Risks of Acting Solely on Verbal Instructions
Interlink編集部Overview
In freight forwarder operations, there are cases where instructions are received by phone or verbally from the shipper and arrangements such as booking, delivery, customs clearance, B/L amendments, delivery date changes, and insurance confirmation are carried out as is.
In urgent situations, verbal instructions may be unavoidable. However, if arrangements are made solely based on verbal instructions without later confirming by email or written documentation, it could lead to additional costs, delivery delays, misdelivery, B/L errors, insurance not being arranged, and disputes over liability.
This article organizes the risks freight forwarders face when acting on verbal instructions alone from shippers, and how in actual logistics practice confirmation emails and internal records should be maintained.
Scope Covered in This Article
This article addresses practical risks when freight forwarders execute instructions received verbally or by phone without written confirmation. It focuses especially on situations prone to later disputes if unrecorded, such as B/L, customs clearance, marine cargo insurance, additional charges, delivery changes, and booking amendments.
| Item | Content Covered in This Article | Covered in Separate Articles/Checks |
|---|---|---|
| Risks of Verbal Instructions | Costs, liability, and record-keeping issues when arrangements are made solely based on verbal or phone instructions. | Legal liability judgment, evidence assessment, and damage claims in individual cases require expert confirmation. |
| Transactions Without Master Service Agreements | Importance of supplementing verbal instructions with email or internal records when no formal contract exists. | Defense strategies using quotes, FCR, standard trading conditions, and master agreements are covered in separate articles. |
| B/L Amendments, Customs, and Insurance | High-risk operational areas if advanced by verbal instructions alone. | Detailed practical procedures for B/L, customs filing, and marine cargo insurance are covered in dedicated articles. |
| Freight Collect and Additional Charges | Cautions on urgent arrangements, delivery address changes, D/O, and additional charge billing based on verbal instructions. | Issues like unpaid Freight Collect, Demurrage, Detention, and Storage are addressed elsewhere. |
| No Show Cargo | Situations where phone cancellations, shipment postponements, or booking changes lead to No Show or cancellation fees. | Cost responsibility for No Show cargo, Dead Freight, and booking restrictions are handled in other articles. |
| Confirmation Emails | Sending confirmation emails after verbal instructions, English verification phrases, and methods to keep internal records. | Preparation of specific email wording and internal workflow organization need company-specific operational checks. |
Verbal Instructions Leave No Record
The biggest problem with verbal instructions is that there is no record that can be checked later.
For example, even if the shipper said “Please hurry,” the freight forwarder might interpret it as “Arrange by the earliest departure.” Similarly, even if the shipper said “Please also arrange insurance,” if the person in charge did not catch this, it cannot be confirmed afterwards.
Moreover, verbal instructions make it unclear who requested what, when, and under what conditions.
If a dispute arises later regarding “I said that” vs. “I didn’t hear that” after an incident or additional charges occur, the freight forwarder will have difficulty explaining. While verbal instructions are sometimes unavoidable in practice, ending the process with verbal instructions alone is risky.
Acting Only on Verbal Instructions Creates Ambiguity in Responsibilities
When freight forwarders act solely on verbal instructions, the scope of work and responsibility become unclear.
For example, if the shipper says by phone, “Please deliver directly to the consignee,” it is not clear whether this includes domestic delivery, time specification, unloading conditions, forklift arrangement, or redelivery costs.
Similarly, vague statements like “Please also check the insurance” could mean a formal marine cargo insurance arrangement request or simply just verifying the necessity of insurance, which leads to very different implications.
With verbal instructions alone, it becomes hard to prove later what the shipper expected and what the freight forwarder agreed to undertake.
Risks of Verbal Instructions by Operational Area
The risks from verbal instructions vary significantly depending on the nature of the operations. It is especially important to confirm instructions by email or written form in high-risk areas such as B/L, customs clearance, marine cargo insurance, delivery changes, additional charges, and booking amendments.
| Business Area | Risks of Acting on Verbal Instructions Only | Necessary Confirmations | Common Troubles |
|---|---|---|---|
| B/L Correction | No record remains to justify changes to Shipper, Consignee, Notify Party, cargo description, quantity, Surrender, or Sea Waybill. | Confirm correction details, reasons, approvers, deadlines, additional costs, and impact on payment. | Wrong delivery, payment discrepancies, bank document mismatches, disputes over additional cost liability occur. |
| Customs Information | Risk of proceeding with declaration while cargo description, HS code, usage, price, origin, importer name remain unclear. | Check Invoice, Packing List, usage, material, price, importer, and other regulatory info. | Declaration delays, customs inquiries, amended declarations, extra charges, and liability disputes arise. |
| Marine Cargo Insurance | It becomes unclear whether this is a formal insurance request or just a consultation on whether insurance is needed. | Confirm insured amount, insured party, transport segment, insurance conditions, cargo details, and shipment date. | Failure to arrange insurance, mismatched coverage terms, and post-accident compensation disputes arise. |
| Delivery Changes | Delivery destination, time specification, vehicle restrictions, unloading conditions, and redelivery conditions become ambiguous. | Confirm delivery address, contact person, vehicle limits, cargo handling conditions, and existence of additional fees. | Misdelivery, waiting charges, small vehicle transshipment, and redelivery cost disputes occur. |
| Urgent Arrangements | Whether earliest possible shipment, dedicated vehicle, after-hours, or holiday service is required becomes unclear. | Check desired delivery time, approval of additional costs, scope of arrangements, and backup plan if deadline is missed. | High extra fees, missed deadlines, no-show, and cancellation charge disputes occur. |
| Booking Changes / Cancellations | No record remains regarding who initiated changes or cancellations and who bears the costs. | Confirm reason for change, cancellation time, desired next vessel/flight, and Dead Freight or cancellation fees. | No Show Cargo, Dead Freight, and reduced booking credibility occur. |
| Freight Collect / D/O | Release before payment, cash advance payments, and D/O exchange conditions become ambiguous. | Check payment status, release conditions, payer, guarantees, and invoicing parties if unpaid. | Non-payment, incorrect releases, and Demurrage or Detention cost disputes arise. |
Additional Cost Disputes Occur Frequently
One common problem with verbal instructions is additional charges.
When a shipper calls and says, "Please deliver by the end of today," and the freight forwarder arranges a timed delivery or a dedicated vehicle, higher fees than usual may occur.
However, if the forwarder did not confirm the occurrence of additional charges by email beforehand, the shipper may claim, "I wasn't informed it would be this expensive."
Waiting charges due to consignee circumstances, redelivery fees, small vehicle transshipment costs, holiday delivery fees, CFS handling fees, storage charges, etc., are similar.
Even when receiving verbal instructions, if additional costs may arise, the conditions should always be confirmed by email.
Particularly Risky for B/L, Customs, and Insurance
Acting solely on verbal instructions is especially risky for instructions related to B/L, customs clearance, and marine cargo insurance.
Details such as Shipper, Consignee, Notify Party, cargo description, quantity, shipment date, Surrender, and Sea Waybill on the B/L affect cargo delivery, payments, insurance claims, and subrogation rights.
In customs, cargo description, HS code, origin, usage, price, and importer name are critical. Proceeding with declarations based only on orally provided information can lead to incorrect declarations and additional inquiries.
For marine cargo insurance, insured amount, transport segments, insurance conditions, insured party name, shipment date, and cargo details must be verified. Simply being told verbally "Please arrange insurance" may lead to missing necessary information.
Instructions related to B/L, customs, and insurance should always be confirmed by email or in writing.
How Verbal Instructions Could Cause Problems After an Incident
After a cargo incident occurs, prior communications are reviewed.
For example, even if the shipper verbally said, "Since it’s urgent, simple packaging is fine," if there is no record of this, the shipper may deny having given such instructions after the incident.
Similarly, even if the shipper said on the phone, "We don’t need insurance," they may later claim, "I was never offered insurance."
If a forwarder acts based on verbal instructions, failing to prove that the instructions existed, were clear, and that additional charges or risks were explained, can lead to disadvantage in determining liability later.
Confirmation Emails to Send After Receiving Verbal Instructions
In actual logistics practice, it is crucial to send a confirmation email immediately after receiving verbal instructions.
The confirmation email should briefly state the instructions received, arrangements made, any additional charges, any unresolved issues, and points for the shipper to confirm.
| Situation | Contents to Leave in Confirmation Email | Example Wording |
|---|---|---|
| Immediately after receiving phone instructions | Record the instructions, start of arrangement, and request contact if there are discrepancies. | Regarding the matter you just instructed us by phone, we will proceed with the arrangement as outlined below. Please contact us immediately if there are any discrepancies. |
| If additional costs are possible | State the possibility of additional costs and that actual expenses will be billed separately. | If additional costs arise, these will be charged separately based on invoices from related parties. |
| When arranging urgently | Specify the scope of urgent handling, possible additional costs, and the possibility of not meeting deadlines. | We have accepted this case as a request for delivery within today. Since this requires time-specific handling, additional costs separate from normal delivery charges may apply. |
| If insurance is mentioned | State whether a formal insurance placement request has been received, necessary information, and current unarranged status. | Regarding marine cargo insurance, as of this email, we have not received a formal insurance placement request. If needed, please provide the insured amount, transport segments, and insurance conditions. |
| When correcting the B/L | Specify correction points, corrected content, additional costs, deadlines, and responsible person. | Regarding the Consignee field on the B/L, we have accepted your instruction to correct it to the following. If correction fees apply, they will be invoiced separately as actual costs. |
| If delivery address changes | State the changed address, contact person, vehicle conditions, and possibility of additional costs. | If delivery location changes, additional costs for vehicle changes, waiting time, redelivery, etc. may be incurred and billed separately as actual expenses. |
Confirmation emails do not need to be lengthy. The important point is to convert verbal instructions into a record.
Handling When the Shipper is in a Hurry
In urgent cases, the shipper may say, "The email can come later, just start moving first."
Even in such cases, the freight forwarder should leave at least a minimum confirmation.
For example, sending an email immediately after the phone call saying, "As a quick note, we will begin arrangements based on the following. Please contact us immediately if there is any discrepancy," is one method.
Even if the shipper does not reply to this email, at least there will be a record of the freight forwarder’s understanding when starting the arrangement.
The more urgent the case, the more likely it is to cause a problem later. It is not that records can be omitted because it's urgent; rather, precisely because it is urgent, a brief confirmation email should be left.
Sample Confirmation Phrases in English
When receiving instructions from overseas shippers or overseas agents by phone or online meeting, it is also important to send a confirmation email.
To confirm instructions given by phone, you can write as follows:
As discussed by phone, we will proceed with the arrangement based on the following instructions. Please let us know immediately if any of the details below are incorrect.
To inform about the possibility of additional costs, you can write as follows:
Please note that any additional costs arising from urgent arrangement, waiting time, re-delivery, customs inspection, storage, demurrage or detention will be charged separately at actual cost.
If you want to limit liability, the following wording can also be used:
We are proceeding based on your verbal instructions and the information currently available to us. Any change or discrepancy may result in additional costs or delay.
Even in English, it is important not to end the verbal agreement with simply "As discussed," but to include specific instruction details in the body of the email.
What Should Be Recorded Internally
When receiving verbal instructions, not only a confirmation email to the shipper but also internal records are important.
| Record Item | Reason for Recording | Practical Points to Note |
|---|---|---|
| Date and Time of Instruction | Knowing when the instruction was received affects cut-off times, delivery deadlines, and additional cost judgments. | Record not only the date but also the time. |
| The Other Party’s Contact Person Name | To confirm from whom the formal instruction was received. | Also record department name, position, and contact details as much as possible. |
| Instruction Details | Clearly specify what was to be changed or arranged. | Do not summarize; record important conditions specifically. |
| Presence or Absence of Additional Cost Explanation | Serves as a basis for explaining cost charges later. | Leave a record whether "additional costs may apply" was explained. |
| Unconfirmed Items | Clarify missing information such as insurance, customs clearance, B/L, delivery conditions, etc. | Also record reasons for proceeding without confirmation. |
| Internal Approver | To verify whether the decision was made solely by the staff or with management approval. | For high-value goods or dangerous cargo, keep approval records. |
| Start Time of Arrangement | To confirm when arrangements actually started after phone instructions. | Record start times for booking, dispatch, D/O issuance, B/L corrections, etc. |
Especially for high-value cargo, dangerous goods, refrigerated/frozen cargo, L/C cases, B/L corrections, insurance arrangements, and delivery destination changes, the reason for proceeding with verbal instructions alone and who made the decision should be recorded.
Relying on individual staff memory is risky. Internal records that can be explained internally in case of accidents or claims are necessary.
Scope of Forwarder and NVOCC Involvement
When receiving verbal instructions, it is necessary to distinguish what forwarders or NVOCCs can practically support and what should not be concluded. In particular, expressions that could be misunderstood as assuming responsibility based on verbal instructions should be avoided.
| Situation | What Can Be Supported | What Should Not Be Definitively Stated | Practical Cautions |
|---|---|---|---|
| Receiving Verbal Instructions | Instructions can be organized and turned into a confirmation email. | It should not be concluded that official terms are finalized based on verbal instructions alone. | If there are discrepancies, request prompt contact and keep a record. |
| Urgent Arrangements | Booking, delivery, customs clearance, and stakeholder confirmation can be advanced as much as possible. | Do not absolutely guarantee third-party responses or deadlines. | Communicate “planned,” “under confirmation,” and “additional charges possible” separately. |
| Explaining Additional Charges | Possibility of waiting fees, redelivery charges, appointment fees, and storage fees can be notified. | Do not definitively state that no charges will occur before confirmation. | Even before finalizing charges, inform about the possibility of additional costs. |
| B/L Corrections | Correction details, deadlines, and shipping company fees can be confirmed. | Without the shipper's official approval, do not independently decide on name changes. | Keep B/L related instructions in writing by email. |
| Marine Cargo Insurance | Guidance on whether insurance arrangement is needed, required information, and contact with a specialized agent can be provided. | Do not explain that insurance is in place based solely on verbal inquiry. | Confirm formal insurance requests and necessary information. |
| Accident / Claim Handling | Organize verbal instructions, emails, internal records, photos, and notifications to involved parties. | Do not immediately conclude “our full responsibility” or “full coverage.” | Confirm facts, scope of liability, and whether insurance is involved. |
| Internal Approval | For high-risk cases, check with management and obtain internal approvals. | Do not let a single person decide on large advances or take responsibility alone. | Record approvers, approval times, and reasons for decisions. |
Common Misunderstandings
| Common Misunderstanding | Actual Perspective | Practical Cautions |
|---|---|---|
| Because it’s urgent, records can be done later. | Urgent matters are more likely to lead to disputes over "said" or "not heard" later. | Send a confirmation email immediately after the call, even if brief. |
| Agreement by phone is sufficient. | Phone conversations are difficult to verify later and misunderstandings often occur. | Document instructions, costs, and unconfirmed matters by email. |
| Proof within the company exists if the person in charge heard it. | The person in charge’s memory alone makes explanations difficult after incidents or resignation. | Keep both internal records and email documentation. |
| Because the instruction comes from the shipper, additional costs will naturally be paid. | If the possibility of additional charges was not communicated in advance, disputes may arise at billing. | Clearly communicate which actual costs will be charged separately. |
| "Check the insurance too" counts as a formal insurance arrangement request. | Formal insurance requests require confirmation of coverage amount, transport section, insured party, conditions, etc. | Separate formal requests and confirmation consultations by email. |
| B/L corrections are fine if accepted by phone. | B/L corrections affect cargo delivery, settlement, insurance, and subrogation. | Keep correction contents and approvers in writing by email. |
| Saying “We will handle it” means accepting full responsibility. | Operational handling and assumption of responsibility are distinct; ambiguous phrases cause misunderstanding. | Separate expressions for arrangement support and responsibility decisions. |
| No record is needed for online meetings with overseas agents. | Even verbal instructions in English can have misunderstandings or missing conditions. | Do not only use "As discussed by phone" but leave concrete instruction details in the email body. |
Cases Prone to Problems in Practice
| Case | Common Issues | Documents to Check | Practical Precautions |
|---|---|---|---|
| Changed delivery destination by phone instruction | Vehicle restrictions, waiting charges, small vehicle transshipment, and redelivery costs may later become disputed. | Phone memo, changed address, delivery company records, additional cost invoices | After changing the delivery destination, document potential additional costs via email. |
| Accepted B/L correction only by phone | Changes to Shipper, Consignee, Notify Party affect payment and handover processes. | B/L instructions, correction requests, carrier correction records, email history | Always obtain approval for B/L corrections by email. |
| Marine cargo insurance was verbally requested, then an accident occurred | It may be disputed whether this was a formal insurance request or just an insurance inquiry. | Insurance request records, quotations, insured amount, accident records | Confirm the existence of insurance requests and required information via email. |
| Arranged a dedicated vehicle for urgent delivery | The shipper may be unaware of the difference in cost compared to standard delivery or of time-specific fees. | Phone records, vehicle order, vehicle company invoices, confirmation emails | Inform the shipper in advance about the possibility of additional fees for urgent handling. |
| Prepared customs declaration based on verbal customs information | Description, usage, price, origin, and HS codes may be inaccurate. | Invoice, Packing List, product descriptions, customs broker records | Verify customs information with documents and emails. |
| Received Booking cancellation by phone | Responsibility for No Show, Dead Freight, and cancellation fees may be disputed. | Booking Confirmation, cut-off, cancellation time, carrier invoices | Record cancellation time and possible fee liability via email. |
| Freight Collect D/O release was verbally rushed | Releasing before payment may cause unpaid freight and local charges. | Payment status, D/O terms, Arrival Notice, release instructions | Avoid releasing D/O without payment confirmation or guarantee. |
| Received change instructions from overseas agent via online meeting | Misunderstandings in English, unclear cost bearing, and responsibility scope may arise. | Meeting notes, confirmation emails, change instructions, cost conditions | Send an English confirmation email immediately after the meeting. |
Decision Checklist
| Confirmation Point | Counterpart | Items to Confirm | Action if Issues Arise |
|---|---|---|---|
| Immediately after receiving verbal instructions | Shipper, overseas agent, internal staff | Instruction details, counterpart name, date/time, scope of arrangement, unconfirmed items | Send a confirmation email and keep internal records. |
| When additional costs may occur | Shipper, delivery company, CFS, carrier, customs broker | Cost items, reason for incurrence, rough estimate or actual costs separately, billing party | Notify the possibility of costs even before finalization. |
| When correcting the B/L | Shipper, Consignee, carrier, NVOCC | Correction points, corrected content, approver, deadline, additional cost | Do not correct solely on verbal instruction; obtain email approval. |
| When receiving customs information | Shipper, importer, customs broker | Description, price, usage, origin, HS code, other regulations, importer name | Confirm by documents and email; clarify unclear points before declaration. |
| When given instructions about marine cargo insurance | Shipper, insurance agent, insurance company | Formal insurance request or not, insured amount, transportation segments, insured party, insurance terms | Do not treat it as insured until all necessary information is collected. |
| When changing the delivery destination | Shipper, delivery destination, delivery company | Changed address, vehicle restrictions, handling conditions, time specifications, additional costs | Document the change details and cost bearing by email. |
| When arranging urgent orders | Shipper, carrier, airline, delivery company, internal managers | Delivery deadline, cut-off, shortest arrangement, additional costs, alternatives if timing fails | Avoid guaranteed statements and clarify pending confirmation items. |
| At occurrence of accidents/claims | Shipper, insurance company, NVOCC, carrier, internal managers | Presence of verbal instructions, confirmation emails, internal records, photos, notifications to relevant parties | Do not rush to assign responsibility; organize based on records. |
Example 1: Trouble Caused by Changing Delivery Destination via Phone Instruction
The day before delivery of imported cargo, the shipper called and requested a change of the delivery destination. The person in charge considered it urgent and informed the delivery company of the new destination without confirming via email.
However, the new delivery destination was inaccessible to large vehicles, requiring transshipment to a small vehicle and redelivery on site. Additional costs arose, including small vehicle transshipment fees, waiting charges, and redelivery fees.
When the freight forwarder billed the shipper for these extra costs, the shipper claimed, "We informed you of the change in delivery destination, but we were not told about additional charges."
The forwarder had a phone memo of the instruction but lacked any email record communicating the possibility of additional costs in advance.
In this case, although the delivery destination change was the shipper's instruction, the absence of a record explaining additional costs made negotiating the cost burden difficult.
If an email had been sent immediately after the call stating, "Additional costs such as vehicle change, waiting, and redelivery may be incurred separately," much of this trouble could have been avoided.
Example 2: Trouble Caused by Receiving B/L Correction Instructions Only by Phone
In one export case, the shipper called and instructed, "Please change the Consignee name." Since the shipment was about to be loaded, the person in charge requested the shipping company to correct the B/L based on the phone instructions.
However, the corrected Consignee name did not match the buyer name in the sales contract or the name on the bank documents. After the cargo arrived, the discrepancy between the settlement documents and the B/L name caused issues, delaying cargo pickup overseas.
The shipper claimed, "I did not intend a formal name change; I just wanted you to check it." Meanwhile, the freight forwarder explained, "We received correction instructions by phone," but there were no emails confirming the correction details or records of the shipper’s approval.
The problem in this case was the failure to recognize that the B/L correction is not mere administrative work but a crucial instruction affecting cargo delivery, settlement, D/O release, and insurance claims.
For B/L corrections, it is necessary to confirm by email the correction points, corrected content, approver, any additional costs, and deadlines before proceeding.
Example 3: Case where marine cargo insurance was verbally requested, but an accident occurred
For an import cargo, the shipper told the freight forwarder by phone, "Please also look into insurance." The person in charge understood this as a consultation to check insurance necessity and did not proceed to arrange formal insurance coverage.
Later, the cargo was damaged during transportation. The shipper claimed, "I requested insurance by phone," and raised an issue with the forwarder for not arranging insurance coverage.
The forwarder explained that they had not received necessary information such as insured amount, transport section, insured party, or insurance conditions, so it was not a formal coverage request. However, no confirmation email was sent after the call stating, "As of this email, we have not received a formal insurance request."
The problem here was leaving the vague verbal expression, "Please also look into insurance," unclarified. In marine cargo insurance, it is essential to distinguish clearly between a formal insurance request and a consultation regarding insurance necessity.
If immediately after the call, the forwarder had sent an email explaining that insurance arrangements require information such as insured amount, transport section, insured party, insurance conditions, and cargo details, the dispute might have been significantly reduced.
Practical Notes
Acting solely on verbal instructions poses significant risks in freight forwarder operations.
Instructions received by phone or verbally cannot be confirmed later. This leads to disputes stating "I said" or "I did not hear" regarding additional costs, B/L, customs clearance, insurance, and accident responses.
Especially for instructions involving B/L corrections, customs clearance information, marine cargo insurance, delivery address changes, urgent arrangements, and additional costs, confirmation by email or written form is always necessary.
What is important for freight forwarders is not to refuse verbal instructions, but to immediately convert them into confirmation emails and internal records. This becomes essential evidence for later cost recovery, clarifying responsibility scope, and accident responses.
Summary
Acting solely on verbal instructions is a major risk in freight forwarder practice. Instructions received by phone or verbally leave no record and are difficult to verify later, leading to disputes over additional costs, delivery delays, misdeliveries, B/L entry errors, failure to arrange insurance, and responsibility scope.
Specifically, instructions related to B/L corrections, customs clearance details, marine cargo insurance, delivery address changes, urgent arrangements, booking changes, freight collect requests, and D/O release should never be handled based only on verbal instructions.
What freight forwarders should do is not to refuse verbal instructions but to convert them immediately after receipt into confirmation emails and internal records. Documenting who gave the instruction, when, what was instructed, under which conditions, and whether additional costs and risks were explained is critical, serving as crucial defense material for later cost recovery, responsibility clarification, and accident handling.
