The Class
A Truckstop
Glossary of Trucking Business and
Financial
Terms
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Add On Interest:
An interest charge added to a base interest charge. Agricultural
Authority:
A special type of operating authority granted to owner operators by the
ICC. It allows owner operators who haul produce to also haul regulated
commodities on their backhaul provided that the number of hauls of
regulated
commodities does not exceed the number of hauls of exempt produce.
All-Risk Cargo
Insurance:
Does not mean any and every possible risk; only certain common risks.
Generally
not available to owner operators. Amortization: The
gradual payment of a debt or the writing off of intangible assets over
a period of time as they expire. Assets: Future
economic
benefits obtained as a result of past transactions. Audit of freight
bills:
The process of verifying the transportation charges shown on the
carrier's
freight bill as reasonable. Average gross revenue
per loaded mile: Total payment received per mile traveled with a
load. Axle Weight:
Weight
carried by one axle. Backhaul:
A haul that returns you to home or base of operation.
Balance sheet: A
financial statement listing all assets, liabilities and owner's equity
at a certain date. BBC: The distance
from the truck's front bumper to the back of its cab. Billed weight:
The
weight shown on a freight bill. Bill of lading:
Written
transportation contract between shipper and carrier; it identifies who
receives the freight and the place of delivery. It also gives terms of
the agreement. Bobtail: A
tractor
operating without a trailer. Bobtail Insurance:
Insurance covering accidents during non trucking use (i.e., not hauling
a load; during maintenance service, etc. Bridge Formula:
Federal
regulation of how far apart the axles must be to legally carry a given
weight. Broker: A person
who arranges loads for owner/operators Bulk Freight:
Unpackaged
freight, (for example, petroleum products) Burden of proof:
The obligation to prove disputed facts at issue in a legal proceeding.
Cargo Insurance:
Insurance on the freight paid for by the carrier.
Carrier: A
person,
partnership or corporation engaged in the business of transporting
goods. Carrier's Lien:
Carrier's
claim on property it has transported as security for charges. Cash Advance:
Money
received from carrier generally used for fuel and deducted from owner
operator's
final settlement check. Cash flow: Ready
cash (net income plus set aside cash, as for depreciation). Cash Disbursement
Journal:
A journal for keeping track of money being paid out. Cash Receipts Journal:
A journal for keeping track of money coming into a business. CDL: Commercial
Driver's
License: A license which authorizes an individual to operate commercial
motor vehicles over 26,000 pounds gross vehicle weight. Chargeable Accidents:
An accident that a driver could have prevented whether or not it was
his
fault. Charge backs:
Those
temporary costs assumed by the carrier for independent contractors. It
is understood through the lease that these costs will be charged back
to
the independent contractor usually at settlement. Clearing House:
An
organization set up to process and collect bills for participating
trucking
companies. COE:
Cab-Over-Engine: Truck/tractor design where the cab sits over the
engine
on the chassis. Collateral: A
pledge
of security for borrowing money, usually a material possession. Commodity: Any
article
of commerce, including raw material, manufactured or grown products.
Common Authority:
Certificate from the ICC that allows the holder to haul regulated
commodities
in a for-hire trucking operation. Common Carriers'
Insurance:
Insurance that covers transportation company's liability for loss of,
or
damage to, cargo or property being transported by them. Consignee: The
person
or firm to whom articles are shipped. Consignor: The
person
or firm who shipped the product. Containerization:
A shipping system based on large cargo carrying containers that can be
easily interchanged between trucks. Contract Carrier:
Truckers who are providing dedicated service under contract to specific
shippers using an ICC certificate. Credit Life Insurance:
A policy covering a buyer's life, until the truck is paid off, thus
guarantees
payment CVSA:
Commercial Vehicle Safety Alliance: An organization of federal, state
and
provincial government agencies and representatives from private
industry
dedicated to improving commercial safety. Deadheading:
Operating
a truck with no load.
Depreciation: A
decrease
in value (usually for tax purposes); a reduction or loss in exchange
for
value or purchasing power. Detention (Demurrage):
Detention of a vehicle beyond the time normally allowed for loading,
unloading,
etc. Disability Insurance:
Insurance policy that covers income if a truck driver is unable to work
for a few weeks or more. Discretionary Income:
Amount of money left after expenses. Dispatcher: A
person
who schedules and controls intercity traffic and intracity pickup and
delivery. D.O.T.: United
States
Department of Transportation Doubles: A
tractor
with two semi trailers connected in tandem by a converter dolly.
Drayage: Trucking
goods from a warehouse to a rail yard or vice versa. Drayage is the
trucking
component of intermodal transportation. Escrow: Money
held
in trust by a third person with directions to use it for a specific
purpose.
Exempt Carrier:
Truckers
hauling certain commodities that are exempt that may be transported in
both interstate and intrastate commerce without operating authority ICC.
Exempt Commodity:
Commodities that are moved interstate and intrastate by truck and not
subject
to regulation (i.e., any fresh fruit or vegetables except bananas)
Fixed Costs:
Costs
that have a long life, such as truck payment, mortgage, insurance, etc.
FOB: Free on
Board:
Usually indicates place where responsibility for expenses and risk for
goods is passed from seller to buyer. Forced Dispatch:
Being forced to take a load whether the driver wants to or not. 401K: An income
fund
set aside to supplement or provide for retirement benefits. Freight: Any
commodity
being transported. Freight Bill:
Document
for a shipment with the description of the freight, weight, charges,
rate
for charges, taxes and whether it is a prepaid or collect shipment.
Freight Charge:
Payment
due for the transportation of the freight Fuel taxes: Taxes
paid to each state a vehicle runs in based on miles driven in that
state. GCW:
Gross Combination Weight: Total weight of tractor- trailer
combinations,
including trucks, trailers and payload.
GVW:
Gross Vehicle Weight: Total weight of the loaded vehicle, including
chassis,
body and payload. Used to refer to the maximum GVW allowed by D.O.T.
regulations. Glider Kit: Truck
that has been rebuilt, particularly component wise. Health Insurance:
Medical and Hospitalization insurance.
ICC: Interstate
Commerce
Commission: The federal body charged with enforcement of acts of
Congress
affecting interstate commerce. IFTA:
International Fuel Tax Agreement A system of centralized fuel tax
payment
allowing truckers to pay all state fuel taxes to a collection agency.
This
agency disburses funds to each state or provincial agency based on the
total miles you reported traveling in each state. Independent
Contractors:
Independent contractors are owner operators who lease themselves and
their
vehicles to trucking companies regulated by the ICC. Individual Variable
Costs:
Costs that are variable and peculiar to a specific trucking operation
such
as accounting fees, helper wages, personal road expenses, etc. Intermodal:
Transportation movement involving more than one mode, example, rail
motor,
motor air, or rail water Interstate:
Between
states Intrastate:
Within
a state Jackknife:
Placing
the tractor/trailer at a very sharp angle resulting from lock-up of
tractor
drive axle(s).
Lading: The
freight
in a truck
Layover Time: The
time a driver spends not working and away from his home terminal before
he is sent to another destination. Lease purchase:
Method
of purchasing a rig (usually from a regulated carrier), whereby some of
the rent paid to the carrier for the privilege of using the cab is
applied
to the principal owed by the owner operator. Liabilities:
Future
items that may become obligations under certain conditions. The
obligations
arise from past transactions or events. Liability Insurance:
Insurance that covers any third party injuries or damages. Line Haul: The
movement
of freight between distant points. It does not include pickup and
delivery
service, or intracity delivery. Loaded Mile:
Distance
traveled with paid freight in a trailer. Logbook: Drivers
book containing daily hours, routes, etc. They are required by DOT
regulation. LTL:
Less Than Truckload: A quantity of freight that is less than required
for
the application of a truckload rate. Lumpers:
Helpers hired to load/unload freight Manifest: A
document
describing a shipment or the contents of a vehicle
MCSAP:
The Motor Carrier Safety Assistance Program: Federal Government program
distributing monies to help states conduct effective truck inspection
and
safety efforts. MCS-90:
A document that shows proof of adequate insurance NTSB:
The National Transportation Safety Board: A Federal Government
organization
charged with investigating accidents in every sector of transportation,
suggesting ways of improving transportation safety through effective
regulatory
requirements, and reporting on its findings and conclusions to Congress.
Operating Expenses:
Expenses needed to move freight, such as, cost of fuel, equipment,
labor,
permits, etc.
Operating ratio:
Total operating expenses divided by gross freight revenue. An operating
ratio of "90" means that a trucker makes a profit of ten cents for
every
dollar spent. Orientation Time:
Training time required to learn specific rules under which a carrier
operates. OTR:
Over the road drivers. Owner Operator: A
person who owns one or more trucks and personally drives at least one
of
them. Also known as a small fleet owner operator if more than one
vehicle
is owned. Payload: Total
weight
of the commodity carried on a truck including packaging, banding, etc.
Permanent Lease:
A lease for at least 30 days where an owner operator leases himself and
his equipment to a regulated carrier. Permits:
Permission
granted to carriers by states to transport freight exceeding legal
weight
and size limits. PIP: Personal
Injury
Protection: An insurance policy that provides personal injury protection
PMs:
Preventive maintenance inspection Pre Trip Inspection:
A walk around inspection of a truck that every driver is required to
perform
prior to every trip in a commercial vehicle. This involves following a
complete check list related to the particular type of vehicle being
inspected.
The pre-trip inspection is considered by experts to be one of the most
neglected, potentially effective means of improving truck safety.
Principal: Actual
amount of money borrowed; the amount that interest will be applied to a
loan. Private Carrier:
A company that has its own trucks to transport its own freight. Pro Rate: To
distribute
proportionately. Rate: The charge
for transporting freight
Recourse Agreement:
An agreement between buyer and seller whereby if a buyer defaults on
payments
and the truck is repossessed, the selling dealer must buy the truck
from
the lender for the unpaid balance. The dealer can sue the former owner
for the balance if it is more than the truck is worth. Regulated commodities:
Commodities that are transported under governmental regulation. Regulated Common
carrier:
Carriers that transport general commodities that are regulated by the
ICC. Rider Policy: An
insurance policy provision that provides coverage to a passenger in a
commercial
vehicle. Road Use Taxes:
Annual
federal tax applied to each vehicle. Scale (Weigh) Station:
A place where trucks are weighed to ensure that GVW and axle weights
are
below permissible levels.
Settlement: A net
amount paid for hauling a load. Surcharge: A
charge
above the usual or customary charge. Surtax: An
additional
or extra tax. Tandem: An
assembly
of two axles, either of which may be powered. Tariff: A
published
rate for hauling goods TL: Truckload: A
full or nearly full trailer of goods. Usually the shipment is made
without
stopover to load/unload. Transportation
Insurance:
This insurance covers loss to shippers because of an accident to goods
in transit.
Trip Lease: A one
trip only lease. Trip Lease Operators:
Owner operators who haul for a different carrier or broker each trip.
Trip Record: A
record
of each trip which includes expenses and revenue. Trip Recorder:
On-
Board Computer - Cab mounted device which records data such as speed,
engine
rpm, idle time and any other information that may be useful to trucking
management. U.S. DOT Number:
Vehicle Registration Number. U.S Dot numbers are supplied without
charge,
and are required for all vehicles exceeding 10,000 lbs. GVW or GCW.
Variable costs:
Equipment
operating expenses which vary from trip to trip. (For example, fuel,
repairs,
tires.) Workers' Compensation:
Compensation for work related injuries not covered by hospitalization
