A telex release lets the buyer collect green coffee at the destination port without the original bill of lading, because the shipper hands the originals back to the carrier at origin and the carrier sends a release instruction to its destination office. An original bill of lading works the other way: the cargo is released only to whoever presents it. Which one you use decides who holds control of the coffee while it is at sea and how fast it can leave the port, so agree it in writing before the first shipment.
What an original bill of lading does
A bill of lading is the carrier’s receipt for the cargo, the contract of carriage and, when it is issued in negotiable form, a document of title. The carrier normally releases the cargo only against an original from the full set. For a seller this is security: the coffee cannot be collected until the buyer, or the bank acting for the buyer, holds the originals. For a buyer the cost is time, because the originals have to travel by courier or through a bank, and a short sea route can arrive before the paperwork does.
What a telex release changes
With a telex release the shipper surrenders the full set of original bills of lading to the carrier or its agent at the port of loading. The carrier then sends a release instruction, today usually electronic, to its office at the destination, and the consignee collects the cargo without presenting an original, normally with proof of identity and a delivery order. The title function of the bill of lading is not used. The coffee can leave the port as soon as the vessel is in and customs are cleared, which avoids storage and demurrage charges caused by late documents.
Who carries the risk
Once the originals are surrendered, the seller no longer controls the cargo through the documents. For that reason a telex release is usually agreed only when payment has already been received, or when the parties trade on settled terms and trust each other. If the buyer expects to resell the coffee while it is at sea, or the bank needs documents, a negotiable original bill of lading is the safer choice. A sea waybill is a third option: it is not a document of title, needs no original, and names the consignee directly.
Payment terms and letters of credit
Banks working with documentary credits generally require the original bill of lading to be presented, so a telex release and a letter of credit do not normally go together unless the credit itself allows it. If the supplier surrenders the originals, there may be nothing left to present to the bank. Check the credit terms and the requirements of both banks before you agree the release method, and ask your freight forwarder to confirm what the carrier accepts for the route.
Frequently asked questions
What does telex release mean in shipping?
It is a carrier instruction, sent from the origin to the destination office, that allows the consignee to collect the cargo without presenting an original bill of lading, because the shipper has already surrendered the originals.
Is a telex release safe for the seller?
It removes the seller’s control over the cargo through the documents, so it is normally used only after payment is confirmed or between trusted parties on settled payment terms.
Can a telex release be used with a letter of credit?
Usually not, because banks generally ask for the original bill of lading. Check the credit terms and the requirements of both banks before agreeing it.
Atlas recommends writing the release method into the contract next to the Incoterms® rule and the payment terms, rather than leaving it to the freight forwarder at the last minute. Atlas is based in Oman and can help set out the document list in a quotation; the release method, price, availability and terms are confirmed only in writing for each transaction.
SeaRates — Telex release, express release and original bill of lading: when to use each option
Dimerco — Telex release: how it works