Guarantee Letter
A guarantee letter is a written assurance provided by a consignee or shipper to a carrier, requesting the release of cargo without presenting the original bills of lading or other required documents. It serves as a temporary commitment that the original documents will be submitted later. The guarantee also confirms that the consignee accepts full responsibility for any liabilities, discrepancies, or financial losses that may arise from early cargo release.
Carriers rely on this letter when documents are delayed, misplaced, or still in transit because of courier issues or banking procedures. By issuing the guarantee, the consignee agrees to indemnify the carrier against claims, such as releasing cargo to the wrong party or facing document mismatches later. This makes the process secure for the carrier while ensuring the cargo does not incur demurrage or storage delays.
Guarantee letters are typically accompanied by a bank guarantee or company undertaking, depending on the carrier’s policies. Once the original documents arrive, the consignee must submit them immediately to close the guarantee. Proper use of a guarantee letter keeps supply chains moving smoothly when documentation challenges occur.
Overall, a guarantee letter offers a practical solution for urgent cargo release. It allows consignees to avoid extra costs, keeps operations on schedule, and provides carriers with legal protection until the formal documents are supplied.
Frequently Asked Questions about Guarantee Letter
Clear answers to the most common questions people have when learning about Guarantee Letter.
It is used when the original Bills of Lading or required documents have not yet arrived, but the consignee needs the cargo released urgently to avoid delays.
Often, carriers require additional security, such as a bank guarantee or company indemnity, to ensure they are protected from financial or legal risks.
The consignee must submit the originals to the carrier immediately so the guarantee can be closed and the carrier’s liability formally resolved.