Improving OTIF Rates with Expedited Transportation

Nick Terry • December 21, 2023

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You're at the helm of a shipping operation where every minute counts and deadlines loom large. Getting your goods delivered precisely on time and in full isn't a goal but literally the heartbeat of your business. If you don’t know or understand the 'On-Time In-Full' (OTIF) acronym, now’s the time to learn. Because those four letters represent much more than a catchy abbreviation, they're a commitment to delivering shipments precisely as promised, complete and undamaged. Falling short on OTIF can lead to devastating consequences, including customer dissatisfaction, financial penalties, or worse.

So now, let's get to know your secret weapon in avoiding such adverse outcomes: expedited transportation. When you hear the term "expedited transportation," you probably think of fast transit and racing against the clock. But in reality, it's about so much more: making smart, timely choices. How can you leverage it to meet OTIF requirements and improve rates? Think of this article as your playbook with expedited transportation as the star QB.

For Today’s Shippers, OTIF Rates Remain a Challenge

Walking the tightrope of high OTIF rates can feel like a high-stakes balancing act for shippers. You're constantly juggling to ensure every order is complete and punctually delivered. Miss the mark, and the consequences are more than just a red mark on a report card — think missed delivery windows and incomplete orders, each slip-up inching you closer to costly penalties. It's a game where precision is key, and the cost of a misstep can ripple through your business.

The High Cost of Missing the Mark: Penalties for Missed Deliveries and Incomplete Orders

Imagine the frustration when a carefully planned delivery misses its window or arrives incomplete. It's like preparing a perfect meal only to have it served cold. In the shipping world, such slip-ups do more than disappoint; they often lead to penalties and real hits to your bottom line and reputation.

Financial Repercussions: The U.S. food retail industry sheds around $15–20 billion in sales annually due to unavailable or unsellable items, roughly 2-3% of total sales. Penalties for not meeting OTIF requirements can reach a staggering $5-6 billion annually in the U.S.
Operational Hurdles: About a quarter of deliveries show up over two hours early, throwing a wrench in distribution center schedules and leading to idle assets and demurrage costs. This inefficiency consumes industry capacity and increases operational challenges.
Strained Supplier-Retailer Ties: A survey of 300 retail buyers revealed that 100% value on-time delivery highly, with 73% having severed ties with suppliers over delivery issues. These relationships are increasingly at risk, with OTIF non-compliance rates averaging 20-30%.
Penalties from Major Retailers: Retail giants like Walmart and Kroger enforce strict penalties for OTIF non-compliance. Walmart fines 3% of the purchase price for early, late, or incomplete orders. At the same time, Kroger imposes a $500 fine for orders over two days late. These fines can accumulate rapidly, especially for larger orders.
Sales Impact: Incomplete deliveries, even when on time, contribute to up to 30% of out-of-stock situations, leading to an estimated $1 trillion in lost sales globally each year.

The Role of Expedited Transportation in a Complex Logistics Environment

In a world where every second counts, expedited transportation is the key to mastering logistics with speed and certainty. Let’s look more deeply at how expedited services go beyond traditional shipping methods, offering tailored, efficient solutions crucial to meeting tight OTIF goals.

Understanding Expedited Transportation: Speed and Reliability Combined

Expedited transportation is more than just quick shipping; it combines efficiency, speed, and reliability. Imagine it as giving your cargo a VIP pass, optimizing every aspect for the fastest delivery possible. Its hallmarks are direct routes that minimize stops, dedicated resources like exclusive vehicles and teams focused solely on your shipment, and enhanced tracking for real-time updates on your shipment's journey.

How Expedited Services Differ from Standard Shipping Methods

Standard shipping is efficient but bound to a set schedule and multiple stops like the regular bus service. Expedited transport, on the other hand, is akin to a private taxi ride explicitly tailored to your urgent needs. While standard shipping suits routine deliveries, expedited services shine in scenarios where time is of the essence. These services offer faster delivery times by significantly reducing transit time, provide customized solutions for unique shipping needs, and involve less cargo handling, lowering the risk of damage and delays.

The Advantages of Expedited Transportation in Meeting OTIF Goals

Do you still need to be sold on expedited services meaningfully differing from standard shipping methods? Consider the following advantages that expedited transportation has in achieving OTIF goals:

Swift and Safe Deliveries: Ensures shipments reach their destinations quickly and intact.
Mitigating Financial Risks: Reduces the likelihood of penalties and lost opportunities due to delays.
Strategic Business Choice: Enhances your business's reputation and reliability in a competitive market.
Improved Customer Satisfaction: Leads to happier clients thanks to reliable and prompt delivery.
Enhanced Flexibility: Offers the ability to respond quickly to last-minute orders or changes in demand.

3 Strategies for Improving OTIF Rates

The world of expedited transportation is a high-stakes race against time with zero margin for error. It's a thrilling yet challenging arena where the right strategies make all the difference. In this dynamic setting, let's dive into three game-changing strategies that promise to boost your OTIF rates and transform your shipping experience into a smoother, more satisfying adventure for you and your customers.

Precise Planning and Forecasting

OTIF success is the holy grail in the world of expedited shipping. Achieving it begins with precise planning and forecasting. Why? It's simple. By accurately predicting customer demand, you can seamlessly align your production schedules with shipping windows. Doing so ensures that goods are ready to ship right when a truck is available, minimizing delays and maximizing efficiency.

Consider this hypothetical scenario: A company anticipates a seasonal surge in demand for its product. By using accurate forecasting methods, it increases production in advance. When the surge arrives, they're ready. Not only are products available, but they've also coordinated with expedited shipping providers ahead of time. This foresight means trucks are waiting to roll out as soon as products are off the line, leading to a significant increase in OTIF delivery rates.

Carrier Selection and Performance

The reliability of your carrier is the core of your logistics. Yet, not all carriers are created equal when it comes to expedited transport. Be sure to evaluate and select those with a proven track record of on-time deliveries. Your due diligence should go beyond just checking boxes and dive deep into their performance history, customer feedback, and operational strengths. The benefits of forging long-term partnerships with these dependable carriers go beyond reliability. They understand your business needs, can anticipate challenges, and are often willing to go the extra mile, quite literally, to meet your OTIF targets.

Real-Time Visibility and Tracking

In expedited transportation, time is not just money; it’s everything. It's here where real-time tracking and visibility become game-changers. The use of advanced technology in providing real-time updates on your shipment’s progress is a tech-driven approach that transforms how you manage logistics, offering a window into each stage of the transportation process. It enables proactive issue resolution, ensuring that you address potential delays before they impact your OTIF. These advantages all lead to an underlying goal far beyond tracking: real-time insight can help build a resilient, responsive, and reliable shipping strategy.

Streamlining Your OTIF Success with Entourage Freight Solutions

As we've explored, expedited transportation is not just about speed; it's about making smart, strategic choices. From the high costs associated with missing delivery targets to the complex logistics environment, the challenges are many. But so are the opportunities for those ready to embrace innovative solutions to improve OTIF rates.

It's here where Entourage Freight Solutions (EFS) steps in. As a dedicated logistics expert, EFS offers a range of services designed to meet the unique needs of your shipping operation. Whether it's Full Truckload (FT) for dedicated shipments, Less Than Truckload (LTL) for efficient multi-destination transport, specialized Refrigerated Trucking, or cross-docking solutions, EFS has you covered. They excel in managing retailer shipping, DC-to-DC transfers, and freight management solutions while leveraging their extensive food service logistics background.

Don't let logistical challenges slow you down. Embrace the opportunity to excel with EFS. Request a quote today and take the first step towards seamless, efficient, and reliable shipping solutions.

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Tariffs, Trade Policy, and the Great Freight Fallout

By Nick Terry • April 28, 2025

In 2025, trade policy is no longer something that the freight industry can leave on the back burner. Trade policy today is shaping strategy at every level. From tariff escalations and retaliatory duties to sweeping regulatory changes and targeted maritime fees, supply chain leaders are navigating a freight market in which unpredictability is the only constant. Sourcing decisions are shifting, pricing dynamics are unstable, and long-standing operational models are being rewritten in real time. This edition brings together key stories highlighting the growing pressure across logistics channels. Each development points to an industry moving fast, and often reactively, to keep pace with volatile policy decisions. Tariffs Stall US Freight Recovery as Shippers Pause Orders The recent move by the U.S. Trade Representative (USTR) to impose entrance fees on Chinese-built ships calling U.S. ports has only added to the confusion and uncertainty gripping global supply chains and freight operations. Shippers are pausing plans and slashing orders, with truckload volumes, containerized imports, and manufacturing output all showing signs of contraction. Ocean freight spot rates have collapsed: Asia-U.S. West Coast rates have fallen 61% since January to $2,050 per FEU, while East Coast rates have dropped 53.7% to $3,100 per FEU . Blank sailings are rising, with vessels leaving Asia half-empty. Amazon and Five Below are among the major retailers reducing orders from Asia. Container imports jumped 15.3% in 2024, but forecasts now predict a 20-27% decline through the summer. Exporters, particularly agriculture and forestry suppliers, are also squeezed, facing 125% retaliatory tariffs from China. Truckload and intermodal rates remain stagnant, while U.S. factory output fell sharply in March. US Apparel Importers Brace for Long-Term Volume Declines According to Trade Partnership Worldwide, a 124.1% tariff on Chinese clothing and footwear is expected to reduce U.S. apparel imports by 1.6% annually . China still accounts for 41.7% of apparel shipments, leaving limited flexibility for diversion. The American Apparel and Footwear Association (AAFA) is warning of price hikes and mounting infrastructure stress as sourcing pivots toward Vietnam, India, and Indonesia. A looming May 2 deadline for de minimis exemptions could further complicate flows and delay deliveries. Even with a temporary 90-day pause in reciprocal tariffs, the policy uncertainty already affects long-term planning. AAFA CEO Steve Lamar calls the shifting policies “chaotic,” and warned that high tariff pressure will hit both importers and U.S. manufacturers reliant on Chinese components. Port and rail capacity limitations at larger gateways are adding to concerns. Retailers now face rising costs, shrinking margins, and operational delays — all while consumer demand continues to shift rapidly. Freight Pricing Gains Lose Momentum According to the TD Cowen/AFS Freight Index, Q1 truckload rates rose 5.9% above the 2018 baseline, but are expected to decline slightly in Q2. Shippers are responding to tariff threats with aggressive front-loading and shorter-haul routes, driving per-shipment costs to three-year lows. LTL carriers remain focused on profitable lanes and high-quality freight rather than chasing volume. The index forecasts a 0.7% year-over-year increase in LTL rate per pound for Q2 , despite sustained demand softness and macro uncertainty. A key driver behind the softening spot market conditions is a shift to shorter hauls and regionalized distribution, pushing per-shipment costs to their lowest point in more than three years. This trend reflects how retailers and manufacturers are repositioning inventory in response to tariff volatility, as NRF’s Jonathan Gold and DAT analyst Dean Croke noted. Meanwhile, the LTL sector is seeing a 4% rise in fuel surcharges, offsetting lower weights and shorter hauls. With the freight market still under pressure after 26 months of contraction, optimism remains subdued as we enter the midyear period. US Truckload Freight Spot Rates Continue to Fluctuate National benchmark rates have experienced a decline across all categories. As of April 18, dry van decreased by 4 cents to $1.62, reefer by 2 cents to $1.88 , and flatbed by 3 cents to $2.16. This marked the first overall decrease since late January, signaling potential shifts in market dynamics. These changes can be attributed to factors such as tariff uncertainties and tighter capacity, especially affecting the flatbed market. Flatbed rates rely heavily on manufacturing activity in the country, which has been particularly hard-hit by the ongoing trade war with China, and to some extent, with the rest of the world. US Finalizes Tiered Fee Plan Targeting Chinese Ships The U.S. is moving forward with a revised plan to levy voyage-based fees on Chinese-owned and Chinese-built ships calling at American ports. The U.S. Trade Representative (USTR) announced the measure as part of a broader Trump administration effort to counter China’s dominance in shipbuilding and logistics while reigniting domestic ship construction and port infrastructure investment. Starting in six months, Chinese operators will be charged $50 per net ton, with an annual increase of $30 for three years . Non-Chinese carriers using Chinese-built vessels will face lower rates, beginning at $18 per ton or $120 per container, with annual increases. The USTR capped fee applications at five voyages per vessel annually, scaling back its original, more punitive per-port-call proposal after intense industry pushback. The fees are tied to findings from a USTR investigation, which concluded that China’s shipbuilding dominance — producing 29% of global fleet capacity and 70% of all container ships on order — stemmed from unfair trade practices. Exemptions apply to ships arriving empty, those in the Great Lakes or U.S. territories, and some bulk exports. LNG vessel transport restrictions will phase in over 22 years to support U.S. production. China’s largest container carrier, Cosco Shipping Lines, has sharply criticized the USTR’s plan. In a strongly worded statement, Cosco labeled the move as “discriminatory,” and warned it would disrupt global industrial and supply chain stability. Cosco denied allegations from that USTR investigation that claimed China manipulated its shipping and shipbuilding sectors to gain an unfair advantage. The carrier said it upholds “integrity, transparency, and compliance” in global competition and remains committed to ensuring the resilience of international trade. Walmart Investing $6B in Mexico, Central America Store Expansion Walmart of Mexico and Central America will invest $6 billion to open new stores across the region , reinforcing its long-term commitment to growth in Latin America. The expansion will include Bodega Aurrera, Walmart Supercenters, Sam’s Club, and Walmart Express formats, building on a robust network of 3,200 stores across all 32 Mexican states. This latest move echoes Walmart’s earlier $1.3 billion investment in 2016 for regional distribution and operational upgrades. The retailer entered the Mexican market in 1991 with a Sam’s Club in Mexico City. In a statement, Walmart said the new expansion reflects confidence in the region’s economic potential and consumer demand. Globally, Walmart continues to invest aggressively in infrastructure and store development. The company has pledged about $4.5 billion for its Canadian operations and $1.3 billion in Chile to build 70 new stores and a distribution center. In the U.S., Walmart is executing a five-year plan to build or convert more than 150 stores while modernizing 650 existing locations under its “Store of the Future” initiative. Experience Seamless Shipping with Entourage Freight Solutions Entourage Freight Solutions believes in total transparency in the shipping process. That is why we invest in tech solutions that track every shipment extensively, monitor every driver, and extract every bit of efficiency without sacrificing quality. Our state-of-the-art platform utilizes cloud-based GPS tracking to keep you informed, reroutes shipments on the fly to avoid delays, and even responds to real-time market changes to ensure you receive your shipment on time and as soon as possible. Our Services Full Truck Load (FTL): When you need a truck all to yourself. Less-Than-Truckload (LTL): Efficient solutions for multi-stop shipments or combining smaller loads to save on costs. Refrigerated Trucking: Keeping your temperature-sensitive products fresh and safe. Cross-Docking: Strategically located facilities in Shelby, Ohio, Cedar Rapids, Iowa, and Romulus, Michigan, for streamlined consolidation, storage, and distribution. Ready to experience a new level of service and control in your freight shipping? Request a quote today to see how Entourage Freight Solutions can help with your freight movement and other supply chain needs.