Traffic policing controls the rate of incoming packets to ensure that network resources are properly allocated. If the traffic rate of a connection exceeds the specifications on an interface, traffic policing allows the interface to drop excess packets or re-mark the packet priority to maximize network resource usage and protect carriers' profits. An example of this process is restricting the rate of HTTP packets to 50% of the network bandwidth.
Traffic shaping controls the rate of outgoing packets to allow the traffic rate to match that on the downstream device.