Partial Shipments and Fill Rate: Ship-Complete Rules for Wholesale Purchase Orders
When a wholesale PO can't be filled in full, the warehouse has to hold it, ship what's there, or cancel the rest. How fill rate is measured, the three partial-shipment policies, and where those rules need to live before orders reach your 3PL.
A retail buyer sends a purchase order for 40 SKUs. On pick day, 37 are fully in stock, two are short by a few cases and one hasn't arrived from the factory. The warehouse now has a decision to make, and if nobody has made it in advance, it gets made on the dock under time pressure: hold the whole order, ship what's there, or cancel the missing lines.
That decision is governed by ship-complete and partial-shipment rules. They affect fill rate, freight cost, chargebacks and how the buyer sees you as a vendor, so they belong in writing before the first wholesale order ever reaches your 3PL.
Fill rate: the number buyers watch
Fill rate measures how much of what was ordered actually shipped. It can be counted several ways, and buyers don't all use the same one:
| Measure | How it's calculated | What it punishes |
|---|---|---|
| Unit fill rate | Units shipped ÷ units ordered | Any shortage, weighted by quantity |
| Line fill rate | Lines shipped complete ÷ lines ordered | Short lines, even by one case |
| Order fill rate | Orders shipped complete ÷ orders received | Any incomplete PO |
A PO that ships 98% of its units can still count as a failed order under an order-level measure. Knowing which one your retailer scores is the starting point for every rule below.
The three policies for a short PO
Ship complete. Nothing leaves until every line is available. The buyer gets one delivery and one invoice, but the whole order waits on the slowest SKU, and a late delivery may cost more than a short one.
Ship partial, backorder the rest. Available lines ship now; missing lines follow in a second shipment. This protects the delivery window but adds a second freight bill, a second receiving appointment and a second set of paperwork. Some retailers don't accept backorders at all.
Ship partial, cancel the rest. Available lines ship; missing lines are cancelled and the buyer reorders later. Cheapest to execute, but it shows directly in fill rate.
Most wholesale brands end up with a mix: ship complete for small POs, partial with cancel for large retail accounts that forbid backorders, partial with backorder for distributors who welcome it.
Where the rule has to live
A policy that sits in someone's inbox doesn't help at 3 p.m. on a pick day. It needs to be set at the level the warehouse actually works from:
- By customer. Each retail or wholesale account gets a default: ship complete, partial-cancel or partial-backorder.
- By PO override. The buyer's order may carry its own instruction; many retailers put a ship-complete or "no backorder" flag in the EDI purchase order itself, which is one reason the 850, 856 and 810 documents need to be mapped carefully.
- By threshold. "Ship partial if at least 90% of units are available, otherwise hold and notify us." A threshold turns a judgment call into a rule.
- By cancel date. Retail POs carry a ship window. The rule should say what happens when the window is about to close: ship what's there rather than miss the date entirely.
Paperwork follows the physical shipment
Whatever ships, the documents must match it exactly:
- The advance ship notice (ASN) lists only what's actually on the pallets, with correct carton counts.
- Carton labels and packing lists reflect the partial quantity, not the PO quantity.
- The invoice bills for what shipped.
A partial shipment with an ASN that shows the full order is one of the most common causes of compliance deductions, since the retailer's receiving team finds cartons that were promised but never arrived. Our piece on retail routing guides and chargebacks covers how those deductions are assessed.
Preventing short POs in the first place
Partial-shipment rules manage shortages; they don't remove them. The upstream habits that help:
- Allocate on order receipt. Reserve inventory to a PO as soon as it arrives, so a DTC flash sale doesn't quietly consume the cases a retailer is counting on.
- Check inbound timing against ship windows. If a container lands two days before a PO's cancel date, flag it early.
- Agree on a short-notice process. Who at your company approves a partial, and how fast the warehouse gets an answer.
- Review fill rate monthly by SKU. Repeat offenders usually point to a forecasting or reorder-point problem, not a warehouse one.
Putting it together with your 3PL
When you hand B2B orders to a fulfillment partner, give them a one-page matrix: each wholesale account, its fill-rate measure, its default partial-shipment policy, any thresholds and who approves exceptions. That page does more to protect your retail relationships than any single pick-and-pack improvement.
IDCEA's B2B and wholesale fulfillment handles case picks, pallet builds, ASNs and retail compliance through our Southern California partner warehouses. If you're setting up wholesale accounts, talk to us about your order rules.