How the fast release without the original bill of lading works and what guarantees sellers and shippers relinquish in the process.
Telex Release and Express Bill of Lading expedite delivery because the goods are released without presentation of an original bill of lading. However, this means that sellers and shippers relinquish the document's security function, often without being aware of the consequences. Rogert & Ulbrich identifies the risks and protects your position.
What Telex Release and Express Bill of Lading mean
Both terms refer to delivery without presentation of an original bill of lading, but differ in their procedure. They are trading practices, not legally defined documents, and are encountered daily in maritime freight.
- Telex Release: The shipper returns all originals of the bill of lading at the port of loading, the carrier declares them settled and instructs his agent at the port of destination to deliver the goods to the named consignee without presentation of an original.
- Express Bill of Lading: No original document is issued in this case. The goods are released directly to the named recipient, similar to a sea waybill.
In both cases, the physical presentation of a blocking document at the destination is no longer required. This saves time and shipping costs for the originals, but fundamentally changes the legal situation. Anyone familiar with the basics of a bill of lading will immediately recognize what is being relinquished here.
An overview of our consulting services transport and forwarding law You can find it on our service page.
Are you going to agree to a Telex release? Have it checked beforehand what safeguards you are giving up.
The difference to the original bill of lading – the abandoned security function
The original bill of lading fulfills three functions: it serves as proof, a blocking document, and a document of title. The blocking function ensures that the carrier may only deliver upon return of the bill of lading. The document of title means that the transfer of the document is equivalent to the delivery of the goods.
With a Telex Release and an Express Bill of Lading, precisely this blocking and traditional effect is eliminated. The goods are released to the named consignee without the need to present a negotiable instrument. For the seller, this means they lose the leverage to withhold the goods until payment is received. Anyone abandoning the functions of the bill of lading should be aware of this consequence.
Unsure what effect your document will have? Have it checked whether you still have a backup.
The main risks for sellers and shippers
Experience shows that many parties involved only realize the full implications of a Telex release after an incident has occurred. The most significant risks are:
- Loss of payment security: Without a blocking document, the goods can no longer be held until payment is received. If payment is not received, the goods have already been delivered.
- Irreversibility: Once the Telex release has been granted or the originals have been returned, the release usually cannot be reversed.
- Incorrect delivery: Release will be made to the named recipient. If their information is incorrect or the recipient is deceived, delivery to the wrong person is imminent.
- No bank financing: Banks generally do not accept security without a negotiable bill of lading, so financing against the document is not possible.
These risks primarily affect the seller and the financing shipper. Especially with unsecured payment terms, a prematurely granted telex release can lead to the total loss of the goods without any compensation. Therefore, payment should be secured before such a release is issued.
Do you sell on open payment terms? Have your payment rights checked to see if a Telex release puts your payment at risk.
Telex release and letter of credit – why the two rarely go together.
If payment is processed via a letter of credit, the bank generally requires the presentation of a complete set of original bills of lading. A telex release or an express bill of lading does not meet this requirement because no original document exists that can be presented.
Anyone who initiates a Telex release despite having a letter of credit risks having the bank refuse payment because the required documents are missing. This means the seller loses both safeguards simultaneously: those of the bill of lading and those of the letter of credit. Therefore, the chosen document type must be precisely aligned with the agreed payment method. This alignment should be done at the beginning of every transaction, not at the end.
Are you using a letter of credit? Have your documents checked to ensure they meet the bank's requirements.
Legal classification and liability issues
Legally, a distinction must be made as to whether an original bill of lading was issued at all. If an original bill of lading was issued, the carrier may generally only deliver upon its return. If the carrier delivers without presenting it, and without a valid telex release, they breach their obligations and are liable. With a telex release, on the other hand, the originals are returned and declared settled, so that the release without presentation is based on a deliberate instruction.
The Express Bill of Lading is similar to the sea waybill, which is neither a blocking document nor a document of title. If delivery to the wrong party occurs, the question of liability arises depending on the specific circumstances: If the carrier correctly implemented the instructions, the risk of an incorrect consignee designation lies more with the shipper. However, if the shipper delivered contrary to the instructions or without effectively completing the original documents, the shipper may be liable. The allocation of liability depends on the individual case and the available documentation.
We support you in contractually securing such processes by assisting you with the Drafting of transport and forwarding contracts.
Was your goods delivered without a receipt? Have it checked whether the carrier has breached its obligations.
When Telex Release makes sense – and your guide to action
Telex Release and Express Bill of Lading are not inherently bad. They make sense when trust and payment are guaranteed, for example, with advance payment, intra-company shipments, or with long-standing, reliable partners. Crucially, they must be used consciously and securely. The following checklist will help:
- Secure payment first: Do not initiate a release without the original until payment has been received or secured.
- Select payment method: Check whether a letter of credit or bank financing requires an original bill of lading.
- Check recipient: Carefully check the details of the named recipient to avoid incorrect deliveries.
- Consider irreversibility: Be aware that once permission has been granted, it usually cannot be revoked.
- Adjusting contracts: Clearly define the permissible document type and the conditions for approval in the contract.
Early support is worthwhile for cross-border business transactions; we offer advice on this as part of our services. advice on international transport law. The clearer the document and payment chain, the lower the risk.
Do you want to use Telex Release securely? Have your processes and contracts reviewed.
Rogert & Ulbrich – Your lawyers in transport and maritime law
Rogert & Ulbrich advises sellers, shippers, and freight forwarders on Telex releases, express bills of lading, and securing document workflows. The lawyers Dr. Marco Rogert and Tobias Ulbrich and their multilingual team are familiar with the functions of the bill of lading and the practices of shipping companies from their daily work.
We review which safeguards you are relinquishing, coordinate the type of document and payment processing, clarify liability issues in case of incorrect delivery, and draft your contracts. Through our Dutch Desk and as Transport law attorney in Rotterdam We also accompany traffic through the Dutch ports.
Whether it's a threatened payment default, incorrect delivery, or contract drafting: Arrange a consultation initial consultation and secure your position.
