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  • QA 061
    Question:
    When damage occurs en route to an FCL shipment, who is responsible?
    Background:
    We read QA 058 with interest. However, the article in question states that under an FCL bill of lading the exporter is responsible if the cargo incurs any damage en route. But your answer suggests this is not so. Can you clarify further?
    Asked by:
    Exporter - Brazil
     
    Answer:

    If it can be conclusively proven that the damage occurred during transit, i.e. en route whilst the goods were under the control of the shipping company, then the shipping company will be responsible. Not the exporter. However, unless the cause of such damage is obvious it may be very difficult to prove the point and exporters can fully expect that receivers will hold them responsible. But at the same time receivers are duty bound to preserve and exercise all rights against third parties and so must also lodge claims with the shipping company, with their underwriters and any other involved party. (Go to 05.05 for more on marine insurance and claims).

    Nevertheless, the burden of proof rests with the exporter, unless and until there is concrete evidence that the loss or damage was due to an external event, an event that took place after the container was handed over for shipment. This is why in QA 058 we also made reference to faulty or incorrectly fitted container liners: should any damage occur because the liner, that an exporter or his agent provided and fitted, somehow failed then that exporter will be held responsible.

    Of course, if an FCL shipment is lost or destroyed in its entirety then in most instances everyone will have little option but to accept the exporter's declaration as to the original contents and their condition. But if upon discharge the goods are found to have been damaged, without any provable link to an external event, then the burden of proof can become very heavy.…

    On a separate but related issue: If really serious damage occurs en route, due to unforeseen events beyond anyone's control - Force Majeure or Acts of God, then under the contract of carriage (bill of lading) a shipping company may decide to declare what is known as General Average. Such a declaration will result in proportional claims being lodged against all the owners/receivers of all the goods that were on board at the time the event took place - this kind of situation can become extremely complicated and may at times result in lengthy litigation.
     

    Posted November 30, 2005
     

    Related chapter(s):
    Related Q & A:
    QA 058