Small Parcel Terminology: Learn the Jargon

What does small parcel mean, anyway? What is the GRI? How about dimensional weight? Today we’re breaking down some of the most common terminology in the small parcel market (including what small parcel really means). Read on to gain insights into the industry!

Accessorial:  

A type of charge that isn’t normally included in the standard cost of shipping a parcel. Accessorial fees can include fees for delivery to a particularly remote area, delivering a parcel that is heavier or larger than most, etc. These fees are levied by the carriers when shipping a parcel.

Carrier:  

‘Carrier’ refers to the company that transports a parcel when it is shipped. Examples of carriers include UPS, FedEx, and the USPS, among many others.

Declared value:  

The value of the product being shipped combined with all transportation and packaging costs. Carriers generally ask for the declared value of each parcel before shipping.  

Dimensional weight:  

A measurement that reflects the relationship between the dimensions of a parcel and its weight. The charged amount to ship a parcel is determined by whichever is greater, weight or dimensions.

Distribution Center:  

Sometimes shortened as ‘DC’ and synonymous with ‘Fulfillment Center’. A distribution center is a warehouse space where products are stored to later be picked, packed, and shipped, a process known as fulfillment (see below).

Fulfillment:  

The entire process of getting a product to the end consumer. This includes picking, packing, and shipping a parcel, among other steps.  

GRI:  

‘GRI’ stands for ‘General Rate Increase’. While carriers may have different names for this increase, it occurs once a year (generally towards the beginning of the year).  

Hub and Spoke:  

A fulfillment strategy that resembles a wheel with spokes coming out from a central location. The hub and spoke model gives guidance on where to strategically place distribution centers in relation to final destinations for parcels being shipped.  

Last Mile Delivery:  

The final step in the fulfillment process when the product being shipped is delivered by the carrier to the end consumer.  

Manifest:  

Sometimes referred to as a ‘Shipping Manifest’, this is a document provided by the shipper to the carrier that includes information about a shipment’s contents. The manifest is requested upon tendering the parcel to the carrier.

Pick and Pack:  

This is what happens after an order is placed. The product is picked from the shelf by a warehouse worker in a distribution center that has the requested product. It is then packed and prepared to be shipped.

Small Parcel:  

A shipment is referred to as a ‘Small Parcel’ depending on the weight and size of the parcel. Small parcels are usually lighter weight and are shipped individually and not via freight.  

Surcharges:  

A price that is added to the general cost of shipping a parcel. ‘Surcharge’ and ‘Accessorial’ are sometimes used interchangeably, along with ‘Tariff’ and ‘Fee’. An example of a surcharge is a fuel surcharge, including the cost of fuel to transport a shipment that is levied on the shipper.

TMS:  

‘TMS’ stands for ‘Transportation Management Solution’ and is a software used by shippers to manage the flow of their goods to the end consumer. TMS programs provide insight into current shipping rates and surcharges and show carrier performance in delivering parcels on time and undamaged.

TWMS:

‘TWMS’ stands for ‘Transportation and Warehouse Management Solution’ and is a joined software that allows for complete management of all aspects of the warehousing and shipping process. ShipCaddie TWMS is the first-to-market TWMS platform.

Value-Added Services:  

A ‘Value-Added Service’ is a service that goes above and beyond the standard level of service offered. Value-added services are often referred to in fulfillment. As an example, ‘pick and pack’ is often referred to as a value-added service.

WMS:  

‘WMS’ stands for ‘Warehouse Management Solution’ and is a software used to run a distribution center efficiently. WMS software usually must integrate with TMS software in order to handle the entire process of shipping a parcel to the end user.

Wow, you made it to the end! Go get yourself a treat as a reward. You’re one step closer to being a shipping pro. Reach out if you have other terms you would like us to define or if you need a seasoned hand to help you with your logistics.