Risks of Acting Only on Oral Instructions

Overview

In forwarding practice, a forwarder may receive instructions from a shipper by telephone or verbally and proceed with booking, delivery, customs clearance, B/L correction, delivery date change or other arrangements based on that instruction.

In urgent cases, oral instructions may be unavoidable. However, if the forwarder proceeds only on oral instructions and does not confirm the details later by email or in writing, disputes may arise over additional costs, delivery delay, misdelivery, B/L errors, uninsured cargo and the scope of responsibility.

This article explains the risks that arise when a forwarder acts only on a shipper’s oral instruction and how such instructions should be recorded in daily practice.

Oral Instructions Do Not Remain as Records

The largest problem with oral instructions is that there is no objective record that can be checked later.

For example, the shipper may have intended to say, “Please arrange this urgently,” while the forwarder may understand this as permission to use the fastest available service. The shipper may believe that it requested cargo insurance, but if the staff member did not clearly hear or record the request, it may be impossible to confirm later.

Oral instructions also make it unclear who gave the instruction, when it was given, what exactly was requested, and under what conditions the forwarder was expected to proceed.

If an accident or additional cost occurs later, the dispute may become a simple conflict of “we said” versus “we did not hear.” In such a situation, the forwarder may have difficulty explaining its position.

Acting Only on Oral Instructions Makes the Scope of Responsibility Unclear

If a forwarder acts only on oral instructions, the scope of work and the scope of responsibility may become unclear.

For example, if the shipper says by telephone, “Please deliver directly to the delivery site,” it may not be clear whether the instruction includes domestic delivery, time-specific delivery, unloading conditions, forklift arrangement or re-delivery costs.

Similarly, a vague expression such as “please also check the insurance” may mean very different things depending on the context. It may mean a formal request to arrange cargo insurance, or it may merely mean a request to check whether insurance is necessary.

With oral instructions alone, it becomes difficult to prove later what the shipper expected and what the forwarder actually undertook.

Additional Cost Disputes Are Common

Additional costs are one of the most common problems arising from oral instructions.

If the shipper says by telephone, “Please deliver today,” and the forwarder arranges a time-specific delivery or a dedicated truck, the cost may be higher than ordinary delivery.

However, if the possibility of additional cost was not confirmed by email in advance, the shipper may later say, “We were not told that the cost would be that high.”

The same issue may arise with waiting charges caused by delivery site circumstances, re-delivery costs, small truck transfer costs, holiday delivery charges and other actual costs.

Even when an oral instruction is received, if additional costs may arise, the forwarder should confirm the conditions by email.

B/L, Customs and Cargo Insurance Instructions Are Especially Risky

Acting only on oral instructions is especially risky when the instruction relates to B/L, customs clearance or cargo insurance.

B/L details such as Shipper, Consignee, Notify Party, cargo description, quantity, shipment date, surrender status and Sea Waybill status may affect cargo release, payment settlement, cargo insurance claims and subrogation.

For customs clearance, information such as cargo description, HS code, country of origin, use, value and importer of record may become important. If the declaration proceeds only based on information heard verbally, errors or additional inquiries may result.

For cargo insurance, the forwarder needs to confirm the insured amount, transport section, insurance conditions, insured party, shipment date and cargo details. A verbal statement such as “please arrange insurance” may not contain enough information for proper insurance arrangement.

Instructions relating to B/L, customs clearance and cargo insurance should always be confirmed by email or in writing.

How Oral Instructions Become a Problem After an Accident

When a cargo accident occurs, the communications before the accident are often reviewed.

For example, even if the shipper verbally said that simple packing was acceptable because the shipment was urgent, the shipper may not acknowledge that instruction after damage occurs if there is no written record.

Similarly, even if the shipper said by telephone that cargo insurance was not required, the shipper may later argue after an accident that no one recommended insurance.

If the forwarder acted based on oral instructions, but cannot show that the instruction existed, that the content was clear, and that additional costs or risks were explained, the forwarder may be placed in a weaker position when responsibility is later reviewed.

Confirmation Email After Receiving an Oral Instruction

When a forwarder receives an oral instruction, it should send a confirmation email as soon as possible.

The confirmation email should briefly state the instruction received, the arrangement to be made, whether additional costs may arise, any points still unconfirmed, and any items that the shipper should confirm.

Useful wording includes:

“Based on your telephone instruction, we will proceed with the arrangement under the details below. Please note that any additional costs arising from this arrangement will be charged separately as actual costs.”

Another example is:

“We understand that you require delivery within today. As this may require time-specific delivery or special arrangement, additional costs may arise separately from ordinary delivery charges.”

For cargo insurance, the following wording may be used:

“As of this email, we have not received any formal instruction to arrange cargo insurance. If cargo insurance arrangement is required, please provide the insured amount, transport section and insurance conditions.”

The confirmation email does not need to be long. The important point is to convert the oral instruction into a written record.

When the Shipper Is in a Hurry

In urgent cases, the shipper may say, “Please proceed first. We will send the email later.”

Even in such cases, the forwarder should leave at least a minimum written record.

One practical method is to send a short email immediately after the call:

“For urgent handling, we will start the arrangement based on the details below. Please contact us immediately if any of the following details are incorrect.”

Even if the shipper does not reply, the email at least records the forwarder’s understanding at the time it started the arrangement.

Urgent cases are more likely to become disputed later. The correct approach is not to omit records because the case is urgent. Rather, because the case is urgent, a short confirmation email should be sent.

Useful English Confirmation Phrases

When instructions are received from an overseas shipper or overseas agent by telephone or online meeting, a confirmation email is also important.

A general confirmation phrase is:

“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 explain possible additional costs, the forwarder may write:

“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.”

To limit the forwarder’s position, the following expression may also be useful:

“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.”

In English correspondence as well, it is not enough to write only “as discussed.” The specific instruction details should be recorded in the body of the email.

Internal Records That Should Be Kept

When an oral instruction is received, internal records are also important in addition to the confirmation email to the shipper.

The forwarder should record the date and time of the instruction, the name of the person who gave the instruction, the content of the instruction, whether additional costs were explained, any unconfirmed items, the internal decision-maker, and the time when arrangement started.

This is especially important for high-value cargo, dangerous goods, frozen or refrigerated cargo, L/C transactions, B/L corrections, cargo insurance arrangement and delivery destination changes.

For these cases, the forwarder should record why it proceeded based on an oral instruction and who approved the decision.

Relying only on the memory of the staff member is dangerous. If an accident or claim occurs, the company needs records that can be explained internally and externally.

Case Example: Delivery Destination Changed by Telephone Instruction

One day before delivery of imported cargo, the shipper called the forwarder and requested a change of delivery destination. The staff member considered the matter urgent and informed the trucking company of the new delivery destination without obtaining email confirmation.

However, the new delivery site did not allow access by a large truck. At the site, the cargo had to be transferred to a small truck, and re-delivery became necessary. Additional costs arose, including small truck transfer costs, waiting charges and re-delivery charges.

When the forwarder billed the additional costs to the shipper, the shipper argued that it had instructed the delivery destination change but had not been told that additional costs would arise.

The forwarder had a telephone memo showing that the destination change had been requested. However, there was no email record showing that the possibility of additional costs had been explained in advance.

In this case, the destination change itself was based on the shipper’s instruction. However, because there was no record explaining the additional cost risk, negotiation over cost allocation became difficult.

The dispute could have been significantly reduced if the forwarder had sent an email immediately after the call stating:

“Due to the delivery destination change, additional costs such as vehicle change, waiting charges or re-delivery costs may arise and will be charged separately as actual costs.”

Practical Checklist After Receiving an Oral Instruction

After receiving an oral instruction, the forwarder should quickly check the following points:

• Who gave the instruction?
• When was the instruction received?
• What exactly was instructed?
• Does the instruction change cost, schedule, delivery conditions, B/L details, customs information or cargo insurance?
• Could additional costs arise?
• Is shipper approval required before proceeding?
• Should management approval be obtained?
• Has a confirmation email been sent?
• Has an internal record been created?

If several of these points remain unclear, the forwarder should not rely only on the oral instruction.

Key Takeaway

Acting only on oral instructions is a major risk in forwarding practice.

Instructions received by telephone or verbally cannot be confirmed later unless they are converted into written records. This easily leads to disputes over additional costs, B/L details, customs information, cargo insurance and accident handling.

Instructions relating to B/L correction, customs information, cargo insurance, delivery destination change, urgent arrangement and additional costs should always be confirmed by email or in writing.

The important point for a forwarder is not to reject oral instructions completely. It is to send a confirmation email and keep internal records immediately after receiving them.

Such records become defensive materials for later cost recovery, responsibility review and cargo accident handling.