ITIC Warning on Use of Forged E-mails to Obtain Cargo Delivery

Writing in the latest edition of its annual publication, The Intermediary, ITIC says, “Fraud in shipping is endemic, cargoes are valuable, and it has never been easier to forge documents, electronic communications, bills of lading, etc. Carriers and their agents must continuously be aware of this fact and take whatever steps are necessary to avoid becoming unnecessarily involved in costly claims for damages which have resulted from a failure to be careful and vigilant.”

ITIC notes that misrelease of valuable cargo is a major factor in claims by principals against their agents, and explains that carelessness in dealing with telex releases has contributed to these losses. ‘Telex release’ is the industry term for the release of cargo at one port when the original bill of lading has been surrendered at another. Today, despite its name, the telex release is almost always made by email.

ITIC says there are two main problems with telex releases. Firstly, they are often worded -- and dealt with -- in a careless manner. ITIC notes, “Considering the value of some of the cargoes which are released in this way, the release instructions which are sent between agents are often extremely casual. There have been several claims reported to ITIC where the releasing agent has taken an ambiguously worded message from a third-country receiving agent to be a release, when it was not.”

The second problem with telex releases, says ITIC, results from email fraud. In its Guidelines for the Release of Cargo, ITIC recommends that agents check the authenticity of messages from other agents to release cargo. ITIC has recently been notified of several claims involving telex release by faked emails. These are emails received by discharge port agents which have been manipulated to appear as though they have originated from the load port agent, and authorise release of cargoes and confirm that freight has been received when it has not.

ITIC says, “One forged email confirmed that the original bills of lading had been collected at the load port for four containers of mobile phones, and another forged email confirmed that the original bills of lading for a cargo of fruit and the attendant freight had been collected. In both cases the fake emails were accepted by the discharge port agent at face value, and cargo was released. In the first case valuable cargo was misdelivered, and in the second case a large amount of freight remained unpaid.”

ITIC advises agents asked to perform a telex release to first obtain written authority from their principal. And it concludes that telex releases must never be accepted at face value.

Note: A copy of The Intermediary is available on request from chris@merlinco.com