Forwarder - Broker 
Notice of Claim Time Limits Page*

Common Provisions Are:

Written Notice Required In the case of damage:

Damage Limit:

U.S. DOMESTIC AIRLINE DEREGULATION: Prior to airline deregulation, the Civil Aeronautics Board (CAB) reviewed filed tariffs of air cargo carriers. Shippers were deemed to have constructive notice of the contents of the tariff, as well as the notice of claim rules for loss & damage. CAB had indicated that most airlines required claims for loss and damage to be filed within 9 months and 9 days from the date of shipment.

The Airline Deregulation Act of 1978 (Pub.L. No. 95-504, 92 Stat. 1705) brought a phased end to the CAB in 1985 as well as the notice of claim rules. Consequently, direct air carriers & indirect air carriers (air forwarders) have been free to mandate rules for loss & damage claims, which often differ from carrier to carrier. Because each carrier may have different rules for air cargo claims, the claimant/transportation practitioner must be familiar with contractual rights of the performing air carrier.

U.S. DOMESTIC AIR CARGO DAMAGE LIMIT: This is usually US$.50 per pound unless the shipper declares the cargo's value and pays a higher shipping rate.

SOURCES OF DOMESTIC AIR CLAIM RULES: To locate the cargo carrier's rule for loss and damage claims, the claimant should look to 3 basic sources:

1.) air waybill of lading;

2.) air service guides;

3.) air cargo tariff (Procedural manual).

The air waybill of lading (AWB) is issued to the shipper; however, the service guides and tariffs (procedural manual) can be requested directly from the direct/indirect carrier. They often contain valuable information not set forth on the air waybill. (Several domestic air carriers have now posted their claim rules on the world wide web.)

These same rules apply for the house air waybill (HAWB) of the indirect air carrier, i.e. the airfreight forwarder/air forwarder. Remember, to the actual air carrier, the indirect air carrier (airfreight forwarder) is the shipper and receives its AWB when cargo is tendered. The actual shipper receives the HAWB of the indirect air carrier/air forwarder. When an HAWB has been issued by the air forwarder, the direct carrier's bill becomes known as an MAWB or master air waybill.

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INTERNATIONAL AIR CARRIAGE: The United States has been a party to the Warsaw Convention since 1934. Generally, the Convention applies to air carriage between the territories of two High Contracting Parties to the Convention. For example, air carriage between the Untied States and England.

FILING AIR CARGO CLAIMS: This presentation cannot begin to outline the various rules each domestic air carrier follows for cargo loss & damage claims, but you can certainly benefit by exercising the following guidelines:

1. Written Notice. All notices of claims and supporting documentation must be WRITTEN. Any WRITTEN notice of claim should be sent by either certified or registered mail, return receipt requested or via courier to the carrier. Notice given to an air carrier by telefax was upheld in a recent case, see Royal Ins. Co. v. Emery Air Freight Corp., 834 F.Supp. 633,635 (S.D.N.Y. 1993). If by telefax keep the confirmation sheet from your machine.

2. Content Of The Written Notice. There are no statutory requirements for written notices of claim. Nevertheless, a claimant's notice should include: (1) name of shipper; (2) name of consignee; (3) AWB or HAWB number; (4) flight number & carrier name; (5) date shipment was delivered to the air carrier; (6) place where the shipment was delivered; (7) port of departure; (8 ) destination port; (9) the description of goods shipped; and (10) a brief description of the goods lost or damaged as well as value, if known.

3. Content Of Claim. Following written notice of claim to the carrier, a formal written claim with supporting documentation must be provided. Certainly the notice and the claim can be combined. The domestic air carrier (or indirect air carrier/FF) will require verifiable documentation supporting the claim, such as a survey/inspection, commercial invoices, etc. [Please visit The Cargo Letter on the World Wide Web at Edition [301] and [303] where we outline documentation necessary to support a cargo claim.]

4. Time Limits. Domestic air carriers require the claimant to provide WRITTEN notice of claim & formal WRITTEN claim within a time period mandated by the AWB/HAWB, etc.. For example, on domestic moves FedEx requires claimants to submit WRITTEN notice of claim within 15 days from delivery in the case of cargo damage, delay or shortage.

FedEx also requires claimants submit verifiable documentation supporting a written claim of loss & damage within 90 days after written notice of the claim was received, differing significantly from the old notification period once indicated by CAB before deregulation. Today, if a claimant misses the deadline for filing loss & damage claims in domestic air moves the carrier may move under contractual provisions of its AWB (or HAWB of the indirect air carrier/air forwarder) to deny the claim.

International air carriers must follow notice requirements of Warsaw. Art. 26 (3) of the Convention requires that every complaint must be made in writing and sent within the time limits. For International air carriage, according to the Warsaw Convention Art. 26 (2) the time limits are seven days from the date of receipt in the case of goods or in the case of delay complaints for delay must be made within 21 days from the date the cargo was placed at the persons disposal of the person entitled to delivery. No time limit is specified by the Convention for loss, however, some courts have held that the carries tariff, usually 120 days, controls. It is recommended that written notice be given as soon as possible.

5. Written Notice To The Cargo Underwriter: If the shipment was covered by air cargo insurance, you must notify the cargo insurance underwriter of the claim IMMEDIATELY. If you are to recover under the subject policy of insurance, the underwriter requires that YOU take ALL required steps to preserve claim against the carrier/indirect carrier in order to protect its rights of subrogation. Following deregulation many shippers became disgruntled, arguing that shorter time limits were overly burdensome and one-sided. Since Deregulation, shippers have had to argue in court that rules for cargo loss & damage were either unconscionable or contrary to public policy under federal common law.

 

THE SAFEST COURSE:

Purchase quality air cargo insurance from your air forwarder professional and avoid uncertainty.

* The Cargo Letter does not provide legal advice applicable to specific situations. The information provided is believed generally reliable, but should be confirmed through the current text of cited laws and authorities. It is understood that all laws & authorities are subject to change without notice to the public. Where specific situations or the conduct of your busniess are concerned, it is important to consult your company attorney or advisor directly. The Cargo Letter cannnot be responsible for failure to follow these instructions.

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Notice of loss or damage must be given at port of discharge before or at the time of removal of the goods unless loss or damage is not apparent, in which case it must be given within 3 days of delivery.

Damage Limit COGSA: $500 per package or customary freight unit.

Damage Limit Visby Rules : (Modification of Hague not adopted in US) Notice of loss or damage must be given at port of discharge before or at the time of removal of the goods unless loss or damage is not apparent, in which case it must be given within 3 days of delivery. Damage Limit: 666.7 SDR per package or unit or 2 SDR per kilo of weight, whichever is higher.

Hamburg Rules: (Modification of Hague not adopted in US). Damage limit: 835 SDR per package or 2.5 SDR per kilo of gross weight for damage. In the case of delay, 2 and 1/2 times the freight for delayed goods

When referring to the maritime transport of goods, we will concentrate from the time the goods are loaded on board the ocean carrier to the time they are discharged from the vessel. This period has often been referred to as "tackle to tackle", referring to the ship's unloading equipment. The Carriage of Goods by Sea Act (COGSA) 46 U.S.C. App. 1300 et seq. was adopted by the United States in 1936 to govern the rights and responsibilities of carriers and shippers of goods by sea. Unlike the Warsaw Convention for international air transport, COGSA does not require a written notice of claim, only written notice of loss or damage.

WRITTEN NOTICE OF LOSS. The written notice of loss must be provided to the carrier or carrier's agent at the port of discharge. If the loss or damage can be readily seen, the written notice must be provided before or at the time of removal of the goods into the custody of the person entitled to delivery. If the loss or damage is not apparent, written notice must be given to the carrier or carrier's agent within three (3) days of delivery. Failure to provide such notice is not fatal to a claim, but it does create a presumption that the goods were delivered in good order. You must then overcome the burden by demonstrating that the damage occurred before delivery.

WHY SUCH A SHORT TIME? (1. The carrier must be given an opportunity to investigate the circumstances of the loss or damage; (2. to avoid fraudulent claims.

CONTENTS OF WRITTEN NOTICES. Although there are no statutory requirements for the contents of written notices, shippers /consignees should provide the following details to the carrier or its agent:

(1) Name of Shipper

(2) Name of Consignee

(3) Bill of Lading Number (copy of bill of lading)

(4) Vessel Name and Voyage

(5) Date shipment Delivered to Carrier

(6) Place of Delivery

(7) Port of Loading

(8) Port of Destination

(9) Description of Goods

(A) Description of Goods Lost or Damaged

(B) Brief Statement of Lost or Damaged Goods

(C) Damage Amount, if known

The notice of damage may be simply written on the bill of lading or on the receipt upon delivery. Separate written notice should be sent by certified or registered mail, return receipt requested or via courier to the carrier or its agent, to the forwarder, to the NVOCC to all involved always receiving a return receipt.

WRITTEN NOTICE OF CLAIM. Although not mandated by COGSA, ocean carriers will require specific information in processing the cargo claim. The notice of cargo loss or damage will not be sufficient to process your claim. If the claimant does not receive instructions from the carrier specifying the necessary documentation to process the claim, the shipper/consignee/agent should submit the following documents in support of the claim: survey, bill of lading, commercial invoices reflecting value of goods, packing lists, certificate of origin, pre-shipment survey, a statement of the loss or damage and documents supporting the post-claim sale or salvage value of the goods. Note: It is highly suggested that no sale/salvage occur until BOTH the carrier and the cargo underwriter have had an opportunity to inspect.

WRITTEN NOTICE TO CARGO INSURANCE UNDERWRITER. Do not forget to notify the cargo insurance underwriter in writing. An earlier article in this series outlined each of the specific requirements for providing notice of loss under a cargo insurance policy and the various claim requirements involved.

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 RESOURCES

 

· COGSA, Carriage of Goods at Sea Act, 46 U.S.C.A. §1300-1315.

 

· Convention for the Unification of Certain Rules Relating to International Transportation by Air; Warsaw Convention, 49 U.S.C.A. §1502

 

· Federal Maritime Commission, Washington D.C.

 

· US Federal Case Law; Second Circuit has a very goods history of COGSA & Warsaw.

 

· Carmack Amendment

 

· National Customs Brokers and Freight Forwarders Assn. New York, New York.

 

· Legal Journals Like ATLLP and Transportation Lawyers

 

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* The Cargo Letter does not provide legal advice applicable to specific situations. The information provided is believed generally reliable, but should be confirmed through the current text of cited laws and authorities. It is understood that all laws & authorities are subject to change without notice to the public. Where specific situations or the conduct of your busniess are concerned, it is important to consult your company attorney or advisor directly. The Cargo Letter cannnot be responsible for failure to follow these instructions.

 

|Cargo law Main Page | The Freight Detective | Law Navigator | Claims Calculator |

| The Logistics Chain | Photo Gallery of Cargo Loss | Our Staff |

| Trans-Cams | Forwarder/Broker Industry Chat & Issue Discussion Board |

| Library & Search Engine of The Cargo Letter | Bookstore |

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The Law Offices of Countryman & McDaniel

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5933 West Century Boulevard

Los Angeles, California, 90045

(310) 342-6500 Voice

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to The Law Offices of Countryman & McDaniel

to The Cargo Letter

 Back To Main Page

 

|Cargo law Main Page | The Freight Detective | Law Navigator | Claims Calculator |

| The Logistics Chain | Photo Gallery of Cargo Loss | Our Staff |

| Trans-Cams | Forwarder/Broker Industry Chat & Issue Discussion Board |

| Library & Search Engine of The Cargo Letter | Bookstore |