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Regarding the Classification of Responsibilities for International Freight Forwarders

2017-06-15

Responsibility allocation when appearing as a pure agent

Freight forwarding companies act as agents to act as intermediaries between shippers and carriers, with shippers and carriers directly signing transportation contracts. Freight forwarding companies charge commissions and have little responsibility. When the goods are lost or damaged, the shipper can directly claim compensation from the carrier.


Responsibility allocation when appearing as a party

  1. Freight forwarding companies sign contracts with third parties (carriers) in their own name

  2. Use your own warehouse or transportation vehicle when arranging storage and transportation

  3. Charge price difference when arranging transportation and LCL consolidation

In the above three situations, for the shipper, the freight forwarder acts as the carrier and should bear the responsibility of the carrier.


Responsibility allocation when appearing as a non vessel operating common carrier

When a freight forwarder engages in non vessel operating common carrier (NVOCC) business and issues its own bill of lading, it becomes a non vessel operating common carrier (NVOCC) operator and is considered a legal carrier, possessing both the nature of a carrier and a shipper.


Responsibility allocation when appearing as a multimodal transport operator

When a freight forwarder is responsible for multimodal transport and issues bills of lading, they become a multimodal transport operator (MTO) and are considered legally responsible

Carrier of aircraft transportation mode

The United Nations Convention on Multimodal Transport stipulates MTO's liability for compensation for loss or delayed delivery of goods

  1. The maximum compensation limit for loss or damage of goods shall not exceed 920SDR per piece or unit of transport, or 2.75SDR per kilogram, whichever is higher. However, if international multimodal transport does not include sea or inland waterway transportation according to the contract, MTO's liability for compensation shall not exceed 8.33 SDR units per kilogram of gross weight of the lost or damaged goods.

  2. For delayed delivery of goods, a delivery deadline of 90 days has been stipulated, and MTO's compensation limit for delayed delivery is 2.5 times the freight cost of the delayed goods, which cannot exceed the full freight cost of the contract.

According to China's Maritime Law, MTO is liable for compensation for loss or delayed delivery of goods.

  1. For loss or damage of goods: 666.67 SDR per piece or per other transportation unit, or 2 SDR per kilogram based on the gross weight of the lost or damaged goods, whichever is higher;

  2. For delayed delivery, China's Maritime Law stipulates that the delivery deadline for goods is 60 days, and the compensation limit for MTO delayed delivery is the amount of freight for delayed delivery of goods. However, delayed delivery caused by the carrier's intentional or negligent actions is not subject to this limitation.


Responsibility allocation when appearing as a "mixed" identity

Freight forwarding has a wide range of business scope. In addition to acting as a freight forwarding agent to handle customs declaration, inspection, and transportation arrangements, it also uses its own employees to provide services with its own vehicles, ships, aircraft, warehouses, and loading and unloading tools, or acts as a carrier during land transportation and an agent during sea transportation. The confirmation of the legal status of freight forwarders cannot be simplified, but should be analyzed on a case by case basis.


Responsibility allocation based on contract terms

In the standard trading conditions of different countries, the responsibilities of freight forwarders are often clearly defined. Usually, these standard transaction conditions are combined in the proof of receipt or similar documents issued by the freight forwarder to the shipper.

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