Once the goods leave your production line, packed and ready for shipment, the Freight Forwarder takes over. But before the first container departs (by air or sea or any other means), the Forwarder and the Forwardee must have already made an accounting of risks and agreed upon the coverage and liabilities of both parties.
Here are some things to remember from both ends:
The Freight Forwarders
- Must make it their responsibility to clarify to their clients the trading conditions they have as a Freight Forwarder “…under which (trading conditions established) any service is provided and usually include limiting the forwarder’s liability in the event of a claim against them. Failure to do this could leave the forwarder with unlimited liability - which could prove very costly.” (From lichfielddc.gov.uk)
- The Forwarder who arranges to transport the customers’ cargo, even if he does not move or handle the goods physically, can still be held liable for damages, especially if they are “Operating a warehouse and performing local cartage services [which] creates a legal responsibility for the cargo while it is in your custody.” (From Roanoke Trade, International Insurance Brokers since 1935)
- On behalf of their clients, a Forwarder acts to get their goods in the best possible condition to a destination on time. They are responsible for booking with the entities involved in the shipment process, while “other responsibilities include preparing and checking bills of carriage, arranging insurance, ensuring the lowest possible customs charges are levied and – where necessary – arranging storage.” (From gov.uk)
Image courtesy of franky242 / FreeDigitalPhotos. - The Freight Forwarder is also responsible for getting further instructions and details from the customer before shipping, controlling the documentations and releasing of them, managing subcontractors, cargo security and insurance as well as handling dangerous or fragile goods. They must have control and care over the cargo from its point of origin to arrival. (From lichfielddc.gov.uk)
- The “non arrival of a cargo, the later arrival of a cargo or the arrival of damaged cargo, usually entails legal claims against the entities in the logistics chain including the international freight forwarder.” (From gsglaw.co.il)
The Client or Customer
- Must know that not all goods can be insured and that hiring a Forwarder does not immediately guarantee automatic insurance. Some claims “can be easy to invalidate the benefits of limited liability through carelessness or ignorance. Also, some risks are uninsurable – such as losses caused by terrorism.” (From lichfielddc.gov.uk)
- Cost may differ from expected when getting goods transported, and “all transport is subject to national and international laws, and each mode has its own legal regulations that limit the liability of the carrier.” (From gov.uk)
- That it may not be entirely the Freight Forwarder’s fault in the case of loss or damage. “Where goods are lost or damaged, it is possible that someone – during the transportation – has been negligent. If there has been negligence, there is likely to be a demand for compensation. The damage or loss might not have been the fault of the forwarder, but if it was caused by someone the forwarder is responsible for – such as a subcontractor – they will be liable as if it were.” (Also from gov.uk)
Image courtesy of Stuart Miles / FreeDigitalPhotos.net - A client is responsible for supplying the Forwarder with complete and accurate information. “The Customer shall be liable to the Freight Forwarder for all loss or damage, costs, expenses and official charges resulting from the Customer’s inaccurate or incomplete information or instructions or the handing over by the Customer or any person acting on his behalf to the Freight Forwarder.” So all goods must be accurately declared, all particular details clearly stated and, if there are dangerous or fragile cargo involved, the Forwarder must be made aware as well. (From transportrecht.org)
- It is the Client’s responsibility to pay the Forwarder what is due, as agreed, invoiced or contracted. But in the case of unforeseen circumstances whilst transporting the goods, when the Forwarder “acts in the best interest of the Customer (to protect the shipment in question), extra costs and charges have to be borne by the Customer”. (Also from transportrecht.org)
