Mike
Well-Known Member
Beginning this Tuesday, the financial stakes of shipping to Walmart Inc. (NYSE:WMT) will get appreciably higher.
Effective Sept. 15, the Bentonville, Arkansas-based retail behemoth will require its suppliers and their carriers to deliver all orders as Walmart required and by their “must-arrive-by” dates 98% of the time or be fined 3% of the cost of the goods. The adjustment was disclosed in a Sept. 1 Walmart memo, giving its massive supplier and carrier network just two weeks to adjust.
The change to the program, known in the retailing trade as “on-time, in-full” (OTIF), brings the two components into uniformity for the first time since Walmart launched it in mid-2017. Currently, 95% of all general merchandise orders must be filled exactly as Walmart wants it. For food and consumables, that figure is 97.5%. Talk Business & Politics, an Arkansas online publication that first reported the story, said OTIF compliance on the food and consumables segment has been well below Walmart’s requirements.
The same uniform standards will apply to the time-in-transit portion. For truckload carriers, Walmart currently sets an 87% on-time threshold for a “prepaid” transaction where the supplier sets the delivery terms and pays the freight charges. It imposes a 95% requirement for a “collect transaction,” where the retailer handles the shipping and absolves the shipper of any responsibility should an in-transit issue like a truck breakdown affect delivery schedules.
Less-than-truckload (LTL) carriers may face the most difficult adjustment. Their on-time requirements are currently set at 70%.
Effective Sept. 15, the Bentonville, Arkansas-based retail behemoth will require its suppliers and their carriers to deliver all orders as Walmart required and by their “must-arrive-by” dates 98% of the time or be fined 3% of the cost of the goods. The adjustment was disclosed in a Sept. 1 Walmart memo, giving its massive supplier and carrier network just two weeks to adjust.
The change to the program, known in the retailing trade as “on-time, in-full” (OTIF), brings the two components into uniformity for the first time since Walmart launched it in mid-2017. Currently, 95% of all general merchandise orders must be filled exactly as Walmart wants it. For food and consumables, that figure is 97.5%. Talk Business & Politics, an Arkansas online publication that first reported the story, said OTIF compliance on the food and consumables segment has been well below Walmart’s requirements.
The same uniform standards will apply to the time-in-transit portion. For truckload carriers, Walmart currently sets an 87% on-time threshold for a “prepaid” transaction where the supplier sets the delivery terms and pays the freight charges. It imposes a 95% requirement for a “collect transaction,” where the retailer handles the shipping and absolves the shipper of any responsibility should an in-transit issue like a truck breakdown affect delivery schedules.
Less-than-truckload (LTL) carriers may face the most difficult adjustment. Their on-time requirements are currently set at 70%.
Walmart tightens on-time, in-full requirements
Suppliers face noncompliance fines of 3% of cost of goods.
freightwaves.com