If the carrier lost my cargo can I hold them liable..??

If the carrier lost my cargo can I hold them liable..?? This is the question from a reader Erik.. His problem is as below..

HUGE issue with a carrier.

The carrier lost track of their container with our cargo load, soon after departure. The container was not found within 9 months and declared the cargo ‘lost’ and the carrier confirmed responsibility for all cost and damages. rq

Then somehow the container was found 2 months later at a random port between POL and POD. The cargo is now in an unusable state and has to be destroyed.

The carrier does not deny responsibility, but does not want to reimburse our cargo value, removal costs and only repay the shipping costs.

Their advice is, that our marine insurance should cover the cost of the cargo and its destruction.

In my opinion, because the carrier declared the cargo ‘lost’ they are responsible for all cost regardless if they found the container.

Especially since the 9 month BL term has lapsed. My question is, should we hold the carrier liable for all costs and push this towards court or is the carrier right?

Curious to see if there’s any similar experience out there and if there is some basic advise available for such an issue.

Erik, there are several factors involved here, chief among which, will be the shipping line, the type of bill of lading issued and the terms and conditions of carriage.. You also mentioned that the carrier confirmed responsibility of all costs and damages (before the container was eventually found).. How exactly did they confirm this responsibility..??

Each line has their own set of terms and conditions governing the bill of lading and the contract of carriage.. These terms and conditions will outline the carriers responsibility and also the compensation and limits of liability of the carrier.. Generally the carriers have a limit of compensation that they will provide and it might not cover the value of your cargo..

Your best option would be to approach your insurance company who will do the needful to ascertain how, where and by whose actions this loss occurred and take remedial action..

Anyone else has any other suggestion, please feel free to add..


*** END OF POST ***

18 thoughts on “If the carrier lost my cargo can I hold them liable..??

Be part of the discussion and share your views about the article here..

  1. Hi Hariesh,
    What is STC?
    The problem is the trucking company is saying that they have cargo insurance liability but under their terms and conditions they only liable for $50. This is unacceptable.

    • STC = Standard trading Terms and Conditions.. If USD.50 is what the company is covered for then that is all you are going to get unfortunately unless you can prove that the mistake was made by them intentionally..

  2. Hi, we are a freight forwarder. Recently our trucker claimed their vehicle got stolen with our shipment. Police report is filed but few days later, we saw the stolen truck is in their lot. This is an air shipment as a freight forwarder we don’t have insurance for each shipment unless the customer ask us for it. Now, the customer is holding all our invoices until this get resolve. The trucking company willing to pay $50 instead the full claim. We have not information on how their insurance set up. Please advice what is our best move in this case. Thank you

    • Hi Hariesh,
      We are insurer under FMC not for any air cargo. In my knowledge it’s our customer responsibility to insure their cargo. Now the customer saying we are outsource the trucking they don’t know them, we have to pay their loss. Also they are holding all our payment because of this case. Any suggestion ?
      Where we can find a standard terms and conditions for the cargo Transportstion from now on to protect our interest. Thanks

    • Hello Wai, you need to make client understand that insurance of cargo is not your responsibility.. I recommend you consult a legal expert to custom make an STC for your company/operations..

  3. I am currently in a similar situation. I ordered three pallets of goods from China. They arrived via ocean at NYC port. They cleared customs. They were shipped by the shipping company in New York down to me in Louisiana. They got to the terminal in Louisiana. Supposed to be delivered to me in three days. Now i’m being told they can not find the goods. It’s been a month and they are still looking. They will not admit the goods are lost, so they say it is too early to file any claim against them. I’m stuck now!

    • Steve, it is never too early to claim. The earlier the better as it is when a claim is submitted that the carrier decides to do some constructive tracing of any missing cargo.

    • Steve you need to get the paper work from the port, where the trucking company sign they pick the load up, with that file a claim if it is under 5000 can do small claim court, or find out what it is the limit in your state, they will denied till the day in court, they will send a lawer if you show to court thay will try to make a deal with you, you need all documents to proove lost money, how much for shipping freight, custom charges ect ect, is the only way, if it is more than the limit for small claim court, has to be a civil court and for that you need a lawer.

  4. Just a further word, to quote from a website that I love to visit being http://www.cargolaw.com, “Shippers Must Have Quality Marine Cargo Insurance …….. Because……… “Ship Happens! ©”
    To Repeat — No Matter How Careful You Are — Or Who You Hire ……. “Ship Happens! ©”. Please take note of the copyright notice!!

    So always ignore how much you may be able to claim from the ship, it is always best to take out insurance at a value equal to at least delivered cost at final destination plus a percentage. Ensure that you preserve rights of recovery from the liable party acting as though not insured, claim from insurer and once you have received settlement under subrogation, let your insurer worry about how much they will recover from the carrier.

  5. I also share this meaning, that Alexander Robertson has described this case correctly. I just wonder, what was the necessity to wait so longer – 9 months?! I’m almost sure, that in every country the transport law gives you a possibility to claim the consignment as lost after a much shorter time. For example in Germany, if a shipment goes abroad and a carrier is not able to deliver it within double period of delivery ( shipping time from Europe to Japan 29 days, so 29+29=58 days), but at least it should be 60 days, so this shipment could be concerned as lost one.
    Small correction: to have a possibility to chose SDR 666,67 per kg./brutto as compensation, the consignment should be shown on the B/L as separate packages and not only the weight in kgs.
    As here was already said, usually a liability of a carrier is not enough to cover all loses. Therefore it’s important first to calculate an amount the carrier is liable for and if it’s not enough, make consignment be insured. First a carrier will cover his part of liability and only than the rest will overtake the insurance.
    I hope, somebody can understand what I’ve written here 

  6. I believe Alexander Robertson has correctly stated the case. Your problem now is a statute of limitations problem. He who sits on his rights, loses them. You should have retained legal counsel long ago.

  7. Erik, I confirm that seen similar file where shippers succeed to get a court decision concluding that cargo is lost before carrier found the container.

    Depending on the law governing this transport and the BL, also if claiming is shippers or receivers; I confirm the last comment, and in order to avoid the carrier limitation of responsibility it will be better to use your insurance.

  8. The shipping line has a duty to care for and deliver the cargo in the same state in which they received it. Besides looking at the b/l terms and conditions, consider under which rules was the cargo shipped, Hague-Visby, Hamburg, COGSA etc. If the b/l was a house b/l then the carrier must settle the claim within 9 months of delivery of the cargo or should have been delivered. Under an ocean b/l the carrier has 12 months. Under a multimodal b/l it depends on whether the claim arose during the land leg or ocean leg. The way this situation is described it will be considered the ocean leg and therefore the claim must be settled by the carrier within 12 months of delivery or should have been delivered failing which the claim will be considered time barred and the claimant will have no further action against the carrier.

    The carrier cannot just locate cargo and deliver it to you and expect you to have it destroyed as it is now unusable. What was the commodity? No carrier has the right to tell any claimant to claim on their insurers. Remember that when an insurer settles any claim under subrogation this only gives the insurer the right to use your name in any recovery action against any third party, so if a claim is submitted by the insurer, it will be in the name of the cargo owner/insured. In this instance the carrier lost the cargo therefore it was their duty to settle any claim submitted prior to the time bar and if the time bar was approaching, the claimant should request an extension of the time bar period which is normally granted. If it is not granted, the only way of preventing the claim from becoming time barred is to issue summons. In this instance it will appear that the claim against the carrier is now time barred and that you will still have a claim against the insurer which prescribes according to the laws of the country where the insurance was placed. Insurers have the right to settle the claim less any recovery which they have lost due to the claim against the carrier being time barred.

    As a matter of interest, under the Hague-Visby rules, the limit of liability of the carrier is SDR2 per kg or SDR666.67 per package whichever is the greater where an SDR is Special Drawing Rights and the rate of exchange can be obtained from http://www.imf.org, making use of the rate applicable on the date of settlement and not any other date. The package when considering a container is the number of packages packed in the container and not taking the container to be one package.

    • They alaways will denied responsability, but at the end if you take them to court, they will paid you, when they took your load they sing responsability of the cargo, the driver sign as their employee, they had insurance oncargo for 1000000.00 every body knows that, but they try not to pay, if you let them they will win. And they will go to the last breath, they will show to court and try to make a deal right there.