FAQ Categories

Glossary of Business Terms

A

  • Accounts Payable (AP): Money owed by a company to its creditors for goods or services received but not yet paid for.
  • Accounts Payable Aging: Report showing the age of unpaid supplier invoices, helping manage debts and supplier relationships.
  • Accounts Receivable (AR): Money owed to a company by its customers for goods or services delivered but not yet paid for.
  • Accounts Receivable Aging: Report detailing the age of money owed by customers, critical for managing cash flow.
  • Accrual Accounting: Accounting method where revenue and expenses are recorded when earned or incurred, not when cash is exchanged.
  • Accruals: Adjustments made in financial statements to reflect revenues earned or expenses incurred, not yet recorded.
  • Acquisition Cost: The total cost incurred to acquire an asset, including the purchase price and associated expenses. In trucking, this could relate to acquiring new trucks or equipment.
  • Active Load: A shipment that is currently being transported.
  • Addendum: A written and signed document that changes or makes additions to a previously signed contract or official document.
  • Ad Valorem Tax: Tax based on the assessed value of an item, such as property or vehicles.
  • Adjustable-Rate Mortgage (ARM): Mortgage with an interest rate that changes over time based on market conditions.
  • Administrative Expenses: Expenses related to the general operation of a business, including office supplies, utilities, and administrative staff salaries.
  • Advance: A pre-payment to a driver or carrier for anticipated expenses for a load or trip.
  • After Tax Profit: The percentage of revenue remaining once operating expenses, interest, income tax, and preferred stock dividends are deducted from a company’s total revenue.
  • Aged Equipment: Trucks or trailers that are old and may require more maintenance or are closer to being replaced.
  • Agent: An individual or company authorized to act on behalf of another (such as a freight broker agent working for a carrier).
  • Aggregate Expenditure: The total spending on final goods and services in an economy.
  • Agreement: A contractual arrangement between parties outlining terms and conditions for a particular arrangement, such as a freight services agreement.
  • Alternative Lending: Financial services and products offered outside of traditional banking institutions, often used by businesses that do not qualify for standard loans.
  • Amortization: Process of gradually writing off the initial cost of an asset over its useful life.
  • Annual Percentage Rate (APR): Yearly interest rate that indicates the cost of financing.
  • Annual Report: A comprehensive report on a company’s activities and financial performance over the previous year.
  • Annuity: Fixed sum of money paid to someone each year, used in business for fixed annual payments or loans.
  • Application Programming Interface (API): Set of protocols for building software, used in trucking for logistics and operation integrations.
  • Appraisal: Valuation of property or equipment by a professional, used for insurance or loan purposes.
  • Arbitrage: Simultaneous purchase and sale of an asset to profit from price differences, not common in trucking but useful in commodity transport.
  • Arbitration: A procedure in which a dispute is submitted, by agreement of the parties, to one or more arbitrators who make a binding decision on the dispute.
  • Articles of Incorporation: Legal documents filed to establish the existence of a corporation.
  • Articles of Organization: Legal documents filed to establish the existence of an LLC.
  • Asset: Any item of value, whether tangible or intangible, that provide some current or future benefit to your business.
  • Asset-Based Lending: Business lending secured by company assets like trucks, equipment, or receivables.
  • Asset Management: The systematic process of operating, maintaining, and upgrading assets cost-effectively.
  • Asset Turnover Ratio: Measure of a company’s ability to generate sales from its assets, indicating operational efficiency.
  • Asset Utilization: A metric that measures how efficiently a company uses its assets to generate revenue.
  • Assignment: The transfer of a right or property, such as the assignment of a lease or a contract to another party.
  • Audit: When an independent person or group inspects a person’s or business’s accounts
  • Audit Trail: Record that traces financial data from its source to the financial statements.
  • Authority: Legal permission for truckers to operate, including necessary permits and licenses.
  • Automated Clearing House (ACH): An electronic network for financial transactions in the United States.
  • Auto Liability Insurance: Insurance that trucking companies carry to cover the costs of damages and injury to others involved in an accident where the truck driver is at fault.
  • Average Collection Period: Average number of days it takes for a company to receive payments from customers.
  • Average Cost: Average expense of inventory or services over a period, critical for calculating profit margins.
  • Average Daily Rate (ADR): In logistics, the average revenue earned per day for certain capacity, like a truck or container.
  • Axle Weight: Weight supported by each axle of a vehicle, important for safety and compliance with transportation regulations.

B

  • B2B: A business focused on selling goods and services to other businesses.
  • B2B: A business that sells its products and services to consumers in the general public instead of to other businesses or the government. 
  • B2G: A business that sells its products or services to the government.
  • Backhaul: The return trip of a transportation vehicle from its destination back to its origin, often carrying a second load of cargo to improve efficiency and revenue
  • Balance Sheet: A financial statement that reports a company’s assets, liabilities, and shareholders’ equity at a specific point in time, providing a snapshot of its financial condition.
  • Bank Guarantee: A promise by a bank to cover a loss if a borrower defaults on a loan, often used in financing large capital purchases like trucks or equipment.
  • Bank Reconciliation: The process of matching the balances in an organization’s accounting records for a cash account to the corresponding information on a bank statement.
  • Bankruptcy: A legal proceeding involving a person or business that is unable to repay their outstanding debts. The bankruptcy process begins with a petition filed by the debtor or on behalf of creditors.
  • Bearer Bond: A bond that is not registered in the investor’s name and is payable to the holder. It is less common in modern times due to the risk of loss or theft.
  • Beneficial Ownership: The natural person(s) who ultimately own or control a customer or the person on whose behalf a transaction is being conducted. It also incorporates those persons who exercise ultimate effective control over a legal person or arrangement.
  • Bill of Lading (BOL): A legal document between a shipper and carrier detailing the type, quantity, and destination of the goods being carried. This document serves as a shipment receipt when the carrier delivers the goods at the predetermined destination.
  • Bond: A fixed income instrument representing a loan made by an investor to a borrower. Bonds can be used by companies, municipalities, states, and sovereign governments to finance projects and operations.
  • Book Value: The net value of a company’s assets, as recorded on the balance sheet, minus its liabilities and intangible assets, such as goodwill.
  • Bookkeeping: The recording of all financial transactions for a business. Proper bookkeeping helps companies track their financial activities, stay organized, and comply with legal obligations.
  • Bottom Line: Business profits that are recorded on the bottom line of a net income financial statement.
  • Break-Even Point: The production level where total revenues equal total expenses. In trucking, this would be the point where the cost of operating a route is equal to the revenue earned from it.
  • Bridge Loan: A short-term, high-interest loan meant to finance an immediate purchase or fill a financing gap.
  • Broker: An individual or firm that acts as an intermediary between an investor and a securities exchange. In trucking, a broker might arrange freight transactions between shippers and carriers.
  • Budget: An estimate of income and expenditure for a set period of time. Creating and sticking to a budget is crucial for trucking companies to maintain profitability and plan for future expenses.
  • Bull Market: A market condition where prices are rising or are expected to rise. While typically used in reference to financial markets, it can also indicate a favorable and booming economy that can benefit the trucking industry.
  • Business Credit: A track record of a company’s financial responsibility that lenders use to determine whether the company is a good candidate to lend money to or do business with.
  • Business Liability Insurance An insurance policy that helps cover the cost of bodily injury, property damage, personal injury, and advertising injury claims and lawsuits.
  • Business Line of Credit: A flexible loan from a bank or financial institution that offers a fixed amount of capital that can be accessed as needed and paid back either immediately or over time.
  • Business Interruption Insurance: Insurance that covers the loss of income a business suffers after a disaster. This could be especially relevant for trucking companies in case of major accidents or natural disasters.
  • Business Plan: A written document describing a company’s core business activities, objectives, and how it plans to achieve its goals. For trucking companies, a business plan is crucial for securing funding and guiding operations.
  • Buyback: The repurchase of outstanding shares by a company to reduce the number of shares on the market. While more common in other industries, buybacks can also apply to privately held trucking companies looking to consolidate ownership.
  • Bylaws: Rules established to specify how a corporation is governed and operated.

C

  • Capital: Wealth in the form of money or assets owned by a business. In trucking, it can refer to liquid assets or investments in vehicles and equipment.
  • Capital Expenditure (CapEx): Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.
  • Cash Accounting: A bookkeeping method where the business records transactions only when it pays or receives money.
  • Cash Flow: The total amount of money being transferred in and out of a business, especially affecting liquidity.
  • Cash Flow Statement: A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents.
  • C Corporation: The most popular type of corporation. It taxes its owners (shareholders) separately from the business. All C Corps must have the following governing positions: president or CEO, treasurer, and secretary.
  • Certificate of Cancellation: A certificate that effectively cancels a business as an active business within a specific state.
  • Certificate of Good Standing: A certificate that verifies that a business is an actively operating legal commercial entity with the state.
  • Certificate of Incorporation: A legal document that will serve as the official registration document for a corporation.
  • Certificate of Insurance (COI): A document used to provide information on specific insurance coverages, assuring the coverage meets minimum requirements.
  • Certified Public Accountant (CPA): A professional who has met state licensing requirements for CPA designation pertaining to accounting and finance.
  • Chief Executive Officer (CEO): An officer of a company or organization whose responsibilities include creating policies, crafting growth strategies, and overseeing the entire staff.
  • Chief Financial Officer (CFO): A senior executive who manages the financial business and actions of a company.
  • Chief Operations Officer (COO): A senior executive who manages the operational aspects of a company.
  • Collateral: An asset that a borrower offers to a lender to secure a loan. If the borrower fails to pay the loan, the lender has the right to seize the collateral.
  • Collection Period: The time it takes for a business to turn its accounts receivable into cash.
  • Commercial Driver’s License (CDL): A driver’s license required in the United States to operate any type of vehicle weighing more than 26,000 pounds for commercial use.
  • Commercial Vehicle: Any type of motor vehicle used for transporting goods or passengers for commercial gain.
  • Commodities: Basic goods used in commerce that are interchangeable with other goods of the same type. In trucking, this refers to the transported goods.
  • Common Stock: A type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings.
  • Compounded Annual Growth Rate (CAGR): The mean annual growth rate of an investment over a specified time period longer than one year.
  • Consolidated Invoice: An invoice that combines multiple shipments or orders into one single document, simplifying the billing process.
  • Contingent Liability: A liability that may occur depending on the outcome of a future event, such as a lawsuit or tax audit.
  • Contribution Margin: A cost accounting concept that allows a company to determine the profitability of individual items.
  • Corporate Charter: A document filed with the state to legally create a business.
  • Corporate Credit: Credit granted to businesses for the purpose of financing their needs.
  • Corporation: A legal entity that is separate from its owners. A corporation can be considered a “legal person” under the law, meaning it can possess the rights and responsibilities of an individual.
  • Cost of Goods Sold (COGS): The direct costs attributable to the production of the goods sold by a company.
  • Creditor: An individual, business, or any entity that has provided goods, services, or a loan, and is owed money by one or more debtors.
  • Credit Analysis: A process for determining the ability of a company or person to repay their debt obligations.
  • Credit Limit: The maximum amount of credit that a financial institution or other lender will extend to a debtor for a particular line of credit.
  • Credit Rating: An assessment of the creditworthiness of a borrower in general terms or concerning a particular debt or financial obligation.
  • Credit Report: A detailed report of an individual’s credit history prepared by a credit bureau.
  • Credit Risk: The risk of loss of principal or loss of a financial reward stemming from a borrower’s failure to repay a loan or otherwise meet a contractual obligation.
  • Credit Score: A numerical expression based on a level analysis of a person’s credit files, to represent the creditworthiness of an individual.
  • Creditor: A person or company to whom money is owed.
  • Current Assets: Assets that are expected to be converted to cash, sold, or consumed during the next 12 months.
  • Current Liabilities: A company’s debts or obligations that are due within one year.
  • Current Ratio: A liquidity ratio that measures a company’s ability to pay short-term and long-term obligations.
  • Customs Broker: A professional that assists importers and exporters in meeting Federal requirements governing imports and exports.

D

  • Data Analysis: The process of examining, cleaning, transforming, and modeling data with the goal of discovering useful information, informing conclusions, and supporting decision-making.
  • Data Analysis: The process of examining, cleaning, transforming, and modeling data with the goal of discovering useful information, informing conclusions, and supporting decision-making.
  • DBA DBA (Doing-Business-As) a name is a legal form required whenever a company operates under a name that’s different from its officially registered name.
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  • Debt Consolidation: The act of combining several loans or liabilities into one loan.
  • Debt Financing: Raising capital through the sale of bonds, bills, or notes to individual and/or institutional investors.
  • Debt Service: The cash that is required to cover the repayment of interest and principal on a debt for a particular period.
  • Debt-to-Equity Ratio (D/E): A measure of a company’s financial leverage, calculated by dividing a company’s total liabilities by its shareholder equity.
  • Debtor: An entity that owes a debt to another entity.
  • Depreciation: The allocation of the cost of an asset over its useful life.
  • Derivative: A security with a price that is dependent upon or derived from one or more underlying assets.
  • Direct Cost: A price that can be directly tied to the production of specific goods or services.
  • Disbursement: The act of paying out or disbursing money, such as money paid out to run a business, cash expenditures, dividend payments, or the amounts that a lawyer might have to pay out on a person’s behalf in connection with a transaction.
  • Discount Rate: The interest rate that an eligible depository institution is charged to borrow short-term funds directly from a Federal Reserve Bank.
  • Dissolution: The official closure of a business entity with the state.
  • Distribution: The payment of dividends or interest to investors, or the allocation of assets, income, or profits among shareholders, bondholders, or other stakeholders.
  • Diversification: The expanding the range of services, cargo types, or geographic routes to reduce dependency on a single source of income and mitigate business risks.
  • Dividend: A distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders.
  • Domestication: The legal process of moving an organization from its state of origin to a new state.
  • Double Entry Accounting: An accounting technique which records each transaction as both a credit and a debit in different accounts.
  • Down Payment: An initial payment made when something is bought on credit.
  • Due Diligence: An investigation or audit of a potential investment or product to confirm all facts, such as reviewing all financial records, plus anything else deemed material.
  • Dun & Bradstreet (D&B): A corporation that offers information on commercial credit as well as reports on businesses.
  • Durable Goods: Goods not for immediate consumption and able to be kept for a period of time. In trucking, this can refer to vehicles and equipment that are a company’s fixed assets.
  • Duty: A kind of tax levied by a state.

E

  • Earnings: The amount of profit that a company produces during a specific period, which is important for tracking the financial health of a trucking business.
  • Earnings Before Interest and Taxes (EBIT): An indicator of a company’s profitability, calculated as revenue minus expenses, excluding tax and interest. It is particularly significant for financial planning and analysis in the trucking industry.
  • Earnings Per Share (EPS): The portion of a company’s profit allocated to each outstanding share of common stock, serving as an indicator of a company’s profitability.
  • Economic Order Quantity (EOQ): The ideal order quantity a company should purchase to minimize inventory costs such as holding costs, shortage costs, and order costs.
  • Economic Value Added (EVA): A measure of a company’s financial performance based on the residual wealth calculated by deducting its cost of capital from its operating profit.
  • EIN: (Employee Identification Number) A unique, nine-digit number used to identify a business entity.
  • Economies of Scale: The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output decreasing with increasing scale.
  • Electronic Data Interchange (EDI): The electronic interchange of business information using a standardized format; a process which allows one company to send information to another company electronically rather than with paper.
  • Employee Benefits: Various types of non-wage compensation provided to employees in addition to their normal wages or salaries, like health insurance, life insurance, and retirement plans.
  • Encumbrance: Any claim or lien on a property, such as a mortgage or a lease, that can affect the transferability of the property and can restrict its free use until the encumbrance is lifted.
  • Endorsement: A legal term referring to the signing of a document which allows for the legal transfer of a negotiable from one party to another.
  • Entity Type: The legal structure of a business, such as S-Corporation, LLC etc.
  • Enterprise Resource Planning (ERP): Business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back-office functions.
  • Equity: The value of an asset after deducting the value of liabilities. In trucking, it can refer to the owner’s value in the company after debts and other liabilities have been paid.
  • Equity Financing: The method of raising capital by selling company stock to investors. In return for the investment, the shareholders receive ownership interests in the company.
  • Escrow: A financial arrangement where a third party holds and regulates the payment of the funds required for two parties involved in a given transaction.
  • Estate Tax: A tax levied on an individual’s estate or total holdings after that individual passes away. It is essential for individual truck operators or owners to understand how it may affect their assets.
  • Estoppel: A legal doctrine that prevents a person from asserting rights or facts that are inconsistent with earlier actions or statements when he/she was legally able to assert them.
  • Exchange Rate: The value of one country’s currency versus the currency of another country or economic area.
  • Expenditure: The action of spending funds. In trucking, it can relate to expenses on fuel, vehicle maintenance, driver salaries, and other operational costs.
  • Expense: The economic costs that a business incurs through its operations to earn revenue. In trucking, common expenses include fuel costs, repair and maintenance, and driver wages.
  • Extended Coverage: Additional layers of coverage that can be purchased to add to a basic insurance policy, providing extra protection against various risks.

F

  • Factoring: A financial transaction where a business sells its accounts receivable (invoices) to a third party (a factor) at a discount, commonly used in the trucking industry to manage cash flow.
  • Factoring Fee: The fee the factor charges to factor a client’s invoices. The fee is expressed as a percentage charged on the face value of the invoice.
  • Factitious Business Name: A name, other than the registered name of the business, that the state gives permission to use when conducting business. 
  • Fiduciary: A person or organization that acts on behalf of another person or persons, putting their clients’ interest ahead of their own, with a duty to preserve good faith and trust.
  • Finance Charge: The total amount of interest and loan charges you would pay over the entire life of the mortgage loan. This assumes you keep the loan until it matures and make only the standard payments.
  • Financial Leverage: The use of borrowed money (debt) to finance the purchase of assets with the expectation that the income or capital gain from the new assets will exceed the cost of borrowing.
  • Financial Statement: A formal record of the financial activities of a business, person, or other entity, relevant for trucking companies for performance analysis and reporting.
  • Fiscal Year: A 12-month period that businesses, governments, and other entities use for accounting purposes, financial reporting, and creating and tracking budgets.
  • Financing: The act of providing funds for business activities, making purchases, or investing. Trucking companies may seek financing to support their operations or expand their fleet.
  • Fixed Asset: Long-term tangible property that a firm owns and uses in its operations to generate income, such as trucks, trailers, and equipment in a trucking business.
  • Fixed Cost: Business expenses that are not dependent on the level of goods or services produced by the business, such as insurance, salaries, and loan payments.
  • Fixed Interest Rate: An interest rate on a liability, such as a loan or mortgage, that remains fixed either for the entire term of the loan or for part of this term.
  • Floating Interest Rate: An interest rate that moves up and down with the market or an index. It can be found in adjustable-rate loans and variable-rate mortgages.
  • Forecasting: The process of making predictions of the future based on past and present data and analysis of trends. It’s crucial in the trucking industry for demand planning and financial management.
  • Foreclosure: The legal process by which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments by forcing the sale of the asset used as the collateral for the loan.
  • Franchise Tax: A tax paid by certain businesses for the right to operate or form in a particular state.
  • Freight Broker: An individual or company that serves as a liaison between another individual or company that needs shipping services and an authorized motor carrier.
  • Freight Class: A classification used to determine shipping costs, based on the density, handling, stowability, and liability of the cargo. It’s crucial in the trucking industry for pricing and logistics.
  • Full Truckload (FTL): A shipment that fills up an entire truck, or at least meets the minimum weight or volume requirements to be classified as a full load.
  • Funding: The act of providing resources, usually in form of money (financing), or other values such as effort or time (support), for a project, a person, a business, or any other private or public institutions.
  • Futures Contract: A legal agreement to buy or sell a particular commodity or asset at a predetermined price at a specified time in the future.

G

  • GAAP (Generally Accepted Accounting Principles): The standard framework of guidelines for financial accounting used in any given jurisdiction; generally known as the standard guidelines for financial accounting.
  • Garnishment: A legal process whereby payments towards a debt owed by an individual can be paid by a third party – which holds money or property that is due to the individual – directly to the creditor.
  • General Ledger: The master set of accounts that summarize all transactions occurring within an entity. In trucking, it might include accounts for revenue, expenses, assets, liabilities, and equity.
  • Gearing: The ratio of a company’s loan capital (debt) to the value of its ordinary shares (equity); also known as leverage.
  • Good Faith: A sincere intention to deal fairly with others, such as entering into agreements or transactions without any intention to defraud or deceive.
  • GDP (Gross Domestic Product): The total value of goods produced and services provided in a country during one year. It’s a broad indicator of an economy’s health that can indirectly affect the trucking industry.
  • Goodwill: An intangible asset that arises when a buyer acquires an existing business, representing the value of the business’s brand name, solid customer base, good customer relations, good employee relations, and any patents or proprietary technology.
  • Gross Margin: A company’s total sales revenue minus its cost of goods sold, divided by the total sales revenue, expressed as a percentage. It represents the portion of each dollar of revenue that the company retains as gross profit.
  • Gross Weight: The total weight of a shipment, including goods and packaging. In trucking, it’s crucial for adhering to weight limits and regulations.
  • Growth Capital: Also known as expansion capital, it is capital provided to businesses to accelerate their growth and development.
  • Guarantee: A promise or assurance, typically in writing, that certain conditions will be fulfilled, especially that a product will be repaired or replaced if not of a specified quality.
  • Guarantor: A person or entity that agrees to be responsible for another’s debt or performance under a contract if the other fails to pay or perform.
  • Gross Vehicle Weight Rating (GVWR): The maximum operating weight/mass of a vehicle as specified by the manufacturer, including the vehicle’s chassis, body, engine, engine fluids, fuel, accessories, driver, passengers, and cargo, but excluding that of any trailers.

H

  • Hazardous Materials (HazMat): Substances in quantities or forms that may pose a risk to health, property, or the environment, which are regulated during transport.
  • Headhaul: The main leg of a trucking trip in which the freight is hauled and generates revenue. It’s often contrasted with a backhaul, which may carry less cargo and generate less revenue.
  • Hedge: An investment to reduce the risk of adverse price movements in an asset, often used in commodities trading, which can be relevant to the trucking industry for fuel cost management.
  • Hedge Fund: An offshore investment fund, typically formed as a private limited partnership, that engages in speculation using credit or borrowed capital.
  • Holding Company: A company created to buy and own the shares of other companies, which it then controls.
  • Horizontal Integration: A strategy where a company creates or acquires production units for outputs that are alike – either complementary or competitive.
  • Hostile Takeover: The acquisition of one company by another without approval from the target company’s management.
  • Hours of Service (HOS): Regulations issued by the Federal Motor Carrier Safety Administration (FMCSA) governing the working hours of anyone operating a commercial motor vehicle in the United States.
  • Human Resources (HR): The division of a business that is charged with finding, screening, recruiting, and training job applicants, and administering employee-benefit programs.
  • Hypothecation: The practice where a debtor pledges collateral to secure a debt or as a condition precedent to the debt, or a third party pledges collateral for the debtor.

I

  • Income Statement: A financial statement that reports a company’s financial performance over a specific accounting period. It provides detailed information about a company’s revenues, expenses, profits, and losses.
  • Incorporation: The formation of a new corporation, which is a legal entity formally recognized by the state it’s located in.
  • Incorporator: An individual responsible for setting up a corporation and registering formal documents with the state where the company will be conducting business. 
  • Indemnity: Security or protection against a loss or other financial burden.
  • Independent Contractor: A person or business that provides goods or services under a written contract or verbal agreement.
  • Index Fund: A type of mutual fund with a portfolio constructed to match or track the components of a market index, such as the Standard & Poor’s 500 Index (S&P 500).
  • Inflation: The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling.
  • Initial Public Offering (IPO): The first time that the stock of a private company is offered to the public, often pursued to raise additional capital.
  • Insolvency: The inability to pay one’s debts as they come due.
  • Insurance: A contract, represented by a policy, in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.
  • Interest: The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.
  • Interest Rate: The amount charged, expressed as a percentage of principal, by a lender to a borrower for the use of assets.
  • Inventory: The raw materials, work-in-process products, and finished goods that are considered to be the portion of a business’s assets that are ready or will be ready for sale.
  • Investment: The action or process of investing money for profit or material result.
  • Invoice: A list of goods sent or services provided, with a statement of the sum due for these; a bill.
  • Invoice: Factoring A form of debtor financing that businesses use to accelerate cash flow by selling their invoices to a third party (factor) at a discount. Businesses receive cash immediately for their unpaid invoices instead of waiting for their customers to pay.
  • IRA (Individual Retirement Account): An investing tool used by individuals to earn and earmark funds for retirement savings.
  • Irrevocable Letter of Credit: A financial instrument used by banks to guarantee a buyer’s obligations to a seller, to be irrevocable once it is issued.

J

  • Job Costing: A cost accounting methodology used to allocate the costs of a project based on specific job tasks, which can be particularly beneficial in the trucking industry for tracking the costs associated with specific hauling jobs or routes.
  • Joint Account: A bank account shared by two or more individuals where each account holder has the right to deposit and withdraw funds. Joint accounts are often set up by business partners or spouses.
  • Joint and Several Liability: A legal term describing the liability of two or more parties where each party is individually responsible for the entire obligation, as well as jointly with the others.
  • Joint Venture: A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task, project, or any other business activity. In the trucking industry, this could involve partnerships between carriers or between carriers and shippers.
  • Judgment: A formal decision made by a court following a lawsuit. It may also refer to the ability of a business owner or manager to understand and make a decision on certain matters.
  • Jumbo Loan: A type of financing that exceeds the limits set by the Federal Housing Finance Agency (FHFA). Unlike conventional mortgages, a jumbo loan is not eligible to be purchased, guaranteed, or securitized by Fannie Mae or Freddie Mac.
  • Just-In-Time (JIT): An inventory management strategy that aligns raw-material orders from suppliers directly with production schedules. Companies employ this inventory strategy to increase efficiency and decrease waste by receiving goods only as they need them for the production process.
  • Justification: In business terms, justification often refers to the process of demonstrating that a particular plan or project is economically or strategically beneficial. It involves providing a basis or rationale for a decision or expenditure.

K

  • Key Performance Indicator (KPI): A set of quantifiable measures used to gauge a company’s overall long-term performance. In trucking, KPIs might include metrics like load times, percentage of on-time deliveries, and average cost per mile.
  • Key Rate: The main interest rate set by a central bank that is used to guide other interest rates. Changes in key rates can influence borrowing costs for trucking companies and their investment in new assets.
  • Kickback: An illegal payment intended as compensation for preferential treatment or any other type of improper services received. It’s crucial for trucking companies to maintain ethical standards and avoid such practices.
  • Kitting: The process of assembling individual items into ready-to-ship sets, or kits. In trucking, kitting can streamline the process of preparing and shipping equipment or parts.
  • Knock-for-Knock Agreement: An agreement between two insurance companies wherein each company pays for the damages caused by its own policyholder, regardless of who was at fault. This term is more common in auto insurance than trucking specifically but can sometimes apply.
  • Knowledge Management: A process of creating, sharing, using, and managing the knowledge and information of an organization. For trucking companies, this can involve managing logistical data, route information, and customer service records to improve efficiency and service quality.

L

  • Lease: A contract by which one party conveys land, property, services, etc., to another for a specified time, usually in return for periodic payments. In trucking, this often refers to the leasing of vehicles or equipment.
  • Leaseback: An arrangement where the seller of an asset leases back the same asset from the purchaser. In the trucking industry, this can be a strategy for a company to free up capital while still being able to use the fleet.
  • Leverage: The use of various financial instruments or borrowed capital (like debt) to increase the potential return of an investment. Trucking companies may use leverage to expand operations or renew their fleet.
  • Liability: A company’s legal debts or obligations that arise during the course of business operations. In trucking, liabilities can include loans, accounts payable, mortgages, deferred revenues, and accrued expenses.
  • Lien: The right to keep possession of property belonging to another person until a debt owed by that person is discharged. In trucking, a lender might place a lien on a vehicle until the loan is paid off.
  • Limited Liability Company (LLC): A corporate structure in the United States whereby the company members are not personally liable for the company’s debts or liabilities.
  • Limited Partnership: A partnership made up of at least two people. The general partner oversees business operations. The others are known as limited partners and their responsibilities don’t involve the business’s management.
  • Line Haul: The movement of freight over the road from origin to destination, not including additional services such as loading, unloading, or pickup and delivery.
  • Line of Credit: A flexible loan from a bank or financial institution that offers a borrower a maximum loan amount, allowing the borrower to draw funds as needed up to the credit limit.
  • Liquidity: The availability of liquid assets to a company and how easily it can convert those assets into cash. High liquidity indicates a company can more readily pay off its debts.
  • Load Board: An online matching system where freight brokers and shippers post loads, and truckers post their trucks. The service helps truckers find loads and helps shippers find available trucks to move their freight.
  • Lockbox: A bank cash management system designed to receive payments by mail and quickly deposit them into the factor’s account. Lockbox systems usually provide scanning of documents, online viewing and cash management systems.
  • Logbook: A record book used by truck drivers to track hours of service, distances traveled, and other details as required by the Department of Transportation.
  • Logistics: The overall management of the way resources are obtained, stored, and moved to the locations where they are required. In trucking, logistics is crucial for managing the flow of goods from origin to destination efficiently.
  • Long Haul: Trucking routes that cover a long distance, often across states or countries, as opposed to short local routes.
  • Loss Payee: The party in a loan or lease who has the right to receive insurance claim payments in the event of a loss, typically the finance company or lender.
  • LTL (Less Than Truckload): Shipping for relatively small freight. LTL carriers combine freight from multiple shippers into a single truckload.

M

  • Maintenance Costs: Regular expenses involved in the upkeep of assets, such as trucks in a trucking fleet, including costs for repairs, part replacements, and general vehicle maintenance.
  • Management Buyout (MBO): A transaction where a company’s management team purchases the assets and operations of the business they manage.
  • Margin: The difference between the selling price of a product or service and its cost, a key indicator of the profitability of a business.
  • Market Capitalization: The total dollar market value of a company’s outstanding shares, commonly used as an indicator of a company’s size.
  • Market Value: The price an asset would fetch in the marketplace or the value investors believe a firm is worth.
  • Markup: The amount added to the cost price of goods to cover overhead and profit.
  • Material Handling: The movement, storage, control, and protection of materials, goods, and products throughout the process of manufacturing, distribution, consumption, and disposal.
  • Maturity Date: The date on which the principal amount of a note, draft, acceptance bond, or other debt instrument becomes due and is repaid to the investor.
  • Member: An individual or entity holding a membership interest in a limited liability company (LLC). 
  • Merger: The combination of two or more companies into one entity, typically involving stock swaps or cash payments to the target company’s shareholders.
  • Mileage Rate: A rate used to calculate charges or costs based on the number of miles traveled.
  • Minimum Charge: The least amount that a business will charge for providing a particular service or product.
  • Money Market: The part of the financial market where short-term financial instruments are traded, including Treasury bills, commercial paper, bankers’ acceptances, and certificates of deposit.
  • Mortgage: A loan secured by the collateral of specified real estate property that the borrower is obliged to pay back with a predetermined set of payments.
  • Motor Carrier: An individual or business that provides transportation of goods or passengers via motor vehicle.
  • Multimodal Transportation: The transportation of goods under one contract but performed with at least two different means of transport (e.g., by rail, sea, and road).
  • Market Liquidity: The extent to which a market allows assets to be bought and sold at stable prices.
  • Mezzanine Financing: A hybrid of debt and equity financing typically used to finance the expansion of existing companies.
  • Microfinance: Financial services, including loans, savings, insurance, and fund transfers to entrepreneurs, small businesses, and individuals who lack access to traditional banking services.
  • Monetize: To convert something into money or establish something as legal tender.
  • Mutual Fund: An investment program funded by shareholders that trades in diversified holdings and is professionally managed.
  • Maturity Risk Premium: The additional return over the risk-free rate demanded by investors to compensate for the risk inherent in securities that have longer maturities

N

  • NAFTA (North American Free Trade Agreement): An agreement among the United States, Canada, and Mexico designed to remove tariff barriers between the three countries, significantly impacting trucking and trade in North America.
  • Net Income: The total earnings of a company after deducting all expenses, including taxes and operating costs. It’s a crucial indicator of a trucking company’s profitability.
  • Net Present Value (NPV): The difference between the present value of cash inflows and the present value of cash outflows over a period of time. In finance, NPV is used to analyze the profitability of an investment or project.
  • Net Worth: The total assets minus total liabilities of an individual or company. For trucking companies, net worth reflects the actual value of the company in financial terms.
  • Network Analysis: In logistics, a method of optimizing a distribution and transportation network to ensure the most efficient movement of goods.
  • Non-Asset-Based Logistics Provider: A logistics provider that does not own the transportation assets (trucks, trailers) but provides logistics services using the assets of other companies.
  • Non-Compete Agreement: A contract between an employee and employer, where the employee agrees not to enter into competition with the employer after the employment period is over.
  • Non-Operating Expense: Expenses incurred by a business that are not related to its core operations, such as interest payments or losses from selling assets.
  • Non-Recourse Factoring: A type of factoring where the factoring company absorbs any credit losses that result from an Account Debtor not paying an invoice. Fees for non-recourse factoring are generally higher than recourse factoring, and credit limits may be lower.
  • Notary Public: An official authorized to certify documents, take affidavits and depositions, and to perform certain other acts varying from jurisdiction to jurisdiction.
  • Note: A financial security that generally has a longer term than a bill but a shorter term than a bond. In trucking, companies may issue notes to finance operations or fleet expansion.
  • Notice of Assignment: A notification typically sent to debtors indicating that a factoring company is managing and collecting the business’s receivables.
  • Novation: The act of replacing one participating party in a contract with another, changing the party’s rights and obligations.
  • NVOCC (Non-Vessel Operating Common Carrier): A shipment consolidator or freight forwarder who does not own any vessel but functions as a carrier by issuing its own bills of lading or air waybills.

O

  • Occupational Safety and Health Administration (OSHA): A federal agency that ensures safe and healthy working conditions by setting and enforcing standards and by providing training, outreach, education, and assistance.
  • Operating Agreement: A document that clearly outlines an LLC’s rules and structure.
  • Operating Cost: The total cost associated with the operation of a business, vehicle, or equipment. In trucking, this includes fuel, maintenance, repairs, and driver wages.
  • Operating Lease: A lease agreement that allows for the use of an asset but does not convey rights of ownership of the asset. Trucking companies often use operating leases for their fleet.
  • Operating Margin: A measurement of what proportion of a company’s revenue is left over after paying for variable costs of production. It indicates how much profit a company makes on a dollar of sales after paying for variable costs.
  • Operating Ratio: A measure of efficiency used in the trucking industry, calculated by dividing operating expenses by net sales or revenues.
  • Operations Management: The administration of business practices to create the highest level of efficiency possible within an organization, crucial in trucking for route planning, fleet management, and service delivery.
  • Opportunity Cost: The cost of foregoing the next best alternative when making a decision. For trucking companies, this could involve choosing between different freight contracts or investment opportunities.
  • Option: A financial instrument that gives the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a certain date.
  • Order Fulfillment: The complete process from point of sales inquiry to delivery of a product to the customer. In trucking, this involves the delivery of goods to the final destination in a timely and accurate manner.
  • Outsourcing: The business practice of hiring a party outside a company to perform services and create goods that traditionally were performed in-house by the company’s own employees and staff.
  • Over-the-Road (OTR): A term used to describe long-haul trucking where drivers spend extended periods away from their home base, often traveling across states or the entire country.
  • Overhead: The ongoing business expenses not directly attributed to creating a product or service. In trucking, this could include administrative costs, office expenses, and property leases.
  • Owner-Operator: A self-employed commercial truck driver who owns and operates their own trucking business. They are responsible for the operations and maintenance of their vehicle and can choose their freight and schedules.

P

  • Packing List: A document that includes details about the contents of a package. It provides information about the items included in the shipment, their quantities, and their weight, crucial in trucking for inventory management.
  • Pallet: A portable platform used to package items for freight shipping. Pallets can be made of wood, plastic, or metal and are commonly used in the trucking industry to streamline loading and unloading processes.
  • Partnership: A legal form of business operation between two or more individuals who share management and profits. In trucking, partnerships can be formed to share the costs and responsibilities of operating a fleet.
  • Pass-Through Taxation: a tax treatment that allows all income, losses, credits, and deductions of a business to pass through to the owner or owners. Most common with LLCs.
  • Payable on Death (POD): An arrangement between a bank and an account holder that designates beneficiaries to receive the funds in the account upon the account holder’s death.
  • Payback Period: The length of time required to recover the cost of an investment. In trucking, it might refer to the time it takes to recoup the investment in a new truck or technology.
  • Payroll: The total amount of money that a company pays to its employees. In trucking, payroll includes drivers’ wages, benefits, and bonuses.
  • Per Diem: A daily allowance for expenses—a common term in many business sectors, including trucking, where it often covers the daily expenses of a driver while on the road.
  • Performance Bond: A bond issued to one party of a contract as a guarantee against the failure of the other party to meet the obligations specified in the contract.
  • Permit: A document that gives permission to do something. In trucking, various permits are required for operations, including haulage permits for oversized loads and permits for operating in different states or countries.
  • Personal Guarantee: A promise made by a business owner or executive to repay a debt if the business cannot pay it.
  • Platooning: A developing vehicle technology where two or more trucks travel in close proximity at high speeds, controlled by connectivity technology and automated driving support systems.
  • Pledging: The act of providing assets as collateral for a loan. In trucking, a company might pledge its trucks or other assets to secure financing.
  • Portfolio: A range of investments held by a person or organization. While typically associated with financial markets, trucking companies also manage a portfolio of assets and contracts.
  • Prepaid Expense: Expenses paid in advance and recorded as assets before they are used or consumed. A common occurrence in trucking for items like insurance or lease payments.
  • Principal: The amount of money borrowed or the amount still owed on a loan, separate from interest.
  • Profit Margin: A profitability ratio calculated as net income divided by revenue, or net profits divided by sales. It’s a measure of how much profit a company makes for every dollar of sales.
  • Profit Sharing: A corporate program in which employees receive a share of the company’s profits, typically allocated based on the company’s earnings over a specific period.
  • Proforma Invoice: A preliminary bill of sale sent to buyers in advance of a shipment or delivery of goods, typically describing the purchased items and other important information.
  • Promissory Note: A financial instrument that contains a written promise by one party to pay another party a definite sum of money either on demand or at a specified future date.
  • Proof of Delivery (POD): A document required from the carrier or driver for proper payment, confirming that the freight has arrived at the correct destination and in good condition.
  • Property Tax: Taxes paid by property owners on the value of the property, including land and buildings. Trucking companies may pay property tax on their facilities and terminals.
  • Purchase Order (PO): A commercial document issued by a buyer to a seller, indicating the type, quantities, and agreed prices for products or services.

Q

  • Quality Assurance (QA): A way of preventing mistakes or defects in manufactured products and avoiding problems when delivering solutions or services to customers. In trucking, QA processes ensure that service standards are met and maintained.
  • Quality Control (QC): A process through which a business seeks to ensure that product quality is maintained or improved. This can involve testing of products to uncover defects, and reporting to management who make the decision to allow or deny product release.
  • Quantitative Analysis: The use of mathematical and statistical methods in finance and economics to measure performance and predict outcomes. Trucking companies may use quantitative analysis for route optimization, cost analysis, and forecasting demand.
  • Quarantine: The state, period, or place of isolation in which people or animals that have arrived from elsewhere or been exposed to infectious or contagious disease are placed. In terms of logistics, this can affect the movement and delivery of goods.
  • Quick Assets: Current assets that can be converted to cash within 90 days or in the short-term. In trucking, this might include receivables or marketable securities.
  • Quick Ratio: An indicator of a company’s short-term liquidity. Also known as the acid-test ratio, it measures the ability of a business to meet its short-term obligations with its most liquid assets.
  • Quota: A government-imposed trade restriction that limits the number or monetary value of goods that can be imported or exported during a particular time period.
  • Quotation or Quote: A statement of price, terms of sale, and description of goods or services offered by a vendor to a prospective buyer. When a buyer accepts a quotation, it becomes a legally binding contract.
  • Quote-to-Cash (QTC): An integrated business process that involves sales, contract, and customer relationship management, focusing on driving revenue and efficiency by streamlining the entire sales process from initial quote to collecting payment.

R

  • Rate Confirmation: A document in the trucking industry that confirms the rate to be paid for the transportation of freight, detailing the terms of the agreement between the carrier and the shipper or broker.
  • Rebate: A return of part of the original payment for some service or merchandise, serving as a discount or reduction.
  • Receivables: Money owed to a company by its clients or customers who have promised to pay for the goods or services at a later date.
  • Recession: A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.
  • Reconciliation: The process of ensuring that two sets of records (usually the balances of two accounts) are in agreement, crucial in bookkeeping and finance to ensure accurate financial records.
  • Recourse Factoring: A type of factoring where the factoring client is responsible for paying the invoice if their customer fails to pay a factoring company.
  • Recovery: The regaining of or possibility of regaining something lost or taken away. In the economic context, it refers to the period following a recession during which economic growth resumes.
  • Redemption: The return of an investor’s principal on a fixed-income security, such as a bond, preferred stock or mutual fund shares, at or before the maturity date.
  • Refinancing: The action of replacing or restructuring existing debt with a new loan, often to benefit from a lower interest rate.
  • Registered Agent: A person or entity that serves as a business’s legal point of contact. 
  • Registered Security: A security, such as a bond or stock, that is registered in the name of the holder or their nominee, not necessarily the actual owner, ensuring the payment of dividends or interest to the registered holder.
  • Regulation: A rule or directive made and maintained by an authority, crucial in the trucking industry to ensure safety, fair business practices, and environmental protection.
  • Reinsurance: The practice of insurers transferring portions of risk portfolios to other parties to reduce the likelihood of paying a large obligation resulting from an insurance claim.
  • Reinstatement: The process of restoring a company’s legal status and good standing, typically after it has been administratively dissolved or its status has been revoked due to non-compliance with filing requirements or failure to pay fees or taxes.
  • Remittance: Money sent in payment or as a gift. In business, it often refers to the funds that are sent by a customer to pay for a delivered product or service.
  • Renewable Energy: Energy from sources that are naturally replenishing but flow-limited; renewable resources are virtually inexhaustible in duration but limited in the amount of energy available per unit of time.
  • Repossession: The action of retaking possession of something, especially when a buyer defaults on payments. In trucking, this can occur when payments on a vehicle or equipment are not met.
  • Reserve Requirements: Regulations set by the Federal Reserve that require banks to keep a certain percentage of deposits on hand each night, known as the reserve ratio.
  • Resolution: A legal document detailing and confirming a formal decision made by the board of directors.
  • Retained Earnings: A company’s earnings that remain in the business after paying shareholder dividends.
  • Return on Investment (ROI): A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.
  • Revenue: The total amount of income generated by the sale of goods or services related to the company’s primary operations.
  • Risk Assessment: The identification and analysis of relevant risks to achieve objectives, forming a basis for determining how the risks should be managed.
  • Risk Management: The forecasting and evaluation of financial risks together with the identification of procedures to avoid or minimize their impact.
  • Routing: The determination of the most cost-effective route(s) that freight should take to reach its destination. In trucking, efficient routing is crucial for minimizing costs and ensuring timely delivery.

S

  • Safety Rating: A rating given to carriers by the Department of Transportation (DOT) indicating their safety performance and compliance with regulations.
  • Sales Forecast: Projection of future sales revenue, often based on historical sales data, analysis of market surveys, and trends.
  • Salvage Value: The estimated resale value of an asset at the end of its useful life.
  • Sarbanes-Oxley Act: A U.S. law enacted to protect investors from the possibility of fraudulent accounting activities by corporations, mandating strict reforms to improve financial disclosures from corporations and prevent accounting fraud.
  • Scalability: The ability of a business to grow and manage increased demand. In trucking, scalability might involve expanding the fleet or operations to meet growing transportation needs.
  • S-Corporation: A type of corporation that meets specific Internal Revenue Code requirements, offering the benefits of incorporation while being taxed as a partnership to avoid double taxation.
  • Seasonal Business: A business that operates only during certain times of the year and has fluctuating levels of business activity according to the season. Trucking can be seasonal depending on the type of goods transported.
  • Secretary of State: The chief clerk for the government who’s responsible for important state records, including business documentation. 
  • Secured Loan: A loan in which the borrower pledges some asset as collateral for the loan.
  • Securities and Exchange Commission (SEC): The U.S. government agency responsible for enforcing the federal securities laws and regulating the securities industry, the nation’s stock and options exchanges, and other related activities and organizations.
  • Security: A financial instrument that represents an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.
  • Self-Employment Tax: The tax that a small business owner must pay to the federal government to fund Medicare and Social Security.
  • Senior Debt: Debt that must be repaid before other debts in the case of a company’s bankruptcy or liquidation.
  • Service of Process: A legal procedure that officially notifies an individual or business that a legal action has been taken against it. 
  • Shareholder: An individual or institution that legally owns one or more shares of stock in a public or private corporation.
  • Shareholder Equity: The assets that remain in a company after all liabilities and debts have been paid. In trucking, this might represent the net value of the company after trucks, property, and other assets have been accounted for.
  • Short Haul: Trucking routes that are relatively short, usually within the same state or region.
  • Single-Entry Bookkeeping: A simple bookkeeping system where a single entry is made for each transaction. It’s less complex than double-entry bookkeeping but may not provide as comprehensive a view of a company’s financial health.
  • Single-Member LLC: A type of limited liability company that has only one owner, referred to as a member. 
  • Small Business Administration (SBA): A federal government agency that provides resources to small businesses.
  • Solvency: The ability of a company to meet its long-term debts and financial obligations. Solvency is crucial for trucking companies to continue operations and grow.
  • Spot Rate: The price quoted for immediate settlement on a commodity, a security, or a currency. In trucking, it refers to the price given for immediate transport services.
  • Stakeholder: Any individual, group, or party that has an interest in an organization and the outcomes of its actions.
  • Standard Costing: A cost accounting system that uses cost units determined before production for estimating the cost of an order or product. For trucking, it might involve estimating costs for fuel, labor, and maintenance in advance.
  • Statement of Cash Flows: A financial statement that shows how changes in balance sheet accounts and income affect cash and cash equivalents, breaking the analysis down to operating, investing, and financing activities.
  • Stock: A type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s assets and earnings.
  • Strategic Alliance: An agreement between two or more parties to pursue a set of agreed-upon objectives needed while remaining independent organizations.
  • Subsidiary: A company that is completely or partly owned and partly or wholly controlled by another company that owns more than half of the subsidiary’s stock.
  • Supply Chain: The network between a company and its suppliers to produce and distribute a specific product to the final buyer. This network includes different activities, people, entities, information, and resources.
  • Surety Bond: A promise by a guarantor to pay a party a certain amount if a second party fails to meet an obligation, such as fulfilling the terms of a contract.
  • Sustainability: Meeting the needs of the present without compromising the ability of future generations to meet their own needs. In trucking, sustainability can involve eco-friendly driving practices, fuel-efficient vehicles, and carbon offset programs.
  • SWOT Analysis: A strategic planning technique used to help a person or organization identify Strengths, Weaknesses, Opportunities, and Threats related to business competition or project planning.

T

  • Tangible Assets: Physical assets that can be seen and touched, such as buildings, machinery, and trucks.
  • Tariff: A tax imposed on imported goods and services, which can significantly impact the cost and availability of goods in the trucking industry.
  • Tax Deduction: An expense that can be subtracted from gross income to reduce the taxable income.
  • Tax Exemption: A monetary exemption which reduces taxable income. Tax-exempt status can provide complete relief from taxes, reduced rates, or tax on only a portion of items.
  • Tax Lien: A legal claim by a government entity against a noncompliant taxpayer’s assets.
  • Taxable Income: The amount of income that is used to calculate how much tax an individual or a company owes to the government.
  • Teamster: A truck driver, especially a semi-trailer driver, part of a strong union in the United States.
  • Telematics: The branch of information technology that deals with the long-distance transmission of computerized information, commonly used in the trucking industry for vehicle tracking and monitoring.
  • Terminal: A facility where freight is received and dispatched, including truck terminals and port terminals.
  • Terms of Sale: The conditions agreed upon between a buyer and a seller, detailing the when, where, and how payments are made and goods are delivered.
  • Third-Party Logistics (3PL): A service that allows businesses to outsource operational logistics from warehousing, all the way through to delivery, and ultimately enables a business to focus on other parts of their operation.
  • Time Value of Money (TVM): The concept that money available at the present time is worth more than the same amount in the future due to its potential earning capacity.
  • Title: A legal document that provides evidence of ownership of an asset, such as a title for a vehicle.
  • Trade Credit: The practice of buying goods or services and paying for them later. It’s the most significant category of short-term debt for most businesses.
  • Trade Deficit: An economic measure of a negative balance of trade, where a country’s imports exceed its exports.
  • Traffic Management: Supervising, planning, and controlling the physical movements of vehicles required to transport goods and services.
  • Trailer Interchange Agreement: An agreement to transfer a trailer from one trucker to another in order to complete a shipment.
  • Transaction: An agreement between a buyer and a seller to exchange goods, services, or financial instruments.
  • Transit Time: The total time taken from the moment goods are dispatched to the moment they are received.
  • Transportation Management System (TMS): A subset of supply chain management concerning transportation operations and may be part of an enterprise resource planning system.
  • Treasurer: A person in charge of managing and accounting for funds within a business organization. 
  • Treasury Stock (Treasury Shares): The portion of shares that a company keeps in its own treasury. They may come from a repurchase or buyback from shareholders or may have never been issued to the public in the first place.
  • Triple Net Lease (NNN): A lease agreement on a property where the tenant or lessee agrees to pay all real estate taxes, building insurance, and maintenance (the three “nets”) on the property in addition to any normal fees that are expected under the agreement.
  • Turnover: In accounting, the annual sales volume net of all discounts and sales taxes. In human resources, turnover refers to the rate at which employees leave a workforce and are replaced.
  • Two-Way Radio: A radio that can both transmit and receive (a transceiver), allowing for bidirectional communication, commonly used in trucking for communication between drivers and dispatchers.

U

  • Underwriter: An individual or entity that assesses and accepts another party’s risk at a fee, such as an insurer or a financial institution. In trucking, underwriters assess the risks involved in insuring vehicles and cargo.
  • Unearned Revenue: Payment received for goods or services which have not yet been delivered or performed. This is common in trucking when customers pay in advance for freight services.
  • Uniform Commercial Code (UCC): A standardized set of business laws that regulate financial contracts and transactions. The UCC has been adopted by most states in the U.S. and covers sales, leases, negotiable instruments, and secured transactions.
  • Unilateral Contract: A contract in which only one party makes a legally enforceable promise. An example could be a reward contract, where one party pays for the completion of a task by another party.
  • Unit Cost: The total expenditure incurred by a company to produce, store, and sell one unit of a particular product or service. This is important in trucking for determining the cost-effectiveness of transporting goods.
  • Unsecured Loan: A loan that is issued and supported only by the borrower’s creditworthiness, rather than by any type of collateral. Unsecured loans are riskier for lenders and, as a result, typically have higher interest rates.
  • Usury: The illegal action or practice of lending money at unreasonably high rates of interest.
  • Utilities: Services necessary for the operation of a business or residence, such as water, electricity, natural gas, and sewage services. For trucking companies, managing utility costs can be a significant part of office and terminal operations.
  • Utility Trailer: A trailer that is generally used for transporting goods and materials. Depending on the type, these trailers may be used for transporting goods for trucking businesses.
  • Utilization Rate: In business, it refers to the amount of output produced compared to the maximum capacity that can be produced in a given period. In trucking, it might refer to the percentage of the fleet actively in use compared to the total fleet capacity

V

  • Valuation: The process of determining the present value of an asset or a company; important in trucking for assessing the value of a fleet, property, or the entire business for sales, purchasing, or investment purposes.
  • Variable Cost: Costs that change in proportion to the good or service that a business produces, such as fuel costs or driver wages in trucking.
  • Variable Interest Rate: An interest rate that can fluctuate over the duration of a loan, credit line, or other form of credit, often tied to a specific benchmark rate.
  • Vendor: A party in the supply chain that makes goods and services available to companies or consumers. In trucking, this could refer to suppliers of trucks, parts, or maintenance services.
  • Venture Capital: Financing that investors provide to startup companies and small businesses that are believed to have long-term growth potential.
  • Vertical Integration: The combination in one company of two or more stages of production normally operated by separate companies. In trucking, this might mean a company controls not just the freight services but also the production or distribution of the goods.
  • Vesting: The process by which an employee accrues non-forfeitable rights over employer-provided stock incentives or employer contributions made to the employee’s qualified retirement plan account.
  • Volume: The number of shares, contracts, or lots that are traded during a particular time frame; in trucking, it can refer to the amount of cargo transported over a period.
  • Voluntary Compliance: An assumption or principle that taxpayers will comply with tax laws and, more broadly, that citizens will comply with legal statutes without being compelled.
  • Voucher: A document that serves as evidence for a business transaction. In trucking, this might be used for fuel purchases, maintenance services, or other operational expenses.

W

  • Warehouse: A large building where raw materials or manufactured goods may be stored before their export or distribution for sale. In trucking, warehouses are crucial nodes in the logistics network.
  • Warehousing: The process of storing goods in a warehouse before they are sold or further distributed. Effective warehousing is essential for inventory management and order fulfillment in the trucking industry.
  • Warranty: A written guarantee, issued to the purchaser of an article by its manufacturer, promising to repair or replace it if necessary within a specified period.
  • Waybill: A document issued by a carrier giving details and instructions relating to the shipment of a consignment of goods. Typically, it shows the names of the consignor and consignee, the point of origin of the consignment, its destination, and route.
  • Weight Ticket: A document that certifies the weight of a vehicle, typically a truck, and its cargo. This is important for compliance with road safety regulations and for calculating shipping costs.
  • Wharfage: A charge assessed by a pier or dock owner for handling incoming or outgoing cargo.
  • Winding Up: One step in corporate dissolution, where the owners work to “wind up” the business operations.
  • Withholding Tax: An income tax to be paid to the government by the payer of the income rather than by the recipient of the income. The tax is thus withheld or deducted from the income due to the recipient.
  • Working Capital: The capital of a business that is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities.
  • Write-Off: A reduction in the recognized value of something. In accounting, a write-off is the itemized deduction of an item’s value from a company’s revenue.
  • Write-Down: Reducing the book value of an asset because it is overvalued compared to the market value. A write-down typically occurs on a company’s financial statement.

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    Z

    • Zero-Based Budgeting (ZBB): A budgeting method where all expenses must be justified for each new period, starting from a “zero base.” In trucking, ZBB can be used to closely manage operational costs by assessing and justifying expenses.
    • Zero-Coupon Bond: A debt security that doesn’t pay interest but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full face value.
    • Zoning: The legislative process for dividing land into zones for different uses. Zoning laws can impact where trucking companies can establish warehouses, terminals, and offices.
    • Z-Score: A statistical measurement that describes a value’s relationship to the mean of a group of values, often used in scoring models for credit risk or bankruptcy prediction. For trucking companies, understanding the Z-score can help assess financial health and risk.
    • Zoning Laws: Regulations that define how property in specific geographic zones can be used. Trucking companies must comply with zoning laws when determining the location of their operations or planning new facilities.
    • Zoning Ordinance: A law that limits the permitted uses of land and maximum density of development in a community. For trucking companies, zoning ordinances can affect the location of terminals, parking areas, and maintenance facilities.

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