On-time delivery (OTD): A guide for supply chain decision-makers

For supply chain leaders, as fulfillment networks grow complex, ensuring that orders arrive within the window promised to the customer requires precision across systems, teams, and partners. Minor inefficiencies in orchestration can quickly lead to missed dates, higher support costs, and lost revenue.

This guide outlines the core considerations for improving on-time delivery (OTD) across the supply chain — from performance benchmarks to practical strategies that enhance execution and reliability. 

Key highlights:

• In shipping, OTD means “on-time delivery,” which refers to the percentage of orders delivered within the promised window. This metric serves as a critical indicator of supply chain reliability.
• Common causes of missed delivery windows include out-of-sync inventory, static routing logic, and misaligned delivery promises.
• Improving on-time delivery rates requires coordinated, data-driven decisions across systems, from checkout to the final mile.
• Shipium helps enterprises achieve consistent delivery on time by unifying fulfillment operations through predictive technology and real-time orchestration.

What is OTD in shipping?

On-time delivery (OTD) in shipping refers to the percentage of orders delivered to customers within your company’s promised timeframe. 

OTD is a core metric for logistics and supply chain performance, reflecting how well a company meets customer expectations for speed and reliability. By monitoring on-time delivery rates, retailers identify supply chain bottlenecks and improve service levels.

Why does an on-time delivery service matter for supply chain success?

Providing an on-time delivery service matters because it directly impacts customer retention, operating costs, and the credibility of your ecommerce brand. 

When businesses don’t deliver shipments within the promised timeline, support teams see a spike in “Where is my order?” (WISMO) requests, and customers are less likely to return. In fact, McKinsey reports that 85% of consumers won’t buy from a retailer again after a poor delivery experience.

OTD performance also affects internal efficiency. Late or unreliable deliveries lead to more exception handling, higher return rates, and inaccurate inventory, labor, and carrier capacity planning. These downstream effects drive up parcel spending and create instability across your fulfillment network.

In contrast, a high OTD rate gives teams control, reducing WISMO requests, enabling more aggressive delivery promises, and lowering operational costs. Simply put, on-time delivery is a supply chain’s most visible — and most consequential — output.

On-time delivery metrics and calculation

At the most basic level, businesses calculate on-time delivery by dividing the number of orders that arrived on or before the promised date by the total number of orders shipped:

OTD rate = (On-time deliveries ÷ Total deliveries) × 100

For example, say your ecommerce network ships 150,000 orders in a month. If 142,500 of those orders arrive on or before the promised date, your OTD rate would be:

(142,500 ÷ 150,000) × 100 = 95% OTD

This simple OTD calculation is the most direct way to track delivery performance — and it's the number most organizations use to evaluate supply chain reliability at a glance.

However, OTD alone won’t tell you why your business failed to deliver 5% of orders on time. To understand and improve this measurement, you need to look at supporting time-based key performance indicators (KPIs) that break down the stages of fulfillment and shipping.

Supporting on-time delivery metrics include:

• Time in fulfillment center: Duration from order confirmation to carrier pickup — critical for identifying warehouse delays
• Time to deliver: Actual transit time from shipment departure to final delivery — a factor for monitoring carrier performance
• Time to first scan: Time between handoff to carrier and their first scan — useful for catching pickup or injection delays
• Time to exception resolution: How quickly in-transit issues are identified and resolved — key for reducing ecommerce shipping delays

These other metrics don’t replace the on-time delivery metric, but they help explain it. Understanding how each step of the shipping workflow contributes to missed promises allows teams to justify operational changes, prioritize tech investments, and reduce future exceptions.

What are the on-time delivery rate benchmarks for ecommerce companies?

Ecommerce on-time delivery rate varies depending on factors like vertical, delivery method, seasonality, and system maturity. But even without universal benchmark standards, keep in mind that: 

• According to Project44, the average on-time delivery performance rate during the 2024 peak season was 84%. 
• Shipium customers, by contrast, achieved a 95.4% OTD rate during the same peak period. 

By coordinating real-time decisions across routing and carrier selection, Shipium’s modern fulfillment platform helps retailers improve speed, accuracy, and cost-efficiency across the shipping lifecycle. 

Learn more about our customers’ OTD results in our 2024 recap.

What are the key factors impacting on-time deliveries?

On-time deliveries depend on your upstream coordination across the entire fulfillment chain. For logistics leaders, the challenge lies in managing a network of moving parts that often operate on outdated rules, disconnected systems, or assumptions that no longer reflect operational reality. Every breakdown in that chain compounds, putting customer experience and delivery efficiency at risk.

The most common reasons for missed deliveries are preventable, though. By identifying the following five factors, you gain the visibility you need to protect your delivery promises, reduce risk, and improve performance across the supply chain.

1. Out-of-sync inventory

When inventory data is inaccurate or delayed, it creates misalignment between what’s promised to the customer and what the network can fulfill. This disconnect is especially common in multi-node environments where systems update asynchronously, or inventory levels are batch-processed instead of real-time. A product might appear available at checkout but is actually sitting in a different node, misplaced in the warehouse, or already reserved by another order.

That initial breakdown throws off every downstream step and increases the risk that the order won’t arrive on time. For logistics leaders, inaccurate inventory is one of the earliest and most costly threats to on-time deliveries, especially during periods of high volume or tight delivery windows.

2. Carrier constraints and capacity gaps

Even the most reliable courier services face real-world limitations, especially during peak periods, macro-environmental changes, or high-volume promotional events. Relying too heavily on a small group of preferred carriers — or failing to account for dynamic capacity limits — can quickly lead to missed pickups, unexpected delays, or unscanned handoffs.

3. Rigid or static order routing

Legacy routing logic tends to follow inflexible rules: ship from the closest warehouse, use the cheapest ground method, or stick with a preferred carrier. But those defaults often ignore current network conditions, such as load balancing across nodes, carrier backlogs, or zone-based transit variability.

This rigidity limits the ability of ops teams to pivot. Even when the data shows a different node or carrier would offer better service, outdated routing systems can’t adjust without heavy IT intervention. In fast-moving operations, that lack of flexibility directly impacts delivery reliability.

4. Disconnected systems and data silos

Fulfillment success depends on clean handoffs between logistics systems. When those systems don’t communicate in real time, supply chain operators lose visibility into where an order stands, what’s holding it up, or when to intervene. These blind spots make it difficult to track SLAs, escalate exceptions, or even understand if a shipment is at risk.

5. Misaligned delivery promises

The delivery date shown to a customer sets the expectation and the bar for operations. Many retailers, however, still generate those dates using static buffers or a fixed logic that doesn’t reflect actual fulfillment capacity. Promises may be too aggressive during peak season or too padded during slower periods, hurting both speed and trust.

When retailers fail to make accurate delivery promises, two things can happen: 

• Customers receive orders late and lose confidence 
• Cart abandonment rises because the estimated delivery date feels too far out

In both cases, the business sacrifices performance. Without aligning the promise to what the network can reliably execute, logistics teams are forced into reactive firefighting instead of proactive delivery management.

How to improve on-time delivery: 5 up-to-date strategies

To increase on-time delivery rates, logistics leaders need tight control over key drivers of delivery performance, including carrier selection, order routing, and customer communication. 

These five strategies offer logistics leaders a clear framework on how to improve on-time delivery:

1. Align delivery promises with real operational capacity

The easiest way to miss a delivery is to promise a date your network can’t support. Many organizations still rely on static service-level agreements (SLAs) or padded estimates that fail to account for warehouse conditions, carrier cutoffs, or regional delays. The result is a widening gap between what the customer sees and what the operation can realistically deliver.

Making accurate, data-driven delivery promises closes that gap. When expected delivery dates are generated using real-time inputs, like inventory status and transit modeling, teams have a clear target, and customers receive transparency they can trust. Aligning promises with actual execution capacity improves the on-time delivery KPI while reducing WISMO requests and refund risk.

2. Optimize order routing using dynamic rules

Fulfillment networks aren’t static. Inventory shifts daily, carrier performance fluctuates, and zone-based cost differences matter. Static logic creates blind spots and missed opportunities.

Dynamic routing replaces rigid rules with adaptable frameworks that respond to real-time network conditions. Logistics teams can route based on delivery speed, cost targets, or customer tier, prioritizing deliveries on time without overspending. 

To see how Shipium powers dynamic routing through a real-time rules engine, explore our Fulfillment Engine.

3. Diversify and actively manage your carrier mix

Depending too heavily on a single carrier — or failing to monitor performance at a granular level — exposes fulfillment operations to avoidable risk. Even top-tier on-time delivery services may experience localized slowdowns, service suspensions, or capacity constraints that delay shipments.

Diversifying the carrier mix and managing it dynamically helps logistics teams shift volume when issues arise. By actively measuring carrier reliability, time-in-transit trends, and zone performance, teams can choose the right service for each shipment based on data, not assumptions. This strategy increases flexibility and improves the reliability of your timely delivery service without defaulting to expensive expedited options.

Keep learning: Carrier contract management made simple

4. Strengthen system integration across fulfillment tech

Disconnected systems create delays long before the order reaches the customer. Each handoff — from order confirmation to pick and pack to label generation — presents a potential point of failure when data doesn’t flow in real time. Poor integration limits visibility and slows exception handling, both of which degrade delivery reliability.

Tightly integrated systems create a connected fulfillment stack, where status updates, inventory changes, and carrier actions sync automatically. That visibility empowers operations teams to act earlier, course-correct when needed, and ensure orders move forward without delay. A fully connected tech stack is foundational to any on-time delivery initiative.

5. Leverage predictive data to prevent delays before they happen

Most delays don’t happen suddenly — they build over time. Carrier delays, node congestion, and weather disruptions often leave signals in the data before they impact performance. Yet many operations still work reactively, only investigating once a shipment is already late.

Predictive analytics helps solve this issue. By analyzing historical trends, real-time shipment data, and carrier behavior, logistics teams can identify risks earlier and take corrective action before they affect the customer.

Achieve consistent delivery on time with Shipium’s modern fulfillment platform

Retailers competing on speed and reliability need systems that consistently support on-time delivery. With Shipium’s modern fulfillment platform, operators can meet delivery expectations at scale. 

Our Delivery Promise feature uses dynamic inputs like inventory status, carrier constraints, and predictive transit times to calculate accurate delivery dates at checkout. By leveraging these capabilities, you can establish consistency in delivery on time, reduce exceptions, and increase confidence throughout the entire fulfillment workflow. 

Book a demo to see our shipping platform in action.

Frequently asked questions

What is the difference between OTD and OTIF?

On-time delivery (OTD) measures whether an order arrives by the promised date. This metric focuses strictly on delivery timeliness: did the shipment reach the customer on time? 

On-time in full (OTIF) combines delivery timing with order completeness. By measuring this metric, businesses can answer the question: Was the right product delivered on time, in the correct quantity, and in a sellable condition?

Both metrics serve different purposes. 

• Transportation and logistics teams typically manage OTD since it focuses on carrier performance and delivery orchestration. 
• OTIF covers a broader scope, including inventory accuracy, warehouse execution, and the customer’s end experience, making it a cross-functional metric that spans multiple teams.

How do I set realistic on-time delivery targets for my supply chain?

To set realistic on-time delivery targets, start by analyzing your historical performance by region, method, carrier, and season. Most companies overestimate their OTD rates due to poor tracking or narrow SLA-based assumptions. 

Look at your actual delivery windows vs. your customer-facing promises. If you quote 3-day delivery but only hit it 60% of the time, that’s your real baseline, not what the carrier claims to be achieving.

From there, segment your goals. Set OTD targets by separating your shipping options (standard vs. expedited), customer region, or fulfillment node. For example, you could establish tiered OTD goals — 95% for high-density urban deliveries, 90% for rural or long-zone shipments, etc. 

How do I recover from a missed delivery on time?

To recover from a missed delivery on time, try to identify the late shipments as early as possible, ideally before the customer asks. Then, search for where the delay occurred and address its root cause: 

• Was it a warehouse delay? 
• A carrier issue? 
• A routing failure? 

Modern technology, like Shipium’s Simulation and predictive modeling, helps teams recover and improve their processes by pinpointing where the delivery process broke down. 

Shipium Simulation allows you to compare actual delivery outcomes against what would have happened under different conditions, like using another carrier, fulfillment node, or service level. You can run scenarios across historical shipments to isolate patterns (e.g., "X carrier underperforms on 2-day promises in Zone 6") and update rules to prevent the same issue from recurring.

Which technologies help ensure on-time delivery?

The technologies that help ensure on-time delivery are those that coordinate decisions across systems in real time, including platforms for dynamic carrier selection, predictive time-in-transit modeling, and automated business rules that respond to changing network conditions. 

The most effective solutions, like Shipium, sit between your order management system (OMS), warehouse management system (WMS), and carrier APIs — integrating data and making smarter fulfillment decisions at the moment of execution.