Warehousing terms, and what each one commits you to.

The terms that decide what gets counted

These describe the shape of an invoice rather than its size. How warehousing is priced is a subject of its own and has a full guide, so this is the short version — the words below are the ones that change what is being counted in the first place.

• Pallet position — a rented slot in the racking, charged whether or not it is full
• Cube — charges the volume your product occupies rather than the floor it covers, which rewards anything that stacks
• Dedicated space — a footprint reserved for you and billed whether you fill it or not, as against shared space you occupy alongside other accounts
• Dwell time — how long the average pallet sits before it leaves. It drives storage cost far more than pallet count does
• Turn rate — how often stock cycles. Fast turns shift the weight of an account off storage and onto handling
• Accessorial — any charge outside the base lines: receiving outside a booked window, pallet rebuilds, unscheduled counts, disposal
• Minimum or guarantee — a floor you pay against whether or not you use it, and the usual reason a low headline rate stays workable for the provider

The terms that decide how freight gets in and out

This is where the vocabulary is used most loosely, and where using it loosely costs the most. Four pairs are worth getting exactly right, because in each pair the two words commit different parties to different things.

• Live unload — the driver waits while the freight comes off. It commits the warehouse to a fixed window and the carrier to sitting in it
• Drop trailer — the trailer is left at the dock, stripped on the warehouse's schedule, and collected later. It removes the window and needs yard space to work
• Demurrage — charged by the terminal or ocean carrier while a container sits at the port beyond its free time
• Detention — charged for holding the carrier's equipment, container or trailer, once it has left the terminal
• Drayage — the short move between a port or rail yard and a warehouse. It is a leg, priced as one, not a long-haul move
• Cross-dock — freight moves between vehicles without being put away, usually inside a day. Nothing is stored
• Transload — freight changes mode or container, most often out of an ocean container onto a domestic trailer, and either side of it may involve storage
• Deadhead — a leg run empty. It is a real cost inside a freight rate whether or not it appears as a line

Demurrage and detention get used interchangeably and are not the same clock. Demurrage runs at the terminal, on the container. Detention runs after it leaves, on the equipment. An importer who has confirmed only one of the two free-time allowances has confirmed half the exposure.

The terms that decide whether a retail order is accepted

Retail programmes are graded, and the grade is contractual. A delivery can be complete, undamaged and on the right day and still be scored as a failure, because these terms measure compliance rather than condition.

• Routing guide — the retailer's rulebook for how freight reaches its distribution centre. It governs carrier, labelling, palletisation and booking, and it is the document every term below is measured against
• MABD, must arrive by date — the outer edge of the delivery window. Arriving early can fail as surely as arriving late
• OTIF, on time in full — the combined score for landing inside the window with the whole order. A short shipment delivered on time still misses
• ASN, advance ship notice — the electronic notice of what is coming, sent ahead of the truck. Late or wrong, and the receiving door treats a booked load as unexpected
• EDI 856, 940 and 945 — the shipment notice, the warehouse shipping order and the shipping advice. They are how a retail programme and a warehouse exchange all of the above without anyone retyping it
• Chargeback — the deduction a retailer applies when any of this fails. It arrives against your invoice rather than as a bill you can dispute at leisure

The terms that decide how stock is counted

Inventory vocabulary is a promise about accuracy. These are the words that say what is actually being promised, and the difference between two of them decides whether dated product ships in the right order.

• SKU — one distinct sellable item. Two sizes of the same product are two SKUs, which is why a SKU count and a pallet count are unrelated numbers and quoting one for the other misprices an account
• Lot or batch — a production run tracked as a unit, so it can be traced or withdrawn together
• FIFO, first in first out — stock leaves in the order it arrived
• FEFO, first expired first out — stock leaves by expiry date instead. This is the rotation dated product needs, and a building running FIFO on it will eventually ship a pallet closer to expiry ahead of a fresher one
• Cycle count — a rolling count of part of the building, run continuously, so an error surfaces within days of appearing
• Physical count — a full count with the building stopped. Accurate, and disruptive
• Shrinkage — the gap between what the system says and what is on the shelf, whatever caused it

The terms that decide what happens before freight clears

Imported goods can sit in customs-controlled storage before duty is paid, and the vocabulary here decides when cash leaves your business rather than merely where a pallet sits.

• Bonded storage — customs-controlled space holding imported goods before they are released
• Duty deferral — the consequence of bonded storage: duty and GST fall due when the goods leave, not when they land
• In-bond move — freight travelling under customs control between two points before release
• Sufferance warehouse — a facility licensed to hold goods that have not yet been released
• Free time — the allowance before demurrage begins at the terminal. It is set by the carrier or terminal, never by the warehouse

The building terms, briefly

Three of these are large enough to carry their own guides, because each one changes what a building can physically do for you. The rest are quick, and they are the ones most often skipped in a tour.

• Selective racking — every pallet directly reachable. The most flexible layout and the least dense
• Drive-in racking — considerably denser, but pallets come out in a constrained order, so it suits few SKUs at high volume
• Push-back racking — the middle position: denser than selective, less order-constrained than drive-in
• Column spacing — the distance between the building's structural columns, which sets how racking can be laid out and how a forklift moves between it
• Dock leveller — the adjustable plate bridging the dock to a trailer floor
• Dock seal — the compressible frame closing the gap around a backed-in trailer, and the reason a temperature-controlled area holds temperature during a load
• High-pile storage — stock stacked above a defined height, which brings its own fire-protection requirements with it

What we do

We name the terms that carry a charge as separate lines on a quote rather than folding them into one rate, and we enumerate the accessorials before you sign rather than after. If your product is dated, we will tell you whether the building rotates it by expiry rather than by receipt. If your freight lands in a container, we will tell you where the free time ends and detention starts, and who is charging it.

Bonded, duty-deferred storage is available through our Vancouver operation, on one agreement with Rolls Right. Whoever clears your entries files the paperwork; the goods are held and released against that clearance.

If a term in somebody else's proposal does not match the definition written here, ask them which reading they are using before you sign. The gap between two readings of the same word is where the first argument of an account almost always starts.