If you sell into major retailers, your shipping performance is scored — and the score has a price. Miss a delivery window, ship the wrong quantity, use the wrong label, or route through the wrong carrier, and a chargeback lands on your remittance. For a mid-sized vendor, these deductions can quietly consume a meaningful share of margin.
The frustrating part is that most chargebacks are not caused by bad service. They are caused by not reading the routing guide carefully enough.
What a routing guide is
A routing guide is the retailer’s rulebook for how vendors must ship to them. It typically specifies:
- Which carriers to use, and whether the retailer controls routing (collect) or the vendor does (prepaid)
- How to request routing and how far in advance
- Delivery appointment procedures and required lead times
- Labeling standards, usually including GS1-128 shipping labels with specific data elements
- Packaging and palletization standards — pallet type, height limits, stacking, overhang
- ASN (advance ship notice) requirements via EDI, and the timing window for transmitting them
- Paperwork standards for the bill of lading and packing list
- The chargeback schedule itself
Routing guides change. Retailers update them, sometimes more than once a year, and vendors get held to the current version whether or not they noticed the update.
What OTIF actually measures
OTIF stands for On Time In Full. It is a compound metric, and that word “compound” is where vendors lose money.
- On time means the shipment arrived within the retailer’s delivery window. Windows can be tight — sometimes a single day, sometimes a specific appointment slot. Early is often as non-compliant as late, because the receiving dock has no space for it.
- In full means the quantity delivered matches the quantity ordered, at whatever level the retailer measures (order line, case, or unit).
A shipment that is on time but short is not OTIF compliant. A shipment that is complete but a day early is not either. Because both conditions must be met, your OTIF percentage is always lower than your on-time percentage alone.
Retailers set target thresholds and apply financial penalties below them. The exact thresholds, measurement methodology, and penalty rates vary by retailer and change over time, so work from your specific vendor agreement rather than industry rules of thumb.
Where chargebacks actually come from
In practice, most deductions trace to a handful of causes:
Late delivery. The single largest category. Often caused by tendering freight too late to make the window rather than by carrier failure.
Early delivery. Underrated as a risk. Docks are scheduled; an unexpected truck gets turned away.
Missed or late ASN. The advance ship notice usually has to transmit before the truck arrives. A correct shipment with a late ASN still generates a deduction.
Label non-compliance. Wrong label format, wrong placement, unscannable barcode, missing data element.
Pallet non-compliance. Wrong pallet type, over-height, overhanging load, or stacking that violates the guide.
Quantity variance. Short shipments, overages, or a packing list that does not match the physical count.
Unauthorized carrier or routing. Shipping prepaid when the retailer’s guide says collect, or using a carrier not on the approved list.
Practices that prevent most deductions
Build backward from the delivery window
Take the delivery appointment, subtract realistic transit time, subtract carrier tender lead time, subtract your own pick-and-pack time, and that is your production deadline. Vendors get burned by working forward from when the order is ready instead of backward from when it must arrive.
Treat the appointment as the deliverable
The purchase order date is not the target — the appointment is. Book it as early as the retailer allows. Appointment slots at busy DCs fill up, and “we could not get an appointment” is not an accepted excuse.
Verify the routing guide version quarterly
Set a recurring reminder to re-download the current guide for each retailer. This costs an hour and prevents entire categories of chargeback.
Get labeling right at the source
Print and apply GS1-128 labels as part of packing, not as an afterthought at the dock. Scan-verify before the pallet is wrapped.
Palletize to the standard, every time
Retail DCs are unforgiving about pallet condition, height, and overhang. Our guide on how to palletize freight for LTL shipping covers the fundamentals that most retail standards build on.
Use a carrier that can prove delivery time
When a retailer asserts a late delivery, your defense is documentation. Electronic proof of delivery with a timestamp, GPS location, and signature settles the dispute quickly. See our electronic proof of delivery guide for what good POD data looks like.
Dispute deductions systematically
Chargebacks are frequently issued in error — the delivery was on time, the ASN did transmit, the count was right. Retailers have dispute windows, and vendors who file consistently recover a meaningful portion. Keep POD records, ASN transmission logs, and appointment confirmations organized so a dispute takes minutes rather than hours.
For South Florida vendors specifically
Two local factors are worth planning around.
Distance to DCs. Most major retail distribution centers serving Florida are in Central and North Florida, not the southern tip. A vendor in Miami-Dade shipping to a DC near Orlando or Jacksonville is looking at a meaningful transit leg, not a local run. Build that into your backward schedule.
Hurricane season. Between June and November, weather can close roads and DCs on short notice. Retailers may or may not grant relief. Shipping earlier in the window during storm season is cheaper than the deduction — see our hurricane season freight prep checklist.
Frequently asked questions
What does OTIF mean in retail shipping?
OTIF stands for On Time In Full. It measures whether a shipment arrived inside the retailer’s specified delivery window and whether the quantity delivered matched the quantity ordered. Both conditions have to be satisfied for the shipment to count as compliant, which is why a vendor’s OTIF score is always lower than its on-time-only score. Retailers set thresholds and apply financial deductions when vendors fall below them.
Can a delivery be too early for a retailer?
Yes. Retail distribution centers schedule receiving tightly, and a truck that arrives before its appointment window frequently cannot be accommodated. Depending on the retailer, an early delivery may be turned away, rescheduled, or recorded as non-compliant in exactly the same way a late delivery would be. Deliver inside the window, not ahead of it.
How do I dispute a retail chargeback?
Start by identifying the specific deduction code and the shipment it references, then gather the supporting documentation — appointment confirmation, electronic proof of delivery with timestamp, ASN transmission log, packing list, and bill of lading. File within the retailer’s stated dispute window, which is often short. Deductions issued in error are common enough that a consistent dispute process usually recovers a worthwhile amount.
Need delivery documentation that stands up to a chargeback dispute? Talk to us about tracking and proof of delivery on your retail lanes.