shipping rates with couriers.

Fulfilment

Order fulfilment is the process covering the initial transaction or sale through to the final delivery to the customer.

Fulfilment location/Fulfilment centre

These are the warehouses used by 3PLs to store and then distribute products.

Fulfilment vs shipping

Shipping refers to the act of transporting products to an end customer, whether that means an actual consumer, a distributor or retailer. Fulfillment refers to the steps and solutions you’re able to choose when processing, receiving and delivering orders.

Incoterms

Incoterms are a set of 11 internationally recognised rules which outline the responsibilities of both buyers and sellers. Incoterms outline who is responsible for paying for and managing shipments, insurance, documentation, clearance for customs, and other details.

Integration

For businesses, software integration refers to bringing together different systems to operate as a more cohesive unit. Integrations can link software, APIs, data and devices.

Integration partners

  • Tech partner: Online platforms like eCommerce management systems, 3PLs, accounting platforms and retail systems.
  • Courier partner: Integrated courier companies such as DHL, Royal Mail, UPS, NZ Post and others.

Label vs orders vs shipments

  • Label: Each individual box will have its own label (Starshipit bills per label not per order).
  • Orders: Everything that one customer has purchased together - one ‘checkout’ so it can have multiple items, multiple shipments, and/or multiple labels.
  • Shipments: Generally, this means the process of shipping a product, but we tend to stay away from the term because people interpret it and use it in many ways.

Manifest

A manifest is all of information about the goods carried on a type of transport (like a ship, airplane, truck or train), together, with information about the transport. This could include characteristics, identification and route.

Marketplace

An eCommerce website that connects sellers directly to buyers.

On-demand delivery

On-demand delivery is when a business uses shipping automation, analytics and online platforms – typically all integrated – to supply products to customers in the shortest possible time and with a variety of shipping options that are most convenient for those customers.

Package

A parcel that does not fall into the mail processing category of letter-sized mail or flat-sized mail.

Packing slip

A document which describes the contents of a particular shipment to a customer. This document contains the product number, description and quantity shipped. The packing slip is produced per order.

Parcel

The physical box that an order is shipped in.

Pick and pack (Process)

Collecting ordered items from the inventory (typically in a warehouse) and packing them for shipment to a customer.

Picking list

A document used in a warehouse which fulfilment staff use to go and pick ordered items. This will produce a list of all orders and include items on one sheet, rather than individual per order.

SaaS

Software as a service (SaaS) means delivering software applications over the internet as a service. Instead of downloading and installing an application, SaaS products are accessible via a web browser. The monthly or yearly subscriptions involved with SaaS cover things like software updates and new features, in addition to your use of the product.

Satchel

A satchel is a bag type typically ranging in size from A5 up to A2, or around 5kgs.

Shipping label

A shipping label contains all the information a courier requires to deliver a package to its destination. This information includes the names, addresses, tracking codes, weight and more.

Shipping notifications

Shipping notifications let customers know where their orders are. These notifications are typically triggered when an order reaches key milestones, such as when the order is received and when it’s out for delivery with a courier.

  • Email and SMS notifications: Order notifications sent via email and SMS, often linking to a branded tracking page with more information.
  • Branded tracking page: An order tracking page that includes elements such as a business's logo, branding and links.

Ship from store

A shipping model that allows sellers to use inventory held in physical store locations and sell it through eCommerce channels. Ship from store allows businesses to more easily sell all units of stock and reduce delivery distance.

SKU

A stock keeping unit (SKU) is a scannable barcode, typically seen on product labels. These codes allow retailers to track the movement of inventory. Every variation of an item will have a unique code, which is determined by the retailer. For example, a red shirt in size L will have a different code to a red shirt in size M.

Starshipit

The number one provider of integrated and automated fulfilment solutions for businesses of all sizes in Australasia.

Shipping rates

Live rates at checkout: Pass through courier rates to the customer. Our rates are mostly based on weight, not dimensions, so this system doesn’t work well for unwieldy/large items. Better for people shipping products that are all the same size.

In-app rates: When processing a shipment, you can see the live rates (updates when changing box size etc). Click on the order, see all the integrated couriers and see the totals etc. Multiple packages etc.

Volumetric/Cubic/Dimensional weight vs. Dead/actual weight

A parcel’s volume which determines how much space it will take up in a courier van or aircraft. Most couriers have a calculation they use to determine this weight (often found on their website). When a courier charges a customer, they will often choose the greater of the actual or volumetric weight. This is determined by the courier directly. Typically, retailers with small and regular sized items will only be charged on dead/actual weight.

Volumetric/cubic/dimensional weight is determined by how big the size of the parcel is. This is determined by the ‘Packages’ in Starshipit. Dead/actual weight is determined by how much the package weights in g/kg’s.

Webhook

A form of API which powers one-way data sharing and is triggered by an event. As they are lightweight, webhooks are an effective way for web applications to communicate with each other. An example of a webhook could be a marketing automation tool automatically sending a review email to a customer after an order.

Starshipit provides webhooks for our customers to use to receive tracking updates to their custom URL.

Writeback

Writeback (or write-back) is a storage method where data is written to a cache every time a change occurs but is only written into the corresponding main location in main memory at specified intervals or when certain conditions are met.

At Starshipit, a writeback is the process in which Starshipit sends the tracking number back to the eCommerce platform of a customer and fulfils the order.

Wrap up

That’s our list of shipping terms – are there any we’ve missed? We’d love to hear your suggestions.

If you’re interested in taking your shipping operations to the next level, the best place you can start is with a powerful shipping and fulfilment platform. Get in touch with the team at Starshipit today if you’ve got any questions or sign up for a 30-day free trial to see how it works for your business.

David Renwick

David Renwick

David is Starshipit's Content Marketing Lead. When he's not whipping up a fresh new product update or chatting to customers for an exciting case study, you'll typically find him scoping out coffee spots and talking about what's on at the movies.

More from this Author