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Delivery Order

Updated on June 29, 2024
Article byJyotsna Suthar
Edited byJyotsna Suthar
Reviewed byDheeraj Vaidya, CFA, FRM

What Is Delivery Order?

Delivery order (D/O) refers to a document issued by the owner of the goods for transporting from one place to another. It serves as a crucial form of communication to release cargo from the carrier to the customer and instruct on the delivery process.

Delivery Order

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This D/O is a legal document used for authorization in the supply chain and logistics industry. It occurs after all the compliances and requirements are fulfilled. However, it acts differently from the bill of lading or receipt as it is not negotiable. Furthermore, it does not represent the title of the goods received.

Key Takeaways

  • A delivery order is a legal document issued by the freight carrier or logistics company when transporting goods to the concerned party.
  • It includes details like consignee (customer) details, delivery location, goods description, order number, weight or volume of the goods shipped, and others.
  • In case there is no physical office for a freight (courier) company, an authorized agent prepares the D/O on the shipper’s behalf.
  • However, it differs from the delivery note, which is prepared when the customer has successfully received the goods. This note acts as a proof of delivery.

Delivery Order Explained

A delivery order form is a legal document issued by the freight company or courier services while transporting goods to another place. It acts as an authorization to dispatch goods to the designated party. Furthermore, it also serves as a tool to maintain transparency in the distribution process. Thus, when a shipper wants to control the dispatched goods, a D/O is used. This form can be either in physical or digital (electronic) format.

The components of the delivery order form mainly include details of the shipper and consignee. However, there is other information, including the delivery order template. Let us look at them:

  • Location (customer’s or buyer’s address) and date
  • Weight (volume) of the goods transported
  • Goods description
  • Order number
  • Delivery instructions and other details.

At times, the shipper or logistics company prepares the D/O for their shipping purpose. It is the last step while releasing goods from the cargo. However, it occurs after the shipment arrives at the port of entry. Once the shipment has been received, the customs broker will clear duties (or charges) if pending any. At this stage, the logistics or freight carrier will prepare the D/O document and send it to the designated party (customer). However, in case there is no physical office of courier services, the document is then prepared by an authorized agent on the shipper’s behalf. 

Likewise, there are some points to consider while preparing the D/O. For instance, if the shipper has paid freight charges to send goods from country A to B, the delivery order charges still apply. This means that the delivery order charges arise before the shipment has reached the port, and the seller must pay them. Otherwise, the buyer is responsible for the same. 

Examples

Let us look at some examples of delivery order in shipping to comprehend the concept better:

Example #1

Suppose Kevin owns a business that makes crochet-based products in South California. He started his business a year back, and now the team has received a massive order of 500 bouquets from overseas markets. As a result, Kevin decided to ship the order via cargo. The approximate time for it to reach France is six to ten days. During this time, he took care of the requisites and procedures associated with it.

After a week, the shipment reached the Marseille Fos Port. For the further delivery process, Kevin had assigned “QuickBee Courier” services to deliver it to Samuel. At this point, the freight provider prepared the D/O document and listed all the details of the shipper and consignee (Samuel in this case). With this, it was feasible for the delivery agent to deliver the shipment to Samuel on a timely basis.

Example #2

According to a recent news update as of March 2024, the global retail chain Walmart has announced early-morning delivery on their orders. It is an attempt to compete with the similar services provided by Target and Amazon. Yet, Walmart’s service includes a fee of $10 per trip for delivery orders shipped within 30 minutes to one hour. However, the order must be placed at 6 am to avail of this service. Likewise, the second option includes a $5 cost to deliver goods within three hours. At present, they cater to around 4700 locations based in the United States.

Importance

D/O has a crucial role to play in supply chain management. It serves as a primary requirement for delivering goods to the concerned party. However, it is more beneficial. Let us understand them in brief:

  • Enables Faster Cargo Release: The prime application of the delivery order template is visible on cargo and ports. It serves as a supreme document for releasing goods from the dock/cargo and scheduling their delivery. Thus, if a consignee has imported items from another country, the document then confirms that the carriage is complete and can be further delivered to the consignee.
  • Proof Of Record For Goods Received: Furthermore, this document can also act as a proof of record for the freight carrier. In other words, when the goods reach the port, the carrier company will release an arrival or freight notice pertaining to the goods having reached successfully. However, as they are further sent for delivery, the D/O form is prepared. Thus, the shipper and the customer are well aware of the current status of the shipment.
  • Legal Compliance: The delivery order document is also viable for complying with specific procedures like customs and import duties. It helps in verifying whether all the requirements have been met or not.
  • Enables Effective Coordination And Communication: In addition, this document also serves as a medium for smoothly conducting the shipment process. It allows the delivery agent to coordinate with the team to deliver goods on time.

Delivery Order vs Purchase Order vs Delivery Note

Although delivery orders, purchase orders, and delivery notes are utilized for logistics, they have specific differences. Let us look at them in detail:

HeadingDelivery OrderPurchase OrderDelivery Note
MeaningIt refers to the document issued for delivering goods to the assigned party (customer).A purchase order is a document issued at the time of purchase from the seller.The delivery note is a document stating the receipt of goods by the buyer.
Parties involvedThe delivery note is a document stating the buyer’s receipt of goods.The seller issues it when the buyer purchases goods from them.This note is signed by the buyer and sent to the seller.
Issuance timeIt is used at the time of order dispatch from the freight carrier.This document is issued when the seller receives an order from the customer.At the time of delivery, the agent may ask the recipient to sign the note as proof of delivery.
LegalityIt is a legal document required for customs and other duties.It is not a legal document.It is not a legal document required, but it does act as evidence.

Frequently Asked Questions (FAQs)

Is delivery order same as invoice?

At times, people need clarification with the D/O and invoice, but they are totally different. An invoice is a document prepared by the seller as proof that sales have occurred in the business. It contains information like transaction details, rate, price, type of goods sold, and terms of sale. However, D/O occurs later in the process.

What are delivery order charges for import?

In imports, there is often a D/O charge charged to either the consignee or shipper. Popular freight carriers charge depending on the service they provide. For instance, an express D/O will have a charge of $30 to $50. Likewise, a low rate is usually within $10 to $20.

What is the difference between a delivery order and a task order?

Both terms sound similar but have vast differences. For instance, a D/O is used mostly when the shipper sends goods to the concerned person. However, task orders enable the contractor to perform tasks on time.

This has been a guide to what is Delivery Order. Here, we explain its examples, comparison with delivery note and purchase order, and importance. You may learn more about financing from the following articles –

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