17 eCommerce shipping terms that every logistics manager should know

Shipping and eCommerce go hand in hand. It is difficult for eCommerce store owners to remember all the eCommerce shipping standards and terminologies. There are so many shipping acronyms that could leave you wondering “what does that even mean?!”. 

But worry not! This article has listed 17 must-know shipping terms to ease your eCommerce journey. So, let’s get started! 

What is the purpose of various shipment terms? 

If you are aiming to ace both domestic and international shipping, you must stay updated. Knowing these shipping terms will improve your communication and help you interact with shipping carriers and customers with greater accuracy. 

There is no room for confusion with a detailed knowledge of these shipment terms. These terms help you stay on the same page with the shipping carriers and ensure a proper flow of knowledge across the organization. 

17 Common eCommerce shipping terms everyone should know 

Here are the international shipping glossary with all the shipping terms you must know: 

1. Free Carriers (FCA) 

FCA shipping term denotes that the seller is responsible for completing the delivery of certain products. They can either deliver the products directly to the customers or to a carrier nominated by the customer. In this case, the seller is responsible for the cargo transporting until the delivery destination has been finalized.  

2. Cost and Freight (CFR) 

CFR shipping term means that the seller is responsible for delivering the items to the destination port only. By “port”, we mean the port where the buyer is residing. Organizing the freight transport is also the responsibility of the buyer. CFR also states that the customer must bear the insurance cost of the items in case the goods are lost or damaged. 

3. Carriage Paid to (CPT) 

CPT is another one of the popular shipping terms, and it means that a seller is responsible for arranging the transport for the goods and delivering those to the destination. In this case, the seller will have to pay for the clearance and freight costs.

4. Delivery Duty Paid (DDP) 

DDP shipping term means that the seller is responsible for delivering the goods to a pre-decided place. This place resides in the buyer’s country and clearing the exports during departure. Any types of risks associated with the goods are also borne by the seller in the case of DDP. DDP is one of those shipping terms where the maximum responsibility of shipping is on the buyers and not on the sellers. 

5. Free on Board (FOB) 

The next name on our list of common eCommerce shipping terms is FOB. You can use this shipping term when the seller is responsible for delivering cargo to the port and loading it onboard. Once the loading activities are complete, the risks of the goods are passed on from the seller to the buyer. Everything is the buyer’s responsibility until the goods are delivered from this point onwards. 

6. Cost, Insurance and Freight (CIF) 

CIF indicates that the seller of goods is responsible for delivering all the goods at the port. Plus, in CIF, the seller will also be responsible for the insurance of all the goods while they are in transit. This part helps you differentiate CIF from CFR. 

7. Commercial Invoice 

A commercial invoice is a document that is particularly useful during international shipments and custom processes. In this document, there should be a list of items you are trying to import, retail value of those items, tax details, safety measures of the items, and more. 

8. Dangerous Goods 

Any item associated with safety and environmental risks while in transit is called dangerous goods. For example, flammable items like alcohol fall under the dangerous goods category and require precaution. 

Some other types of dangerous goods include: 

  • Explosives 
  • Toxic substances 
  • Gases 
  • Radioactive materials 

9. Expedited Shipping 

The next shipping term on our list is called “expedited shipping”. As the name suggests, this shipping method indicates any kind of fast shipping method that can deliver the goods at the customers’ doorsteps at the fastest possible time. This could mean same-day delivery, one-day delivery, 2-day delivery, etc. However, expedited shipping is costlier compared to the other modes of shipping. 

10. Paperless Trade 

Paperless trade is a type of eCommerce shipping term where all the shipping documents are submitted electronically, without any possibilities of physical touches. Peerless trade is faster and it saves the cost of printing. 

11. First-mile Delivery 

The first stage of the logistics supply chain is called first-mile delivery. In this case, the seller can either drop the shipment package at the buyer’s doorsteps or request a shipping service provider to deliver the product. 

12. Last-mile Delivery 

The concept of last-mile delivery is opposite to first-mile delivery. This shipping term suggests the last stage of the logistics supply chain, where a shipment package is delivered to the end customer. Last-mile delivery is the most crucial stage for eCommerce businesses. This shipping term is associated with customers and it is the biggest impact on customers’ perceived value of your brand. 

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13. Return Label 

A return label is a pre-paid label that ensures that customers can return an item post-purchase in case it doesn’t meet their requirements. The seller will pay the shipping charges if the customer uses the return label to return a particular item. 

14. Shipping Label 

This eCommerce shipping term explains a particular type of label that is affixed to each shipping item. The shipping label includes information like the shipment’s source and destination and other relevant information. Getting discounted shipping labels can go a long way in helping you save on shipping costs.

15. Waybill 

A waybill is a shipping document that is close to the shipping label and it includes different types of information related to the package. This includes the source and destination of the shipment package, tracking ID, shipping method, and so on. You can replace the shipping label with a waybill too. 

16. Tracking ID 

A tracking ID is one of the most common shipping terms. Once the shipment is created, the customers get a tracking ID or information number. They can then use this identification to track their order status, delivery date, delivery delay monitoring, return, and so on. The purpose of offering tracking ID is to maintain a transparent process and establish open communication with end customers. 

17. Collect On Delivery (COD) 

When a customer selects the COD option during placing the order, it would mean that they will pay for a certain package during delivery and not in advance. 

Final Words 

So, here is our glossary of the most common eCommerce shipping terms that every online store should know. We are confident that understanding these shipping terms will simplify your eCommerce journey and help you develop a better shipping process. 

Also, there is no need to get overwhelmed with so many confusing terminologies for new eCommerce store owners. You can take one step at a time and learn these shipping terms one by one. That way, it will be easier for you to apply those in practice. 

If you enjoyed this, you’d love our blog post on eCommerce memes. It will show you the fun side of eCommerce.

Revathi Karthik
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