{
  "id": 16033037,
  "title": "Late, short deliveries cost food and CPG makers $100 billion",
  "url": "https://urgent.news/2026/10/22/late-short-deliveries-cost-food-and-cpg-makers-100-billion",
  "topic": "business",
  "section": "Business",
  "published": "2026-10-22T11:00:00.000Z",
  "source": {
    "name": "FreightWaves",
    "slug": "freightwaves",
    "url": "https://www.freightwaves.com/news/cleo-otif-failures-cost-cpg-100-billion"
  },
  "original_language": "en",
  "account": "A recent report estimates that delays and incomplete deliveries in the supply chain industry cost U.S. and Canadian consumer packaged goods (CPG) manufacturers and food and beverage companies roughly $100 billion annually. Cleo, a supply chain software company, released this figure in a report on on-time, in-full (OTIF) performance. The $100 billion total is divided into direct costs, such as retailer chargebacks, expedited freight, and dispute management, which account for $10 billion to $11 billion. The remaining $85 billion to $90 billion is attributed to indirect losses, including lost shelf space, smaller retailer orders, excess inventory, and manufacturing inefficiencies.\n\nRetailers penalize suppliers when orders miss the delivery window or arrive short. For instance, Walmart mandates that suppliers meet 98% OTIF standards, imposing a 3% chargeback of the goods' cost if the requirement is not met. Cleo's President and CEO, Mahesh Rajasekharan, emphasized that a missed delivery can jeopardize a manufacturer's next order, its shelf space, and ultimately its relationship with a retailer. He added that the chargeback only captures a fraction of the damage caused by a missed delivery.\n\nThe report highlights that most OTIF failures begin before a truck is loaded. Inaccurate forecasts, late purchase orders, and promotional spikes can force suppliers to use expedited shipping or make last-minute production changes. Freight costs peak in the fourth quarter due to promotional and holiday demand. Between 5% and 15% of shipments to major retailers require expedited logistics. Suppliers are advised to reserve carrier capacity and secure carrier commitments 90 to 120 days before the fourth quarter to avoid these costs.\n\nChargeback disputes, which account for $1.16 billion annually across the U.S. and Canadian CPG industry, involve deduction analysts, compliance managers, third-party platforms, and recovery consultants. The report estimates that 60% to 70% of disputed chargebacks are written off, while 20% to 30% of successful recoveries may go to recovery-service fees. A dedicated deduction analyst costs between $80,000 to $120,000 per year. Cleo recommends that manufacturers measure both direct and indirect OTIF costs together and assign ownership of the total to an executive with profit-and-loss responsibility. The report suggests that a 5- to 10-percentage-point improvement in OTIF performance could recover $11 billion to $23 billion across the market.",
  "summary": "Cleo's OTIF report models $10 billion to $11 billion in direct costs and $85 billion to $90 billion in indirect losses for North American CPG and food manufacturers. The post Late, short deliveries cost food and CPG makers $100 billion appeared first on FreightWaves .",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}