Free Telex Release LOI Generator (Switch B/L)

What a telex release LOI actually is

A negotiable bill of lading is a document of title. The carrier's promise is not "deliver to the buyer" — it is "deliver to whoever presents one original of this set, duly endorsed". That is what lets a cargo be sold three times while it is still at sea, and it is why the carrier is entitled to refuse delivery to a consignee standing on the quay empty-handed, however obviously the cargo is theirs.

A telex release is the workaround. You surrender the full original set to the carrier at the load port, or confirm you are holding it; the carrier's origin office messages its discharge-port office to release the cargo without production of an original. The bill is retired at one end and the goods walk out at the other. It is fast, it is routine, and it is entirely at the carrier's discretion — nothing in any convention obliges them to do it.

The letter of indemnity is the price of that discretion. By releasing without an original, the carrier commits a breach of the contract of carriage against anyone who later turns up holding a genuine original — and that liability is excluded from standard P&I club cover, so the carrier is uninsured for exactly the risk you are asking them to run. The LOI is how they get covered: you, and sometimes your bank, become their insurer. This is not a form. It is a commercial undertaking, unlimited in time and amount, that whoever signs it is bound by.

Note what this document is not. It is not required by SOLAS, by UCP 600, or by any customs authority, and it has no place in air freight: an air waybill is a receipt, not a document of title, so nothing is surrendered to obtain delivery and there is no telex release to request and no indemnity of this kind to give. This is a sea-freight instrument. It exists because a carrier's release desk asks for it, which also means the wording is theirs to accept — most lines work to the International Group of P&I Clubs recommended forms, and most will tell you which one they want if you ask before you print. Treat what this tool produces as a draft modelled on that wording, not as the carrier's own approved form.

What has to be on it

The B/L number, and only one of them. The indemnity attaches to a specific bill; a letter that says "our shipment of oranges" indemnifies nothing the carrier can file. Copy the carrier's own number off the face of the bill, character for character. Where the shipment is containerised, the container and seal numbers on the bill are the ISO 6346 identifiers the discharge terminal will actually match against — if the bill and the release instruction disagree on those, the release stalls at the terminal, not at the carrier.

The original set accounting, stated honestly. How many originals were issued — normally three, but the bill says so on its face — and how many you are actually holding. Section 5 warrants that the entire set is in your possession or under your control and undertakes to surrender it on demand. If one original is sitting in a bank in Rotterdam under a collection you have not settled, that warranty is false and the letter is worse than useless: it converts a commercial dispute into a fraud allegation with your signature on it.

The carrier, named. The letter is addressed to them and indemnifies them, their servants and their agents. "To whom it may concern" indemnifies whom it may concern, which is nobody.

The parties, the vessel and voyage, the port pair, and the cargo. The discharge port matters most: on a telex release the request clause names it as the place of delivery. Use the port's proper name — the carrier's systems key on UN/LOCODE, and "Alexandria" versus "El Dekheila" is two different terminals. The cargo description does not need to be a customs declaration here, but it must not contradict the bill, and on a switch B/L it must not contradict the commercial invoice either.

The signature block, completed by a person with authority to bind the company, under the company seal. An LOI signed by a shipping clerk is a letter the carrier's lawyers will pick apart at the exact moment it is being tested.

Telex release, switch B/L, sea waybill

These three solve the same problem — the goods arrive before the paper — and they are not interchangeable. A telex release retires an existing negotiable bill. A sea waybill (or an "express release") is issued non-negotiable from the start: there is no document of title, delivery goes to the named consignee on proof of identity, and no LOI is needed because nothing is being bypassed. If you are shipping on open account to a buyer you have traded with for ten years, the sea waybill is the honest answer and the LOI is a question you never have to ask.

A switch bill is a different animal. It is a second set issued in place of the first, usually because a trader in the middle does not want the end buyer to see the producer's name, or because the goods were re-sold in transit and the load port on the original tells a story the seller would rather not tell. The carrier cancels the first set and issues a second. The danger is obvious and it is the reason carriers charge for it and demand a bank counter-signature: if the first set is not actually recovered, two sets of documents of title for one parcel of cargo are in circulation, and the carrier can be made to deliver twice.

So the switch letter warrants something extra: the goods described on the new bill remain identical in description, quantity, weight and measurement to the original. A switch is a permissible change of paperwork about the same cargo. Changing the cargo description under cover of a switch is a misdeclaration, and asking a carrier to date a new bill to a shipment date that never happened is a false document, whatever your buyer's letter of credit says about the latest shipment date.

Where the Incoterm bites: under CFR and CIF the seller must provide the buyer with the usual transport document for the agreed port of destination, one that enables the buyer to claim the goods from the carrier and to sell them in transit. Deliver a telex release instead of the original set and you have satisfied the first purpose and destroyed the second. If your buyer intends to on-sell afloat, they need paper, not a message.

Where it goes wrong

Telex-releasing before you are paid. This is the big one. Under a documentary collection governed by URC 522, the bank's only leverage is that it holds the original bills and will not hand them over except against payment or acceptance. If you instruct a telex release, the goods are delivered and the documents in the bank's hands are worth nothing but the paper. The same applies to any deal where the B/L is consigned "to order" as your security. Release the cargo and you have converted a secured sale into an unsecured loan to a stranger, at their option.

Assuming the bank will take the LOI instead of the bill. It will not. Under UCP 600 a bank examines the presentation for a transport document that meets Article 20 — issued by the carrier, showing shipment on board, presented as the full set where the credit calls for it. A letter of indemnity is not a transport document under any article of UCP 600, and the discrepancy is fatal. Carriers accept LOIs; banks accept bills.

Form A where the carrier wanted Form B. The bank counter-indemnity block is not decoration. When it is present, the bank joins the indemnity in solido — jointly, to the full extent — which is why the bank has to have agreed in advance and will normally want a facility or cash cover against it. Printing a bank's name in that block without their agreement is worthless at best. Ask the carrier which form they require before you draft, not after your box is sitting on demurrage.

Signing a warranty you cannot keep. "All originals are in our possession or under our control" is the operative sentence of the whole document, and it is the one people sign without reading. If a copy went out with a courier last week, or your forwarder has one, or one is pledged to a bank, you do not control the set. The indemnity survives without limit in time or amount and expressly survives someone else later presenting an original — that clause is not boilerplate, it is the entire point of the letter, and it is the clause that will be read back to you.

Finally: no LOI ever cures a delivery to the wrong party. If the cargo goes to someone who is not entitled to it, the indemnity does not make that right — it just moves the loss from the carrier onto you.

Common questions