February 2020 | Commentary | Good Question

GOOD QUESTION | What Supply Chain Terms Do People Sometimes Confuse?

Tags: 3PL, Distribution, Supply Chain


Carrier vs. broker or 3PL. Shippers often don't recognize the value difference—and motivations—of an asset owner versus a non-asset player. We're measured the same, but when the rubber meets the road, it's the asset provider who has to deliver. The key is to understand where a broker brings value.

Greg Orr
President, CFI


Savings vs. value. Purchase price variance does not always equal savings. To eliminate confusion, establish a comprehensive process that does not end when a new route guide enters the ERP system.

Charlie Midkiff
SVP, Global MLS & Client Services,
Odyssey Logistics & Technology


Demurrage vs. detention. Demurrage—storage charges that occur when a container is left at the ocean or rail terminal beyond the allotted amount of free time—is different from detention, which refers to storage charges that occur when the shipper or consignee holds on to the ocean carrier equipment beyond the amount of free time allotted by the ocean carrier.

Micah Holst
Chief Commercial Officer,
Ascent Global Logistics



Logistics park vs. logistics center. Logistics parks use an intermodal hub to anchor distribution centers nearby, usually serving e-commerce and manufacturing locations. Logistics centers offer direct-rail service in multi-customer, multi-commodity business parks.

Chris Gutierrez
President, Kansas City SmartPort


Fulfillment vs. distribution. Fulfillment centers support a warehousing strategy that meets customer experience requirements and favors speed in a direct-to-consumer model without reducing quality performance historically serviced by retail elements downstream from a DC.

Dr. Robert Berg
Director of Implementations,
Sunland Logistics Solutions


Partial truckload (PTL) vs. less than truckload (LTL). A PTL doesn't take up a full truckload and won't qualify for discounted shipping prices with LTL carriers. Most LTL carriers price loads six pallets or less and with a maximum weight of 8,000 lbs. Anything above that—in pallet count and/or weight, but less than a full truckload—is a partial load.

Farah Ali
CTO and Co-Founder, FreightWeb


Supply chain as an industry vs. a business function/discipline. If you work in the supply chain department for a shipper (manufacturer, retailer, wholesaler), you work in the business function of supply chain. If you work for a provider of supply chain services/products to shippers, you work in the supply chain industry.

Rodney Apple
Managing Partner,
SCM Talent Group


Strategic planning vs. management. While each term impacts the function of supply chains, they have different purposes. Planning involves analysis, while management focuses on integration.

Steve Dowse
SVP, Product Management,
Blume Global


Automated guided vehicles (AGVs) transport materials using fixed routes guided by permanent wires, magnetic strips, or sensors embedded in the floor, potentially expensive, inflexible, and disruptive for dynamic environments. Autonomous mobile robots (AMRs) navigate via internal sensors, cameras, and sophisticated software, more flexible and cost-effective if policies or layouts change.

Ed Mullen
VP of Sales, Americas
Mobile Industrial Robots


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