By definition, “A Delivery Order is a release document issued by the carrier releasing the cargo to the consignee mentioned in the bill of lading”
It is issued by the carrier in exchange for
- One or all duly endorsed Original Bill(s) of Lading or a duly authorised Bank Guarantee (in the absence of an original bill of lading)
- A Telex Release confirmation from the loading port or principal confirming surrender of one or all Original bills of lading issued for the shipment
- A copy of a Sea Waybill issued
Only with this delivery order the consignee can clear his cargo with customs and take delivery of the cargo from the port or terminal or depot or wherever it is stored..
UCP 600/ISBP considers a Delivery Order only as a document that is used in relation to the transportation of goods and not as a contract of carriage or as a transportation document as defined in UCP 600 articles 19-25..
Be that as it may, since a delivery order is issued in exchange for a Bill of Lading which is a legal document and is issued to the legal receiver of the cargo, in that sense a delivery order and the release maybe considered as “legally binding”..
A Delivery Order can be considered as the FINAL step in the import cargo release process..
Therefore, it is imperative that the Delivery Order is issued to the right entity and in the below table you can see the endorsements that are required on a bill of lading before release of the delivery order (depending on how the bill of lading is consigned)..
|Bill of Lading consigned to||Endorsements Required on the bill of lading|
|A Company||When consigned to a named consignee, the bill of lading is known as a Straight Bill of Lading, and in the case of a Straight Bill of lading, the release maybe given only to the named consignee and this bill of lading is not negotiable or transferable..|
|Individual’s Name||When consigned to a named consignee, the bill of lading is known as a Straight Bill of Lading, and in the case of a Straight Bill of lading, the release maybe given only to the named consignee and this bill of lading is not negotiable or transferable..Since the consignee is a private individual, release may be effected only after verification of Original ID of the person presenting the OBsL for release..|
|To Order or To Order of ZYX
||Shipper’s endorsement stating DELIVER TO THE ORDER OF “ZYX Client” and ZYX’s company stamp and sign in case he is taking the final delivery or his endorsement stating, DELIVER TO THE ORDER OF “ABC Client” (if the cargo has been further sold)….|
|To Order of Bank||Shipper’s endorsement stating DELIVER TO THE ORDER OF “XYZ BANK” and banks’ endorsement stating, DELIVER TO THE ORDER OF “ZYX Client” and ZYX’s company stamp and sign in case he is taking the final delivery or his endorsement stating, DELIVER TO THE ORDER OF “ABC Client” (if the cargo has been further sold)..|
A point to be noted here is that these days due to the advanced technologies there may not be an actual physical Delivery Order issued to the client particularly in the container business..
A lot of the ports/terminals are on-line with the shipping lines these days and the delivery order maybe in the form of an update in the port or customs system or in the form of an EDI message..
In such cases, the release in the system maybe considered as a Delivery Order but still the process of release MUST BE FOLLOWED..
Do you have any experience with the legality of a Delivery Order that you would like to share..??
I tend to agree with Mohammed, in the U.S., the delivery order is issued by the receiver of the goods (Owner) to the Carrier to direct the final disposition of the goods. Carriers’ require certain events to release the cargo; Carrier Release, Customs Release, Terminal Release and a Delivery Order. The delivery order is not a legal document but it does direct the ultimate instruction for where to delivery the cargo.
Of Telex Release : shipper should surrender all(three) Original Bills of Lading at loading port.
Delivery Order is required only when goods are in custody of Bailee. A delivery order is an instruction from the carrier to the Bailee (Port authority or CFS or Warehouse operator, etc.) who is holding the goods on behalf of carrier, to deliver the goods to a particular person/consignee. This is a procedural document and not a legal document, unlike Bill of Lading.
Further, in case where the consignee himself operates the Port (Captive jetty/Terminal, etc.) there is no requirement to issue Delivery Order. D.O. does not mention any terms and conditions, to be considered as legal document. It only signifies that consignee has paid all the required dues of the carrier and carrier has no objection if the goods are delivered to the consignee by the Bailee (custodian).
Therefore in my view, Delivery Order is not a legal document like Bill of Lading.
if delivery order missed by the consignee so FIR is rehired or not?
I read the article on whether the delivery order is a legal document with a great interest.
Would like to know some countries or ports in which the delivery order is not applicable, if any. Are there any ports globally which carriers/shipping agents don’t use delivery orders to release cargo? Which ones ? Kindly help.
Hi Clement, the Delivery Order as discussed in this article could be one in a traditional form such as a paper document and it is still the case in many of the countries around the world.. But in many of the more developed countries this delivery order is transmitted electronically either to the port or the releasing entity directly.. In one form or the other, the delivery order will continue to exist and no shipping line or port should release cargo without this order..
Trust this assists..
To my mind a Delivery Order can not amount to a legal document. Let’s look at it from the purpose or function a delivery order serves. It is a document which enables the consignee to clear his goods from the port as the person entitled. It does nothing more than to present the holder as the “person entitled” to receive the goods. With this function of the delivery order it is hard to see how it can fit in as a legal document.
Thank you for your comments Bola..
A Delivery Note can be used by Approved Exporters for the purpose of proving preferential origin (and benefit from reduced customs duties). Would that be another reason to consider this document as a legal one?
My shipper released the goods from port without bank enforcement. As a result importer’s bank back all original docs without making any payment. Total value was USD 105,000.00
PL ADVICE. Thanks.
Point well taken as it relates to a steamship company or carrier issuing a delivery order.
However in the majority of cases (when the routing is other than store door) the delivery order is actually issued by the customs broker or in some cases the freight forwarder or OTI.
Secondly, from an insurance perspective clauses either listed on the delivery order or not listed on the delivery order have an impact on liability.
Therefore when one says a legal document, I wonder what the definition of legal is in the context of this article.
does it say that overseas a DO is the same as the booking confirmation here in the USA?
According to UCC a DO refers to an order given by an Owner of a goods to a person in possession of them (the Carrier during transit or WharehouseMan when Stock) directing the person to deliver the goods to a person named in order. The Uniform Document of Title Act Permits the use of negotiable delivery orders (if the order directs delivery to a named person or order). However it is still necessary to single out delivery orders for special treatment. Until the delivery order is accepted by the bailee who subsequently has possession on consignment.