Bill of Lading: Original or Telex Release — Which to Choose and How Not to Lose Your Cargo

A bill of lading (B/L) is a document the carrier issues after cargo is loaded onto a vessel. It serves three functions at once: a receipt for cargo received on board, a contract of carriage, and a document of title - meaning only whoever presents the original (or whoever the carrier named as consignee under a telex release) has the right to collect the cargo at the destination port. Confusion at this exact point isn’t theoretical: the wrong type of bill of lading, not customs, is the most common reason a loaded container sits on a terminal for extra weeks.

Below is which type of bill of lading to choose for your payment scheme, what to check in the document before shipment, and what to do if the original gets delayed in transit.

Original B/L, Telex Release, or Seaway Bill: Which to Choose

In practice, shipments from China use three release schemes, and the choice between them is primarily a question of trust and payment terms, not logistics itself.

The rule is simple: if a bank is involved (a letter of credit) or the seller isn’t confident payment will clear before the cargo is released, they use an original B/L - the paper original keeps control over the cargo until the final payment lands. If payment has already been made in full and the parties have worked together before, telex release saves 5-10 days and removes the risk of losing the document in courier transit entirely. A seaway bill only makes sense where no one needs to transfer the right to dispose of the cargo in transit - for example, on recurring shipments to your own warehouse.

Straight, Order, or Bearer: Who Can Claim the Cargo

Separate from the release method (original / telex / seaway), a bill of lading is also classified by who is named as consignee:

• Straight B/L. The consignee is a specific, named company. Non-negotiable: the right to the cargo cannot be transferred to anyone else. Used for direct shipments without intermediaries.
• Order B/L. The classic wording “to order of shipper” or “to order of [bank].” Negotiable - transferred via an endorsement on the back of the document. This is the standard for letter-of-credit payments: the bank holds the right to the cargo until the buyer pays.
• Bearer B/L. Whoever physically presents the original can claim the cargo, with no named consignee at all. Rare precisely because of the risk: if the document is lost, it effectively becomes a ticket to someone else’s cargo.

For most shipments from China settled directly without a letter of credit, a straight B/L or an order B/L without an endorsement (functionally equivalent to a straight B/L) is used, paired with a 30/70 payment schedule - covered in more detail in the article on paying a Chinese supplier safely.

What to Check in a Bill of Lading Before Shipment

• Shipper, Consignee, Notify Party - must match the contract and the proforma invoice. A mistake in the consignee’s legal name is a common reason cargo can’t be cleared locally.
• Ports of loading and discharge - must match the Incoterms conditions in the contract (for example, FOB Ningbo, not FOB Shanghai in practice). See the breakdown of terms in the article on Incoterms FOB, EXW, CIF.
• Freight Prepaid or Freight Collect - determines who, per the documents, pays for the ocean carriage; a mismatch with the contract means part of the logistics cost may unexpectedly fall on you.
• Clean B/L, not claused. If the carrier’s agent noted damaged packaging at loading and added a remark to the document, a bank operating under a letter of credit won’t accept it - the deal will need renegotiating.
• The bill of lading date must not be later than the shipment deadline set in the contract or letter of credit - a one-day delay formally gives the buyer grounds to reject the documents.
• Cargo description and piece count must match the packing list and commercial invoice - any mismatch surfaces at customs during clearance. Duty and VAT rates for imported goods depend on the destination country, so verify the applicable HS code and rate locally before shipment.

Case: How the Wrong Bill of Lading Choice Delayed Cargo by Three Weeks

A furniture importer ordered a container on 30% deposit / 70% after shipment terms and asked the forwarder to arrange telex release, so the cargo could be collected as soon as the vessel arrived, without waiting for a courier. The factory agreed, but under its standard practice it only issues a telex release once the full amount clears - a standard condition nobody had thought through in advance.

The vessel departed, and the balance payment was delayed by two weeks due to bank payment checks. The factory, following its rule, held off on the telex release until the money arrived - and the cargo, already sitting at the destination port, stayed on the terminal for another week while the telex release was processed after payment confirmation. Total demurrage exceeded $600, even though the underlying scheme (telex release against a balance payment) was workable in principle - the payment timeline and the vessel’s arrival simply hadn’t been synchronized in advance.

If the Original Bill of Lading Is Lost or Delayed

When cargo is issued under an original B/L and the paper original is stuck in the mail, with a courier, or at a bank, the carrier can release the cargo against a Letter of Indemnity (LOI), usually backed by a bank guarantee for the full value of the cargo. This is a workable but slow and non-free mechanism: arranging the LOI and bank guarantee takes several days at minimum, and a carrier is entitled to refuse if the amount or the parties’ standing doesn’t satisfy it. It’s cheaper and more predictable to choose telex release upfront, if the deal terms allow it, than to arrange an LOI after a delay has already happened.

The share of electronic bills of lading (eB/L) is also growing - they are legally recognized under the UNCITRAL Model Law on Electronic Transferable Records, but in practice not every bank or destination country accepts them yet, so letter-of-credit payments still more often rely on the classic paper original.

How Not to Lose Your Cargo: A Short Checklist

1. Decide on the release type (original / telex / seaway) before signing the contract, not at the moment of shipment - it’s part of negotiating payment terms, not a technical detail for the forwarder to sort out.
2. If you’re paying after shipment, synchronize the payment timeline with the vessel’s arrival: telex release waits for full payment, not the other way around.
3. Check that the bill of lading is clean, not claused - especially if payment goes through a letter of credit.
4. When working with a new supplier or a complex logistics chain, prefer an original B/L or order B/L - it keeps you leverage until the final payment.
5. Cross-check Shipper/Consignee/Notify Party and the ports on the bill of lading against the contract and proforma invoice as soon as you receive the document, not once the cargo arrives.

Not sure which type of bill of lading fits your payment scheme, or received a document from a factory and want it checked before shipment? Send the deal terms to orders@dreamviewchina.com or via Telegram t.me/dreamviewchina - we’ll check the bill of lading and logistics scheme for free before the container heads out to sea.