In cross-border logistics, the MBL (Master Bill of Lading) telex release is a critical step to ensure cargo delivery. Any delay may trigger a chain of disputes over additional costs. In a recent case handled by a logistics dispute platform, Indonesian Agent A claimed additional costs due to MBL telex release delay, while UK Principal B insisted on paying only the basic freight. The dispute centered on liability attribution. This typical case exposed hidden risks under DAP terms, serving as an important warning for the industry.
I. Hidden Risk: “Invisible Minefield” under DAP Terms
The root cause of the dispute lay in the trade terms agreed at the outset. UK Agent B entrusted Indonesian Agent A with a DAP shipment, from the UK to Manila Port. Responsibilities were defined: A handled customs clearance, trucking, and final delivery at destination, while B was responsible for MBL telex release and origin documentation. Yet, three overlooked “minefields” emerged in what seemed a clear division of responsibility:
1. Rigid timing of “direct pick-up” not defined. The cargo was a special flat rack container. Carrier MSC required “direct truck pick-up” upon vessel arrival; otherwise, detention fees applied. Both parties only agreed “waiting charges beyond standard time shall be borne by consignee,” without specifying a clear timeline for DO (Delivery Order) release. As B failed to meet carrier’s timeline, liability became blurred.
2. No binding time limit for MBL telex release. B controlled the MBL and directly affected DO issuance. On June 4, DO could not be processed due to MBL being on “Hold.” Despite A’s repeated urging, B delayed release for 4 more days, missing the critical window. No timeframe or emergency mechanism for telex release was defined.
3. Lack of alternative solution communication. B later argued “warehousing would have been cheaper,” but at the time did not consult with A or consignee about alternatives. This violated the principle of duty to mitigate loss, i.e., parties must take reasonable measures to prevent further loss, or otherwise bear excess costs themselves.
II. Platform Intervention: Evidence-Based Liability Attribution
Upon receiving A’s claim, the platform investigated based on Incoterms and cooperation documents.
Contractual obligations: Under Incoterms 2020, DAP requires the shipper (B) to ensure delivery at the named destination. Timely MBL telex release was B’s core obligation. Delay constituted breach of contract.
Causality: On June 4, MBL “Hold” caused DO rejection. Despite urgent reminders from A, B only released at 17:51 on June 5, missing the 15:00 deadline. DO was delayed until June 9. The 4 days’ detention and waiting fees directly resulted from this delay.
Authenticity of costs: A provided receipts of USD 320 detention fee from carrier and USD 1,600 waiting fee from trucker, partially borne by itself. The consignee issued a written statement confirming delay was due to MBL telex release and refused to cover costs, supporting cost authenticity.
III. Resolution: Full Liability – USD 3,015 to Be Paid
The platform ruled B fully liable for the delay, ordering B to pay A a total of USD 3,015, including the original freight of USD 1,095 plus USD 1,920 for detention and waiting fees.
B’s defense was rejected:
A’s “direct pick-up” was a reasonable Risk Mitigation measure, aligned with carrier requirements. Avoiding it would have led to even higher costs.
B’s failure to propose alternatives during the incident, while later arguing warehousing would have been cheaper, did not meet duty-to-mitigate requirements.
IV. Risk Alerts: Four Practical Takeaways to Avoid DAP Disputes
This case provides important operational lessons, particularly under DAP/DDP door-to-door terms. Practitioners should focus on:
1. Define clear timelines, avoid vague terms. Agreements must specify key deadlines, e.g., “MBL telex release must be completed 24 hours before vessel arrival,” instead of broad terms like “timely” or “as soon as possible.”
2. Establish contingency mechanisms and alternatives. Define communication protocols for exceptions, designate emergency contacts, require response within 2 hours. Set triggers for alternatives, e.g., “if telex release delayed over 4 hours, warehousing to be arranged at liable party’s cost.”
3. Preserve complete evidence. Emergency communication, cost arrangements, and responsibility acknowledgments must be documented in writing. Collect official receipts from third parties and consignee’s confirmation letters as proof in disputes.
4. Clarify liability boundaries. When assigning costs to consignee, specify conditions, e.g., “waiting fees borne by consignee, except when delay is due to principal’s documentation.”
As a neutral third party, JCtrans upholds a fact-based and impartial stance, successfully resolving disputes and earning the trust of all parties involved. Yet, no ruling after the fact can ever replace prevention beforehand. Clear agreements and timely communication remain the cornerstones of risk control. May this case serve as a lasting reminder, inspiring all our members to strengthen their defenses against risk together
