Can I action a Telex Release if bill is consigned To Order…….??
Let me refresh your mind on What is a Telex Release and what is its purpose..
A telex release is simply a message that is sent by the shipping line or agent at load port to their office or agent at discharge port advising that the shipper or exporter has surrendered one or all of the original bills of lading that have been issued to them, and that the cargo can be released to the consignee shown on the bill of lading without presentation of any original bills of lading..
Why would the shipper or exporter request a telex release :
- the consignee at destination is a counterpart office of the shipper – example – if say DHL Global Forwarding is the shipper shown on the bill of lading and they are shipping some cargo to their office overseas, as there is no negotiation involved, they don’t require an original bill of lading at destination
- the shipper did not process his documentation in time and the ship that is carrying his cargo has already reached or reaching the destination and the original bills will not reach the consignee in time for them to clear before the expiry of free days
- some cases, an NVOCC operator might request for a telex release from the line so that they can issue their house bill of lading to their customer
As discussed in one of my previous articles about Ocean Bill of lading, Sea Waybill of Lading & Memo Bill of Lading, when a bill of lading is issued in Original, other than consigning the bill to a direct customer (Straight Bill of Lading), the shipper has the option to consign the shipment as below (in another of my articles about duly discharged bills of lading, I have discussed the permutations and the endorsements required for each of these instances) :
- To Order of a named Consignee
- To Order of a Bank
- To Order of Shipper (To Order)
When an Original Bill of Lading is consigned as above, they are generally issued with the intention of further negotiations and also with opportunities for resale/transfer of goods to someone else..
When issued as To Order or its derivatives above above, since a consignee has not yet been ascertained or there exists the possibility of transfer, the shipping line does not know who to release the cargo to..
Therefore, a Telex Release can be actioned, only once the bill of lading has been endorsed to someone tangible by the named Consignee, Bank or Shipper as consigned above..
What is your opinion and have you had any alternate experiences with the Telex Release on a To Order bill of lading..??
If my BL is consigned “TO ORDER”, now I have found a buyer for the cargo. What should I do in order for shipping line to release cargo to my buyer.
As a banker,
is it possible to issue telex release BL consigned to bank
Hi Kotresh, a telex release on a bill consigned to the bank defeats the purpose of negotiation unless the bank does NOT need to see the originals..
If the bill of lading shows consignee as to order and if the POL issues telex release stating to issue in the name of notify party will it be possible to do so
Hi Prabin, Telex Release cannot be done on a Negotiable To Order Bill..
We ( as a bank) have recently sent our exporters documents to Spain, but we have not endorsed behind the Bill of lading (neither to the bank nor to the beneficiary) Will there be any issues for the beneficiary regarding thedelivery of goods at customs?? Is it okay if the banks don’t endorse behind the bill of lading??
Hi GSKK, if the cargo is consigned to the bank, then the bank MUST endorse it further, otherwise the release at destination could be affected..
WHAT HAPPENS IN THE CASE A BILL OF LADING IS CONSIGNED TO A PARTY IN SINGAPORE AND THEY IN TURN SELL TO PARTY IN DUBAI BUT DUBAI PARTY CANNOT DO THE TELEX RELEASE IN DUBAI BECAUSE SHIPPING LINE SAYS CONSIGNEE CAN ONLY DO IT. ON BL THE DESTINATION PARTY IS THERE IN NOTIFY 1 AND DUBAI PARTY ON NOTIFY 2 IN BODY OF BL.
HOW CAN ONE THE DUBAI PARTY OVERCOME THIS OBSTACLE AND HAVE THE OBL SURRENDERED WITH SHIPPER AND CONSIGNEE ENDORSEMENT AT THE BACK OF THE OBL? KINDLY SUGGEST.
A “To Order” Bill of Lading is a negotiable document that represents title to the cargo. Cargo cannot be released under a negotiable B/L without surrender of the original B/L properly endorsed. Carriers who agree to release cargo shipped under a negotiable B/L without surrender of an endorsed B/L do so at great risk. Acceptance of an LOI from the Shipper in such cases is not sufficient protection. The value and security offered by an LOI is directly proportional to the financial position, stability and credibility of the party issuing the LOI. An LOI issued by someone who has little to no money to back it up is worth the value of the single page of paper only. LOI’s can also jeopardize the P&I cover of the ocean carrier if not accepted in consultation with and approval by the underwriters.
To often today, Shippers are using negotiable Bills of Lading without any real underlying knowledge of the risks versus the benefits. Quite often cargo is shipped under negotiable Bills of Lading when there is no bank L/C involved and the terms of sale do not warrant their use. In such cases, many Shippers are consigning the cargo “To Order” out of what they perceive as the custom of the trade rather than a true requirement for the business.
1. To Order of a named Consignee
2.To Order of a Bank
3.To Order of Shipper (To Order)
In case shipper requests telex release under the above conditions, best option would be that the shipper surrenders complete set of bill of ladings issued to him and provide a revised shipping instructions changing consignee from negotiable to straight consigned Bl. viz. From To Order of XXX to a named consignee. Basis this revised instructions, Carrier would change their system accordingly and will conveniently send a TELEX RELEASE message to their counterpart (who then should not have any doubt in their minds as to why an ORDER BL was surrendered back).
There has been instances where some Shipping Lines agreed to a telex release, based on:
The Shipper endorsing the “To Order of Shipper” Original full set Bills of Lading and surrenderending the full set back to the Shipping Line.
The Shipper completes a LOI idemnifying the Shipping Line against incorrect release and clearly stipulating the release party on the indemnity.
Hi Jackie, thanks for your comments.. Glad to know that your experience is also in line with I have mentioned above.. But since the bill of lading has been endorsed by the shipper and surrendered, is there a requirement for the LOI..??