Affreightment Bills Of Lading And Insurance Outline

Affreightment, Bills of Lading and Insurance

1. Carrier Basics

   1. Common Carrier: holds itself out to the general public as engaged in the business of transportation

      1. E.g., Fedex, Amtrak

   2. Contract Carrier: provides transportation services only for certain clients, can refuse to serve certain clients [called public carrier in the UK!]

   3. Private Carrier: provides transportation just for the particular instance but their regular business is something else.

2. Moving Goods From Seller to Buyer:

3. Governing Law: Air

   1. Convention for the Unification of Certain Rules for International Carriage by Air (Montreal Convention)

      1. Entered into force 2003

      2. Liability limit: 17 SDR per kilogram (unless shipper declares actual value of the good)

      3. Defenses of carrier:

         1. Inherent defect of cargo

         2. Defective packaging

         3. Act of war

         4. Act of public authorities…

4. Governing Law

   1. Sea

      1. Domestic law

         1. US:

            1. Jones Act

            2. US Shipping Act of 1984 (for NVOCC and VOCC)

            3. Carriage of Goods by Sea Act (COGSA): liability limit of $500 per package

               1. COGSA may be applicable to a more than just transport by sea where its application is chosen in a clause paramount (choice of law clause). See, e.g., Fruit of the Loom (TWEN).

               2. COGSA Provisions:

§ 1301 Definitions.

When used in this chapter --

(a) The term "carrier" includes the owner or the charterer who enters into a contract of carriage with a shipper.

(b) The term "contract of carriage" applies only to contracts of carriage covered by a bill of lading or any similar document of title, insofar as such document relates to the carriage of goods by sea, including any bill of lading or any similar document as aforesaid issued under or pursuant to a charter party from the moment at which such bill of lading or similar document of title regulates the relations between a carrier and a holder of the same.

(c) The term "goods" includes goods, wares, merchandise, and articles of every kind whatsoever, except live animals and cargo which by the contract of carriage is stated as being carried on deck and is so carried.

(d) The term "ship" means any vessel used for the carriage goods by sea.

(e) The term "carriage of goods" covers the period from the time when the goods are loaded on to the time when they are discharged from the ship.

§ 1302 Duties and rights of carrier.

Subject to the provisions of section 1306 of this title, under every contract of carriage of goods by sea, the carrier in relation to the loading, handling, stowage, carriage, custody, care, and discharge of such goods, shall be subject to the responsibilities and liabilities and entitled to the rights and immunities set forth in sections 1303 and 1304 of this title.

§ 1303 Responsibilities of carrier and ship.

[1] Seaworthiness.

The carrier shall be bound, before and at the beginning of the voyage, to exercise due diligence to:

(a) Make the ship seaworthy;

(b) Properly man, equip, and supply the ship;

(c) Make the holds, refrigerating and cooling chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage, and preservation.

[2]Cargo.

The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.

[3] Contents of bill.

After receiving the goods into his charge the carrier, or the master or agent of the carrier, shall, on demand of the shipper, issue to the shipper a bill of lading showing among other things :

(a) The leading marks necessary for identification of the goods as the same are furnished in writing by the shipper before the loading of such goods starts, provided such marks are stamped or otherwise shown clearly upon the goods if uncovered, or on the cases or coverings in which such goods are contained, in such a manner as should ordinarily remain legible until the end of the voyage.

(b) Either the number of packages or pieces, or the quantity or weight, as the case may be, as furnished in writing by the shipper.

(c) The apparent order and condition of the goods: Provided that no carrier, master, or agent of the carrier, shall be bound to state or show in the bill of lading any marks, number, quantity, or weight which he has reasonable ground for suspecting not accurately to represent the goods actually received, or which he has had no reasonable means of checking. [This is how COGSA treats the situation in Distribuidora Internacional Alimentos v. Amcar Forwarding, Inc. (CB 214).]

[4] Bill as prima facie evidence.

Such a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described in accordance with paragraphs (3)(a), (b), and (c), of this section: Provided, That nothing in this chapter shall be construed as repealing or limiting the application of any part of sections 81 to 124 of Title 49. [COGSA will defer to Federal Bill of Lading Act where there is a conflict.]

[5] Guaranty of statements.

The shipper shall be deemed to have guaranteed to the carrier the accuracy at the time of shipment of the marks, number, quantity, and weight, as furnished by him; and the shipper shall indemnify the carrier against all loss, damages, and expenses arising or resulting from inaccuracies in such particulars. The right of the carrier to such indemnity shall in no way limit his responsibility and liability under the contract of carriage to any person other than the shipper.

[6] Notice of loss or damage; limitation of actions.

Unless notice of loss or damage and the general nature of such loss or damage be given in writing to the carrier or his agent at the port of discharge before or at the time of the removal of the goods into the custody of the person entitled to delivery thereof under the contract of carriage, such removal shall be prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading. If the loss or damage is not apparent, the notice must be given within three days of the delivery.

Said notice of loss or damage may be...

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