Supply chains are complex logistics networks in which cargos move from one point to another. During a shipment, from production to its final delivery, it can occur that goods don’t arrive in the right quantities or in good condition.
Shipping variances can be common when dealing with large orders or with high shipping frequencies. There are three types of shipping variances, which can commonly occur. They are known as overages, shortages, and damages.
In this article, we’ll be taking a closer look at shipping tolerances and what each of these three different classifications mean. We are also going to explore what variance reports are and how claim reports for variances are submitted.
What Is the Meaning of Over, Short & Damaged (OS&D)?
OS&D stands for over, short, and damaged and are shipping variances that refer to the condition of the cargo and the final quantity of goods that was received by the consignee.
The term “over” refers to overages, “short” refers to shortages, and “damaged” to cargo damages. Let’s take a closer look at these three classifications.
Overages in Shipping
Overages occur when the total number of goods were found to be more than what was originally ordered. This means that the shipper overfulfilled the shipping quality by a margin.
For example, when a consignment was shipped for 550 cartons of red socks, and a total of 553 cartons were received at the destination, the shipment had overages of 3 cartons.
Overages in shipping are typically handled in one of three ways:
- The shipper deducts the excess amount of the delivered goods against future shipments.
- The consignee returns the overages in a return shipment, in which freight costs are typically charged back to the shipper.
- The shipper leaves the shipment in the hands of the consignee and writes this off as an error.
Shortages in Shipping
Shortages in shipping are the opposite of overages. They are often also referred to as short shipments, which occur when the shipper has underfullfilled the consignment.
For example, when a consignee receives a total of 235 cartons containing blue shirts when the actual order was placed for just 250 cartons. This shipment has a shortage of 15 cartons.
This means that less cargo was received by the consignee than was ordered. If the shipping quality is less than what was ordered, the shipment is also referred to as being short shipped.
Shortages in shipping are typically handled in one of three ways:
- The missing quantity is shipped in the next batch to make up for the difference.
- The shipper sends the missing quantity immediately (for critical items other modes of transport may be arranged).
- The consignee requests a partial refund that is equivalent to the value of the shortages.
Damages in Shipping
Damages happen if the item is found to be defective, unusable, or not according to specification.
For example, a container with printers was shipped via ocean freight. Upon opening the container, the consignee notices that the pallets were not properly secured, which lead to a few pallets being toppled over. The improper securing of cargo led to damages, which rendered the printers partially unusable.
Due to frequent cargo handling and other external factors, shipments may get damaged before, during, and after transit. This is true for cargo that is being transported by all modes of transport, including air, sea, rail, and road.
Damages in shipping are typically handled in one of three ways:
- The consignee is refunded based on the number of damages received.
- The shipper sends another consignment to make up for the damaged cargo.
- The consignee accepts the damaged cargo as it was received.
What Is an Over, Short & Damaged Report?
An Over, Short, and Damaged (OS&D) Report is a document that captures information on the cargo quantity and condition in which it was received
Once all of the important information has been gathered a claim may be filed by the consignee to any of the following parties depending on where and how the incident occurred and who is responsible or liable for them.
Involved parties could be the trucker, airline, shipping line, carrier, or the shipper. The OS&B report is always completed and submitted by the party that receives the cargo, which is typically the consignee or buyer.
What Information Is Required on an Over, Short & Damaged Report?
The Over, Short & Damaged Report contains important information about the shipments that include details about the commodity, packaging, contract, order, and mode of transport, among several others. Let’s take a closer look at each of these details.
- Name Of Commodity – The declared commodity as stated in the bill of lading (BL) or air waybill (AWB). In other words, this refers to the goods that were agreed to be transported. The commodity is also mentioned in the sales contract or purchase order between the buyer and seller.
- Type Of Packaging – How the commodity was packed. For example, the commodity could be in bags, boxes, pallets, drums, crates, and cartons, among other forms of packaging.
- Contract Number – The freight contract number of the shipment. This is usually a unique reference number that is generated by the carrier (shipping line, airline, or freight forwarder).
- Destination County, State & City – The final place of delivery. This is usually indicated by the name of the country, state, and city.
- Delivery Order Number – A unique number that is found on a shipping document called a delivery order. This document is required for equipment release to the trucking company at the port of discharge or destination airport.
- Notice To Deliver Number – A number that is used to reference the delivery of the respective order.
- Method Of Delivery – The mode of delivery. Shipments are typically transported via sea freight, airfreight, rail, or truck.
- Car or Truck Number – The number plate or reference number of the truck that was assigned for this delivery.
- Unloading Details (Started/ Completed) – The date and time that the unloading process at the consignee’s premise was started and completed.
- BL or AWB Number – The carrier’s unique identifying number for each shipment. The bill of lading number is indicated for sea shipments and the air waybill number is indicated for air shipments.
- Quantity (Short, Over & Damaged) – The total number of items that were received either as overages, shortages, or damages. While typically indicated in cartons, it can depend on the packaging.
- Variance Discovery (Before, During & After) – Where the supposed variance was detected to have been over shipped, short shipped, or damaged. Three different assessment periods are measured which are before loading, during loading, and after loading.
- Carrier’s Presence During Unloading – Confirmation if the carrier or its appointed agent was present during the cargo unloading process. This is answered either with a yes or a no.
- Door Seal Number – The unique seal number used to lock the container or truck. It’s also important to indicate if the shipment was sealed when the container was received.
- Carrier’s Agent Notification – The date and time when the carrier’s agent or an authorized representative was notified of the shipping variance. This can also include how they were advised of the variance.
- Carrier’s Agent Response – Confirmation that the carrier or its appointed agent was notified of the variance. This is answered either with a yes or a no.
How Does The Claim Process Work for Short, Over, and Damaged Cargo?
In the event of overages, shortages, or damages, the consignee can initiate a claim against the shipper or party that is liable for the variance.
The claim process typically takes between a few days to several weeks to resolve. A certain amount of time is needed to investigate, make and file an accurate report, and undergo the insurance process.
A consignee must have an accurate report supported by evidence of the variance. Constant follow-ups are generally needed to ensure that the claim is being attended to and is not sidetracked.
To file a claim for short, over, and damaged cargo, the consignee can follow the process below:
- Carefully investigate and gather the correct information about the shipping variance.
- Complete an OS&D form and file it through the respective channels.
- Coordinate with the insurance company if required.
- Follow up with the shipper of the liable party, until the claim is settled.
- Ensure that the claim is correctly processed and that remedies are in line with contractual agreements.