As we navigate through the plethora of documents in logistics, particularly in the shipping industry, a term that stands out is telex release. Ideally, every shipment should reach its destination without any issues, but the reality is that several risks are involved, from theft to damage, delays, and disputes.
Several shipping elements have adopted paper-based documents as an essential tool in the shipping process to mitigate these risks. However, despite its effectiveness, physical paperwork has limitations, highlighting the need for technological assistance to complement and enhance its capabilities. This is where telex release takes effect.
What Is A Telex Release
A telex release or telegraphic transfer is an electronic document that provides proof of delivery in international shipping. Specifically, these documents are sent via telex to inform the recipient that the shipper has released the goods without needing a physical bill of lading or any similar document.
This document is usually issued when a shipper receives payment for the goods and trusts the consignee to take possession of the shipment without additional documentation. With the telex release, shipping processes are simplified by eliminating the need for physical documents, which can be time-consuming and costly to produce and exchange.
How Does It Work
It is essential to understand the bill of lading to grasp the purpose of a telex release better. A BoL is a document issued by a carrier to a shipper confirming shipments were received in an acceptable condition and are ready to be shipped. A BoL serves as a crucial document and evidence of a contract between a seller and a buyer and a receipt of the goods purchased.
At this point, the telex release takes effect. When the bill of lading is submitted at the port, carriers send a release authorization to the point of origin. This procedure guarantees the shipment’s release and enables the consignee to obtain their goods without physically presenting the bill of lading.
A telex release ensures the shipping process can be expedited, reducing the time and cost associated with producing and exchanging physical documents. Here’s how a telex release typically works:
- The shipper and carrier agree to issue a telex release for the shipment, eliminating the need for physical documents to be presented to the shipping line before releasing goods to the recipient.
- The shipper instructs the carrier to issue this electronic document to the recipient once they receive payment or when the shipper meets other sale conditions.
- The carrier then sends a message via telex or other electronic mediums to the recipient, informing them that the goods have been released and providing any relevant details, such as the container or booking number.
- Finally, the recipient presents the telex release message to the carrier or their agent at the destination port, along with other necessary documents or identification, to take possession of the shipment.
In earlier times, the communication of telex releases occurred through telegraphic exchange machines; however, these releases took more work to obtain due to the complicated request process. Nowadays, shipping companies usually offer the option of requesting a telex release via their digital platforms.
Despite technological advancements, sending a telex transfer could still be inconvenient, and it is the shipper’s responsibility to check with the issuer of the OBL and confirm the exact procedure. Furthermore, while a telex release provides a more streamlined shipping process, it is essential to note that it may not be appropriate for all shipments or situations. Before using this delivery method, all parties involved in the shipping process should carefully consider the risks and benefits.
Telex Release vs. Express Release
Telex release and express release are both types of cargo release procedures in international trade, but they differ in terms of the method of communication and the required documentation.
As we’ve seen earlier, the telex release is sent via telex communication to the consignee, indicating that the cargo has been released and can be collected without presenting an original bill of lading. This process is usually quicker and more convenient than the traditional method of releasing cargo, but it also carries a higher risk of fraud or unauthorized cargo release.
On the other hand, an express release works without physical document exchange. It provides an endorsement on the bill of lading, stating that carriers or logistics agents can release the cargo to the consignee without presenting the original BoL. This method is often used when the shipment is consigned to a trusted party and eliminates the need for physical document exchange, making the shipping process faster and more convenient.
Generally, a telex release is less secure than an express release, with the former relying on electronic communication, which can be intercepted or manipulated. In comparison, express release requires a physical endorsement on the BoL, which is harder to manage.
Risks Of A Telex Release
Typically, carrier agents at the destination port obtain the original BoL before releasing cargo to the consignee. The BoL accompanies the load throughout its transit to prevent shipping risks such as theft.
However, there are scenarios where the shipper may surrender the original BoL in a port other than the discharge port. In such cases, a telex release must be sent to the discharging port agent, confirming they have the original BoL. The telex release instructs the agent at the discharge point to release the cargo to a specified consignee.
There are recorded cases in global commerce where language barriers or negligent communication have resulted in the delivery of valuable merchandise to unauthorized recipients. Additionally, criminals engage in wire fraud by dispatching deceptive telex release emails to discharge agents instructing them to release shipments to other accomplices involved.
Thankfully, several shipping companies have established protocols to thwart such risk. These protocols include written confirmations, password protection, dual authentication, and strict verification processes.
When To Request A Telex Release
In international trade, releasing cargo to the consignee can be complicated and time-consuming. As such, several cargo release procedures help streamline this process, including a telex release. If you wish to explore this procedure, here are some ideal scenarios to request a telex release.
- When the consignee at the destination is a branch office of the shipper, no negotiations are required. This scenario eliminates the need for an Original Bill of Lading, as the consignee is essentially the same entity as the shipper, making the transaction less complicated.
- When the shipper cannot process all necessary documentation on time, and the ship carrying their cargo is close to or has already arrived at its destination, the consignee may not receive the OBL in time to clear the shipment. This can occur due to delays, logistics challenges, or other issues linked to the shipping process, making it necessary to expedite the cargo release process with a telex release.
- An NVOCC operator may request a telex release from the shipping line in certain uncommon situations. This process assists the agent in generating a house bill of lading for the client, simplifying the shipment release process. A telex release is most beneficial when cargo needs to be released as quickly and efficiently as possible.
While a telex release can be ideal in several scenarios, the decision to request a telex release in international trade depends on various circumstances. Whatever the case, it is essential to follow safety protocols to mitigate the risks associated with the process. Furthermore, by understanding when to request a telex release following the appropriate protocols, international trade transactions can be expedited, secure, and efficient for all parties involved.