In cross-border logistics, long supply chains and multiple stakeholders mean that significant risks often hide in the seemingly simple act of cargo release. This article outlines a typical case that reveals major legal vulnerabilities in cargo delivery and cross-border payment collection.
I. Case Background: The Allocation of Rights and Liabilities Under FOB Bills of Lading
Exporter A in China sold USD 25,000 worth of garments to Buyer B in Venezuela under FOB terms. Buyer B instructed its freight forwarder C to arrange the booking, and C’s Ningbo branch (C1) coordinated with NVOCC D. As the contractual carrier, D issued three original Bills of Lading to A, who retained the full set at all times. After the cargo was released, the remaining payment was never settled, and A sued D for the financial loss.
II. Core Issue: The Legal Boundary of Delivery Without Original Bills of Lading
The key factual findings pointed directly to the core liability:
1. The original Bill of Lading is the sole basis for delivery. Under Article 71 of the Maritime Code, a carrier may only release cargo upon surrender of the original Bill of Lading. In this case, D arranged for its overseas agent to release the goods without receiving the originals, constituting delivery without original Bills of Lading. Email instructions from the buyer or its forwarder cannot substitute for the legal effect of the originals.
2. Instructions from intermediaries have no legal effect for cargo release. Although C1 and Buyer B had ongoing business, the contractual privity principle prevents the buyer’s forwarder–carrier relationship from overriding the cargo rights of the Bill of Lading holder (the shipper). Payment arrangements between the shipper and buyer fall under the sales contract and do not alter the carrier’s statutory liability for delivery without the original Bill of Lading.
3. Cargo value is determined according to customs-assessed price. When the cargo value is disputed, customs will base its appraisal on the transaction price under the valuation rules, and the customs declaration prevails over pro forma invoices. If parties can provide genuine contracts, payment records, or supporting evidence showing discrepancies between the declared and actual transaction prices, courts may adjust the value assessment accordingly.
Judgment: NVOCC D released the cargo without receiving the original Bills of Lading, violating the Maritime Code and relevant judicial interpretations, and was therefore held fully liable for A’s outstanding payment loss.
III. Case Reflections: Three Common Misconceptions in Cross-Border Cargo Release
Misconception 1: Can the buyer’s forwarder issue delivery instructions under FOB? No. FOB only grants the buyer the right to arrange shipment; it does not transfer delivery control. Only the holder of the original Bill of Lading (initially the shipper and transferrable by endorsement) possesses the statutory right to demand cargo release. Instructions from the buyer’s forwarder cannot substitute for surrender of the Bill of Lading.
Misconception 2: Does silence from the shipper equal consent? No. Cargo release requires surrender of the original Bill of Lading or explicit written authorization from its holder. Under the principle that “silence does not constitute consent,” a shipper’s non-response cannot be presumed as authorization. The carrier must prove it received a legitimate instruction.
Misconception 3: Is the seller’s risk minimal after delivery under FOB? No. The FOB risk transfer (“risk passes when goods cross the ship’s rail”) applies only to loss/damage risks under the sales contract, not to the cargo rights embodied in the Bill of Lading. As long as the shipper holds the original Bill of Lading, they retain control of the goods, and a carrier releasing cargo without the originals acts unlawfully.
Summary: Instructions from third-party forwarders can never substitute for the original Bill of Lading. As long as the Bill remains with its holder, delivering without it is unlawful. In full-container shipments, allowing the consignee to open, manipulate, or dispose of cargo (e.g., paying demurrage or reselling) may constitute unauthorized delivery even without physical handover.
IV. Risk Control Insights: Key Points on Bill of Lading Risks
1. Delivery without original Bills of Lading is a high-risk act. Carriers (including NVOCCs) must strictly follow “delivery against originals,” verifying the original Bill or written authorization before acting on any third-party release instruction. Email or verbal directions are never sufficient.
2. Liability hinges on who holds the Bill of Lading. Regardless of sales terms, if the original Bill has not been surrendered, the party releasing the cargo (carrier or agent) will bear full liability. As the contractual carrier, an NVOCC must compensate the Bill holder first and then seek recourse from the actual carrier.
3. Trade obligations and transport obligations must be separated. Payment flows among the shipper, buyer, and forwarder are matters of the sales contract and do not alter the carrier’s liability for unauthorized delivery. Carriers cannot defend themselves by citing “buyer’s instructions” or “partial payment to the shipper.”
4. Beware of jurisdiction-specific rules at certain ports. In destinations such as Brazil or Venezuela where cargo must be handed to customs or port authorities, carriers must retain evidence proving loss of control (e.g., customs receipts or gate-release records), or they may still be held liable.
In conclusion, the Bill of Lading represents cargo rights, and cargo release is a legal obligation. As long as the original Bill remains with the shipper, regardless of instructions from any party, sales terms, or payment status, any release without the originals constitutes unauthorized delivery—a clear statutory rule and a fundamental principle of the industry.
