The cargo release process in freight forwarding appears straightforward but conceals significant risks. A single misstep can lead to financial losses or even legal disputes. This article examines three fundamental principles of cargo release that help build a robust risk management framework.
1. Original Bill of Lading Release: The Paramount Protocol
The original bill of lading serves as the title document for goods and the core authorization for release. Like a bank check, only the legitimate holder can claim the cargo. Freight forwarders must strictly adhere to these procedures:
Bill of Lading Authentication
- Type verification: Distinguish between House Bills (HB/L) and Ocean Bills (OB/L). The former must be collected, while the latter requires return to the shipping company.
- Payment confirmation: Ensure all fees are settled to prevent cargo detention and additional storage costs.
- Endorsement validation: Verify consignee information and required endorsements from shippers or banks.
- Seaway bill identification: Recognize non-negotiable sea waybills that don't require original documents.
- Straight bill recognition: Identify non-transferable bills where the consignee is specifically named.
Document Verification
- Cross-check dates and B/L numbers against cargo manifests
- Confirm authorized signatures match company records
- Validate any amendments through proper stamps and signatures
- Verify container/seal numbers against shipping documents
- Confirm accurate cargo descriptions and package counts
- Exercise caution with bulk cargo split across multiple bills
- Ensure consistency among shipper/consignee/notify party details
Delivery Order Issuance
Mark original bills with "ACCOMPLISHED" in bold red before issuing delivery orders to prevent duplicate use.
2. Release Without Original Bill: A High-Stakes Exception
Exceptional circumstances may require cargo release without original bills, but this carries substantial legal and financial risks. Such actions violate bill of lading contracts and may void insurance coverage.
- Management approval: Always require senior management authorization
- Written authorization: Obtain explicit instructions from the correct principal
- Clear wording: Ensure documents specifically mention release without original bills
- Shipper consent: Secure written approval from cargo owners
- Authorization verification: Authenticate all release instructions
- Notify parties: Inform all relevant parties listed on the bill
- Document integrity: Never accept faxes or copies as substitutes for originals
3. Letter of Indemnity Releases: Calculated Compromises
While letters of indemnity (LOI) facilitate cargo release without original documents, they don't absolve carriers of liability to rightful bill holders. They merely provide compensation mechanisms.
- Principal authorization: Obtain written approval before accepting LOIs
- Cargo owner consent: Secure authorization from goods owners
- LOI specifics: Confirm precise wording, validity period, amount, and bank guarantees
- Cargo details: Ensure LOI descriptions match bill of lading information
- Coverage scope: Verify protection extends to all potentially affected parties
- Secure storage: Maintain LOIs safely while pursuing original bills
- Original documents: Reject faxed or copied LOIs
4. Supplementary Protective Measures
Additional safeguards strengthen the risk management framework:
- Maintain updated cargo manifests reflecting all amendments
- Immediately communicate release instructions to import teams
- Organize delivery orders systematically by voyage and bill numbers
- Secure blank and signed delivery orders during non-business hours
- Implement controlled distribution for all delivery documents
The cargo release process demands meticulous attention to detail and comprehensive risk management. From strict original bill verification to cautious exceptional releases and systematic safeguards, each element contributes to operational security in this critical logistics function.