In ocean shipping, original bill of lading is far more secure than telex release bill of lading. The core differences between the two stem from their “document of title” attributes and “delivery logic.” Choosing between the two requires a comprehensive assessment based on the trade scenario, trust relationships, and risk tolerance.
In this article, Weefreight will provide a detailed explanation, which we hope will be helpful.
First, clarify the core definitions of “telegraph release bill of lading” and “original bill of lading.”
To understand the security differences, we must first distinguish the essential attributes of the two:
An original bill of lading is a paper document of title issued by the carrier. It has a fixed format (usually three originals and three copies) and is marked “Original.” It not only proves that the goods have been loaded on board, but also represents “ownership” of the goods. Whoever holds the original bill of lading has the right to collect the goods at the port of destination. Upon collection, the original bill of lading (usually one or two copies) must be presented to the carrier, making this a “delivery against bills of lading” procedure.
A telex release bill of lading is essentially a confirmation of the “waiver of the right to collect the goods under the original bill of lading.” After the shipper applies for a telex release from the carrier, the carrier will notify the destination agent via email or other means, stating that the original bill of lading is not required; the goods will be released upon receipt of the consignee’s identification. Telex release bills of lading are often electronic (or paper copies marked “Telex Release”) and do not constitute a document of title, serving only as proof of cargo transportation.
II. Security Comparison: Original Bills of Lading are “Absolutely Prioritized”
From the perspectives of “cargo control” and “trade risk mitigation,” the security gap between the two is significant:
- Original Bills of Lading: The core of security lies in “controllable property rights”
The security of original bills of lading lies in the binding of cargo ownership to the document, which maximizes the protection of the shipper’s (or payer’s) interests:
For the shipper: As long as the original bill of lading is not delivered to the consignee, the carrier will not release the goods, even if they have arrived at the destination port. This means that the shipper can guarantee payment by “controlling the original bill of lading.” For example, in letter of credit (L/C) trade, banks will require the consignee to pay before releasing the original bill of lading, avoiding the risk of “paying but not receiving the goods” or “delivering but not receiving the payment.” If the consignee defaults on payment, the shipper can even resell or return the goods with the original bill of lading, maintaining firm control over the goods.
For the consignee: When picking up goods with the original bill of lading, they can verify that the bill of lading information (such as cargo name, quantity, and container number) matches the actual goods. If there are issues such as mismatched goods or damaged goods, the original bill of lading can be used to hold the carrier or insurance company accountable, providing a basis for prosecution.
- Telex Release Bill of Lading: Security Risk Focuses on “Loss of Control over Cargo Ownership”
The core risk of telex release bills of lading is the “separation of cargo release from documents”—once the carrier issues a telex release order, the consignee can pick up the goods without providing any proof of title, completely losing control of the goods.
For the shipper: If a telex release is requested first and payment is received later, there is a significant risk of the consignee refusing to pay after picking up the goods (especially with unfamiliar trading partners or when payment is made by T/T (telegraphic transfer) and the full payment has not been received). Even if there are quality issues with the goods, the consignee may refuse to negotiate after picking up the goods, claiming “no need to return the bill,” making it difficult for the shipper to enforce their rights.
For the consignee: While picking up the goods is more convenient, since there’s no need to verify the original bill of lading, if the carrier makes an operational error (such as incorrectly issuing a telex release order or releasing the wrong cargo) and the goods are picked up by someone else, the consignee will have difficulty proving their ownership of the goods with the telex release bill of lading, making the accountability process more complicated.
III. How to Choose: Determine Based on “Trade Model, Trust, and Efficiency Needs”
The core logic of this selection is to prioritize the original bill of lading for security, and only use the telex release bill of lading to improve efficiency when security is guaranteed. Specific scenarios are as follows:
- Where the “original bill of lading” is preferred (security needs > efficiency)
Unknown trading partner/first-time collaboration: Lack of trust between the two parties necessitates the use of the original bill of lading to bind “payment” and “cargo ownership” to avoid fraud risks (such as consignee fraud or shipper fraud).
Letter of Credit (L/C) or Documents Against Payment (D/P) trade: The core principle of these settlement methods is “payment against original bill of lading”—the bank must review the original bill of lading before releasing the payment. The original bill of lading is an essential document in the trade process and cannot be replaced by a telex release.
High-value goods (such as machinery, electronics, and luxury goods): The high value of the goods can lead to significant losses if they are lost, so the original bill of lading is essential to maintain control of the goods and mitigate risk.
Consignees must present the bill of lading for import customs clearance/tax refunds: Customs in some countries (such as South America and parts of the Middle East) require the original bill of lading for customs clearance. Telex release bills of lading cannot meet compliance requirements, so the original bill of lading is the only option.
- Scenario Where “Telex Release of Bills of Lading” is Optional (Efficiency Needs Outweigh Risk, and Security is Guaranteed)
Long-term, trusted partners (such as subsidiaries, fixed suppliers/customers): With a stable relationship, there’s no risk of payment or delivery fraud. Telex Release can streamline the process (no need to mail the original bill of lading, saving 3-7 days of express delivery time).
Short-sea routes (such as China – Japan and South Korea, China – Southeast Asia): The voyage is short (usually 3-10 days), but the original bill of lading can take 3-5 days to arrive at the destination port via express delivery. This can easily lead to situations where “goods have arrived at the port, but the original bill of lading has not” (resulting in demurrage and container charges). Telex Release can avoid this inefficiency.
After 100% prepayment has been received: The shipper has received full payment, and ownership of the goods has been transferred to the consignee. In this case, Telex Release does not affect the shipper’s own interests and can help the consignee quickly pick up the goods, improving the cooperation experience.
Less-than-Container Load (LCL) or Small-Value Cargo: LCL cargo is typically picked up by a freight forwarder, and the handling of original bills of lading is complex. However, the risk of loss for small-value cargo is lower, and using telex release can reduce operational costs (such as printing and mailing costs for original bills of lading).
IV. Supplementary: Safety Considerations for Using Telex Release
If you must choose telex release, take the following steps to mitigate risk:
Always Confirm “Full Payment Receipt”: Before requesting a telex release from the carrier, the shipper must ensure that the consignee has paid the full amount (or the agreed-upon prepayment percentage) to avoid “uncollected payment after telex release.”
Sign a written “Telex Release Request Letter”: Clearly stipulate that “the telex release instruction is only effective for the designated consignee.” Keep the carrier’s written receipt confirming the telex release (e.g., email or stamped confirmation slip) to avoid subsequent disputes.
Verify consignee information: The consignee’s name, address, and contact information provided to the carrier must be accurate to avoid “wrong release” due to incorrect information.
Inform the consignee of the telex release details: Let the consignee know in advance that they will need to present a copy of their ID card or business license to pick up the goods after the telex release. This ensures a smooth process and avoids delays in releasing the goods at the destination port.
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