Simone Lamont-Black, Scotland, Simone.Lamont-Black@ed.ac.uk
This book is based on selected papers presented at conferences in Edinburgh[1] and Antwerp[2] on contemporary issues in freight forwarding. It illustrates the legal minefield that encircles the business of freight forwarding and adopts a comparative methodology to the examination of key issues.
The contributions cover a number of legal topics and jurisdictions. A general introduction and identification of fundamental concepts is followed by a classification of freight forwarders and their duties, an analysis of private international law aspects of jurisdiction and applicable law, culminating in an examination of selected regional and country specific standard freight forwarding contract terms. Since the business of freight forwarding usually involves the carriage or organisation of the carriage of goods, often by a number of transport modes, mostly including road transport, particular attention is allocated to multimodal transport issues and to the CMR.[3]
Detailed appendices give the reader access to the relevant carriage conventions, standard industry documents and standard freight forwarding contract terms, which represent the wider context to many of the issues discussed and analysed in the contributions.
The duties and liabilities of freight forwarders have long been debated and are regulated in different ways depending on the type of activity agreed, whether a mandatory (carriage) regime applies, and if under national law particular rules apply. The inherently international nature of transportation of goods also means that the transit is likely to pass through a number of jurisdictions with different legal concepts and national laws, and with different policies relating to the incorporation of international conventions, which, to a larger or lesser extent, may curtail freedom to contract.
While standard contract terms recommended by freight forwarding organisations may be adopted by freight forwarders, the effect of their incorporation may differ depending on the jurisdiction in which they are in issue. Even internationally accepted standard forms may receive different interpretations in different jurisdictions. Some countries enact special provisions regulating freight forwarding services, with more or less room for the adoption of industry rules. Questions of jurisdiction and applicable law are therefore never far from the surface and some parties, carrier or shipper, may engage in forum shopping to ensure a jurisdiction “friendly” to their view of matters.
Whether standard terms and conditions have been successfully incorporated, may be easier to claim in some fora than others. In countries where standard terms have been negotiated and are recommended by both, forwarders and shippers, incorporation may be liberally accepted absent an indication to the contrary, such as in the Nordic countries and Germany. But elsewhere detailed incorporation may need to be expressly agreed before standard terms can be relied upon. This may cause difficulty, in particular in areas of fast moving transport business where contracts are seldom reduced to writing, unless a framework contract is in place. However, for the smaller freight forwarder or the typical one person-one lorry forwarder this may not be the norm.
The problems are further exacerbated by the very vague notion of what it is to be a freight forwarder and what, in any particular instance, has been promised by way of contractual performance. The job description of a freight forwarder has developed considerably from the core obligation to organise the transportation of goods and related customs and border clearance services. The contemporary function in commercial terms is flexible and uncertain, ranging from the provision of minimal transport services to large and complex supply chain operations. Furthermore, the contemporary freight business attracts a number of business models, from one man-one vehicle carriers, to large shipping lines, to large shippers expanding into freight solutions, to large freight forwarding businesses, some with and others without rolling stock, relying on outsourcing of all cargo handling and carriage. And to each type of forwarder and forwarding business there may attach a distinct legal environment.
A freight forwarder may simply organise transportation through others or be directly involved in the carriage of goods. He may act as agent of the shipper or assume carrier liability, whether or not as an actual carrier. Certain carriage or freight documents such as FIATA’s Multimodal Transport Bill of Lading or Multimodal Transport Waybill or BIMCO’s MULTIDOC and COMBICON Bills of Lading denote the issuer as carrier, whether a non-vessel owning carrier (NVOC) and outsourcing transportation or not.
Some legal systems may attribute carrier status to freight forwarders based on particular parameters, such as, under German law, the charging of a fixed rate for the services or the consolidation of goods by the freight forwarder. The French classification as a commissionnaire de transport combines organisational duties and inflicts carrier liability, although normally back-to-back with the performing carrier. In the UK, the question of whether a freight forwarder has contracted as agent or carrier is investigated separately in each case and the standard contract terms used by the British freight forwarding industry are careful not to give any indication of the capacity in which the services are performed, leaving it to the parties to designate this or, more often, a judge or arbitrator to determine it as a question of fact.
Even where it is clear that a freight forwarder is contracting as agent, further questions may arise as to the terms negotiated with carriers and whether they provide his customer with the best recourse and least liability. What level of authority was in fact given to the freight forwarder to negotiate contracts on behalf of the customer and what are the duties of the freight forwarder regarding recourse in case of loss or damage caused by the contracting carrier? What are the responsibilities and potential liability of a freight forwarder for the defaults of the contracting and/or performing carriers? Does there exist a chain of sub-contracts and who can be sued legally and practically? The freight forwarding industry has witnessed a significant growth in the sub-contracting of services from one forwarder to another, particularly in road transportation. The last link in the chain is often a small performing carrier who, in all likelihood, would be unable to service a cargo claim beyond his insurance cover.
What are the boundaries of the freight forwarding contract and what exactly are the duties, responsibilities and rights of the parties? These questions may be further compounded where shippers and forwarders are involved, physically or contractually, in loading and unloading operations, and also in cases of part carriage of cargo.
The bigger freight forwarders may provide much broader logistic services, relating to anything connected to the initial movement of goods to their final destination. These may include picking and packing, and the provision of services which may range from packaging, stuffing and consolidating goods into containers and insuring the goods for transit risks, to organising the transport chain and procuring necessary documentation and clearance for export and import. And, dependent on instructions received from consignees, delivering products directly to their destination, for example, to the shelves of the store, possibly at selected intervals. Some logistics services contracts promise a just-in-time delivery service to allow their customers to outsource warehousing and to receive relevant parts on demand, which may, for example, be of particular interest to manufacturing businesses. And while this allows customers to concentrate on their business operations, rather than on logistics and warehousing, the potential for production stand-still and other resulting loss or damage arising out of defective contractual performance or force majeure events is significant. Detailed and specialised contractual arrangements are essential for these types of long-term services contracts.
On the other side of the business scale, parcel delivery services respond to demands arising from international shipments to urban freight distribution systems, demands which have escalated with the growth of e-commerce. In this context the challenge is how effectively and economically to deliver a large number of small parcels, as to size and content, to consumers. The ongoing task in this area is to find workable, effective and environmentally friendly solutions for urban freight distribution systems. Trials for drone and robot deliveries are already taking place, an emerging area which will require careful regulation.
Creative solutions may also be essential to respond to growing concerns about pollution and road congestion, for example by directing the transit of goods to rail and/or inland waterways, which may be an effective way of improving access to city centres. It may be anticipated that environmental issues and the quest for solutions will come increasingly to the fore as freight traffic increases. However, the legal issues pertaining to supply chain contracts, robotics and green transport are topics for analysis elsewhere.
We are confident that the contributions to this book address many of the central issues and collectively provide an effective picture of the law and commerce relating to the evolving international practice of freight forwarding.
Note: An short summary of the chapters 1-14 can be found in the book review published in Zbornik PFZ in 2018. Chapters 15 – 17 continue to discuss salient features of the German, Nordic and Irish Freight forwarding conditions.
Notes:
[1] Edinburgh Conference on Current Issues in Freight Forwarding: Law and Logistics Freight forwarding, 3-4 September 2015, organised by Edinburgh University, School of Law and Edinburgh Centre of Commercial Law.
[2] Antwerp Conference on Law and logistics: the way forward, 12 October 2016, organized by Antwerp Forwarding Association, Forwarderlaw and Flows.
[3] The United Nations Convention on International Carriage of Goods by Road 1956; the CMR has been adopted by some 55 states across Europe, North Africa, the Middle East and beyond including the Russian Federation and Mongolia.