OSD (Overages, Shortages, Damages)

OSD – overages, shortages, and damages – is the standard framework warehouses and receivers use to document discrepancies between what was expected and what actually showed up on the dock. An overage means extra units arrived beyond the purchase order quantity. A shortage means units are missing. Damage means product arrived in a condition that makes it unsalable or unusable. Together, these three categories capture the vast majority of inbound receiving exceptions.

OSD reporting typically happens at the point of delivery during the unloading and receiving process. The receiver counts units against the purchase order or advance ship notice, inspects for visible damage, and records any discrepancies on the delivery receipt or POD. Each exception should include the SKU, quantity affected, nature of the issue, and photographic evidence where possible. This receiving data then flows back to the shipper's logistics and finance teams to trigger investigations, adjustments, or freight claims against the responsible carrier.

Consistent OSD tracking matters because these exceptions directly impact inventory accuracy, customer satisfaction, and freight costs. A shortage that isn't caught at receiving becomes a phantom inventory problem downstream. Damage that isn't documented on the POD becomes nearly impossible to claim against a carrier later. And chronic overage or shortage patterns on specific lanes or with specific carriers often point to systemic issues – poor load building, inadequate packaging, or carrier mishandling – that won't fix themselves without data.

The shift toward electronic receiving and real-time exception reporting has made OSD management significantly more actionable. When OSD data is captured digitally at the dock and immediately visible to the shipper's logistics team, response times shrink from days to hours – and the documentation needed for freight claims or vendor chargebacks is already in hand.