What is Letter of Indemnity (LOI)?

• A Letter of Indemnity (LOI) is a legally binding document ensures specific conditions in agreements between parties involved in business transactions are met.

• It is useful when a shipper requires different treatments from standard practices in shipping.

• The LOI can prevents financial losses if the other ones fail to fulfill their obligations.

Here are some key items to be included in the Letter of Indemnity (LOI) , 

• Clearly identify all parties involved, including the shipper, carrier, and, if applicable, the consignee or recipient.

• Provide detailed information such as the ports of origin and destination, description of shipments, container number, etc.

• Specify the extent of the carrier’s liability.

• Indicate the applicable law and venue for resolving disputes.

• Signatures of the parties.

• Date the contract is executed.

• Key terms and conditions 

Letter of Indemnity (LOI) provide additional protections in many scenarios, for examples:

• If shipping documents are misplaced or delayed, allowing a carrier to release the shipment without the original Bill of Lading using an LOI for protection.

• An LOI can authorize a change in the destination port specified in the Bill of Lading (BOL) and ensure any additional charges are covered.

• If any other changes are made to the original Bill of Lading terms, an LOI can protect the carrier and authorize the transport of goods under altered or split Bill of Lading terms.

• A carrier may request an LOI to protect against potential damage when special equipment or handling is needed for the cargo.

• An LOI can release the carrier from liability if the consignee does not accept delivery and the goods are no longer in their possession.

In essence, the LOI serves as a safeguard, detailing the responsibilities and liabilities of each party, and can help prevent disputes by clarifying expectations before formal contracts are established.

The information provided in this document does not, and is not intended to, constitute legal and/or business advice; instead, the information contained herein is for general informational purposes only. Readers of this document should contact their own advisor to obtain advice with respect to any particular matter or topic addressed herein. The content in this document is provided on an “as is” basis; FedEx makes no warranties or representations in relation to the currency, accuracy and/or sufficiency of the information set out herein and shall not be liable for any reliance placed on the same. For the avoidance of doubt, any and all liability with respect to actions taken or not taken based on the contents of this document are hereby expressly disclaimed.