The EDI 940 is the standard electronic document used to instruct a warehouse or third-party logistics provider to ship goods on your behalf. If your business stores inventory at a remote warehouse or 3PL fulfillment center, the 940 is how you tell them what to ship, where to ship it, and when.
This guide covers what the EDI 940 contains, how its segments are structured, where it fits in the warehouse workflow, and how it connects to the other warehouse EDI documents.
Outsourced warehousing is now the norm rather than the exception, which makes the accuracy of every shipping instruction a real financial lever.
Sources: Armstrong & Associates, IBISWorld, and the Credit Research Foundation.
What Is an EDI 940?
An EDI 940, formally known as the Warehouse Shipping Order, is a transaction set within the ANSI X12 standard. It is sent by a seller, such as a manufacturer or wholesaler, to a warehouse or third-party logistics provider to authorize the shipment of goods to a buyer or retailer.
The 940 is one of the most fundamental documents in electronic data interchange for companies that outsource warehousing and fulfillment. Rather than emailing, faxing, or calling your 3PL with shipping instructions for each order, the EDI 940 automates the entire process. When a customer places an order, your system generates a 940 and transmits it electronically to the warehouse, which can begin picking, packing, and shipping immediately.
Beyond initiating a shipment, the EDI 940 can also be used to modify an existing shipping order or cancel one that was previously transmitted.
What Information Does an EDI 940 Contain?
An EDI 940 provides all the detail a warehouse needs to fulfill a shipping order accurately. The key data fields include:
- Shipping order number: A unique identifier linking the warehouse instruction to the original sales order or purchase order
- Purchase order or sales order reference: Connects the shipment back to the customer’s order
- Ship-to address: The destination where goods must be delivered
- Ship-from address: The warehouse or facility dispatching the goods
- Item identification: Product codes such as SKU, UPC, GTIN, or vendor part numbers
- Quantities: Units to ship for each line item, with unit of measure
- Expected shipping date: When the warehouse should dispatch the shipment
- Carrier and routing information: Preferred carrier, SCAC codes, shipping method, and freight terms (FOB)
- Packaging instructions: Pallet, case, or unit-level packing specifications
- Special handling instructions: Temperature control, hazardous materials, labeling requirements, or other conditions
- Contact information: For warehouse or transportation coordination
Each trading partner and 3PL may require different fields. Your EDI provider configures the 940 map to match each warehouse’s specific requirements.
EDI 940 Segment Structure Explained
The EDI 940 is organized into segments and data elements following the X12 standard. The warehouse-specific segments differ from those in a general purchase order (EDI 850), using W-prefixed segment codes designed for warehouse operations.
Here is the segment structure of a typical EDI 940:
- ISA (Interchange Control Header): Opens the EDI interchange with sender/receiver IDs, date, and control number
- GS (Functional Group Header): Identifies the transaction type and groups related documents
- ST (Transaction Set Header): Marks the beginning of the 940 document. “ST*940” identifies it as a warehouse shipping order
- W05 (Shipping Order Identification): Contains the shipping order number, date, and purpose code (original, modify, or cancel)
- N1 (Name Identification): Identifies parties including the depositor (the company requesting the shipment), the ship-to party, and the carrier
- N3/N4 (Address and Geographic Location): Street address, city, state, and postal code for each party
- W66 (Warehouse Carrier Instructions): Specifies the carrier, transportation method, SCAC code, pallet exchange instructions, loading instructions, and FOB terms
- LX (Assigned Number): Opens a loop for each line item group
- W01 (Line Item Detail): Contains the product identification, quantity, unit of measure, and lot/serial number for each item to ship
- SE (Transaction Set Trailer): Closes the 940 and reports the segment count
- GE/IEA (Group and Interchange Trailers): Close the functional group and interchange
The W05, W66, and W01 segments are unique to warehouse transactions. If you are familiar with the EDI 850 purchase order, think of W05 as the warehouse equivalent of BEG, W01 as the equivalent of PO1, and W66 as carrier-specific routing that has no direct PO counterpart.
How the EDI 940 Fits Into the Warehouse Workflow
The EDI 940 sits at the center of the warehouse fulfillment process. Here is the typical end-to-end workflow from customer order to payment:
- A retailer sends an EDI 850 (Purchase Order) to the seller
- The seller sends an EDI 855 (Purchase Order Acknowledgment) to confirm the order
- The seller’s system generates an EDI 940 (Warehouse Shipping Order) and transmits it to the 3PL or warehouse
- The warehouse sends an EDI 997 (Functional Acknowledgment) to confirm receipt of the 940
- The warehouse picks, packs, and ships the order
- The warehouse sends an EDI 945 (Warehouse Shipping Advice) back to the seller with shipment details and tracking
- The seller generates an EDI 856 (Advance Ship Notice) and sends it to the retailer
- The seller sends an EDI 810 (Invoice) to the retailer to request payment
This chain shows why the 940 is critical: it is the trigger that converts a customer order into a physical shipment. Without it, the warehouse has no instruction to act on.
The 940 is the trigger that turns a customer order into a physical shipment.
The Complete Warehouse EDI Document Family
The EDI 940 is part of a family of warehouse EDI document types that together provide complete visibility into inventory movement between sellers and their warehouses. Understanding the full set is important for businesses managing inventory across multiple locations.
- EDI 940 (Warehouse Shipping Order): Seller instructs the warehouse to ship goods to a buyer
- EDI 943 (Warehouse Stock Transfer Shipment Advice): Seller notifies the warehouse that a stock replenishment shipment is on its way
- EDI 944 (Warehouse Stock Transfer Receipt Advice): Warehouse confirms receipt of the stock transfer sent via the 943
- EDI 945 (Warehouse Shipping Advice): Warehouse confirms to the seller that a shipment (requested via the 940) has been dispatched, with tracking and delivery details
- EDI 947 (Warehouse Inventory Adjustment Advice): Warehouse notifies the seller of inventory changes due to damage, loss, cycle counts, or other adjustments
Together, these five documents create a closed loop: the seller sends inventory in (943/944), instructs shipments out (940/945), and reconciles any discrepancies (947). Businesses that implement the full family gain real-time insight into what is stored, what has shipped, and what needs attention, eliminating inventory discrepancies and reducing warehouse integration headaches.
EDI 940 vs. EDI 945: What Is the Difference?
The EDI 940 and EDI 945 are a matched pair:
- EDI 940 (Warehouse Shipping Order): Sent to the warehouse by the seller. It is an instruction to ship specified goods to a buyer. Think of it as the request.
- EDI 945 (Warehouse Shipping Advice): Sent from the warehouse back to the seller. It is a confirmation that the shipment has been processed and dispatched. Think of it as the response.
The 945 includes the actual shipment details: carrier used, tracking numbers, quantities shipped (which may differ from the 940 if inventory was short), and estimated delivery dates. The seller then uses the 945 data to generate the EDI 856 ASN for the retailer and the EDI 810 invoice.
Common EDI 940 Errors and How to Avoid Them
Even with automated processing, errors in EDI 940 documents can cause shipping errors, delays, and downstream chargebacks from retailers. Common issues include:
- Incorrect ship-to addresses: The address does not match what the warehouse has on file, causing the 940 to fail validation or the shipment to go to the wrong location
- Missing or invalid item identification: The SKU or UPC on the 940 does not exist in the warehouse’s WMS, preventing the order from being picked
- Quantity exceeds available inventory: The 940 requests more units than the warehouse has in stock, causing partial shipments or holds
- Invalid SCAC codes: The carrier code in the W66 segment is unrecognized, blocking routing
- Formatting errors: Missing required segments or incorrect data types cause the warehouse to return a rejected EDI 997
The best prevention is working with an EDI provider that validates every 940 against both the X12 standard and your warehouse’s specific requirements before transmission. Vantree catches these issues before they reach your 3PL.
Before the next order goes out, run a quick check on your own warehouse EDI setup. Tap Yes or Not yet for each, and see where you stand:
Can your ERP generate an EDI 940 automatically when a customer order is confirmed, with no manual re-keying?
Is every 940 validated against each warehouse’s specific requirements before it is sent?
When a shipment goes out, does the returning EDI 945 flow back into your system automatically?
Can you see the status of every warehouse shipping order (sent, acknowledged, shipped, rejected) in one place?
Are you alerted automatically when a 940 is rejected or a 997 comes back with errors?
Do your EDI 856 advance ship notice and EDI 810 invoice generate automatically from the 945 data?
Can you onboard a new 3PL or warehouse without rebuilding your entire EDI setup?
Answer each question to see where you stand.
How Vantree Handles EDI 940 Processing for 3PLs
If your business relies on third-party warehouses for fulfillment, Vantree’s managed EDI service automates the entire 940 workflow from order receipt to shipment confirmation.
Vantree offers two solutions for handling EDI 940 documents:
- Web EDI: A cloud-based platform for managing warehouse shipping orders through an intuitive browser interface. Ideal for businesses with lower order volumes or those getting started with 3PL EDI.
- EDI Automation: A fully integrated solution that connects your ERP or order management system directly to your 3PL’s WMS. When an EDI 850 purchase order arrives from a retailer, Vantree automatically generates the EDI 940 and transmits it to the correct warehouse. The returning EDI 945 flows back into your system to trigger ASN and invoice generation.
Vantree supports 35+ ERP integrations including SAP Business One, Microsoft Dynamics, NetSuite, Acumatica, and QuickBooks. For a practical example of how this works, see how Vantree’s 3PL EDI automation with SAP Business One eliminates manual warehouse communication and gives sellers real-time visibility into shipment status.
For businesses managing multiple 3PL relationships, Vantree’s 3PL EDI integration service handles the mapping differences between each warehouse so you can streamline operations from a single platform.
Frequently Asked Questions About EDI 940
What does EDI 940 stand for?
EDI 940 refers to the Warehouse Shipping Order transaction set within the ANSI X12 standard. The number 940 is the designated code for warehouse shipping instructions in the X12 family. It is part of the 940-series of warehouse transaction sets that also includes the 943, 944, 945, and 947.
Who sends the EDI 940?
The EDI 940 is sent by the seller (the company that owns the inventory) to the warehouse or 3PL that stores and ships the goods. In practice, this means a manufacturer, wholesaler, or distributor sends the 940 to instruct their fulfillment partner to ship a specific order to a buyer or retailer.
What is the difference between EDI 940 and EDI 945?
The EDI 940 is the shipping instruction sent to the warehouse. The EDI 945 is the shipping confirmation sent back from the warehouse after the order has been dispatched. The 940 says “please ship this.” The 945 says “we shipped it, here are the details.” They are always used as a pair.
Can an EDI 940 be used to cancel or modify a shipping order?
Yes. The EDI 940 supports purpose codes that indicate whether the document is an original shipping order, a modification to a previously transmitted order, or a cancellation. The W05 segment contains the purpose code that tells the warehouse which action to take.
How does the EDI 940 connect to ERP and WMS systems?
The EDI 940 is typically generated automatically from a sales order in the seller’s ERP system. When a customer order is confirmed, the ERP creates the 940 with the correct item, quantity, and shipping data, and the EDI provider transmits it to the warehouse’s WMS. The returning EDI 945 then updates the ERP with shipment confirmation. This automation eliminates manual communication and keeps both systems synchronized in real-time.
