Short Shipment refers to a situation where the seller delivers a quantity of goods that is less than the amount stipulated in the contract or letter of credit. It commonly occurs during shipment due to production, inventory, or transportation issues. Usage scenarios include letter of credit settlements, FOB/CIF contracts, and cases where the buyer requests partial shipments. Precautions: If the letter of credit states 'partial shipment not allowed,' a short shipment may constitute a discrepancy, leading to refusal of payment; if partial shipment is allowed, the shortfall can be shipped later, but attention must be paid to the L/C expiry date and shipment period. It is the opposite of 'Over Shipment,' which means shipping more than the stipulated quantity. According to UCP600, even when over/short shipment is allowed, it is usually limited to within 5% (unless otherwise specified in the L/C). Short shipment may trigger buyer claims, price reductions, or order cancellation. Therefore, sellers should verify quantities before shipment, promptly notify the buyer, and negotiate to amend the L/C or contract.
📝 Examples
1. Due to insufficient factory capacity, this order has a 5% short shipment. We suggest shipping the shortfall with the next batch. (Note: The seller proactively acknowledges the short shipment and proposes a remedy.)
2. The L/C stipulates that partial shipment is not allowed, but 200 cartons were short-shipped, resulting in the bank's refusal of payment. Please negotiate with the buyer to amend the L/C as soon as possible. (Note: Short shipment caused document discrepancy; the L/C needs to be amended for smooth settlement.)
💡 Foreign Trade Tips
Foreign trade terms are the foundation of international business communication
Trade practices may vary slightly by country; pay attention when using them
When using terms in contracts, specify the applicable version (e.g., Incoterms 2020)
For unfamiliar terms, use GlobalSync's multilingual email helper to confirm with your partner