How Tillamook Halved Outbound Damage Claims and Eliminated $173K in Chargebacks

What you need to know

• $173K in customer fees and chargebacks prevented in 2025
• 50% year-over-year reduction in damage claims
• 92.9% year-over-year drop in safety incidents
• Record 99.8% inventory accuracy in 2025
• 42 customer claims successfully refuted with evidence

The company

Tillamook County Creamery Association is a farmer-owned dairy cooperative shipping to retailers nationwide.

Industry: Food & Beverage.

Use case: outbound OS&D inventory control.

The challenge

In food distribution, the burden of proof is on the shipper. For every overage, shortage, and damage (OS&D) the shipper is presumed guilty until proven innocent. Even rare claims can get expensive and impact reputation, especially at Tillamook’s scale. 

In 2024, Tillamook delivered strong operational performance with 99.6% inventory accuracy. But the dock doors were still a visibility gap. Warehouse operators had no way to consistently verify what was leaving each of the seven dock doors. 

The team needed a live view of what was actually happening at the dock.

Integration

In order to identify discrepancies before they shipped, Kargo Towers needed access to order data in the WMS.

Integrating allowed Tillamook’s WMS to send expected orders to Kargo for real-time validation. Kargo towers captured LPNs and SKUs and compared them against what was expected in the order.

To get up and running fast, Kargo and Tillamook started with flat file transfers over SFTP. The whole integration process, from scoping to go-live, required only a few hours of IT bandwidth and was fully completed in a matter of weeks.

The solution: the Kargo Platform

In December 2024, Tillamook deployed Kargo at 100% of the outbound dock doors in Tillamook, OR. Kargo’s camera Towers capture SKUs, LPNs and lot codes as pallets are loaded onto the trailer. The towers eliminate typical OS&D claims by flagging critical exceptions in real-time: 

• Damaged cases on outbound pallets
• Broken pallets that put loads at risk
• Unexpected SKUs that don’t match orders 
• Short-shelf or on-hold pallets

Results: a year of operational proof

The impact was immediate:

Financial

• $173,000 in fees and chargebacks avoided in 2025, caught and prevented before product left the building.
• 42 customer claims refuted with photo and sensor evidence captured at the dock.

Operational

• Inventory accuracy climbed from 99.6% (2024) to 99.8% (2025), with Kargo flagging outbound mismatches in real time, pallet by pallet.
• Damage claims fell 50% year-over-year, because damaged cases got caught at the dock instead of at the customer’s receiving door.

System Performance

• Read rate: >99% on outbound pallets
• OCR accuracy: >99%
• Event-to-alert Latency: 31 seconds
• Scope: 100% of outbound doors

The unexpected upside

Tillamook implemented Kargo to ensure outbound accuracy. 

In achieving those goals, Tillamook also improved the efficiency of their back office. Researching claims, responding to customer inquiries and AR/AP functions became rooted in real-time, accurate data, saving Tillamook countless hours per month.

With the Towers in place, manual auditors no longer need to supervise active docks at all times. As a result, Tillamook had a 92.9% reduction in safety incidents from 2024 to 2025. 

Minimal effort → Huge benefits

Tillamook’s Kargo implementation took only two months and realized immediate impact. Tillamook’s 2.5x cash ROI has a direct impact on site P&L while ensuring the highest quality to their customers. Tillamook continues to grow their brand while trusting Kargo to have their back.