Have you ever found your freight consignment or shipment being delayed because of a missing original bill of lading? When that happened, did you have to go to all the trouble via numerous phone calls and emails to get your original bill of lading or documents you need to clear your consignment successfully?
If you have ever been in this situation, you probably understand the importance of the original bill of lading. Alternatively, you could consider using a telex release. In this article, we bring you through how a telex release could potentially save you lots of time in your logistics process.
This article at a glance:
1. What is a telex release?
A telex release is basically a message that is sent via electronic communication to all parties involved in the shipment, in replacement of a physical hardcopy of the Original Bill of Lading.
2. Is there a difference between a telex release and an express release?
Yes! With an express release, no original bill of lading was ever involved and your cargo can be released immediately. However, there are circumstances for using it.
3. How does a telex release make things easier for you?
For starters, you do not have to wait for all relevant parties to sign on your original bill of lading and courier it to and fro. You can now use emails for all your communications.
What is a Telex Release?
To put it simply, a telex release is the industry term used for the message sent by a shipping agent or line from a port to the office at the customs destination. It is meant for the release of a cargo at one port when all original copies of the bill of lading have been surrendered at other ports.
The telex release includes the following information:
- Type of product in the consignment
- Quantity of products
- Destination of the goods being carried
To help you understand better, here’s an example of how a telex release is used.
Company A, an exporter of outdoor sports products from Malaysia, sends a consignment of goods to Catherine (importer located in Vietnam). There is one problem they face with this batch of goods, however, as Catherine needs to clear this consignment immediately upon arrival due to the urgent delivery to one of her distributors. If the port in Vietnam follows the traditional release by using a bill of lading, it would take almost a day for the clearance process.
Catherine does not want to wait for the clearance of her shipment, as she is running on a very tight schedule. Instead, she wants the immediate release of her cargo at the port in Vietnam. Can she do this? Yes, she can.
Company A can surrender the original bill of lading, along with other copies, to the shipping company and request for it to issue a telex release. Once the telex release is issued, the port in Vietnam will not need the original bill of lading to clear the cargo once it arrives. It can be immediately released upon arrival to Catherine, who can then receive the goods as soon as they arrive.
Before, this was the most common reason for issuing a telex release. However, recently many sellers and exporters are using telex releases for another reason. Instead of waiting till full original documents arrive at the buyer, sellers are using telex releases despite having the original bill of lading—which means the seller gives permission for the shipping company to release the cargo at the arrival port ahead of receiving all documents.
Well, the physical copy of the original bill of lading (OBL) was crucial in the earlier days when shippers relied on this document to release their consignments. Nevertheless, with the increasing popularity of telex releases, it may somewhat point to the fact that OBLs are not as important as they were before. Moving on, let’s touch on what the OBL is and how it links to the telex release.
What is an Original Bill of Lading?
The original bill of lading (OBL), commonly referred to as the order bill of lading or straight bill of lading, is a hardcopy paper bill of lading that is issued to a customer or shipper at the port of lading by the carrier, hence the name.
You may not often see the physical copy labeled “Original Bill of Lading”, but you may have come across a document titled “Order Bill of Lading '' or “Straight Bill of Lading”. Although these are often used interchangeably, the original bill of lading is technically made up of both the order and straight bill of lading.
What is the Order Bill of Lading?
The Order Bill of Lading is consigned “To Order of Shipper” / “To Order” / “To order of xxx Bank”. This bill is in the original format, negotiable, and can be transferred to another party.
How about the Straight Bill of Lading?
The Straight Bill of Lading is issued in an original format to the named and designated consignee. This bill does not involve any negotiation and the cargo cannot be transferred to another party (except the consignee who is named in that document). Also, it’s main purpose is to serve as evidence of the contract of carriage and the receipt of goods.
Telex Release versus Express Release
Both the telex release and express release allow the consignee to receive the goods without producing the original bill of lading at the destination. These two terms are often used interchangeably, but they are quite different. As an exporter or importer, you should know the difference, as it can mean different things when it comes to your consignments.
We’ve already explained what a telex release is, so let’s dive straight into what an express release means. An express release means that no original bill of lading was issued at all in the shipping instructions to the carrier. Upon arrival at the destination port, the agent can release the goods directly to the consignee without any production of any original bill of lading (because there were no bills issued at all in the first place).
So what’s the difference? With a telex release, the original bill of lading is issued, printed in hardcopy, and then handed to the shipper. Then, the shipper surrenders the original bill of lading to issue a telex release. With an express release, no original bill of lading was ever requested or issued throughout the freight consignment process.
You may think: why don’t I just use an express release instead and save on all the trouble? The reason is that express releases are only requested in circumstances when there is no requirement for an original bill of lading. Some instances where an express release can be used are as follows:
- The shipment and transaction are between trusted parties (such as group companies and branch offices).
- There was a long history and relationship between both parties and there is enough trust to go without an OBL.
- The payment for the consignment is already secured and no banks are involved in the transaction.
- The supplier does not have sufficient time to release the OBL and courier it to the destination without incurring storage or other charges.
When Does An Exporter Request For a Telex Release?
Using an original bill of lading can be a long and tedious process, especially when you want your goods released as soon as they arrive at the destination port. Therefore, here are some reasons why exporters usually prefer to use telex releases over the OBL.
- There is no risk of misplacing hardcopy, physical documents, including the OBL.
- The message can be sent via electronic communication, which lowers the risk of delays.
- For shipments that have short voyages with little time for hardcopy documents to be couriered, using an electronic message saves a lot of time.
- Save on storage fees when the OBL cannot be mailed to the destination in time.
How Do You Issue a Telex Release?
Now that you know when and why to use a telex release instead of an original bill of lading, here’re the two big steps to issue one.
- Obtain written authority from the first shipper.
- If it is your first time, check and review telex release procedures of the shipping line (this should also state procedures to be followed strictly by the Third Country Receiving Agent and the Releasing Agent). Knowing what the receiving agent and releasing agent does is important, as it makes up the entire process.
Third country receiving agents must:
- Obtain the full set of three originals for a bill of lading (one for the consignee, one for the forwarder, and one for the customs agent).
- Collect outstanding freight charges at their port as applicable.
- Get written instruction from the shipper that the shipment can be released at the releasing agent’s port. Written details of the consignee should be given as well (name, address, phone, fax, and email).
- Send written instructions to the releasing agent, including all detailed information about the shipment, the consignee, and the cargo.
- Ensure that confirmation by the releasing agent is sent once the cargo is released.
Releasing agents should:
- Ensure that the principal shipper’s authority to release the telex release is received.
- Check and make sure the details of the telex release sent by the receiving agent is all correct (including confirmation that the OBLs have been collected, cargo can be released, all freight and other charges have been collected and full details of the cargo, and consignee details)
How Do You Ensure a Safe Process When Using a Telex Release?
As with all shipments, the shipping company or carrier has the responsibility to obtain the original bill of lading before releasing the cargo to the consignee or the recipient listed on the OBL. Even when opting to use a telex release, it is best that the bill of lading accompanies the cargo throughout its transit. This is best for internal controls, to make sure that the correct cargo is delivered to the correct recipient.
However, there are times when the OBL is surrendered at other ports other than the final destination port, resulting in possible miscommunications or goods being delivered to the wrong recipients. This is where the third party receiving agent comes in to ensure that the telex release is sent to the discharge port agent confirming the OBL—and that the cargo can be released to the specified consignee or authorised party. In some cases, one wrong release may contribute to asset theft.
Wire fraud is another common case that criminals perform by sending fake release emails to releasing agents, authorising them to release shipments to their partners in crime. That is why releasing agents play a very important role, to make sure that written confirmation comes from the authorised shipper before releasing any cargo.
Commonly seen in international and global trade, language barriers or careless communication can lead to the wrong release of goods by the releasing agent. This is sometimes difficult to avoid especially when there are countries that do not share the same language (such as Mandarin and Spanish). In order to lower the chances of miscommunication, it is good to ensure that a common language is used, with a professional staff in your team who understands multiple languages.
Importance of releasing agents
When it comes to telex releases, releasing agents play a huge role as the last barrier of control. Releasing agents must be discerning when receiving telex releases including verifying that the email address used to send the telex release to them is indeed genuine. In all cases, the email sent should include all verified parties of the consignment (such as the first shipper, the third country receiving agent, and the destination consignee).
How Does Using a Telex Release Speed Up The Speed of Your Logistics?
As consumers raise their expectations for faster shipping speeds, it is a game-changer for exporters and importers alike. How do you make sure your processes stay efficient without the risk of errors? In the shipping world, telex releases are proving to be a way for logistics companies to take advantage of digitalisation and move from paper to electronic means.
Couriering OBL documents the traditional way takes a long time to arrive—imagine spending 5-8 days waiting for documents (including paperwork, couriering documents, and getting approvals from relevant parties). Instead of the shipper couriering three sets of original bills of lading, copies of the OBLs are sent via email to all the involved parties. You will be able to receive signed copies within a few hours.
As the shipping and logistics world moves towards an easier, more efficient way of running processes, so should your cross-border payment methods.
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Author: Silverbird Content Team
Illustration: Irina Lisogor