12 Nov Telex Surrendered vs. Original Bill of Lading: What’s the Difference?
Telex Surrendered vs. Original Bill of Lading: What’s the Difference?
When it comes to international shipping, understanding the types of Bills of Lading (BOL) is crucial for ensuring a smooth and efficient process. Two common types you’ll encounter are Telex Surrendered and Original Bills of Lading. While both serve the same primary purpose—acting as a receipt for goods and a proof of ownership—there are key differences between them, particularly in how they’re processed and handled. Let’s explore these two types of Bills of Lading and explain which one might be right for your shipment.
What is a Bill of Lading?
A Bill of Lading (BOL) is an important shipping document that serves several roles in international trade:
- Receipt for Goods: It confirms that the carrier has received the goods and they are in good condition.
- Contract of Carriage: It outlines the terms and conditions under which the goods will be transported.
- Title to Goods: It acts as a document of ownership, meaning the holder of the BOL has the right to claim the goods upon arrival at the destination port.
There are two main types of Bills of Lading: Original Bills of Lading and Telex Surrendered Bills of Lading.
What is an Original Bill of Lading?
An Original Bill of Lading is a physical document issued by the carrier to the shipper when goods are shipped. It’s the traditional and most widely known version of the BOL and serves as proof of ownership and a receipt for the goods.
Key Features of an Original Bill of Lading:
- Physical Document: The Original Bill of Lading is a paper document that is sent to the consignee (the buyer or receiver of the goods) after the shipment is made.
- Required for Customs and Delivery: The consignee needs the Original Bill of Lading to claim the goods at the destination port. Without it, they may not be able to take possession of the cargo.
- Transferable: An Original Bill of Lading is transferable, meaning it can be endorsed (signed over) to another party. This feature is essential for transactions involving third parties, such as banks in trade finance.
- Time-Sensitive: Since the physical document must be sent from the shipper to the consignee, it can delay the process of receiving goods, especially when dealing with international shipments. The consignee must present the document to claim the goods.
Advantages:
- Clear Title of Ownership: The holder of the Original Bill of Lading has a legal right to the goods.
- Used in Trade Finance: It’s often required for securing payments or loans when a trade finance institution is involved.
Disadvantages:
- Slower Process: The physical transfer of the Original Bill of Lading can cause delays, especially if the document needs to be couriered internationally.
- Risk of Loss or Theft: Being a paper document, it is susceptible to being lost, stolen, or damaged.
What is a Telex Surrendered Bill of Lading?
A Telex Surrendered Bill of Lading (also called a “Telex Release”) is a more modern alternative to the Original Bill of Lading, often used to speed up the process of releasing goods at the destination. Instead of using the physical document, the shipper can instruct the carrier to release the goods upon receiving confirmation from the consignee.
Key Features of a Telex Surrendered Bill of Lading:
- No Physical Document: In a Telex Surrendered transaction, the shipper doesn’t need to send the physical Bill of Lading. Instead, they provide a “surrender” instruction to the carrier.
- Electronic Process: The Telex Surrendered Bill of Lading is processed electronically, allowing for quicker and more efficient release of the goods.
- Faster Release: Once the shipper “surrenders” the BOL (by submitting the relevant request), the consignee can collect the goods without waiting for the physical document to arrive, speeding up the clearance and delivery process.
- No Title Transfer: Unlike the Original BOL, the Telex Surrendered BOL doesn’t need to be transferred or endorsed because the carrier receives confirmation electronically that the consignee has the right to take delivery of the goods.
Advantages:
- Faster Process: The main benefit of Telex Surrendered is the speed. The consignee can claim the goods as soon as the surrender is confirmed, without waiting for the physical BOL to be shipped.
- Reduced Risk of Loss: Since there is no physical document, the risk of losing the BOL is eliminated.
- Convenient for Close Business Relationships: Telex Surrender is often used for shipments between trusted trading partners where the shipper and consignee have a close, reliable relationship.
Disadvantages:
- Limited Transferability: Since there is no physical document, a Telex Surrendered Bill of Lading doesn’t allow for easy transfer of ownership. The goods are typically released only to the original consignee.
- Potential for Fraud: The electronic nature of Telex Surrendered BOLs can sometimes lead to security concerns, such as unauthorized releases if the system isn’t properly managed.
Key Differences Between Telex Surrender and Original Bill of Lading
| Feature | Original Bill of Lading | Telex Surrendered Bill of Lading |
|---|---|---|
| Form | Physical document | Electronic surrender |
| Transferability | Transferable through endorsement | Non-transferable, goods are released only to consignee |
| Speed | Slower – physical BOL must be sent | Faster – goods can be released immediately upon surrender |
| Security | Risk of loss, theft, or damage | Less risk of physical loss, but potential for fraud |
| Customs/Delivery Requirement | Needed to claim goods at the destination | Goods released without physical BOL after surrender |
| Cost | Higher due to document handling and delivery charges | Lower, as no physical document needs to be handled |
Which One Should You Choose?
- Use an Original Bill of Lading if:
- You need to ensure clear title of ownership.
- The shipment is involved in a trade finance transaction (e.g., letter of credit).
- You’re shipping goods to a destination where Telex Surrender is not available or not commonly used.
- Use a Telex Surrendered Bill of Lading if:
- You need a quicker process and want to avoid the delays associated with mailing physical documents.
- You have a trusted business relationship with the consignee.
- The goods are not being sold through a bank or trade finance institution and there is no need for a title transfer.
Conclusion
Both Telex Surrendered and Original Bills of Lading serve the same purpose in shipping but offer different advantages depending on the circumstances. Telex Surrendered Bills of Lading provide speed and convenience for trusted partners, while Original Bills of Lading offer more security and flexibility in ownership transfer. Understanding these differences will help you choose the best option for your business needs, ensuring smoother and more efficient international shipments.