On-Time Delivery (OTD)

On-time delivery (OTD) is the percentage of shipments delivered on or before the expected delivery date. It’s one of the most important metrics for measuring carrier reliability and overall supply chain performance.

Calculating OTD

OTD Rate = (On-Time Deliveries ÷ Total Deliveries) × 100

Example:

• Shipments delivered on time: 940
• Total shipments: 1,000
• OTD = (940 ÷ 1,000) × 100 = 94%

What “On Time” Means

The definition varies by context:

• Parcel shipping: By end of promised delivery day
• LTL freight: Within delivery window (often a day range)
• B2B: By appointment time (often a 2-hour window)
• Same-day: By promised hour

Carrier OTD Benchmarks

Factors Affecting OTD

Carrier-Related

• Network capacity
• Weather events
• Peak season volume
• Driver availability

Shipper-Related

• Late shipment tender
• Address errors
• Packaging issues
• Missing documentation

Improving OTD

1. Ship on time - Meet carrier pickup windows
2. Address validation - Verify addresses before shipping
3. Carrier selection - Use reliable carriers for critical shipments
4. Track proactively - Identify issues before delivery
5. Set realistic promises - Don’t overpromise delivery dates
6. Diversify carriers - Don’t rely on single carrier

Business Impact

• Each 1% OTD improvement can increase customer satisfaction 2-3%
• Late deliveries are the #1 cause of negative reviews
• Many retailers penalize suppliers for poor OTD