Responsibilities of Ocean Carriers & Customers in an Ocean Shipment

Being in the shipping and logistics business over 18 years, I have experienced number of different disputes about the responsibility of shippers/consignees against carriers and vice versa. I can clearly say that there is still a huge crowd of shippers that are not aware of their and the carrier’s responsibilitites, according to the only viable contract in maritime law – Bill of Lading.

I will not go too deep into actual Bill of Lading terms, but will be giving examples of common misperceptions of the terms and conditions of the Bill of Lading, through day-to-day examples.

Now, every item I explain may differ for a specific situation, so do not take any of this information as legal advice.

• Bill of Lading is the only contract in ocean transportation – the other contracts you may be signing will just work only as support documents.
• As a shipper, you are responsible for securing your goods in the shipping container, for a sea journey. So, if you don’t, any kind of damages not only to your goods, but also to the container, vessel, terminal infrastructure, and even fatal injuries, is your responsibility. According to TT Club, 65% of damages to cargo result from poorly-packed containers.
• Correctly declaring what you loaded is also extremely important. Your cargo can be hazardous or very heavy, for example, and this information must be correctly communicated with the carriers. I won’t even mention the problems your customer will face if you make the mistake of putting wrong piece in the shipping container.
• Carriers have limited liability on the carriage of goods. What does that mean? If a carrier (or a vendor the carrier uses) drops your container in the terminal, gets into an accident, creates a hole in the container in transit, or damages your cargo in any way, the carrier will not pay you your cargo value. Instead, the maximum they will be responsible for is $500 per package. So, always get cargo insurance.
• If the vessel you are shipping your goods on has grounded in a low-depth body of water or river, or due to any other natural, Mother Nature event that allows an irreversible incident to happen, the carrier may be allowed to declare general average. At that point, you as the shipper become responsible for contributing to save that vessel. This is another great example why shippers should always consider getting cargo insurance.
• Carriers have the right to unload your cargo pretty much anywhere they want, if they see that the destination that is written on the Bill of Lading has some kind of “risk, danger, delay, or difficulty” such as civil unrest, flooding, etc. As a shipper you are responsible to pick up your cargo, and pay all dues.
• If any customs authority puts any kind of hold, investigation, call back on the goods, etc., the shipper is again responsible to pay all charges due, regardless of whether or not that hold is removed later and no fault is found by the authority.
• Last but not the least, unfortunately, carriers cannot be held responsible if they delay your containers.

These are some of the discussion items that we have experienced in the past, and for sure, will be experiencing again in the future.

It is really is important for everyone in the shipping industry to know their own, and the other party’s responsibilities, in handling such cases in a better, and a less damaging, way.