Cargo Damage: Who is Responsible?

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Cargo damage can happen during overseas shipments. If you are selling cargo to someone overseas, who is responsible when cargo damage occurs?

Unfortunately, there is no easy answer. Whether you are the buyer receiving goods or the seller exporting overseas, there are steps that can be taken to clear up the confusion should cargo damage occur.

The Shipping Line

Generally shipping lines are not held responsible for the contents of a shipping container. The seller should perform an inspection of their shipping container prior to loading the cargo. If the container is being provided by the shipping line, the seller is responsible for checking the seaworthiness of the container and making sure the size is appropriate for the items being shipped.

If these requirements are not up to the seller’s satisfaction, they are obligated to refuse to load the cargo into the container and request a new container from the shipping line.

Pre-Shipping Agreement

The buyer and seller should agree before shipping on inspection procedures. This should contain a checklist of what is going to occur on both ends of the shipment. Once the inspection procedures are agreed upon, it is up to both the seller and the buyer to perform their inspections as discussed.

Discharge Inspection

At the port of discharge, both the seller and the buyer should have representatives on hand to perform the inspection as agreed upon. If just the buyer performs the inspection, this could bias it against the seller if any damage is found.

Request a Report From the Shipping Line

If there is damage found, the buyer should request a report from the shipping line. This report might reflect any adverse conditions that the shipping containers were subjected to during shipping.

The shipping line should have records of things like rough sea, accidents during loading/unloading of the container or any other damage the shipping container might have been subjected to.

Condition of the Shipping Container on Arrival

If the receipt inspection does not reveal any damage to the shipping container, it might be difficult to put responsibility on the seller. If the type of cargo is fragile or prone to damage it is the responsibility of the seller to ensure that the cargo is protected against reasonable shipping vibrations and jostling.

Insurance Claims

Cargo insurance might require their own inspections of the cargo upon arrival to pay damage claims. Depending on the pre-shipment agreements insurance claims should be filed by the responsible party. If there is not a clear line of responsibility, legal counsel might be necessary in order to determine just who should pay for the damages in the cargo.

International law might come into effect depending on where ports are located. Hopefully pre-shipment agreements will prevent this from happening; be prepared to have legal counsel in both locations.

Sellers should rely on professionals in shipping and packing like Cratex Group. We can ensure your industrial packing is done properly and in containers that are of the highest quality. Contact us today!