A supplier, logistics provider, or warehouse operator sends this transaction to a buyer or their designated recipient to report exceptions or discrepancies encountered during shipment delivery. The 854 communicates problems such as damaged goods, quantity mismatches, missing items, or delivery failures that prevent successful order fulfillment. The transaction is typically sent in response to an actual delivery attempt or receipt event. Key segments include the BDD (Beginning Segment for Shipment Delivery Discrepancy Information), which initiates the report and establishes the context; the LX segment, which sequentially numbers each shipment line item being reported; and the Q8 segment (Detail Delivery Exception Information), which specifies the nature of each discrepancy, such as damage codes, quantity variances, or exception reasons.

Consider a scenario where TechSupply Inc. receives a partial shipment from ManufacturCorp intended for customer delivery. Upon inspection, TechSupply discovers that 50 units of the 200 ordered arrived damaged due to improper packaging, and 10 units are entirely missing. TechSupply sends an 854 transaction to ManufacturCorp detailing the shipment reference number, the delivery date, identification of the receiving location, and within the Q8 loops, the specific discrepancies: 50 units marked as damaged with a damage code, and 10 units noted as short or missing. ManufacturCorp receives this 854 to initiate corrective actions, whether issuing replacement goods, processing credits, or investigating the carrier’s handling.