EDI 940 – Warehouse Shipping Order: Meaning, Flow & Best Practices

EDI 940 – Warehouse Shipping Order

The EDI 940 (Warehouse Shipping Order) is a standardized electronic document a seller (or the seller’s system) sends to a warehouse or 3PL instructing it to pick, pack, and ship goods. It replaces emailed PDFs and phone calls with a reliable, automated, machine-readable order that reduces errors, speeds fulfillment, and gives you and your trading partners real-time visibility.

What is an EDI 940?

An EDI 940 provides a warehouse with everything needed to ship an order: who to ship to, what to ship, how much, how to ship (carrier/service), and when. It’s commonly used in retail, distribution, CPG, and eCommerce when the seller outsources fulfillment to a third-party logistics (3PL) provider.

Core purpose: translate your sales order into precise, executable warehouse shipping instructions.

When do you use it?

You sell products but inventory sits in a 3PL/warehouse you don’t operate.
You need consistent same-day or next-day shipping with low error rates.
Trading partners require EDI compliance for on-time, accurate shipments.

EDI 940 vs EDI 945 (and Related Docs)

EDI 940 (Warehouse Shipping Order): You → Warehouse | “Please ship these items.”
EDI 945 (Warehouse Shipping Advice): Warehouse → You | “We shipped them; here’s what went out.”
EDI 943/944: Inventory transfer to warehouse (943) and receipt advice from warehouse (944).
EDI 850: Purchase Order (retailers send to suppliers).
EDI 856: Advance Ship Notice (ASN) to the buyer/retailer; often generated after the 945 confirms what shipped.

Typical chain: 850 (from retailer) → your sales order → 940 to 3PL → 945 back from 3PL → 856 ASN to retailer → 810 Invoice.

How the EDI 940 Workflow Operates

Sales order is approved in your ERP/OMS.
940 is generated with ship-to address, items, quantities, and shipping instructions.
Transport & translation: your EDI system maps the 940 to the warehouse’s specs; sent over AS2/SFTP/VAN.
Warehouse executes: picks, packs, labels, and hands off to carrier.
Warehouse returns 945 confirming shipped quantities, lot/serials, and tracking.
You update inventory, send ASN (856) to the buyer, and invoice (810).

Key benefits: faster cycle times, fewer manual touches, inventory accuracy, higher fill rates, and compliance with retailer scorecards.

Typical EDI 940 Structure (Key Segments)

Exact usage varies by trading partner. Your map should follow your partner’s Implementation Guide.

ISA/GS – Interchange/group headers
ST – Transaction set header
W05 – Shipping Order Identification (order type, number, date)
N1/N3/N4 – Parties & addresses (ship-to, ship-from, bill-to)
G62 – Dates/Times (ship no earlier/later than)
NTE – Notes (special handling)
W66 – Shipping instructions (shipment method)
LX – Line counter
W01 – Line items (item identifiers, quantities)
G69 – Item description
MAN – Marks and numbers (e.g., container IDs)
CTT/SE – Totals and transaction trailer

Data Elements You Should Get Right

Item identification: SKU, UPC/EAN, Vendor Number, GTIN.
Quantities & UOM: EA, CS, PLT; avoid silent unit mismatches.
Dates & service levels: ship by/arrival by, carrier, service (e.g., UPS Ground).
Address normalization: verified postal codes, DC codes, and GLNs if used.
Compliance notes: labeling, packaging, SSCC-18 if the partner requires UPC/GS1 standards.
Lots/serials: if regulated or high-value items require traceability.

Business Benefits

Speed: automated instructions reduce waiting and manual keying.
Accuracy: fewer pick/pack errors and chargebacks.
Visibility: instant confirmations via EDI 945 and downstream ASN/Invoice.
Scalability: handle peak season without extra headcount.
Compliance: meet retailer routing guides and scorecard KPIs.

Common Pitfalls (and How to Avoid Them)

Mismatched item masters: Establish a single source of truth; sync SKUs/UPCs regularly.
Address errors: run automated validation before sending.
Quantities vs UOM: include unit codes and test edge cases (eaches vs cases).
Late cutoffs: reflect warehouse cutoff times in G62; send 940s earlier in the day.
Special handling lost in transit: push critical notes into NTE and confirm the 3PL maps them.
Test fatigue: always do end-to-end testing with realistic volumes and exception scenarios.

Implementation Checklist

Confirm partner guide: get the warehouse’s 940/945 implementation guide.
Map & validate: build maps for W05/N1/G62/W01 etc.; validate against X12 syntax and partner rules.
Transport setup: exchange certificates/keys; configure AS2, SFTP, or VAN mailbox.
Item & address sync: reconcile SKUs, UPCs, GLNs, DC codes.
Test cycles: send sample orders, partials, backorders, and cancelled lines.
Exception playbooks: define responses to shorts, substitutions, and carrier changes.
Go-live monitoring: alerting on failed interchanges, late 945s, and quantity mismatches.
Continuous improvement: track fill rate, OTIF, chargebacks, and dock-to-stock time.

940 in a 3PL/Omnichannel Context

eCommerce DTC: trigger 940s from your OMS for each consumer order; 945s feed tracking back to customers.
Retail replenishment: consolidate multiple POs into waves; 940 lines map to wave picks; 945 returns final shipped.
B2B wholesale: pallet/case shipping with SSCC labels; 945 confirms pallet IDs and counts.
Dropship: act as the seller sending a 940 to a brand’s 3PL on the retailer’s behalf.