Freight & Trucking Glossary
A comprehensive guide to the most important terms in freight, trucking, and logistics. Whether you are a carrier, broker, or shipper — bookmark this page for quick reference.
B
Backhaul
A return trip or load that a carrier picks up after delivering a primary load, reducing empty miles. Backhaul rates are typically lower than headhaul rates because carriers are looking to cover fuel and operating costs on the return trip rather than deadheading.
Bill of Lading (BOL)
A legal document issued by a carrier to a shipper that details the type, quantity, and destination of the freight being transported. It serves as a receipt of shipment, a contract of carriage, and a document of title.
Blind Shipment
A shipment where the shipper or consignee information is hidden from one or both parties. Brokers commonly use blind shipments to protect their business relationships and prevent carriers from going directly to shippers.
Broker
A licensed intermediary who arranges the transportation of freight between shippers and carriers without taking physical possession of the goods. Brokers earn revenue from the difference between what shippers pay and what carriers charge.
Broker Authority (MC Number)
A license issued by the Federal Motor Carrier Safety Administration (FMCSA) that authorizes a company to operate as a freight broker. Requires a surety bond or trust fund of at least $75,000.
C
Capacity
The available supply of trucks and trailers in a given market or lane. When capacity is tight, there are fewer trucks available relative to demand, which pushes rates up. When capacity is loose, the opposite occurs.
Carrier
A company or individual that owns and operates trucks to physically transport freight. Carriers can be large fleets with thousands of trucks or single owner-operators with one vehicle.
Class (Freight Class)
A standardized classification system (1 to 500) used by the National Motor Freight Traffic Association (NMFTA) to categorize LTL shipments based on density, stowability, handling, and liability. Higher class numbers generally mean higher shipping costs.
Consignee
The party to whom freight is being delivered. The consignee is the recipient listed on the bill of lading and is responsible for accepting delivery at the destination.
Contract Rate
A pre-negotiated freight rate between a shipper and carrier (or broker) that remains fixed for a set period, typically 6 to 12 months. Contract rates provide price stability but are usually slightly above the spot market average.
Cost Per Mile (CPM)
The total operating cost for a carrier to move a truck one mile. Includes fuel, maintenance, insurance, driver pay, and overhead. Understanding CPM is critical for carriers to determine their minimum acceptable rate per mile.
D
DAT
DAT Freight & Analytics (formerly Dial-A-Truck) is one of the largest freight rate and load board data providers in North America. DAT powers many rate benchmarking tools used by carriers, brokers, and shippers.
Deadhead
Miles driven with an empty trailer, generating no revenue. Deadhead miles are a significant cost for carriers and reducing them is one of the primary goals of freight lane optimization.
Dedicated Contract Carriage
An arrangement where a carrier dedicates specific trucks and drivers exclusively to a single shipper under a long-term contract. Provides consistent capacity and pricing for the shipper and guaranteed revenue for the carrier.
Detention
Time a truck spends waiting at a shipper or receiver facility beyond the agreed free time (usually 2 hours). Carriers may charge detention fees to compensate for lost driving time and revenue.
Drayage
Short-distance hauling of freight, typically the movement of containers or trailers to and from ports, rail yards, and intermodal terminals. Drayage is a critical first and last mile link in intermodal shipping.
Dry Van
The most common type of trailer in trucking — an enclosed, non-temperature-controlled box trailer used to haul general freight. Approximately 60-70% of all truckload shipments move in dry vans.
E
ELD (Electronic Logging Device)
A device installed in commercial motor vehicles that automatically records a driver's hours of service (HOS). ELDs are federally mandated for most commercial carriers to ensure compliance with HOS regulations.
F
Flatbed
An open trailer with no sides or roof, used to transport oversized, heavy, or irregularly shaped freight such as steel, lumber, machinery, and construction materials. Flatbed rates are typically higher than dry van due to specialized equipment and loading requirements.
Freight Lane
A specific origin-to-destination route on which freight is regularly moved. Lane analysis involves evaluating rate trends, volume patterns, and profitability for that particular corridor.
FTL (Full Truckload)
A shipping mode where a single shipper's freight fills an entire trailer (typically 42-45 pallets or 43,000-45,000 lbs). FTL shipments move directly from origin to destination without stops.
Fuel Surcharge
An additional charge added to freight rates to offset fluctuations in diesel fuel prices. The surcharge typically adjusts weekly based on the DOE national average diesel price and is calculated as cents per mile.
H
Headhaul
The primary or outbound leg of a trip, typically the higher-paying load that a carrier plans their route around. The opposite of backhaul.
I
Intermodal
A shipping method that uses two or more modes of transportation (typically truck and rail) to move freight. Containers are transferred between modes without handling the cargo itself, making it cost-effective for long-haul shipments.
L
Lane Analytics
The analysis of freight rate trends, volume patterns, capacity metrics, and profitability data for specific origin-destination corridors. Lane analytics help carriers, brokers, and shippers make informed routing and pricing decisions.
Linehaul
The transportation of freight between two major terminals or cities, excluding local pickup and delivery. Linehaul refers to the long-distance portion of the trip and is the primary driver of transportation cost.
Load Board
An online marketplace where shippers and brokers post available loads and carriers search for freight. Major load boards include DAT, Truckstop.com, and Amazon Relay.
Load-to-Truck Ratio
A metric that compares the number of available loads to the number of available trucks in a given market or lane. A high ratio indicates tight capacity (favoring carriers), while a low ratio indicates loose capacity (favoring shippers/brokers).
LTL (Less Than Truckload)
A shipping mode for freight that does not require a full trailer. Multiple shippers' freight is consolidated onto a single trailer. LTL rates are typically based on weight, freight class, and distance.
O
OTRI (Outbound Tender Rejection Index)
A metric that measures the percentage of electronically tendered loads that carriers reject. A high OTRI indicates a tight market where carriers can be selective, while a low OTRI suggests loose capacity.
Owner-Operator
An independent truck driver who owns and operates their own truck. Owner-operators may lease onto a carrier's authority or hold their own MC number. They bear all operating costs but typically earn higher per-mile rates than company drivers.
P
Per Diem
A daily allowance paid to truck drivers for meals and incidental expenses while on the road. The IRS sets standard per diem rates for the transportation industry, currently at $69 per day for travel within the Continental US.
R
Rate Per Mile (RPM)
The total payment a carrier receives divided by the total miles driven for a load. RPM is the most common benchmark used by carriers and brokers to evaluate load profitability and compare rates across lanes.
Reefer (Refrigerated Trailer)
A temperature-controlled trailer used to transport perishable goods such as produce, dairy, pharmaceuticals, and frozen food. Reefer rates are generally 15-25% higher than dry van due to equipment costs and seasonal demand.
Revenue Per Truck Per Week
A key performance metric for carriers that measures the gross revenue generated by each truck in the fleet per week. Helps fleet managers evaluate asset utilization and profitability.
S
Shipper
The party that originates the freight shipment. Shippers are the companies or individuals who need goods transported from one location to another, and they pay carriers or brokers to handle the transportation.
SONAR
FreightWaves SONAR is a premium freight market intelligence platform that provides real-time data on rates, capacity, volumes, and economic indicators. It is primarily used by enterprise shippers, brokers, and 3PLs.
Spot Market
The real-time, on-demand freight market where loads are booked at current market rates rather than pre-negotiated contract rates. Spot rates fluctuate based on immediate supply and demand and tend to be more volatile than contract rates.
Spot Rate
The current market rate for moving freight on the spot market. Spot rates are determined by real-time supply and demand and can change daily or even hourly on popular lanes.
T
Tanker
A specialized trailer designed to transport liquid or gaseous materials. Tanker endorsements are required on a driver's CDL, and hazmat certification may be needed depending on the cargo.
Tender
An electronic request from a shipper to a carrier to move a load under a pre-existing contract. Carriers can accept or reject tenders based on their current capacity and operational priorities.
Third-Party Logistics (3PL)
A company that provides outsourced logistics and supply chain management services to shippers, including freight brokerage, warehousing, transportation management, and order fulfillment.
Truckload (TL)
See FTL (Full Truckload). The terms are used interchangeably in the freight industry to describe shipments that fill an entire trailer.
Truck Parking
Designated areas where commercial truck drivers can safely park their vehicles during mandatory rest breaks. Truck parking shortages are a significant safety and compliance issue in the trucking industry.
V
Volume Shipment
A shipment that is larger than a typical LTL shipment (usually 6+ pallets or 10,000+ lbs) but does not require a full truckload. Volume shipments often receive discounted LTL rates or may be handled as partial truckloads.