Over Shipment refers to the situation where the quantity of goods actually shipped by the seller exceeds the quantity stipulated in the contract or letter of credit. In international trade, over shipment typically involves quantity terms and the strict compliance principle of letters of credit. According to Article 30(b) of the Uniform Customs and Practice for Documentary Credits (UCP600), unless the letter of credit stipulates that the quantity must not be increased or decreased, a tolerance of 5% more or less is allowed even if partial shipment is not permitted, provided that the amount drawn does not exceed the credit amount. If the letter of credit explicitly prohibits over shipment or specifies a fixed quantity, over shipment constitutes a discrepancy and may result in the bank refusing payment. This is commonly seen in bulk cargo (such as grain, ore) where slight excess occurs due to loading errors. Precautions: The seller should strictly check the quantity terms of the letter of credit and contract to avoid discrepancies caused by over shipment; if over shipment is necessary, the buyer's consent should be obtained in advance and the letter of credit amended. It is the opposite of 'Short Shipment'; both are quantity discrepancies, but over shipment may bring additional payment and storage burdens to the buyer.
📝 Examples
1. The contract quantity for this batch of soybeans is 1000 metric tons. Due to an over shipment of 15 metric tons during loading, the seller needs to confirm whether the letter of credit allows a 5% tolerance; otherwise, the bank may refuse payment. (Note: After over shipment, the tolerance clause in the letter of credit must be checked to avoid discrepancies.)
2. After receiving the goods, the buyer found that the actual delivered quantity exceeded the order by 200 pieces and immediately notified the seller that the over-shipped portion would be paid at the contract price, but required written confirmation before the next shipment. (Note: After over shipment, both parties need to negotiate the payment and follow-up arrangements for the excess goods.)
💡 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