Logistics Glossary: F-N

F.A.S. (Free Alongside Ship) - The term f.a.s. must be qualified by a named port. The seller is liable for all charges and risks until the goods sold are delivered alongside a vessel at such port or are delivered to the port on a dock which will by used by the vessel. Title passes to the buyer when the seller has secured a clean dock or ship's receipt for the goods.

Fill Rate - The percentage of order items that the picking operation actually fills within a given period of time.

Finished Goods Inventory (FGI) - Products completely manufactured, packaged, stored, and ready for distribution.

Fixed Costs - Costs which do not fluctuate with business volume in the short run.

FOB (Free on Board) - Contractual terms between a buyer and a seller which define where title transfer takes place.

FOB Destination - Title passes at destination, and seller has total responsibility until shipment is delivered.

FOB Origin - Title passes at origin, and buyer has total responsibility over the goods while in shipment.

FOR (Free on Rail) - A term meaning that seller will make delivery as far as the railroad terminal named, or in case of overseas shipment, in harbor at port of departure, name of port stated. To avoid misunderstanding, since the term is often considered to be the equivalent of F.O.B. vessel, or F.A.S. vessel, the phrase is amplified further, f.o.r., cartage to vessel extra.

Foreign Trade Zone (FTZ) - An area or zone set aside at or near a port or airport, under the control of the U.S. Customs Service, for holding goods duty-free pending customs clearance.

Free Port - A restricted area at a seaport for the handling of duty exempted import goods, a foreign trade zone.

Freight at Destination - An expression meaning that freight charges will be paid by the consignee of goods upon their arrival at a specified destination.

Full-Service Leasing - An equipment-leasing arrangement that includes a variety of services to support leased equipment (i.e., motor carrier tractors).

Globalization - The process of making something worldwide in scope or application.

Handling Costs - The cost involved in moving, transferring, preparing, and otherwise handling inventory.

Hazardous Material - A substance or material which the Department of Transportation has determined to be capable of posing a risk to health, safety, and property when stored or transported in commerce.

Hundredweight - In the United States measurement and in domestic rail freight, 100lb; in English measurement and in ocean freight parlance a hundredweight, or cwt, is 112lb., or one-twentieth of a long ton of 2,240lb. Care should be taken in the use of this phrase to avoid confusion as to the exact meaning.

In Bond - The storage or transport of goods in the custody of a warehouse or carrier from whom the goods can be taken only upon payment of taxes or duties to a government agency.

Inbound Logistics - The movement of materials from suppliers and vendors into production processes or storage facilities.

INCOTERMS - International terms of sale developed by the International Chamber of Commerce to define sellers' and buyers' responsibilities.

Integrated Logistics - A comprehensive, system-wide view of the entire supply chain as a single process, from raw materials supply through finished goods distribution. All functions that make up the supply chain are managed as a single entity, rather than managing individual functions separately.

Intermodal Transportation - Transporting freight by using two or more transportation modes.

Inventory - Raw materials, work in process, finished goods and supplies required for creation of a company's goods and services.

Inventory Carrying Costs - A financial measurement that calculates all the costs associated with holding goods in storage, usually expressed as a percentage of the inventory value. It includes inventory-in-storage, warehousing, obsolescence, deterioration or spoilage, insurance, taxes, depreciation, and handling costs.

Inventory Deployment - A technique for strategically positioning inventory to meet customer service levels while minimizing inventory and storage levels. Excess inventory is replaced with information derived through monitoring supply, demand and inventory at rest as well as in motion.

Inventory Management - The process of ensuring the availability of products through inventory administration.

Inventory Turns - The cost of goods sold divided by the average level of inventory on hand. This ratio measures how many times a company's inventory has been sold during a period of time. Operationally, inventory turns are measured as total throughput divided by average level of inventory for a given period.

Inventory Velocity - The speed with which inventory moves through a defined cycle (i.e., from receiving to shipping).

Just-In-Time (JIT) - An inventory control system that controls material flow into assembly and manufacturing plants by coordinating demand and supply to the point where desired materials arrive just in time for use.

Kitting - Light assembly of components or parts into defined units.

Less-Than-Carloads - Abbreviation: l.c.l. - A quantity of freight which is less than the amount necessary to constitute a carload.

Less-Than-Carload - A rate applicable to less than a carload shipment.

Less-Than-Truckload Abbreviation: LTL. - A quantity of freight which is less than the amount necessary to constitute a truckload.

Less-Than-Truckload - A rate applicable to less than a truckload shipment.

Less-Than-Truckload (LTL) Carriers - Trucking companies that consolidate and transport smaller (less than truckload) shipments of freight by utilizing a network of terminals and relay points.

Logistics - According to the Council of Logistics Management (CLM), logistics is the process of planning, implementing, and controlling the efficient, effective flow and storage of goods, services, and related information from point of origin to point of consumption for the purpose of conforming to customer requirements.

Marginal Cost - The cost to produce one additional unit of output. The change in total variable cost resulting from a one-unit change in output.

Materials Handling - The physical handling of products and materials between procurement and shipping.

Materials Management - Inbound logistics from suppliers through the production process. The movement and management of materials and products from procurement through production.

Materials Requirements Planning (MRP) - A decision-making methodology used to determine the timing and quantities of materials to purchase.

N.M.F.C. (National Motor Freight Classification) - A tariff which contains descriptions and classifications of commodities and rules for domestic movement by motor carriers in the U.S.