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Partial Shipments
On this article I would like to explain partial shipments in international letters of credit. You can find detailed explanations regarding the definition and conditions of the partial shipments.













What are the conditions of a partial shipment?

In certain situations it would be a very tricky job determining whether a partial shipment has been effected or not. Things are getting complicated especially if more than one set of transport documents have been presented under the same presentation. For this reason it would be better to explain partial shipment definitions under two conditions:

Determining partial shipments when only one set of original transport documents have been presented: It is comparatively straight forward if only one set of original transport documents have been presented. Checking the shipment quantity and drawings would be enough. If letter of credit amount has not been drawn in full and documents are showing that the goods have not been loaded completely, you can reach to the conclusion that partial shipment has been effected. Please kindly keep in mind that letter of credit rules allow some tolerances even when partial shipments are prohibited.

Example : How to determine partial shipment when presentation consisting of one set of transport documents?

A letter of credit has been issued in SWIFT format, subject to UCP latest version, with the following details:



Field 43P: Partial Shipments: Not Allowed

Field 43T: Transhipment: Allowed

Field 45A: Description of Goods and or Services: Frozen Seabass and Seabream. Frozen Seabass Price: 6USD/kgs Frozen Seabream Price: 7USD/kgs Quantity: 5000kgs seabass and 5000kgs seabream 10.000kgs in total. Delivery Terms: CIF Rotterdam Seaport Netherlands Incoterms 2010.

Field 46A: Documents Required: 

  • 3 original signed commercial invoices and 3 copies.
  • Certificate of Origin issued and certified by the Chamber of Commerce in Beneficiary's country indicating South African origin of the goods.
  • Insurance certificate or policy in assignable form and endorsed in blank for 110% CIF commercial invoice value covering all risks showing claims payable in Netherlands in commercial invoice currency.
  • Full set of original bill of lading shipped on board established to the order of Bank Nederlandse Gemeenten notify applicant company marked freight prepaid.

The beneficiary presented one set of original bills of lading among other documents with the following data:














Determining partial shipments when more than one set of original transport documents have been presented: If more than one set of original transport documents have been presented under the same letter of credit presentation, you cannot determine whether partial shipment has been effected by simply comparing the actual shipment quantity&amount with the letter of credit quantity&amount. 

You have to check couple of additional variables in order to reach correct conclusion. 

How to determine whether partial shipment has been effected when the presentation consisting of more than one set of transport documents:

Step 1 : Checking the total quantity and amount shipped: 

  • If total quantity and amount less than what letter of credit states you can say that partial shipment has been effected.
  • If actual shipment amount and quality equals to the letter of credit requirements you need to check the transport documents.

Step 2 : Checking the transport documents: 

  • If transport documents evidencing shipment commencing on the same means of conveyance and for the same journey, provided they indicate the same destination, will not be regarded as covering a partial shipment, even if they indicate different dates of shipment or different ports of loading, places of taking in charge or dispatch.

  • If transport documents evidencing shipment on more than one means of conveyance within the same mode of transport will be regarded as covering a partial shipment, even if the means of conveyance leave on the same day for the same destination

Example : How to determine partial shipment when presentation consisting of more than one set of transport documents?

A letter of credit has been issued in SWIFT format, subject to UCP latest version, with the following details:



Field 43P: Partial Shipments: Not Allowed

Field 43T: Transhipment: Allowed

Field 45A: Description of Goods and or Services: Frozen Sliced Red Peppers and Frozen Sliced Potatoes. Frozen Sliced Red Peppers Price: 2USD/kgs Frozen Sliced Potatoes Price: 1,5 USD/kgs Quantity: 10000kgs peppers and 10000kgs potatoes 20.000kgs in total. Delivery Terms: CIF Dammam Seaport Kingdom of Saudi Arabia Incoterms 2010.

Field 46A: Documents Required: 

  • 3 original signed commercial invoices and 3 copies.
  • Certificate of Origin issued and certified by the Chamber of Commerce in Beneficiary's country indicating South African origin of the goods.
  • Insurance certificate or policy in assignable form and endorsed in blank for 110% CIF commercial invoice value covering all risks showing claims payable in Kingdom of Saudi Arabia in commercial invoice currency.
  • Full set of original bill of lading shipped on board established to the order of AlAhli Bank notify applicant company marked freight prepaid.

The beneficiary presented two sets of original bills of lading among other documents with the following data:












Conclusion: 

Letter of credit amount shipped in full. 10000kgs frozen sliced red peppers and 10000kgs frozen sliced potatoes have been loaded which makes 20.000kgs in total as the same as letter of credit requested, but presentation consisting of more than one set of bills of lading, which means that we have to look at the bills of lading in order to determine whether partial shipment effected or not. 

First bill of lading shows the vessel name "Sea Voyager" voyage number "IV". Second bill of lading shows the vessel name " Blue Bird" voyage number "1337 ". there are two means of conveyances (two different vessels) have been utilized on this shipment, 

As a result partial shipment has been effected.

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What is the definition of a partial shipment? 
Partial shipment is one of the key definitions in a letter of credit transaction. Every letter of credit that is requesting presentation of a transport document such as a bill of lading, air waybill, road consignment note, rail transport document etc. must indicate whether partial shipments are allowed or not allowed.



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Key Terms and Definitions

  • Is partial shipment or transhipment more important?
  • What are the consequences of not allowing partial shipments?
  • What constitutes a partial shipment in letter of credit rules?
  • Do partial drawings and partial shipments have the same meaning?
  • How to claim partial negotiation under partial shipments? 
  • Is it possiable to get partial payments when making partial shipments?
  • Is there any tolerance limits allowed under partial shipments?
  • Is presentation of two sets of documents constitues a discrepancy when letter of credit prohibits partial shipments?
  • How to write description of goods on the commercial invoice when partial shipments are allowed?
  • Understanding quantity tolerances in partial shipments with an example
  • Partial shipment example : Partial shipment allowed, provided that each individual purchase order shipped in full
  • What is pro rate deduction of advance payment under partial shipments?
  • How to determine partial shipment in air transportation?
  • What happens if letter of credit is silent about partial shipments?
  • How to prepare invoice and draft under partial shipments when only 80% of the letter of credit amount payable against shipping documents?
  • How to determine insurance coverage amount under partial shipments?





Letter of Credit Conditions



bill of lading partial shipment
Partial Shipment


assumıng that only one set of bill of lading presented under this sample letter of credit. As can seen above, letter of credit prohibits partial shipments but bill of lading is showing short shipment on both product types. As a result partial shipment has been effected. 

Shipped on Board Date : 10.08.2014
Vessel Name : Sea Rush V 
Consignee: Bank Nederlandse Gemeenten, Netherlands
Notify: Applicant Company
Description of Goods: seabass and seabream
Quantity: 4500kgs seabass and 4500kgs seabream

Letter of Credit Conditions
Bill of Lading 1


partial-shipment-bill-of-lading
Bill of Lading 2


Shipped on Board Date : 19.08.2014
Vessel Name : Blue Bird 1337  
Consignee: To the order of AlAhli Bank, KSA
Notify: Applicant Company
Description of Goods: 10000kgs Frozen Potatoes