Freight Forwarders Must Read How to Deal with Deliveries Without Bills of Lading? Sharing of Practical Knowledge in International Logistics

How to Deal with No-Documents-Release in Foreign Trade

Practical Knowledge Sharing on International Logistics No-Documents-Release

In international trade, no-documents-release is a common phenomenon, especially in transactions involving ocean shipping. This behavior usually refers to the carrier delivering the goods to the consignee without receiving the original bill of lading. For exporters, this can be very dangerous as it may lead to unrecoverable payment for the goods and even result in economic losses. Understanding the causes, risks, and countermeasures of no-documents-release is crucial.

Causes of No-Documents-Release

The main reason for no-documents-release lies in trust issues between buyers and sellers. In international trade, buyers and sellers are often far apart and lack sufficient understanding of each other. To facilitate the transaction, sellers may choose to accept payment methods other than letters of credit, such as collection or open account. In such cases, if the buyer colludes with the carrier, no-documents-release may occur.

Carriers may also choose no-documents-release out of commercial interests. For example, when the buyer promises to pay high freight charges, the carrier might be willing to take the risk of handing over the goods to the buyer without waiting for the original bill of lading. Although this situation is not common, it does exist.

Risks of No-Documents-Release

For exporters, the risks of no-documents-release are obvious. First, exporters may face the problem of unrecoverable payments. Once the goods are released without documents, the buyer may refuse to pay or delay payment under various pretexts. Second, exporters may need to bear additional costs, such as re-arranging transportation and storage fees. More seriously, exporters may lose customers, affecting future business development.

According to a case from a certain foreign trade company in China, an exporter encountered no-documents-release in one transaction. Due to the failure to adopt effective preventive measures beforehand, the company not only failed to recover its payment but also had to bear additional legal expenses. This incident reminds us that no-documents-release is not a trivial matter but a problem that requires sufficient attention.

Methods to Address No-Documents-Release

In the face of the risks of no-documents-release, exporters can take the following methods to prevent and respond

1. Choosing Appropriate Payment Methods

In international trade, choosing appropriate payment methods is crucial. Exporters should try to avoid using open account methods and prioritize letters of credit as the payment method. A letter of credit is a bank-guaranteed payment method that can effectively reduce the risk of no-documents-release. If it is necessary to use collection or open account methods, exporters should clearly stipulate the delivery conditions of the original bill of lading in the contract and require the buyer to provide bank guarantees or other forms of security.

2. Strengthening Communication with Carriers

When selecting carriers, exporters should carefully review their qualifications and credibility. When signing transport contracts, clearly define the delivery conditions of the original bill of lading and ensure that the carrier agrees to execute according to the contract. If any violations by the carrier are discovered, timely reports should be made to relevant institutions and legal means should be taken to protect one's own rights and interests.

3. Seeking Legal Support

In the event of no-documents-release, exporters should promptly seek legal support. Through legal channels, responsibility of the carrier and buyer can be pursued to recover losses. At the same time, exporters can apply for asset preservation to prevent the buyer from transferring assets.

4. Enhancing Risk Management Awareness

Exporters should enhance their risk management awareness, regularly participate in relevant training and seminars, and learn the latest international trade rules and risk management techniques. Exporters can also leverage professional risk management companies to provide comprehensive risk assessment and management services.

Conclusion

No-documents-release is a complex and thorny issue in international trade, but it is not insurmountable. By choosing appropriate payment methods, strengthening communication with carriers, seeking legal support, and enhancing risk management awareness, exporters can significantly reduce the risks associated with no-documents-release. It is hoped that the information provided in this article will help foreign trade professionals better address this challenge and achieve greater success in international trade.