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What is Overstock fee
There are 21 days of free stock allowed for V-EMB (EMB 400 still 10 days allowed). This means that from receipt (goods receipt in LES), the V-EMB may be kept free of charge for 21 days (10 days for EMB 400).
The Overstock Fee is invoiced monthly, for V-EMB stock exceeding 21 days free stock period (10 days for EMB 400).
All delivered volumes of V-EMB, including surrounding packaging (e.g. pallets used for transporting other empty packaging), will be registered on the user account upon automatic goods receipt date in LES.
After the allowed 21 days free stock period has passed (10 days for EMB 400), all V-EMB (including surrounding packaging) still in stock, will be subject to overstock fees until it is used for shipments and goods issued in LES, or goods issued in LES to return to VGPL terminal at the cost of the user.
- Goods receipt date in LES = V-EMB enters stock balance in LES. Free stock period start date.
- Goods Issue date in LES = V-EMB leaves stock balance in LES
If you have any more questions about the Overstock Fee, you can place a Ticket to Packaging --> Invoice.
More information on how to calculate the Overstock fee is available in the next section of this article.
How is the Overstock fee calculated?
In this example we calculate the Overstock Fee for V-EMB 1:
The quantity on the invoice is not the same as the actual quantity in stock. It is the quantity to charge. The quantity to charge is a system-based sum that is based on the difference between Actual stock and Free stock. The quantity charged each day is accumulated and equals the total number charged at the end of the period.
Accumulated quantity to charge for current month = Actual stock – Free stock
You can find the detailed calculations for the Invoiced Overstock Fee in the History section in LES:
History --> Invoiced Overstock Fee --> Choose one entire month --> Enter
You can then export the information to Excel by clicking on “Export”.
Free stock:
The Free stock is based on a stock of 21 days (10 days for Emb 400).
From receiving the packaging material on the account, these quantities will be free of charge for 21 days.
How to calculate Free stock:
Free stock = Accumulated “summed qty of movements incr. stock” of the past 21 days (+ 1 day of arrival).
For example:
Free stock for 990000001 on 2024-02-21 = 206 pcs
2024-02-21 – 21 days (+ 1 day of arrival) = 2024-01-31
Summed qty of movements incr. stock between 2024-01-31 – 2024-02-21 = 206 pcs
Base for rent (Overstock):
Base for rent = Stock level of applicable date – Free stock
Base for rent 2024-02-01:
Base for rent = 1 555 - 2055 = -500 (Negative values will become 0)
Base for rent 2024-02-02:
Base for rent = 1555 – 1472 = 83
Calculation connected to price:
The Base for rent of each day during the month is accumulated and equals the total amount to charge at the end of the month.
The price per for Overstock of V-EMB 1 is in this example:
You can find the price lists - here
Important! You must be logged in to Supplier Portal to open the link
Note! Currency rounding might result in small differences between your calculations and the result on the specification.
Common Q&A
The quantity on the invoice is incorrect
The quantity on the invoice is not the same as the actual quantity in stock:
It is the quantity to charge. The quantity to charge is a system-based sum that is based on the difference between Actual stock and Free stock. The quantity charged each day is accumulated and equals the total number charged at the end of the period.
Volvo requires parts to be stored in V-EMB
If a user is requested by his customer to store volumes of V-EMB which results in overstock charges, these invoices must be paid to VGPL. The user and the customer are then to settle claims generated from this cost without interference from VGPL.
Fluctuating schedules from Volvo Plants
Overstock fee will not be reduced based on fluctuation schedules.
We are all in a very unpredictable situation when it comes to the global supply chain, so we have limited impact when it comes to foreseeing changed production.
When it comes to volume related disputes connected to schedules, we refer to purchasing as they are managing the overall commercial discussion. Packaging is only one of the parts (as there is usually raw material and other costs that are far bigger) connected to changed schedules.