Blog · Compliance
A late shipment is never just a late shipment. It triggers a compliance cascade: late fees, fill-rate penalties, appointment chargebacks, and in the worst case, product discontinuation. This post maps every consequence, the upstream causes that produce late deliveries, and how to prevent and dispute the charges.
For CPG operations, logistics, and finance teams managing KeHE supplier accounts.
Direct answer
When a KeHE purchase order ships late, the consequences do not stop at one fee. The late shipment charge ($250) is just the entry point. If the delivery appointment is missed, that is another $250. If the brand cancels same-day to avoid the no-show, that is also $250. If the late shipment was partial, the fill-rate penalty (3% SLF) can apply on top. And if the pattern continues for 60 days, KeHE can discontinue the product entirely.
The fee amounts are documented in the KeHE compliance guide. This post focuses on the chain reaction: how one missed deadline produces multiple charges, and how to break the cycle.
The compliance cascade
Each of these can trigger independently. On a bad order, several compound on the same PO.
Late shipment fee
$250 per late PO
Triggers when your quarterly on-time delivery rate falls below 85%. Above that threshold, no fee. Below it, every late PO costs $250. The measurement is quarterly, so a bad month can pull the trailing average down and activate fees retroactively across the period.
Fill-rate shortfall
3% SLF on affected POs
If the late shipment is also a partial shipment, the fill rate may drop below the 95% threshold. When it does, the 3% service level fine (SLF) applies to the affected POs. A single late partial can trigger both the late fee and the fill-rate penalty on the same order.
Appointment no-show
$250 per missed appointment
If the scheduled delivery appointment at the KeHE DC is missed entirely, the no-show fee is $250. This is an appointment-class fee that applies regardless of delivery method, whether KeHE-arranged or Supplier Delivered.
Same-day cancellation
$250 per cancellation
Cancelling a scheduled appointment on the day it was set incurs a $250 fee. This often compounds with a late shipment when a brand realizes the order will not make the window and cancels at the last minute.
Short-notice reschedule
$200 per reschedule
Rescheduling an appointment with insufficient lead time costs $200. This is the fee brands hit when they try to recover from a delay by moving the appointment rather than cancelling it.
Product discontinuation
Risk after 60 days of non-shipment
Per P&P section 6.5, 60 consecutive days of non-shipment on an item can trigger discontinuation from the KeHE catalog. This is the most severe consequence and the hardest to reverse, because it requires re-onboarding the product through the full listing process.
Why POs ship late
Late deliveries are symptoms. The root causes live upstream in scheduling, EDI compliance, carrier coordination, and inventory planning.
Delivery appointments must be scheduled through C3 Reservations at least 7 days in advance, with separate credentials for each DC. A missed scheduling window means the shipment cannot be received, regardless of whether the product is ready.
The ready-to-ship notice (EDI 753) is due 3 business days before the scheduled pickup. Missing this deadline can delay carrier dispatch and cascade into a late delivery, even when inventory is available.
The handoff between the brand (or 3PL), the carrier, and the KeHE DC involves multiple parties with independent systems. A carrier delay, a missed pickup, or a routing error can turn a shipment that left on time into a delivery that arrives late.
If inventory is not available when the PO is due to ship, the brand faces a choice: ship late and incur the penalty, ship partial and risk the fill-rate fee, or cancel and risk discontinuation. None of these outcomes are free.
Prevention
Every late delivery fee is a failure of visibility, not a failure of intent. The brand intended to ship on time. The system did not surface the risk early enough to act.
Track the 753 due date (3 business days before pickup), the 855 acknowledgment (24 hours after PO receipt), and the appointment confirmation from C3. Each of these has a hard deadline, and missing any one can cascade into a late delivery.
Confirm appointment slots through C3 Reservations as early as possible. Monitor for DC-side changes or cancellations. An appointment that moves without your knowledge turns into a no-show fee.
Use carrier tracking to confirm pickup, transit, and delivery against the appointment window. A carrier delay discovered on the day of delivery leaves no room to reschedule without the $200 short-notice fee.
If inventory will not be available for a PO, the decision to ship partial, delay, or cancel should be made early enough to avoid compounding penalties. A planned partial shipment filed in advance is better than a surprise short-ship at the dock.
When a late-delivery deduction lands
Not every late-delivery fee is the supplier’s fault. Carrier failures, DC-initiated appointment changes, and system errors can all produce fees that should not stick. The dispute path runs through K-Solve with a 180-day window. Here is what to bring.
Export the appointment record from C3 Reservations showing the originally scheduled time, any modifications, and who initiated each change. If KeHE moved the appointment, this is the evidence that the brand did not cause the miss.
Timestamped carrier events showing pickup, transit, and delivery. If the carrier was late but the brand shipped on time, these records establish that the delay was not the supplier's fault.
Emails, portal messages, or system records showing who moved the date or changed the appointment. The distinction matters: if the DC initiated the reschedule, the fee should not apply to the supplier.
Appointment-class fees (no-show, same-day cancellation, short-notice reschedule) apply to both delivery methods. Lumping fees apply only to Supplier Delivered shipments. Confirm the fee category before disputing.
For the full dispute process, evidence packets by deduction type, and K-Solve filing instructions, see the KeHE dispute guide. For a complete reference of all 111 prefix codes, see the prefix code directory.
The Intelligent PO™ connection
The PO workspace monitors the EDI 753 deadline (3 business days before pickup), the C3 appointment window, and carrier pickup confirmation. When a deadline is at risk, the workspace surfaces it before the penalty triggers, not after the deduction lands on the remittance.
When a late-delivery deduction does land, the evidence packet already exists: appointment records, carrier events, EDI timestamps, and communication history are attached to the PO from the moment the order was created. The dispute starts from evidence, not from a scramble to reconstruct what happened.
For how this fits into the broader system architecture, see the architecture guide.
Frequently asked
The late shipment fee is $250 per late PO, but it only activates when your quarterly on-time delivery rate falls below 85%. Above that threshold, there is no per-PO fee. However, a late delivery can also trigger appointment no-show fees ($250), same-day cancellation fees ($250), and short-notice reschedule fees ($200) independently of the on-time rate.
Yes. A late partial shipment can trigger the $250 late shipment fee (if the quarterly rate is below 85%), the 3% service level fine (if fill rate drops below 95%), and the $250 appointment no-show fee if the delivery window is missed entirely. These are separate compliance mechanisms that can compound on a single order.
The strongest disputes show that the brand fulfilled its obligations on time and the delay was caused by a carrier failure, a DC-initiated appointment change, or a system error. Evidence from C3 Reservations (appointment history), carrier tracking (pickup and transit timestamps), and communication records (who moved the date) are the critical documents. File through K-Solve within the 180-day dispute window.
Per KeHE Policies & Procedures section 6.5, 60 consecutive days of non-shipment on an item can trigger product discontinuation from the KeHE catalog. Discontinuation requires re-onboarding through the full listing process, which is significantly more costly than resolving the supply issue that caused the gap.
The Intelligent PO workspace tracks every PO through its lifecycle, including the EDI 753 deadline (3 business days before pickup), appointment status from C3, and carrier events. When a PO is at risk of shipping late, the workspace surfaces the risk before the penalty triggers. If a late-delivery deduction does land, the evidence packet assembles automatically from the data already attached to the order.
Free audit
Upload your K-Solve export. The audit classifies each deduction, separates contractual from disputable, and estimates what is recoverable. No sign-up required.
Related reading
Evidence boundary: All fee amounts, thresholds, and policy references in this post are sourced from verified KeHE documentation including the Policies & Procedures manual and the IBR Fee Schedule. KeHE may update these policies at any time. Confirm current terms directly with KeHE or through your KeHE account representative before making compliance or dispute decisions.
