When a manufacturer, brand or distributor stores inventory at a 3PL or contract warehouse, it doesn’t ship the goods itself; it tells the warehouse to. The 940 carries the depositor’s order number, the customer’s PO number, ship-to and bill-to details, the requested ship date, carrier and routing instructions, and each item and quantity to ship, plus any special handling, labeling or packing requirements.
The 940 usually goes out once a customer’s purchase order (EDI 850) is accepted and released for shipping. The warehouse picks, packs and ships, then confirms with a warehouse shipping advice (EDI 945). That confirmation lets you send your customer an advance ship notice (EDI 856) and an invoice (EDI 810). If transportation needs to be booked, a load tender (EDI 204) may go to a carrier.
Because the warehouse ships exactly what the 940 says, errors here become customer errors. Wrong ship-to codes, missing customer label or packing requirements, outdated item numbers and duplicate orders lead to misshipments and retailer chargebacks. A 940 with no matching 945 is just as risky: you can’t confirm the order shipped, so ASNs and invoices go out late or not at all.