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ltl shipping

Walmart’s OTIF Policy Gets Harder 

On Time In Full is a policy that Walmart created back in 2016 and implemented in August of 2017. In an attempt to drive their proficiency up and costs down, the mega retail chain started targeting their supply chain. Under this policy, suppliers that failed to deliver the total amount of promised goods, to designated stores at the prescribed time are penalized; fined up to three percent of the total shipment value.  

The shipment has to arrive exactly when it’s expected. Not before, and certainly not after.  

It’s not just trying to curb late deliveries, either. The OTIF policy also cracks down on trucks arriving too early, as it can create excess traffic and delays for loading and unloading. For suppliers and trucking companies, this means there’s no leaving early to create a buffer zone. The shipment has to arrive exactly when it’s expected. Not before, and certainly not after.   

In addition to making things more challenging for suppliers to make sure their goods arrive on time, it will bring even more stress on carriers – we discussed this in more detail in our earlier post. With the Electronic Logging Device more closely monitoring hours of service, truckers will be in a tight spot when it comes to making sure that deliveries arrive exactly when they’re supposed to, all while making sure to stay compliant with their working hours.  

A Tough Policy Gets Tougher 

As of April 1st of this year, the company made the policy even harder. Prior to this month, the OTIF policy stated that full truckload shipments needed to meet a 75 percent OTIF rating and less-than-truckload shipments needed to meet 33 percent OTIF to avoid fines. Now, FTL’s are required to meet an 85 percent standard (down from the lofty 95 percent they had originally planned) while LTL requirements have increased to 36 percent.

Keeping products on the shelf is the name of the game for Walmart.

Keeping products on the shelf is the name of the game for Walmart. With increased competition from the likes of Target, Dollar General, and Amazon, the more items Walmart can keep in stock, the less likely they are to lose out to the competition.  

A Necessary Change 

While it’s easy to paint Walmart in a bad light through this policy, they aren’t the only company to enforce such a policy. Competition stores like Target, Kroger, and Walgreens also have similar OTIF policies. If retailers don’t hold the supplier accountable and they don’t make them try to comply, then suppliers can cause backlogs.

With the 90 percent failure rate for full and timely deliveries, Walmart has found a rather convenient way to turn a problem into profit.

According to a Bloomberg report, Walmart had a OTIF success rate hovering around a dismal 10 percent. With the 90 percent failure rate for full and timely deliveries, Walmart has found a rather convenient way to turn a problem into profit. This new policy doesn’t cost the company a dime. In addition to generating money from the fines, increased product availability will also mean increased in-store sales.  

Given that Walmart is such a heavy hitter for suppliers, suppliers will have little choice but to either comply or lose out on some considerable business. With the extra revenue generation, Walmart can take that money and reinvest in its e-commerce business.  

A Hard Place for Small Suppliers 

While larger companies have no problem meeting delivery quotas, it’s the LTL deliveries that are going to take the brunt of the OTIF policy. Considering the strained nature of supply chain as it is, especially in the trucking sector. ELD and HoS mandates are pitting truckers against the clock as it stands. Couple that with the driver shortage and rising demand for LTL, and capacity becomes even more limited.   

Couple that with the driver shortage and rising demand for LTL, and capacity becomes even more limited.   

At least in that regard, the company has cut smaller suppliers a little slack, which is the reason that LTL shipments have less than half the requirements of their FTL counterparts. An LTL doesn’t schedule a delivery to a Walmart [distribution center] until the freight arrives at the terminal.

In order to avoid hefty fines being levied by Walmart and other retailers such as Kroger and Walgreens, suppliers are going to have to tighten and fine tune their logistics and supply chain considerably, especially given the current tight capacity environment.  

Do You Need Help With OTIF Issues?

A 3PL, such as BlueGrace, can help your business overcome the challenges of OTIF and other supply chain issues. If you have questions about OTIF or just how to simplify your current transportation program, feel free to contact us via phone at 800.MY.SHIPPING or using the form below and we will be happy to assist.

Volume Quotes: Improving processes and turn around times

2013 is a much anticipated year of tremendous process improvements which include getting our customers the information they need faster, more efficiently and with more accuracy. With that said, our customers can now take advantage of our new volume quoting process. You no longer have to wait for a volume quote when booking your shipments. Our new processes allows anyone to get a volume quote with the same speed as an LTL Quote! No more waiting 30-45 minutes, hoping that your customers expectations have ceased on your behalf to deliver. Our new process increases our response time and we are proud to say we can over-deliver volume quoting shipping needs with the same expectations of a standard LTL shipment! Click here for details on differentiating standard LTL shipping with Volume Shipping. 

Time is of the essence and we get that better than anyone else in the business. With our new volume quoting density calculator, combined with the power of the TMS Rate Shop we can provide you with pricing in less than 2 minutes!  The new calculator takes in consideration one very important factor: CUBIC CAPACITY

We’re providing our customers with a quick estimate, reducing turnaround time significantly and giving them more options with more carriers. They will be able to acquire more customers with this new process because the time for them to shop will be reduced significantly and will see that less people will need to be involved with overall operations. Everyone understands that price is a determining factor in sales processes across all industries, but we give our customers an opportunity to sell on value.

To take advantage of our new process there are several things you can do. For more information or to get a quote over the phone call 800.MY.SHIPPING, or send an email to contactus@mybluegrace.com. You can also ask to request a BlueShip TMS account . When calling to get a quote make sure you have the weight, dimensions and piece count of your shipment(s) available in addition to your pickup and delivery destinations.

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