Telex Release: a Viable Alternative to LOI?

DCW readers are aware of several recent court cases which have illustrated the problems that can emerge for trade finance parties relying on a letter of indemnity (LOI) as a substitute for presentation of a bill of lading.    

Another approach utilized in trade for overcoming B/L unavailability is telex release which has been described as action by the carrier, at the request of the shipper, of notifying its agent at the port of destination in an expedient manner (such as by fax, email, or other) to deliver goods to a person designated by the shipper without the need to recover the original bill of lading. That is, if telex release is agreed upon, the carrier typically does not issue B/Ls but instead provides the shipper with a non-negotiable B/L draft signifying telex release via the manner (fax, email, or other expedient means) used.