Partial Solutions: Sea Waybills and Telex Releases
Over the years, companies have tried to find different shortcuts to mitigate the complexity of working with Bills of Lading. For example, companies started using Sea Waybills and Telex Releases that require shorter processes.
Sea Waybills are non-negotiable Bills of Lading that under some jurisdictions are not considered documents of title and therefore are sent via email. (Non-negotiable means that the buyer of the goods can’t transfer rights over the bill to anyone else.)
The shipper requests a named consignee to be listed on the document and from that moment, the Sea Waybill can only be canceled and replaced by the shipper if the goods have not yet been claimed by the consignee.
With Sea Waybills, goods are delivered and can be released by the document consignee quickly and easily without presenting the Sea Waybill in its original paper form.
Speed is the main advantage of Sea Waybills, which is why today they are generally issued through email. But emailed documents are not legally considered unique, and as a result email cannot be used to legally transfer possession of the Sea Waybill. In other words, the shipper cannot, via email, control possession of the Sea Waybill, and therefore of the cargo. Because of the limitations of email as a communications method, there is no requirement for the consignee named on the Sea Waybill to actually present it to the carrier in order to release the cargo. This poses a significant risk to the shipper, because it means that the consignee can collect the cargo before paying the shipper for the goods.
WAVE BL’s platform, which unlike email does enable the legal transfer of unique documents, is a new solution that makes it possible to preserve the speed and convenience of Sea Waybills while enabling shippers to control the timing of possession transfer to the consignee.
Telex Releases are electronic internal messages from a carrier’s representative at the port of origin to its representative at the port of destination. They contain instructions to release cargo to a buyer.
Telex Release is a practice used to bypass the need of physically transferring a Bill of Lading to the hands of the buyer. Once a BL is issued by the carrier to a shipper, in some trade flows, the shipper does not send the BL to the consignee, and instead waits for the consignee to perform the payment. Following payment, the shipper surrenders the Bill of Lading to the carrier at the port of origin, with a request to the carrier to send a Telex Release to its representatives at the port of destination with an instruction to release the cargo to the consignee. Telex Releases are fast but, unlike Bills of Lading, do not offer an option for negotiability. They are also very costly to the seller.
Using emailed Sea Waybills and Telex Releases, which in practice both serve as shortcuts, adds speed at the cost of the legal certainty and negotiability that Bills of Lading offer. However, as we’ve seen above, paper BLs carry risks of their own, like delays, loss, forgery, and more. Electronic Bills of Lading combine the speed and certainty of Sea Waybills and Telex Releases with the benefits of paper BLs: control over document possession, negotiability, and low costs. Today, digital technologies like WAVE BL are accessible and affordable. There is no need to settle for partial solutions anymore.