Specialty Food Maker 101: Shipping and Freight Terms to Know

The food industry has a specific lingo with which startups should become familiar. Here is a glossary of shipping and freight terms from The Basics: The Business of Specialty Food, SFA’s intensive workshop where a team of veteran makers help new companies learn the fundamentals of the market and best practices to get their business off the ground.

COD: Cash on delivery; a payment agreement where payment for a product is given at time of delivery.

Fill Rate: The comparison between the amount of goods ordered versus the amount actually delivered. Usually stated in percentage. Used to evaluate performance of sellers as seen from the buyers’ perspective.

FOB: Literal translation – freight on board. When quoting a price, a supplier will identify if the price includes delivery (freight) to the buyer’s warehouse or store – i.e. Delivered Price. If freight is paid by buyer, that is called FOB, but is usually specific to location (e.g.: FOB Public Warehouse-Newark, NJ).

Lead Time: The amount of time, usually in days, that it takes for a manufacturer to receive, process, and ship an order. This time should also include the actual shipping time.

Less Than Truckload (LTL): Designates a shipment that does not meet the weight or cube requirement of a full truckload.

Lumper Fees: Billback for cost of unloading product.

Minimum Order: A vendor’s terms of sale frequently require a purchase of a specific amount for commercial buyers.

O.O.S.: Out of stock; Not available for sale either from the retailer or from a distributor, wholesaler, chain warehouse, importer, or producer.

Pallet Fees: Billback for shipping on pallets that do not meet specifications.

Pallet Pattern: Describes the number of cases on a single layer, and the number of layers on a pallet.

Short Shipped: An order shipped or delivered without some of the items ordered.

The SFA’s upcoming Basics online course is taking place October 6-7. Find more information about the event here.