Fill-rate / service-level penalties

What is a fill-rate / service-level penalties?

Fill-rate (service-level) penalties are charged when you deliver fewer units than KeHE ordered on a purchase order. They punish under-shipment separately from any shortage at receiving.

Per KeHE's compliance program, shipments below a 98% fill-rate threshold incur a fee of 3% of the value of the shorted product. This is a compliance-style penalty — it's about the gap between ordered and shipped, not what was received.

Why does it happen?

• A genuine short-ship because of stockouts or capacity limits.
• KeHE cut the PO or substituted quantities after you shipped, but the penalty was still applied.
• The penalty was calculated on the wrong ordered quantity or SKU.

Is it disputable?

Sometimes. Valid short-ships are hard to reverse — the fee is contractual. But penalties are recoverable when they were calculated on an amended PO, a cancelled line, or an incorrect ordered quantity. The dispute comes down to matching the penalty to the final PO.

KeHE specifics: fees and timing

KeHE's compliance program issues a 3% fee on the amount of product shorted below the 98% fill-rate threshold (per SPS Commerce / SupplierWiki and KeHE's inbound routing guide). KeHE also assesses quarterly fines when on-time performance falls below 92%. Confirm current thresholds in your agreement.

Backup you'll need to win it

• The original and any amended PO
• Your shipment confirmation / ASN
• Correspondence showing PO changes or cancellations

You dispute KeHE deductions in K-Solve, inside the KeHE CONNECT supplier portal. See the step-by-step dispute guide and check the KeHE dispute window before you file — miss it and even a valid claim is lost.