Advanced B/L Letter of Indemnity

Advanced B/L Letter of Indemnity is a written guarantee issued by the shipper to the carrier in international trade when the goods have not yet been loaded on board or the loading date is later than the latest shipment date stipulated in the letter of credit, in order to facilitate the negotiation of documents. The shipper uses this letter of indemnity to request the carrier to issue an on board bill of lading in advance (i.e., an advanced bill of lading) and undertakes to bear all risks and costs arising therefrom. It is commonly used when the letter of credit is about to expire, the goods are ready but not yet loaded on board in time. Precautions: The advanced B/L letter of indemnity is essentially a private agreement between the shipper and the carrier, which is not binding on the consignee or the bank. Once discovered, it may constitute letter of credit fraud, leading to bank refusal of payment and the carrier facing claims. The difference from a backdated bill of lading letter of indemnity is that backdating means the goods have been loaded on board but the date is backdated, while advancing means the bill of lading is issued in advance before the goods are loaded on board. Compared with a telex release letter of indemnity, the latter is used for releasing goods, while the advanced B/L letter of indemnity is used to obtain the bill of lading. Foreign trade practitioners should try to avoid using it. If it must be used, they need to assess legal risks and ensure timely loading on board afterwards.