Knowledge & Opinions
13 Jun 2022

Singapore: Telex releases for cargo

MSI's Singapore law firm member Tito Isaac & Co LLP discusses the use of telex releases in lieu of original bills of lading for the release of cargo to consignees.

By convention in carriage of goods by sea, goods are generally released by the carrier to the consignee against original bills of ladings (“OBL”) furnished by the consignee at the port of discharge (“POD”). Telex releases (“Telex Release”) are regularly utilised for the release of cargo to the consignee, in lieu of an OBL to meet the demands of increasingly short timelines for commercial transactions and delivery of cargo. This article briefly discusses the use of Telex Release.

WHAT IS A TELEX RELEASE?

In the ordinary of course of dealings, the carrier issues the OBL to the shipper of the goods when the shipment is laden or loaded on board the vessel. The shipper then sends the OBL to the consignee by courier. A Telex Release dispenses with a need to do the latter. A Telex Release is essentially an electronic message transmitted from an agent or shipping line at the port of loading to the consignee at the POD. The shipper would, by instructing the carrier to issue a Telex Release, have surrendered all the OBLs for that particular cargo to the carrier. Where Telex Releases are involved, it is common for carriers to issue straight bills of lading. Those straight bills of lading are non-negotiable documents.

WHY USE A TELEX RELEASE?

Telex Releases provide a quick and convenient method of providing the consignee a way of receiving goods at the POD without the need to wait and be in receipt of OBLs. Telex Releases are often used in liner shipment of cargo. In the present age where transactions take place rapidly and vessels travel faster, there is a potential risk that goods are delivered to the POD before the consignee receives the OBL thus leading to the situation where the cargo cannot be cleared before the expiry of “free days”. In the event of the latter, the cargo interest can potentially face claims for demurrage or detention, especially in the age of wide spread use of containers in the transport of cargo. A Telex Release dispenses with the need for the production of OBL resulting in the faster release of cargo to consignees. Another benefit of Telex Releases is that the carrier can ship the freight without the OBL thus minimizing the risk of such documents being lost or stolen. A shipment requiring third-party transportation services may be delayed if the OBLs are not readily available. A Telex Release may also be required where there are problems in the documentation of the OBLs. In the event that the OBLs are lost, stolen or otherwise inaccessible, the shipper would be left with no option but to require a Telex Release from the carriers. Such a process is time consuming and usually results in additional freight storage charges. NVOCC [Non-Vessel-Operting Common Carrier] operators may also require shipping lines to use Telex Releases for the NVOCC to issue its own house bill of ladings to their customers. Telex Releases are not a complete panacea for expedited discharge of goods to consignees. There are issues of delays caused by the administrative work and increased costs generated by the use of Telex Release. Telex Releases are not a complete replacement for OBLs. Instead, the Telex Release is merely a convenient option for shippers who do not require original documents for their accounts and legal records.

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