Responsible is the One who Сarries
Arranging cargo delivery people don't think about the compensation, - they believe that it will be delivered to the customer safe. But it is necessary to know that a sender can count on the amends.
The contractor is responsible for the safety of the cargo. The sender must draw up all the documents correctly and comply with obligations under them for his part. How else can we protect ourselves from the need to claim the compensation?
It is necessary to start from the things that most often occur with the cargo:
- Mechanical damage
The cargo must be properly and efficiently packed in an appropriate container to prevent from being broken / dented / damaged.
- Violation of transportation conditions
Freezing cargo cannot be transported without a refrigerator. It is obvious. But it concerns all cargoes - if they need special temperature requirements, the carrier and the forwarder should be informed of it. The sender must name the deadlines for transportation and other restrictions.
The client cannot influence on the following 2 points:
- Road traffic accident
- Theft or highway robbery
In this case the insurance can help. And you can insure both cargo and civil liability. Of course, according to the law, the freight forwarder and the carrier have responsibility for the described cases, but, as judicial practice shows, it is easier to get money from insurance than to prove the fault in the accident and the amount of damage - the fact of loss of cargo is a reason for paying the insurance. A liability insurance contract guarantees payments to the client in the case of an insured event.
One more plus: the insurance company will cover losses if the carrier or forwarder goes into bankruptcy. If you do not use insurance - you should at least apply to a proven company.
There are usually no problems, tells Denis Bobrakov, Commercial Director, ACEX in Novorossiysk:
The company operates in the port of Novorossiysk. They insure the expensive goods, but they are often transported by air. In other cases, at least in half ones, the clients have insurance themselves - the forwarding company can be uninformed in it. But even without the insurance, they are ready to pay compensation - if the cargo damage is caused by their fault. Denis Bobrakov remembers his practical examples:
We transported toys. The upper boxes shifted and damaged the lower ones and the goods in them. We saw it at the customs and recorded, the insurance company and the sender did not have a claim to us. Besides, they were responsible for the proper packaging and placement. But last year we transported MDF panels. While customs was examining them, it began to rain; some of them were wet and swollen. The client noticed when he receipted it and we paid the compensation for those goods that had lost their vendibility - without any insurance, on the basis of general legislation.
There are a lot of liability laws: there is the 7th article of the Federal Law “About Freight Forwarding Activities” for freight forwarders. For carriers - there is the 796th article from the Civil Code–and the Charters and Codes depending on the type of transportation - by land, air or sea.
The responsibility is written in the international documents. According to the Montreal Convention of 1990 (Russia joined to it this year), it should be 19 sdr of compensation for 1 kg of gross weight of the destroyed, lost, damaged cargo. According to the Warsaw Convention of 1929 and the Hague Protocol –it should be 250 gold francs - 20 USD per 1 kg of gross weight.
So if the cargo costs less than 20 dollars per kilogram - it can be sent without insurance, says ACEX deputy business development director Alexandra Chagina, who has been involved in air freight for many years. In other cases, the insurance is strongly recommended. After all, having saved a couple of thousand on insurance, you can lose much more at the end:
It is more profitable sometimes to send a small cargo by air - up to 500 kilograms. But most often we transport the urgent goods. These are live animals, which you cannot transport for a month, some kinds of equipment, and the unproductive time from the absence of which costs more expensive than transportation. Valuable cargoes areexpensive themselves (antiques, etc.) or goods which are often exposed to theft (alcohol, accessories, etc.) - because air traffic control is more serious. Another detail –the compensation of 20 dollars per kilogram is for the international transportation. For Russian ones, the freight forwarder may be responsible for the full good’s prize.
All compensation amounts are written and known. So, the carrier and freight forwarder should fulfil the following conditions for the transportation damage:
- Pay in full for lost or missing cargo;
- Pay a part of the prize by which its value has decreased upon damage. Or the full prize, if the goods are not saved;
- The full prize- if the goods disappear with the declaration of value or partially - in the case if the goods are partially lost or spoiled.
In addition, the client can get back the freight fee in proportion to the value of the lost cargo (if it is not included in the cost of cargo). He can get money even for lost profits, which occurred because of the forwarder.
But, to say the truth, these rules do not work during hurricanes, earthquakes and floods: if the freight forwarder or carrier proves that the cargo was damaged or lost due to reasons beyond their control, the client will only apply to the nature forces for compensation.Calculate the cost of transportation online